India — Tariff Treatment on Certain Goods in the Information and Communications Technology (ICT) Sector disputes against India at WTO by EU, Japan and Chinese Taipei

During 2019, European Union, Japan and Chinese Taipei (“complainants”), alleged that India by imposing duties on certain information and communication technology (“ICT”)products, India is in violation of provisions of General Agreement on Tariffs and Trade 1994 (“GATT 1994”). The panel was established individually for all three cases during second half of 2020. The Panel
issued its final report to all WTO members on 17 April 2023.

Brazil, Canada, China, Indonesia, Korea, Norway, Pakistan, Russian Federation, Singapore, Thailand, Turkey, Ukraine, and United States have joined as thirdparties in these disputes. It has been alleged by thecomplainants that India has applied duty on imports of the certain ICT products of up to 20% which is in excess of its bound rate of 0% as set forth in its Schedule of
Concessions (tariff lines based on HS 2007). The contested products includemobile phones, mobile phone components and accessories, line telephone handsets, base stations, static converters, electric conductors and cables.

India has argued that its measure of levying duty against the above-mentioned products is legally valid as these products do not fall under the ambit of Information Technology Agreement -1
(ITA-1) to which India is a signatory. Thus, flowing from the commitments under ITA-1, India has accordingly amended its Schedule of Concessions submitted to WTO. Each member country at WTO shall update/transpose all the tariff codes and descriptions under its Schedule of Concessions that change due to the introduction of new HS nomenclatures, including those relating to tariff quotas and export subsidies. The HS nomenclatures are updated every five-six yearby World Customs Organization (WCO). Owing to the transposition error during HS2007 process, India inadvertently certified the afore-mentioned products under its Scope of Concessions despite not being obliged as asignatory to ITA-1. India has invoked the 1980’s procedure for modification and rectification of Schedule of concessions, to rectify the same.

The Panel in its reports has over-ruled India’s argument with respect to ITA-1, and recommended that India brings the abovementioned measures in conformity with its GATT 1994 obligations.

As per the available Dispute Settlement procedures, India is taking the necessary steps, and is also exploring the options available in light of its WTO rights and obligations.It is expected that the panel’s report will not have any immediate impact on India’s ICT products. EU’s share of total imports of aforementioned ICT products into India during the calendar year 2022 was at 3.03% (estimated at USD 550 million), while Japan’s and Chinese Taipei’s are at 0.33% (estimated at USD 24 million) and 2.86% (estimated at USD 235 million)respectively. Moreover, India has brought its duty rates to 0% with respect to two of the contested products, namely, Headphones/ Earphones and Electric Convertors since February 2022