India urges WTO members to reconsider moratorium on duties on e-commerce

The e-commerce moratorium is nothing short of duty-free, quota-free' access to digital products of the digitally industrialized members by the rest of the membership, said India's WTO representative

India has asked the WTO members to "urgently" reconsider the continuation of the moratorium on customs duties on e-commerce trade as the coronavirus pandemic has demonstrated the importance of retaining the flexibility to regulate such imports.

The e-commerce moratorium is nothing short of duty-free, quota-free' access to digital products of the digitally industrialized members by the rest of the membership, according to the statements delivered by Ambassador and Permanent Representative of India to the WTO at informal open-ended meeting of the General Council on Work Programme of Electronic Commerce held on Tuesday.

"In short, the Covid-19 pandemic has demonstrated the importance of retaining the flexibility to regulate imports of electronic transmissions and levy customs duties on their imports by the governments. Therefore, the continuation of the moratorium must be urgently reconsidered by the membership," it said.

It said that India is witnessing an exponential rise in imports of electronic transmissions, mainly of items like movies, music, video games and printed matter some of which could fall within the scope of the moratorium.

While the profits and revenues of digital players are rising steadily, the ability of the governments to check these imports and generate additional tariff revenues is being severely limited because of the moratorium on e-commerce, it added.

According to industry experts, India wants an end to the moratorium and imposition of import duties to protect domestic industry and revenue.

Since 1998, the moratorium is being extended time and again for two years. It was last extended by the General Council held in December 2019 until the 12th Ministerial Conference, the highest decision making body of the WTO.

It also said that if the scope of the moratorium includes digitised and digitizable goods, its implications are "very serious" as technological developments have resulted in a rapid rise in the growth of online trade of digitized goods.

Non-availability of the use of tariffs for digitized goods as a result of the moratorium therefore poses very profound challenges for developing countries, the statement said.

"Allowing the moratorium to lapse is important for developing countries to preserve policy space for their digital advancement and provide level playing field to budding domestic producers of intangible goods, which is extremely critical for employment generation and income creation," it added.

It also said that the requirement of new sources of revenue to save lives and livelihood during the ongoing Covid 19 pandemic especially in developing countries including LDCs, when millions of their citizens are being pushed into extreme poverty, also underlines the need for ending the e-commerce moratorium.

"To the contrary, the unbridled and unchecked imports via electronic transmissions are increasing due to the existing moratorium due to the extended lockdowns as a fallout of the pandemic, resulting in imbalances in importing Members' current accounts," it said.