New Delhi: The European Union (EU) has decided to up the ante on its trade dispute with India over import tariffs on certain information and communications technology (ICT) products.
The dispute is already before the World Trade Organisation (WTO).
The EU sought to establish a dispute panel at the WTO, but New Delhi blocked the move last week, ThePrint has learnt. But now that India has blocked the first attempt, Brussels plans to request the WTO to set up the panel again, diplomatic sources told ThePrint.
According to WTO rules, the second request will get accepted automatically, and India will not be able to block it.
This comes at a time when the much-awaited summit meeting between India and the EU, which was scheduled to take place on 13 March, has been deferred due to the coronavirus scare. Prime Minister Narendra Modi was supposed to travel to Brussels for it.
The tiff
Brussels had dragged New Delhi to the WTO’s dispute settlement body last April for hiking import tariffs, ranging from 7.5 per cent to 20 per cent, on a number of ICT products, such as mobile phones and components, integrated circuits, headsets and cameras.
According to the EU, India has applied duties on seven ICT products in excess of the 0 per cent binding rates, as laid out under WTO norms.
Both sides held wide-ranging consultations on the matter in May 2019 but failed to settle the dispute. The EU had also made efforts to raise the matter with India bilaterally, but even that attempt failed, said a trade official based in Geneva.
As a result, the EU has sought to establish a dispute panel at the Geneva-headquartered WTO, in order to fight the issue legally.
Brussels exports ICT products worth $400-$600 million to India annually, which are now impacted by the tariffs. The EU has the backing of Japan and the US, who have “shared the concerns raised by the EU regarding India’s high tech tariffs”, according to the Geneva-based official.
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India ‘disappointed’ by EU move
India, meanwhile, has informed the WTO that it is “disappointed” by the EU’s move to seek a dispute panel on this case.
India has said the EU is “taking advantage” of the fact that some of the products on which it has raised tariffs did not even exist when the WTO agreement on ICT was being drafted way back in 1996, official sources said.
“Efforts are being made (by India) to correct the error and it is not in violation of WTO’s Information Technology Agreement because some of these products that are under questions are not covered under this agreement. Thus, the EU’s attempt to seek a dispute panel was rejected,” an official said.
Both sides were planning to discuss the matter during the summit, a new date for which has not yet been announced.
Japan and Taiwan have also initiated WTO dispute proceedings challenging the Indian tariffs.
According to WTO’s dispute settlement norms, the first step is to seek consultations. If that fails, then the complainant can request for a panel to be set up.
Also read: US files WTO appeal against Indian steel after neutralising that very process