India to WTO: Review, relook continuation of moratorium on customs duties on e-commerce trade

PTI | Geneva | Updated: 15-06-2022 21:47 IST | Created: 15-06-2022 21:47 IST
India to WTO: Review, relook continuation of moratorium on customs duties on e-commerce trade
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India on Wednesday called upon the WTO members to review and relook the continuation of the moratorium on customs duties on e-commerce trade as the issue now has huge implications for the economy of developing countries.

Addressing the thematic session on e-commerce work programme and moratorium at the 12th ministerial conference (MC 12) of the World Trade Organisation (WTO), commerce and industry minister Piyush Goyal said that increasing participation of the developing countries in trade in electronic transmission continues to be a challenge due to the huge digital divide that exists between the developed and the developing countries.

As per estimates, 86 out of 95 developing countries are net importers of digital products and only five big tech giant companies are controlling the market.

They make super profits, have high market capitalisation, and do not allow new entrants in this space due to their financial clout and influence.

The minister said that while small exporters of physical products like textiles, handloom, clothing, footwear, mainly based in the developing countries, are facing both domestic taxes as well as customs duties, the big digital exporters are being exempted from custom duties due to the moratorium.

According to another estimate, 40 per cent of cross-border physical global trade will be replaced by 3D printing by 2040.

''This will actually jeopardise domestic manufacturing capacities which will be subjected to regular tariffs, which would actually become totally uncompetitive. I think this moratorium which has been continuing for 24 years needs to be reviewed, relooked at,'' Goyal said.

It is reported that during 2017-2020, developing countries have lost potential tariff revenue of possibly upward of USD 50 billion only on import of 49 digital products, he said, adding, in fact, 95 per cent of this revenue tariff loss is borne by the developing countries.

''Is it fair that the cost of the moratorium is almost completely borne by the developing countries for extending duty free quota, quota free market access, largely for a very few players. Can we justify this wealth accumulated by big tech at the cost of the ability of the emerging markets to generate resources, to meet the basic needs of their large population?'' the minister asked.

By 2025, this revenue loss is estimated to be USD 30 billion every year.

India has argued on many occasions that instead of perpetuating the dominant position of a few digital monopolies through creating or maintaining rules for global e-commerce, developing countries first need to focus on improving domestic physical and digital infrastructure, creating supportive policy and regulatory framework and developing our own digital capabilities.

The WTO members had agreed not to impose customs duties on electronic transmissions since 1998 and the moratorium has been periodically extended at successive WTO's ministerial conferences -- the highest decision-making body of the 164-member organisation.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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