In a bid to bolster revenue streams and ensure fair competition in global digital trade, India is spearheading efforts to lift the longstanding freeze on countries imposing tariffs on electronic trade. The move, if successful, would enable tariffs to be levied on a wide array of digital transactions ranging from software downloads to online gaming.
According to a reliable source familiar with the matter, New Delhi is set to table the proposal at the World Trade Organization‘s ministerial meeting scheduled to take place in Abu Dhabi this February. The source, who preferred anonymity due to the sensitive nature of the discussions, revealed that India seeks to terminate the moratorium on customs duties applied to electronic transmissions.
Since its inception in 1998, the WTO has maintained a moratorium on customs duties pertaining to electronic transmissions, a policy regularly renewed every two years by its members. However, countries like India and South Africa argue that this practice results in significant tariff revenue losses and hampers their trade competitiveness on the global stage.
India aims to gain greater World Digital Trade Clarity
India’s primary objective is to introduce taxation measures for goods embedded within digital trade, as stated by the source. Additionally, India intends to advocate for greater clarity regarding the definition of goods in the realm of e-commerce during the upcoming WTO discussions.
Despite India’s push, multinational corporations have expressed strong opposition to lifting the moratorium. They urge WTO members to retain the existing restrictions, citing the need to support the industry’s post-pandemic recovery and maintain the resilience of global supply chains.
As the stage is set for deliberations at the forthcoming WTO summit, the outcome of these discussions holds significant implications for the future landscape of international trade, particularly in the rapidly evolving digital sphere.