The World Trade Organization (WTO) has today ruled in favour of the EU in a major case challenging India's tariff on key information and communication technology (ICT) products. In its panel ruling, the WTO upheld all EU claims against India and found that India's tariffs of up to 20% on certain ICT products, such as mobile phones, were not in line with its WTO commitments, and thus are illegal. The amount of EU exports of such technology affected by India's violations is up to €600 million annually. While this is already significant, the real impact on European companies, which also export from other countries to India, is considerably higher.
The panel confirmed that India's tariffs could not be justified by any of the reasons India brought forward in this case. India could not invoke the Information and Technology Agreement (ITA) to escape the commitments made in its WTO schedule, nor limit its zero-duty commitment to products that existed at the time of this commitment and exclude more recent technological products falling under the same tariff line. The panel also confirmed that no mistake was committed when determining India's tariff commitments, including when the tariff lines nomenclatures were updated, and refused to examine India's request to rectify its tariff commitments. Such changes would need to be negotiated among WTO Members.
Background
India has since 2014 gradually introduced customs duties of up to 20% on products such as mobile phones, mobile phone components and accessories, line telephone handsets, base stations, static converters or electric wires and cables. The EU considered that these duties were in direct breach of WTO rules since India is obliged under its WTO commitments to apply a zero-duty rate to such products.
The EU initiated this WTO dispute settlement case in 2019.The panel issued its final report to all WTO Members on 17 April 2023.
Japan and Taiwan filed parallel cases (DS584/DS588) in 2019 following EU's initiative. These two parallel cases cover the same issue (tariffs on ICT products) and almost the same products. The WTO is expected to rule on these cases today as well.
