Customs duty moratorium on e-commerce needs re-examination

ABU DHABI: India on Thursday pitched for re-examination of the implications of the customs duties moratorium on e-commerce trade for developing and least developed member nations of the WTO.

India is not in favour of further continuation of the moratorium of customs duties on e-commerce trade as it is impacting developing countries.

The issue came up for discussion during a session of a work programme on e-commerce at the World Trade Organization’s 13th Ministerial Conference, which entered its last day on Thursday.

The e-commerce medium is a fast-growing segment for cross-border and domestic trade.

India said that this emerging segment of the global economy holds the promise for economic development and prosperity for developing countries, including the least developed countries (LDCs).

Due to this, New Delhi has stressed that all policy options, including the imposition of customs duties on e-commerce trade, should be available for the WTO members to promote digital industrialisation.

“With the digital revolution still unfolding and with increasing diffusion of technologies such as additive manufacturing and 3D printing, data analytics, artificial intelligence, Internet-of-Things etc., there was a need for re-examination of the implications of the moratorium on customs duties on electronic transmissions, particularly for the developing countries and the LDCs, “ the commerce ministry said.

Currently, a few firms based in developed countries dominate the global landscape of e-commerce.

“India explained that there was a huge digital chasm between the developed and the developing countries, which makes it challenging to increase the participation of developing countries in global e-commerce,” the ministry said.

The country also argued that developing countries need to focus on improving their domestic physical and digital infrastructure, creating supportive policy and regulatory frameworks, and developing digital capabilities.

India and certain other developing nations are pushing to discuss the scope of the moratorium, as there are revenue implications due to this.

As per estimates, the potential tariff revenue losses to the developing countries are about $10 billion every year. For India, it could be over $500 million every year.

The WTO members have agreed not to impose customs duties on electronic transmissions since 1998, and the moratorium has been periodically extended at successive ministerial conferences (MC), the highest decision-making body of the 166-member body.

India is witnessing a 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.