India challenges WTO panel ruling on import duties on certain ICT products in dispute with Japan, EU

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India appeals against WTO panel's decision on ICT import duties
Image source: Representative India appeals against WTO panel’s decision on ICT import duties

New Delhi: India has filed an appeal against a recent ruling by a World Trade Organization (WTO) panel that it violated global trade rules by imposing tariffs on certain information and technology products. The appeal was filed by India at the Appellate Body of the World Trade Organisation, which is the final authority on such trade disputes.

The WTO had in April said India violated rules in its dispute with the European Union, Japan and Taiwan over import duties on IT products.

‘Contrary, modify, or declare controversial’

The WTO has said, “India appeals, and requests the Appellate Body to reverse, modify, or declare the findings, conclusions, rulings and recommendations of the Panel as moot and without any legal effect.” It said India has sought review by an appellate body of “errors of law” and legal interpretation by the panel in its report.

The WTO Disputes Panel in its report on April 17 said that import duties imposed by India on certain information and technology products violate global trade norms. The ruling followed a dispute filed by the European Union, Japan and Taiwan against these duties at the WTO.

EU challenges import duty imposed by India

The European Union on April 2, 2019 challenged the imposition of import duties by India on a wide range of ICT products, for example, mobile phones and components, base stations, integrated circuits and optical equipment. The EU claimed that the measures appeared to be inconsistent with certain provisions of the World Trade Organisation. Later Chinese Taipei and Japan also joined the dispute.

According to WTO rules, a WTO member or members can file a case with a multilateral body based in Geneva if they believe a particular trade measure is against WTO norms. Bilateral consultations are the first step to resolve the dispute. If both the parties are not able to resolve the matter through consultations, either of them may approach setting up of a Dispute Settlement Panel.

The decision or report of the panel can be challenged in the Appellate Body of the WTO.

Interestingly, the Appellate Body is not functioning due to differences among the member states for the appointment of its members. There are already several disputes pending with this body. America has been obstructing the appointment of members.

“Given the lack of agreement among WTO members regarding the filling of Appellate Body vacancies, no Appellate Body Division is currently available to deal with appeals,” the WTO said in a statement.

India will have to abide by the decision of the appellate body

Even if the body, which is the final arbiter on such trade disputes, starts functioning now, it will take more than a year to take up India’s appeal. According to trade experts, if the Appellate Body also passes a decision against India’s support measures, New Delhi will have to comply and make appropriate changes to the way those measures are provided.

Last year, India appealed against a ruling by the World Trade Organization’s Trade Dispute Settlement Panel that said the country’s domestic support measures for sugar and sugarcane were inconsistent with global trade norms.

(With PTI inputs)

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