WTO delays ruling on India’s import duty dispute at India’s request

The WTO has postponed the ruling on New Delhi’s import duties on IT products until October-end. The two sides (India and Taiwan) had requested a delay in considering the panel reports until October 28, 2024, to assist in resolving the disputes.

The WTO’s dispute settlement body (DSB) has extended the deadline until October-end for India and Taiwan to resolve their dispute over tariffs on certain IT products, including telephone handsets. This extension, decided in the DSB meeting on July 26, came after a joint request from both countries on July 15. 

The two nations had earlier been given time until September 19, 2023, then December 18, 2023 and then April 26, 2024 to resolve the dispute

Taiwan initiated the dispute in September 2019, challenging India’s tariffs on specific information and communications technology goods, claiming they violated WTO rules. Following Taiwan’s complaint, the US, Singapore, Canada, and the European Union joined the dispute. 

In June 2020, a dispute settlement panel was established, which issued an adverse ruling against India in April 2023, recommending that India reduce its tariffs. (In its report, a dispute panel of the WTO on April 17, 2023, said import duties imposed by India on certain information and technology products violate global trading norms.)

The ruling followed a case filed by the EU, Japan and Taiwan against these duties in WTO.

The core of the dispute lies in India’s tariffs on telephone handsets or mobile phones. India contends that these products fall under the WTO’s Information Technology Products (ITA-2) agreement, to which it is not a signatory. India is only a participant in ITA-1, signed in 1997, which does not mandate the elimination of customs duties on these products. 

After the panel’s adverse ruling, India had a 60-day window to appeal or comply with the order. Instead, both parties opted for bilateral consultations, which began in May of the previous year and have already seen three deadline extensions.

Under WTO rules, a member country can file a case if it believes a trade measure violates WTO norms. The initial step for resolving a dispute is bilateral consultation between the parties. If these consultations fail, either party can request the establishment of a dispute settlement panel. The panel’s ruling can be appealed to the WTO’s appellate body. However, the appellate body is currently non-operational due to disagreements among member countries over appointing its members, leading to several unresolved disputes.