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Government Said to Seek an End to WTO’s 1998 Tariff Freeze on Digital Trade

Government Said to Seek an End to WTO’s 1998 Tariff Freeze on Digital Trade

The government is also said to be planning to push the WTO to bring clarity on the definition of goods in e-commerce.

By Shruti Srivastava, Bloomberg | Updated: 8 February 2024 20:48 IST

Photo Credit: Bloomberg

The WTO has had a moratorium on customs duties on electronic transmissions since 1998

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Highlights

The government is said to be seeking an end to a 1998 WTO moratorium
The 26-year freeze limits tariffs on software and digital goods
It will also seek clarity on the definition of goods in e-commerce

India is seeking to end a freeze on countries taxing electronic trade, a move that would allow tariffs to be imposed on anything from software downloads to video games.

New Delhi will ask World Trade Organization members to lift a moratorium on customs duties on electronic transmissions, according to a person familiar with the matter, who asked not to be identified as the discussions aren't public. The issue will come up for discussion at the WTO's ministerial meeting in Abu Dhabi in February.

The WTO has had a moratorium on customs duties on electronic transmissions since 1998, and members have extended the rule every two years. India and other developing nations like South Africa say the restriction leads to a loss of tariff revenue and affects their trade competitiveness.

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India wants to be able to tax goods that are embedded in digital trade, the person said. It will also push the WTO to bring clarity on the definition of goods in e-commerce, the person said.

Global businesses have opposed the lifting of the moratorium, urging WTO members to keep the restrictions in place in order to help the post-pandemic recovery of the industry and to preserve supply chains.

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