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Canada, Thailand seek to join WTO consultations over India tariff issue

Thursday, April 25, 2019

New Delhi: Canada and Thailand Wednesday expressed interest to join consultations in a case filed by the European Union in the WTO against India's import duties on certain ICT products, including mobile phones.

On April 9 this year, the European Union (EU) dragged India into the WTO's (World Trade Organisation) dispute settlement mechanism over Indian import duties on nine categories of information and communications technology (ICT) products, including mobile phones and components, base stations, integrated circuits and optical instruments.

They have alleged that imposition of duties infringes WTO norms as India has committed zero per cent bound tariffs on these products.

While bound tariffs or duties refer to the ceiling over which a WTO member country can not impose import duty, the applied tariff is the duty which is currently in place.

The EU has alleged that despite India's legally binding commitment in the WTO that it would not charge any import duty on ICT products, India has been applying duties ranging from 7.5 per cent to 20 per cent.

"These import duties are therefore in clear breach by India of WTO rules. The levies affect EU exports worth 600 million euros per year," the EU has said.

According to WTO rules, seeking consultation is the first step of dispute settlement process. If the bilateral consultations requested by the EU with India do not result in a satisfactory solution, the EU can request the WTO to set up a dispute panel to pass a ruling on the matter.

The US, Singapore and Chinese Taipei had also expressed their interest to join consultations in this dispute on Tuesday.

As per the WTO rules, these countries would have to seek approval from India and the EU to join the consultation process.

Canada and Thailand in separate communications to the WTO have said they have substantial trade interest in these consultations as they are major players in the ICT sector.

Canada in its application said it has a substantial trade interest in these consultations.

Over 2016-2018, India's imports from Canada of these products averaged USD 40.2 million, it said, adding that during the same period Canada's global exports of all ICT products averaged USD 11.3 billion and accounted for 2.8 per cent of all Canadian exports. "Based on the foregoing, Canada respectfully requests that it be permitted to join the consultations in this dispute," it added.

Similarly, Thailand said India imported these items worth USD 318.2 million from the South East Asian country in 2018. "In particular, from 2015 to 2017, Thailand was India's largest supplying market for digital cameras, with imports from Thailand accounted for 34.5 per cent of India's total imports...As a result of this substantial trade interest, Thailand requests that it be permitted to join the consultations in this dispute," Thailand said.

A WTO member country can file a dispute if it perceive that another country's trade policies or actions are violating global trade norms.

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