The European Union (EU) has dragged India into World Trade Organisation’s (WTO) dispute settlement mechanism over imposition of import duties on certain Information and Communication Technology (ICT) product, alleging breach of global trade norms. The EU is challenging the introduction of import duties of between 7.5 and 20 percent for a wide range of ICT products, such as mobile phones and components, as well as integrated circuits.
EU has requested consultations with the Indian government under WTO rules governing the settlement of disputes with regard to the tariff treatment that the country accords to certain goods in the ICT sector. EU said that despite its (India) earlier legally binding commitment in the WTO not to charge any duties on these products, India has been applying duties ranging from 7.5 percent to 20 percent. It also said that these import duties are therefore in clear breach by India of WTO rules. It indicated that the levies affect EU exports worth Euro 600 million per year. It added that technological innovation keeps companies competitive in the global market and supports hundreds of thousands of high value jobs across Europe.
In October 2018, India hiked the import duty on certain communication items, including base station and digital line systems, to 20 percent, in efforts to check widening current account deficit (CAD) by curbing imports. Seeking consultation is the first step of dispute settlement process as per WTO rules. If the consultations requested with both India do not result in a satisfactory solution, the EU can request that the WTO set up a panel in the case to rule on the issue raised.