India decides to opt-out of WTO e-commerce talks over digital tax concerns: Report

Entrance of WTO buildingWTO

  • India has reportedly decided to not participate in the e-commerce discussions with the World Trade Organisation (WTO) scheduled to begin in March.
  • India is concerned about the proposed custom duties of electronic transmissions.
  • India’s own draft e-commerce policy that was released on Saturday could help strengthen the opposition against the WTO’s e-commerce rules.
India won’t be participating in the World Trade Organization (WTO) talks on e-commerce next month because of concerns over unfair market access to foreign players.


India also just came out with its own draft of the e-commerce policy on Saturday, but its main concern with WTO is the proposed custom duties on electronic transmissions.


A commerce department official told Business Standard, “WTO rules come into effect for all 164 members and need to be ratified by each, but for the first time a major decision has been taken without complete consensus among member nations. We will not encourage a multilateral platform to run, based on the interests of a few nations. Our policy will deal with concerns such as cross-border data flow.”


Most global e-commerce players haven’t been too subtle about the fact that India is a ‘strategic market’ for them.


India claims the new rules put forth by the WTO could provide unfair market access to foreign companies, something they’ve been working hard to deter despite opening the Foreign Direct Investment (FDI) pipelines.


Tax on tax


The draft e-commerce policy that the Indian government put out on Saturday favours not imposing any customs duties on electronic transmissions — basically any type of digital trade — which is in contradiction to the WTO’s e-commerce policy.

“With increasing digitisation, more and more products such as books, music, films, video games, etc. are being traded electronically. By agreeing to the permanent moratorium, countries with tariff schedules, which allow putting duties on these kinds of products, will give up these rights and lose revenues.”

India’s draft e-commerce policy


Even developed nations like the US have called for “non-discrimination in treatment of digital products” since it is “at the core of the digital trading system.” Other developed nations likes the Singapore and South Korea are also propagating that custom duties should not be imposed on the transaction of digital products.


On the other hand, China is in favour of the deal, according to officials. They told Business Standard that Alibaba, the Chinese multinational conglomerate, has partnered with the WTO and the World Economic Forum (WEF) to create an Electronic World Trade Platform (eWTP).


While data is at the heart of India’s new e-commerce, it can help India’s cause at the WTO by strengthening the opposition.


See also:
Amazon may have found a way around India’s new e-commerce rules


Amazon's newest challenger may be the richest man in Asia


Mukesh Ambani may be the surprise winner from India's new rules hurting Amazon and Walmart
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