Exclusive | India bats for e-commerce at WTO meeting, says framing rules would disadvantage developing nations

India at a meeting of the World Trade Organization's (WTO's) General Council, held last week, has expressed concerns over formulating rules on e-commerce at this point, as India is of the opinion that it may not help providing a level-playing field to developing countries.

"Under the JSI (Joint Statement Initiative) on e-commerce, some countries like Australia and Singapore have been leading the demand to form rules on the sector. New Delhi has conveyed that member nations should consider that making rules at this point might discourage innovation and creativity and could leave the field uncontested to established names," a senior official told Moneycontrol.

India has also conveyed the Work Programme on E-commerce (1998) needs to be reviewed regularly and it should be a standing committee agenda item at the meetings. The scope of the moratorium on customs duties on electronic transmissions needs more clarity, India has conveyed, the official said.

An agreement was reached in 1998 on the WTO e-commerce moratorium. As per this, member countries cannot impose customs duties on electronic transmissions. Usually every two years, this is extended at the Ministerial Conferences. Recently, India and South Africa questioned its continuous extension. "The related revenue loss has been significant to developing nations. And it's more pinching during Covid-19 pandemic, as e-transmissions have shown a significant uptick," the official said.

Imports of electronic transmissions like printed matter, video games, movies, and music has seen a significant rise in India. According to a research paper published by the United Nations Conference on Trade and Development (UNCTAD) last year, India’s loss of potential taxes because of the continuous extension of the moratorium was estimated at $500 million.

In January 2019 on the sidelines of the World Economic Forum meet at Davos, as many as seventy-five countries agreed on informal talks on fixing global e-commerce rules. India has opposed any such move to set e-commerce rules outside the ambit of WTO and has insisted that the current multilateral programme on e-commerce under WTO should be taken to its logical conclusion.

India's point is that any such discussions can undo progress on many pending issues on the Doha Development Agenda. If e-commerce talks have to happen, it should be embedded in the WTO’s original digital trade agenda of 1998.