India to seek import duty on trade of digital goods

NEW DELHI:  Citing that the country is losing $500 million every year, the Indian government is planning to oppose any move to extend the non-imposition of import duty on online trade of digital goods at the 12th Ministerial Conference of the World Trade Organisation (WTO) in June.

The government on Tuesday said it will demand the removal of the moratorium on customs duty on the transfer of digital goods like music and video downloads, video games, software, etc. Quoting estimates made by UNCTAD, commerce ministry officials have said India could be losing $500 million annually as it could not impose import duties on such goods.

A commerce ministry official said the decision to not impose customs duty on electronic transmission was taken by the WTO in 1998 when the digital transfer space was at its nascent stage. However, over the years due to technological advancement, there has been a rapid rise in the online trade of digital goods.

The Indian government, along with South Africa, in November ministerial conference had made joint submissions highlighting the adverse impact of the moratorium on developing countries and has suggested reconsideration of the demand by some members to make it permanent. As per the submission made by India and South Africa, of the $10 billion annual revenue loss suffered due to the non-imposition of import duty on digital goods, 95% is borne by developing countries.