WTO Nixes India's Tech Tariffs

A World Trade Organization (WTO) panel ruled in favor of the European Union, Japan, and Taiwan on Monday, rejecting India's tech tariffs after a trade dispute. The panel determined that India failed to implement its scheduled tariff commitments on certain electronic products under the General Agreement on Tariffs and Trade (GATT) 1994.

In a 145-page ruling circulated to the three complainants, the panel found that India made fundamental errors and did not properly implement its scheduled commitments. The decision could go into limbo if India appeals the panel ruling before the paralyzed Appellate Body (AB), which has been inoperative since December 2019 due to the United States' actions.

The complainants initially held consultations with India but were unable to reach an agreement. A panel was then established by the Dispute Settlement Body in June 2020. The core issue, as stated in the complaints, is that India applied tariffs on certain Information Technology Agreement products above the zero duty outlined in its WTO Schedule, violating core provisions of the scheduling commitments, particularly Articles II:1(a) and II:1(b) of the GATT 1994.

Japan further argued that India acted inconsistently with Article II:1(a) by granting exemptions through customs notifications subject to repeal at any time, creating a lack of foreseeability for traders.

The panel's conclusions included a rejection of India's assertions regarding its WTO tariff commitments, stating that the Information Technology Agreement (ITA) is not a covered agreement within the meaning of the WTO Agreement and the Dispute Settlement Understanding (DSU). The panel also declined to read aspects of India's WTO Schedule as invalid under Article 48 of the Vienna Convention.

Additionally, the panel found that India's tariff treatment of certain products was inconsistent with Articles II:1(a) and (b) of the GATT 1994. However, it noted that, as of February 1, 2022, India's tariff treatment of certain products had become consistent with the GATT 1994 provisions.