India opposed customs duties moratorium continuation on e-com trade
Recently it was decided by the Government of India that India will oppose the continuation of electronic transmission customs duty at the World Trade Organization (WTO) meeting.
Since 1998, WTO member states have agreed not to impose customs duties on electronic transmission. Electronic transmission includes both goods (such as e-books and music downloads) and services.
The customs moratorium on electronic transmission has been extended from time to time. Currently, digital trade is dominated by technologically capable and developed countries. Therefore, the customs moratorium is entirely tilted in favor of the developed countries.
India has made joint applications several times to highlight the adverse impact of the moratorium on developing countries.
Due to this, developing countries are estimated to have an annual revenue loss of $10 billion in the form of tariffs. India suffers an annual loss of about 500 million dollars.
The digitization of earlier physical goods (online streaming instead of DVDs, e-books instead of printed books, etc.) has resulted in loss of revenue.
If investment in 3D printing technology is doubled, it could potentially reduce cross-border physical global trade by up to 40% by the year 2047. This may lead to further loss of revenue.
The end of the import duty moratorium is important for developing countries. With this, they will be able to make policies keeping in view their progress in the digital sector. Through this they will be able to regulate imports and get revenue.
However, proponents of the duty moratorium claim that imposition of customs duty will adversely affect the growth of the digital economy.
Source – The Hindu