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WTO moratorium on customs duties for e-comm trade must end: Experts

However, India and South Africa have opposed the moratorium of customs duties on electronic sale of online contents.

Screenshot 2024 01 22 152228NEW DELHI: Ahead of the 13th Ministerial Conference of the World Trade Organization (WTO) to be held from February 26-29, 2024 in Abu Dhabi, United Arab Emirates, experts have advised the Indian government to oppose the extension of moratorium on customs duties on online deliveries of music, e-books, films, software, and video games.

Analysts say that ending the moratorium should be a key priority of the Indian government during the conference. “As the longest-running moratorium in WTO history, India must argue that its continued extension without concrete progress on resolving underlying concerns is detrimental to developing countries seeking to leverage digital trade for development,” says Ajay Srivastava, founder of the think tank Global Trade Research Initiative.

The moratorium has been in place since 1998, and 105 countries support the moratorium saying that the moratorium maintains certainty and predictability for businesses and consumers, especially during the pandemic.

However, India and South Africa have opposed the moratorium of customs duties on electronic sale of online contents. The two countries have referred to data from the UN Conference on Trade and Development that claimed that the moratorium leads to a global loss of $10 billion every year in potential customs duties, with 95% of this loss borne by developing countries. The two countries have also sought more clarity on what exactly constitutes electronic transmission.

According to trade experts, India must emphasise the need for policy space to enact regulations and domestic support measures for its burgeoning e-commerce sector.

This includes the ability to levy customs duties on electronic transmissions to generate revenue and foster a level playing field for domestic businesses.

India must also, say experts, urge that e-commerce discussions should go beyond the moratorium and cover broader issues such as data privacy, cybersecurity, and consumer protection. India should also advocate for a comprehensive approach to e-commerce regulation that considers all related aspects.

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