India will resist US and European plans to prolong a global ban on cross-border ecommerce charges at the World Trade Organisation conference next week, fearing a continuous massive revenue loss, news agency Reuters reported.
New Delhi, South Africa and Indonesia want poor countries to be able to tax cross-border electronic communications and India will advocate for this at the WTO’s Ministerial Conference in Abu Dhabi, which begins on Monday, it said.
According to the report, the Indian officials have expressed their opposition to the extension of a global moratorium on electronic commerce duties, asserting that the current regulations do not adequately address the evolving nature of digital services.
It highlighted the need for a comprehensive discussion and resolution of issues related to the taxation of digital goods and services before considering an extension of the moratorium.
In 2022, members of the World Trade Organization (WTO) reached a consensus to extend the existing moratorium on ecommerce duties. This agreement, supported by major economies such as the United States, Britain and the European Union, aimed to safeguard the global ecommerce sector from potential disruptions by maintaining the status quo. The fear was that allowing the moratorium to lapse could jeopardise the ongoing recovery of the global ecommerce market.
However, India has taken a divergent stance, emphasising the changing landscape of trade where physical goods, like books and videos, are now available as digital services. The country argues that traditional tariff rules should be reevaluated in the context of this digital transformation, with a focus on imposing duties on these digital services.
The commerce ministry, leading India’s negotiations at the WTO, refrained from offering a comment on the matter.
According to estimates by the WTO, developing countries incurred a substantial loss of around USD 10 billion in customs duties in 2017 due to the import of e-commerce products from developed nations. India alone faced a nearly USD 500 million loss in customs duties during that period.
With the surge in electronic transmissions, including movies, digital books and video games, India contends that the potential revenue loss has increased significantly since 2017.
