According to media reports, this big dispute between India and EU is going to be resolved soon. On this, a meeting was held in the high level Trade and Tech Council (TTC) formed between India and EU where the solution was discussed.
The dispute is regarding Information Communications Technology (ICT) products. Fears were being expressed that this could have an impact on India’s efforts to promote the production of electronic goods within the country.
What is the reason for the fight?
The dispute started in 2019 when the EU complained against India in the WTO. India had imposed import duty on ICT products like mobile phones, their components, base stations, integrated circuits and optical equipment and the EU had challenged this duty.
The EU claimed that the duties were not in line with global standards and were hurting its tech exports worth Rs 54 billion sent to India. The EU challenged this duty under the WTO’s dispute settlement system.
India had imposed higher duty on ICT goods so that it could promote the production of electronic goods within the country. Later, for this, the Government of India also started the Production Linked Incentive (PLI) Scheme.
Apart from this, India told the EU that the Union has imposed some restrictions on the import of Indian steel, due to which India is also facing similar losses. The EU had set a limit for steel import, beyond which 25 percent additional import duty was being imposed.
How was the solution?
The WTO ruled in favor of the EU in April 2023 and said India’s tariffs violate India’s commitments under multilateral trade rules. After this, India raised questions on the validity of this order itself.
Then both the parties sought time from WTO to resolve the dispute through talks among themselves. First time was given till September 19 and after that three more months were given. Now it is being claimed in media reports that both the parties are moving towards a mutual agreement in this matter.
TTC is being given credit for this possible solution. Before India, EU had TTC only with America. Through such processes, the EU is looking to partner with like-minded countries in the field of technology amid increasing tensions with China.
The union is already India’s second largest trading partner. India is gradually moving towards settling all its pending disputes in WTO. Recently it also resolved its seven pending disputes with America. However, like the disputes with EU, India’s disputes with Japan and Taiwan are still going on.
