This follows India’s resolution of all seven trade disputes with its primary trade partner, the United States, at the World Trade Organization (WTO)
India is on the verge of resolving a long-standing trade dispute with the European Union (EU) over information communications technology (ICT) products, according to a senior government official. Following the settlement of all seven trade disputes with the United States at the World Trade Organization (WTO), this development marks a significant stride in India’s trade relationships.
The EU had taken India to the WTO’s dispute settlement mechanism in 2019, challenging the imposition of import duties on various ICT products. These included mobile phones, components, base stations, integrated circuits, and optical instruments. The EU argued that these duties violated global trade norms and adversely affected 600 million worth of its tech exports to India. The resolution is crucial for India’s ambitions in electronic product manufacturing, a strategic sector aimed at reducing reliance on China. An adverse ruling could have disrupted the Production-Linked Incentive (PLI) scheme.
The impending resolution follows India’s communication to the EU about facing losses due to the EU’s restrictions on Indian steel. This pertained to specific quotas and additional import duties of 25 percent, aiming to prevent the diversion of exports from the US market to the EU market amid controversial steel tariffs during the Donald Trump administration.
The potential resolution is expected to stem from the Trade and Tech Council (TTC) meeting between India and the EU, addressing outstanding issues in the absence of a functional dispute resolution mechanism at the WTO. The TTC assumes significance, as it is a unique platform the EU has only with the US, aiming to build technology partnerships amid tensions with China.
India, through its Production-Linked Incentive scheme, imposed higher duties on ICT products to boost electronic manufacturing, a strategy proving successful as electronic product exports from India rise while overall goods exports decline. India had earlier contested the WTO dispute resolution body’s order in favour of the EU, questioning its legality and asserting that the legal standard for determining contribution through conduct must consider notice, which was lacking in this case.