India smacked for illegal tech import tariffs that hurt buyers and exporters everywhere

Is this the way to take China’s title as top tech manufacturer? Maybe yes, maybe no

The World Trade Organisation (WTO) has delivered a damning verdict on India’s tech import tariffs, ruling they’re out of order and must end.

The European Union asked the WTO to consider India’s practices way back in 2019, when it complained [PDF] that India charged duties on “certain goods in the information and communications technology “ – including mobile base stations, cabling, and power conversion products – at rates different to those set out in international agreements. Some kit that should not have attracted duties at all was taxed, regardless.

15 other nations joined the EU complaint, among them China, the USA, Singapore, and Russia. Taiwan joined in, too.

The WTO is not noted for moving rapidly and COVID-19 didn’t help , but the matter burbled along during the plague years and on Monday a report [PDF] emerged with a finding that India has indeed taxed imports it ought to have let cross its border without tariffs, and that doing so made life tough for countries that want to import.

Taiwan’s Office of Trade Negotiations celebrated the ruling as a sign it can use the WTO to defend its interests, and pointed out that US/China trade tensions mean tech manufacturers are moving from China to India to diversify their supply chains.

Yet India’s naughty taxes mean Taiwanese components landing in India can attract tariffs of up to 20 percent!

Those costs are passed on to buyers … if Indian buyers bother to pay the price.

India hopes they won’t: the nation’s “Atmanirbhar Bharat” policy calls for self-reliance in as many fields as possible, plus participation in more links of supply chains. Flouting world trade rules to give local players a leg-up is on-strategy for India.

India intends to appeal the ruling. Which will mean years more talk during which time India grows its tech manufacturing base further.

That growth is enormously popular: Apple CEO Tim Cook yesterday opened the iPhone-maker’s first retail store in India, an event accompanied by reams of coverage from local media celebrating the fact that Apple’s outsourced manufacturers are expanding their Indian presences. And yeah, thanks for the shiny shop selling stuff a tiny fraction of the population can afford.

Yes, The Register is aware that The Phantom Menace is the exemplar of how hard it is to make trade disputes entertaining. But there’s one more twist in this tale: India and Russia are reportedly talking about a free trade agreement. If such a deal were to be done, it would give India’s tech sector a significant market to target, and Russia a new way to acquire tech. It could also test the resolve of the UK, which is seeking its own free trade deal with Delhi that is felt to include easy access to Indian IT services. ®