GS Paper III

News Excerpt

India's challenge of the WTO panel ruling on ICT import duties is considered a good strategy for several reasons.

Issue involved:

• India faced a WTO panel ruling against import duties on certain Information and Communication Technology (ICT) products, including smartphones. It decided to challenge the ruling.
• The EU, Japan, and Chinese Taipei appealed to the WTO against India's progressively imposed import duties on certain ICT products.
• India was unable to reach a mutually agreeable solution (MAS) with Brussels on the WTO dispute as an overall rollback in import tariffs on the items would hurt the country’s PLI scheme.
• India approached the Appellate Body only after it could not arrive at a MAS with the EU.
• India is still in talks with Chinese Taipei to find a resolution to the dispute, indicating the complexity and ongoing nature of the issue.

Benefits of India’s challenge of WTO panel ruling

• Timing Advantage: The WTO Appellate Body is currently dysfunctional due to the non-appointment of members, rendering all appeals void. By challenging the ruling at this juncture, India buys time and effectively delays any potential adverse consequences.
• Strategic Use of Appellate Body Absence: The absence of a functioning Appellate Body allows India to maintain its stance without the risk of facing immediate consequences. This strategic move leverages the current state of the WTO's dispute resolution mechanism to India's advantage.
• Protecting PLI Scheme: India's refusal to roll back import tariffs is rooted in the the need to protect its Production-Linked Incentive (PLI) scheme. Any overall reduction in import tariffs could undermine the competitiveness of the scheme, which aims to attract investments in the manufacturing of ICT items, including smartphones.

Conclusion

India's challenge to the WTO ruling on import duties reflects a strategic move amid the dysfunctional Appellate Body. Balancing trade interests and the PLI scheme, negotiations with the EU highlight complex international dynamics in play.

Mains PYQ

Q. WTO is an important international institution where decisions taken affect countries in a profound manner. What is the mandate of WTO and how binding are their decisions? Critically analyse India’s stand on the latest round of talks on Food security. (UPSC 2014)