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International

INDIA-EU WTO Trade Dispute of 2019

20 Nov 2023 Zinkpot 202
  1. India has had the most contentious trade dispute with its second-largest partner, the European Union involving information communications technology (ICT) products since 2019.
  2. Brussels, the capital city of Belgium, dragged New Delhi to the WTO’s dispute settlement mechanism in 2019, challenging its levying of import duty on a wide range of ICT products including mobile phones and components, base stations, integrated circuits, and optical instruments. 
  3. It claims that the duty was inconsistent with global trade norms and was hurting €600 million worth of its tech exports to India. India introduced import duties of between 7.5% and 20% for a wide range of IT products. 
  4. India is on the verge of resolving this significant trade dispute with the European Union. Resolving the trade dispute is crucial for India’s push to boost electronic manufacturing and reduce reliance on China. 
  5. Ruling of this dispute could disrupt the flagship PLI scheme, emphasizing the importance of a resolution to safeguard India’s objectives in navigating global trade dynamics.
  6. The resolution of this grave issue reflects a positive trend in India’s trade relations, particularly as it follows the successful conclusion of disputes with the United States. 
  7. This signifies a step towards fostering smoother international trade relations and addressing concerns raised by key trade partners regarding their trade practices and tariffs.
  8. The imminent resolution of the dispute between India and the EU is prompted by India's concerns over losses due to EU restrictions on Indian steel. These restrictions involve fixed quotas for steel imports, triggering a 25 percent additional import duty beyond the set limits.
  9. India raised duties on ICT products to bolster electronic manufacturing through the production-linked incentive (PLI) scheme. This strategy has proven successful, with India's electronic product exports increasing despite a decline in overall goods exports this fiscal year.

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