On the 1st of August 2019, the US had consulted India regarding the import duties on ICT products such as mobile phones, base stations, etc. According to the United States, the bi-lateral consultation failed which forced them to plead for the formation of a dispute panel at WTO (World Trade Organization). WTO constituted a 3 member panel including L Blumberg, Serge Pannatier, and Jose Buencamino concluded that India can no longer give export subsidies since its GNP (Gross National Product) per capita income has already crossed $1000 per year.
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The good news is that India can challenge the verdict of this panel by appealing to the appellate trade body which is considered to be the apex court for international trade issues and disputes. However, if the appellate sticks to the decision of the panel then India will have to stop its current schemes related to export promotion.
The US government had highlighted this issue in 2018 where the authorities stated that India should discontinue its export promotion programs since developing countries with GNP of $1000 are not entitled to it. The thing that can go against India is that it has already made two announcements of stopping the export subsidies in 2015 and 2017 respectively.
However, despite these announcements, the India government has continued these subsidies. This will provide a good opportunity for the United States as they can pressurize the Indian government to give them free access to the Indian market to sell their medical accessories and products. The functioning of the appellate body can be suspended in December 2019 and this will increase the troubles for the Indian government since they can no longer file a plea in the apex court.
The US officials said that the ICT goods of $490 million were exported to India in 2018 and India did not follow its commitment to not levy duty on these exports. The ICT goods are exported by countries like Canada, China, Singapore, EU (European Union), Thailand, and Taiwan as well to which India levies import duties. Even the EU has challenged India’s import duties and if the other countries also join it then it means that India might suffer heavy losses in the global trade henceforth. This is terrible news for the Indian government which is already facing the heat due to ongoing economic slowdown.