Naysayer to decision-maker

INDIA SHOULD SUPPORT ITS CONTINUATION, WHILE PRESSING FOR CLARITY, FAIRNESS, AND SAFEGUARDS

- ARPITA MUKHERJEE

NDIA IS ONE of the global leaders in digitally delivered services and goods trade through e-commerce. The government has taken several measures to promote small and medium enterprise exports through online platforms at a time of global trade uncertainty. As the World Trade Organization (WTO) approaches its next Ministerial Conference (MC14) next week in Cameroon, debate intensifies on India’s position regarding the moratorium on e-commerce.

Should India secure its export interests and shift from a naysayer to a decision-maker, or continue aligning with South Africa and Indonesia, even if they shift positions for key markets like the US?

Discussions on e-commerce began in 1998 with the establishment of the Working Programme on E-commerce (WPEC) at the WTO. Members agreed to a “moratorium”—no customs duty on electronic transmissions. This has been renewed at each Ministerial Conference and was extended in MC13 until MC14 or March 31, when both the moratorium and WPEC are set to expire. Progress on trade rules within WPEC has been limited, raising questions about its survival.

What began as a temporary arrangement has, over nearly three decades, underpinned the expansion of the digital economy and India’s exports. India has opposed permanent moratorium, arguing that the definition of e-commerce is still evolving and duties cannot be permanently waived for a sector that remains undefined. Concerns have also been raised about tariff revenue losses for developing countries. Yet, India has struggled to build support, as many developing nations have joined the Joint Statement Initiative (JSI) on e-commerce. On July 26, 2024, 80 JSI members reached consensus on trade rules in a “stabilised text”. Key exceptions are India and the US, with Washington treating the moratorium as a bargaining tool in its trade agreements.

Stakes for a digital economy