Japan has dragged India to the World Trade Organisation (WTO) over the
import duties imposed on certain electronic goods, according to the global
trade body.
Japan has accused India of "continuously and systematically" raise import
duties on these goods after announcement of ''Make in India'' campaign in
September 2014, according to a communication released by the WTO
Tuesday.
It has also alleged that these import duties are in excess of bound rates, which
is a ceiling of import duty beyond which a WTO member country can not go.
Japan has sought consultations with India under the WTO''s dispute
settlement mechanism.
In a communication to the WTO, Japan said that has continued to adjust the
rates of various indirect taxes, including custom duties, in support of policies seeking to foster domestic production and value addition.
Since announcement of ''Make in India'' campaign in September 2014, India
has "continuously and systematically raised" import duties on a wide range
of products in various sectors, such as electronics systems, mining,
automobiles, renewable energy, defense manufacturing, food, processing,
automobile components, and textiles and garments, it has alleged.
These tariff treatments seem to have been implemented by the Government
of India under certain policies, aiming at further incentivising domestic
value addition, it added.
Through those policies, among its wide range of tariff increases, India
appears to subject a number of goods to import duties which are
"inconsistent" with its concessions and commitments under WTO norms, it
said.
"This request for consultation addresses some of the tariff treatments which
are, simultaneously, clearly in excess of bound rates and of substantial
interest to Japan," the country added.
Citing examples, it said that India applies 20 per cent duty on products like
telephones for cellular networks, which clearly "exceeds" the applicable
bound rate of zero per cent set forth in India''s schedule.
India also impose 10 per cent or 20 per cent duties on products like machines
for reception, conversion and transmission or regeneration of voice, images
or other data, "which clearly exceeds" the applicable bound rate of zero per
cent.
The other goods over which Japan has raised duty issues include telephones
for cellular networks, base stations, populated, and loaded or stuffed printed
circuit boards.Each of these "measures appears to be inconsistent" with
India''s obligations under a WTO norm, it added.
"Japan looks forward to receiving the Government of India''s reply to this
request for consultation and to agreeing upon a mutually acceptable date for
the consultations," it said.
As per the WTO''s dispute settlement process, the request for consultations
is the first step in a dispute. Consultations give the parties an opportunity to
discuss the matter and find a satisfactory solution without proceeding
further with litigation.
After 60 days, if consultations fail to resolve the dispute, the complainant
may request adjudication by a panel.
The bilateral trade between India and Japan the countries stood at USD 15.7
billion in 2017-18. Trade is highly in favour of Japan.
Source: The Business Standard, India Thursday, 16 May 2019