The government reportedly aims to terminate the WTO’s 1998 tariff freeze on digital trade

The government is reportedly planning to urge the WTO to provide clarity on the definition of goods in e-commerce.

India is seeking to end a freeze on countries taxing electronic trade, a move that would allow tariffs to be imposed on anything from software downloads to video games.

New Delhi will ask World Trade Organization members to lift a moratorium on customs duties on electronic transmissions, according to a person familiar with the matter, who asked not to be identified as the discussions aren’t public. The issue will come up for discussion at the WTO’s ministerial meeting in Abu Dhabi in February.

The WTO has had a moratorium on customs duties on electronic transmissions since 1998, and members have extended the rule every two years. India and other developing nations like South Africa say the restriction leads to a loss of tariff revenue and affects their trade competitiveness.

The individual stated that India seeks the ability to levy taxes on goods embedded in digital trade. Furthermore, they mentioned that India will advocate for the WTO to clarify the definition of goods in e-commerce.

Global businesses have voiced opposition to the moratorium’s removal, urging WTO members to maintain the restrictions to aid the industry’s post-pandemic recovery and to safeguard supply chains.