India’s stance on data transfers at WTO spooks semiconductor industry giants
- Recently, a global consortium of semiconductor industry groups appealed to India to reconsider its plan to impose duties on cross-border digital e-commerce and data transfers.
The Background
- This plea comes ahead of a World Trade Organization (WTO) meeting in Abu Dhabi, where ministers from various countries will discuss trade-related issues.
- This includes extending a moratorium on applying duties on electronic transmissions, in place since 1998.
- Developing nations like India, South Africa and Indonesia are set to oppose efforts by the US and Europe to extend the moratorium.
Concerns Raised
- The collapse of the moratorium could result in tariffs on digital e-commerce and chip design data transfers, exacerbating chip shortages and raising costs.
- The World Semiconductor Council (WSC) highlights that such tariffs would hinder India's semiconductor industry growth and its efforts to attract investment.
- Especially considering India hosts over 20% of the world's semiconductor design workforce.
- India's stance to renew the moratorium is seen as crucial for signalling a favourable investment climate to semiconductor companies.
India's Perspective
- India argues that physical goods, once governed by traditional tariff rules, should now incur duties due to their availability as digital services.
- Developing nations are facing massive loss in potential revenue with such imports from developed countries on the rise.
Prelims Takeaway
- E-commerce
- World Trade Organization (WTO)
- World Semiconductor Council (WSC)