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India Hesitant To Join WTO Negotiations To Chalk Out Ecommerce Policies

India Hesitant To Join WTO Negotiations To Chalk Out Ecommerce Policies

India introduced its draft ecommerce policy on February 23

The WTO charges zero duty on ecommerce

WTO discussions are being supported by 49 countries

India has reportedly told the World Trade Organisation (WTO) during a delegations meeting that it will not join the negotiations to develop trade rules on ecommerce, arguing that it is an idea whose time has not yet come. It also argued that the discussions by some countries are not consistent with the mandate of the multilateral trading system.

With India’s ecommerce market reaching $200 Bn, the Indian government has now launched its draft ecommerce policy to regulate the sector. It is however challenging the World Trade Organisation (WTO) and its 49-member countries which are supporting trade regulations for ecommerce.

The WTO has been hosting discussions on ecommerce across the globe while at present, the Geneva Declaration has formed the basis of zero duty on electronic commerce from May 1998 to December, 1999. The Third Ministerial Conference of WTO at Seattle could not review the work programme relating to ecommerce.

Since then, no decision has yet been taken on the issue of extending the period of zero duty on ecommerce. And this is where clashes of opinions are happening in the global ecommerce plans.

India emphasised that it will not join the negotiations currently as it is working on a national ecommerce policy, which will be finalised soon. “This policy will inform our international engagements on this important subject,” India said.

India has in its submission also sought reforms of the multilateral body and resolution of outstanding issues urgently.

“The top most priority is to protect and preserve the system, fix the Appellate Body issue so that the independent dispute settlement mechanism… can function effectively,” the Indian trade envoy said. He also cautioned against debating contentious issues like differentiation, which could be divisive and further reduce trust within the organization.

India is not the only one doubtful of WTO restrictions as recently Civil society organisations — including development advocates, consumer and environmental groups from developed and developing countries — called the US government to reject WTO talks on ecommerce.

The letter noted that a few global players continue to dominate digital trade, and that “threats to economic sovereignty and future development prospects from premature digital liberalisation will be greatly amplified if the rapidly evolving digital economic space is governed by rules that were developed by transnational corporations (TNCs) for their own profit-making around the world, as they are proposing in the WTO.”

In India, the ecommerce market is largely dominated by Amazon, Walmart-owned Flipkart with latest entrant being Mukesh Ambani’s Reliance. The government’s draft ecommerce policy proposed regulations on cross border data flows and enabling sharing of anonymised community data.

The policy is focusing on six broad issues in the ecommerce sector — data, infrastructure development, ecommerce marketplaces, regulatory issues, stimulating domestic digital economy, and export promotion through ecommerce.