India invokes EU steel tariffs to defend its electronics tariffs

A senior Indian delegation is set to tell the EU that New Delhi’s move to increase tariffs on electronic goods – the subject of a dispute between the two sides – is no different from the measures Europe took to protect its steel industry from Chinese imports to protect .

New Delhi’s justification comes at an ongoing EU-India Trade and Technology Council (TTC) meeting in Brussels, attended by Foreign Minister S Jaishankar, Trade and Industry Minister Piyush Goyal and Information Technology Minister Rajeev Chandrasekhar.

The meeting started on Tuesday.

The EU says India should apply a zero tariff to information and communications technology products such as mobile phones, under its World Trade Organization commitments, and has referred the matter to a WTO dispute settlement body, which ruled in favor of the EU.

But India will argue in Brussels that its move is similar to the tariff barriers the EU has put in place to protect its steelmakers.

“Our argument will be that Europe has imposed tariff quotas (TRQ) on Chinese steel to protect its interests. India also has concerns in the case of mobile phones. India reacted in the same way as Europe. And India needs this political space. We can discuss any concerns of the European industry, but the current policy is in India’s interest,” said a government official who was aware of the discussions.

The TRQ is a tariff barrier that allows the EU to restrict imports of a range of products that it believes affect its steelmakers. The ban applies to imports from China, Russia, South Korea, Turkey, Ukraine and India. As with the EU, Indian customs primarily target Chinese imports – more than 90% of Chinese electronics coming into India consists of integrated circuits, which are used in most electronic items. The EU says up to €600 million of its technology exports to India are affected by Indian tariffs each year. The EU addressed the WTO panel on this issue in 2019. India’s electronic goods exports rose 26% to US$2.1 billion in April this year, compared to US$1.67 billion in April 2022.

The talks at the TTC are important because the WTO’s Court of Appeal is non-functional and a settlement of the tariff issue could prevent tensions between India and the 27-nation bloc. The EU and India are in the middle of negotiations to conclude a free trade agreement. At the same time, there is disagreement over an EU proposal to impose a “carbon tax” on certain imports from India.

The establishment of the EU-India TTC is significant due to its focus on strategic technology. As geopolitical competition for technology intensifies, nations are scrambling to forge new technology partnerships with like-minded countries.

Last week, Mint reported that India is in talks with the UK for a similar strategic technology partnership. In 2022, India and the US announced a Critical and Emerging Technologies Initiative that aims to bring the defense and science ecosystems in both countries closer together.

Also this month, New Delhi and Washington will hold the first edition of their Strategic Trade Dialogue on High Technology Export Controls.

India has 60 days to respond to the WTO Disputes Advisory Council’s decision. India plans to take the case to the WTO’s Court of Appeal, which is currently non-functional.

Should the WTO’s Appellate Body rule against India, it could impact the country’s fast-growing electronic manufacturing and exports – which, given its strategic nature, is one of India’s key areas of focus.

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