Piyush Goyal Proposes Custom Duty On Digital Exporters

Commerce and Industry Minister Piyush Goyal argued that the plan to further prolong the moratorium on customs charges on electronic transmission mainly benefits developed countries during the final round of negotiations at the ongoing ministerial meeting of the World Trade Organization on Wednesday.

Goyal argued against the proposals that would fundamentally alter the institutional structure of the WTO, “running the risk of skewing the system against the interest of developing countries,” and he pushed for the continuation of the special and differential treatment provisions already in place for developing members of the organization.

The negotiations on the major topics on the table continued till midnight with less than 24 hours until the conclusion of the 12th ministerial meeting.
Goyal urged the member nations to restart discussions on the Work Programme on e-commerce in line with its mandate to thoroughly examine all trade-related issues relating to international e-commerce while taking into account the needs of developing nations in terms of economic, financial, and development.

“I think this moratorium that has been continuing for 24 years needs to be reviewed, relooked at. The work program needs to be reinvigorated, and must provide regulatory space for developing countries to provide a level playing field to domestic SMEs in the digital sector while continuing to contribute to their economies,” said Goyal during his intervention.

When WTO members decided not to apply any customs duties on electronic transmission in 1998, the problem first came up. The moratorium has, however, been repeatedly extended in ministerial conferences, and a number of nations want to make it permanent. India objects to a prolongation on the grounds that developing nations have been losing money. India has said that the ban directly benefits developed countries because large tech and wealthy countries currently control the majority of the digital trade.

In his remarks during the thematic debate on the subject, Goyal said that the import of just 49 digital products between 2017 and 2020 cost developing nations potential tariff income of

“In fact, going forward one estimate says that 40% of cross-border physical global trade will be replaced by 3D printing by 2040. This will actually jeopardize domestic manufacturing capacities, which will be subjected to regular tariffs who would actually become totally uncompetitive,” said Goyal.

Up to $50 billion. According to him, developing nations bear the burden of this revenue tariff loss to the tune of 95%.

“Is it fair that the developing nations pay practically all of the costs associated with the moratorium for granting duty-free quota and quota-free market access, mostly to a very small number of players? Can we rationalise the fact that the big tech has gained money at the expense of emerging countries’ ability to produce resources and provide for their enormous population’s basic needs? By the way, it’s predicted that by 2025, this revenue loss will cost $30 billion annually. And consider the good that the community may accomplish with these resources, added Goyal.

He pointed out that while large exporters of digital goods are exempt from customs duties as a result of the moratorium, small exporters of physical goods like textiles, handlooms, clothing, and footwear—which are primarily based in developing countries—are subject to both domestic taxes and customs duties.