India is readying to fight a bitter-battle on global rules for e-commerce trade at the World Trade Organization (WTO) with close to 70 countries siding with the US to have a multilateral mechanism. India is evidently under pressure at most global gatherings. With only South Africa on its side, the government had to drop a mention of the issue in a declaration issued after the mini-ministerial meeting. In the draft prepared by Indian officials, it talked about restraining from plurilateral agreements, where a group of countries and not the entire WTO membership came together for a deal. US, Europe, Japan and China are already seeking some sort of rules that will benefit the likes of Amazon, Alibaba and Uber by opening doors to markets across the globe.
So far India, South Africa and Saudi Arabia have been the naysayers. Government sources, however, said that at a recent G-20 meeting, even South Africa indicated that there is little support for blocking an international framework on e-commerce or digital trade, with a large bloc from the African continent “beginning to see the gains” that may accrue to them.
Government officials said India is going to hold firm as very little benefit accrues to consumers and domestic players. “Even if it is 160 countries in favour of global e-commerce rules, India will seek to stop it,” said a source. The absence of a domestic policy as well as free data flow being pushed by the US and Europe stems India’s concern. India fears that new rules could provide the pretext for unfair mandatory market access to foreign companies. In addition, the government doubts that the architecture being proposed may force developing and least developed countries to lower duties and ease restrictions on services trading, something that was being done autonomously.
In fact, the European Union in its submission to WTO, has sought an expansion of the Information Technology Agreement (ITA) something that India has sought to avoid and has not signed ITA-2. Signing ITA-1 is believed to be a mistake by many policy makers as it restricted the government’s ability to impose import duty on several electronic goods. The US and EU members have openly sought removal of data localisation requirements, although they recognise that privacy needs to be protected. Already, fintech companies and the likes of Amazon and WhatsApp have been complaining about the requirement with the Trump administration backing them. On its part, China has been less ambitious in its proposals.
