Central India Nears Resolution of Trade Dispute with EU on ICT Products

India is nearing a resolution of its major trade dispute with the European Union (EU) regarding information communications technology (ICT) products, according to a senior government official. This development follows India’s successful settlement of seven trade disputes with the United States at the World Trade Organization (WTO).

In 2019, Brussels took India to the WTO’s dispute settlement mechanism over import duties on various ICT products, contending that the duties were inconsistent with global trade norms and were impacting €600 million worth of EU tech exports to India. The resolution of this dispute is crucial for India’s efforts to enhance electronic products manufacturing and reduce dependence on China. It could also impact India’s flagship production-linked incentive (PLI) scheme.

India has raised concerns about losses due to the EU’s restrictions on Indian steel imports, which were implemented to prevent export diversion from the US market. A potential mutual settlement is expected following a high-level Trade and Tech Council (TTC) meeting between India and the EU, as they seek to address outstanding issues without a functional dispute resolution mechanism at the WTO.

India has raised tariffs on ICT products to boost electronic manufacturing under the PLI scheme, leading to growth in electronic exports despite a decline in overall goods exports. Earlier this year, India challenged a WTO dispute resolution body decision in favor of the EU, arguing that the legal standard for determining contribution through conduct requires prior notice of the error.