E-com customs duty key to end big tech monopoly: India to WTO members

Goyal said that increasing participation of the developing countries in trade in electronic transmission continues to be a challenge due to the huge digital divide that exists between the developed and the developing countries.

Eighty six out of 95 developing countries are estimated to be net importers of digital products and only five big tech giants are controlling the market. They make super profits, have high market capitalisation, and do not allow new entrants in this space due to their financial clout and influence. Another estimate says 40 per cent of cross-border physical global trade will be replaced by 3D printing by 2040.

The minister said that while small exporters of physical products like textiles, handloom, clothing, footwear, mainly based in the developing countries, are facing both domestic taxes as well as customs duties, the big digital exporters are being exempted from custom duties due to the moratorium.

“This will actually jeopardise domestic manufacturing capacities which will be subjected to regular tariffs, which would actually become totally uncompetitive. I think this moratorium which has been continuing for 24 years needs to be reviewed, relooked at,” Goyal was quoted as saying by a news agency.

During 2017-2020, developing countries reportedly lost potential tariff revenue of possibly upward of $50 billion only on import of 49 digital products, he said. Ninety five per cent of this revenue tariff loss is borne by the developing countries, Goyal said.

“Is it fair that the cost of the moratorium is almost completely borne by the developing countries for extending duty free quota, quota free market access, largely for a very few players. Can we justify this wealth accumulated by big tech at the cost of the ability of the emerging markets to generate resources, to meet the basic needs of their large population?” the minister asked.

By 2025, this revenue loss is estimated to be $30 billion a year.

Fibre2Fashion News Desk (DS)