Tariffs on 201 IT products to be cut under WTO pact

The World Trade Organization has recently witnessed significant progress with two path-breaking deals – the Trade Facilitation Agreement adopted in November 2014 and an agreement on information technology (ITA), which was finalized on 24 July 2015.

The original ITA was finalized on 13 December 1996, at the first WTO ministerial conference, held in Singapore. It led to the elimination of import duties on products which in 2013 accounted for an estimated US$1.6 trillion in trade. Initially subscribed to by 29 WTO members, the ITA now covers 81 WTO members (including India), which account for approximately 97% of world trade in IT products.

In the recently concluded deal, the ITA seeks to extend duty-free treatment to 201 additional products, including multi-component integrated circuits, GPS navigation systems, medical devices, software media, machine tools for manufacturing printed circuits, telecommunications satellites and touch screens.

The parties to the deal have agreed to reduce customs duties on these products in four equal annual instalments, starting on 1 July 2016 and ending on 1 July 2019. The deal also provides for extended staging of reductions for some sensitive products, which may be carved out in exceptional circumstances.

Sanjay Notani is a partner at Economic Laws Practice. This article is intended for informational purposes and does not constitute a legal opinion or advice.

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