China files case with WTO against India’s tariff on IT products

China has filed a case with the World Trade Organisation against India's tariffs on information and communications technology products. Reports quoting a statement of the Chinese commerce ministry released on Friday said that the Indian tariffs "give India's domestic industries an unfair competitive advantage, harm Chinese interests" and were in violation of WTO rules.

The commerce ministry of China has said that China urged India ‘to abide by its relevant commitments at the WTO and immediately correct its erroneous practices".

Indian consumer is heavily dependent on Chinese information communication technology products as these Chinese goods are available at a relatively more affordable price. China fears that the tariff will increase the prices, making the market more difficult for China.

India imposed tariffs up to 20% on various Chinese information communication technology (ITC) products, including mobile phones and telecom gear, starting around 2014. Tariffs keep increasing from time to time, resulting in disputes at the World Trade Organisation with the European Union, United States and China. The trading partner nations claim that India violates its zero-duty WTO commitments under the Information Technology Agreement. Indian on the other hand, says that these goods don’t come under the Information Technology Agreement.

Though the increase in Indian tariff is for all the trading partner countries, it majorly affects China as China has a sizable Indian market for these products. This primarily is the reason why China feels the brunt, and has moved to WTO.

The Indian tariff is aimed at boosting local information and communication technology industries as India is pushing its production under its ‘Make in India’ drive.

On the other hand, in another development, India a couple of days back reformed its business visa regime to aid easy movement of foreign engineers and technicians. The reformed visa regime is expected to boost Indian firms that engage Chinese professional in manufacturing services.

Areas where visa of Chinese professionals has been eased include factory installation, commissioning, maintenance, and production.

Indian business predominantly depends on Chinese professionals for such services. As such business deploy Chinese machinery, Chinese professionals are required in India to train local staff in such factories.

After the China-India clash in 2020 at Himalayan borders, Chinese visits to India had been nearly stopped as visa rules had been made very tough.