India’s opposition to new e-commerce rules

E-commerce (Electronic Commerce) has emerged as a game changer in global trade that gives market access to both small and large firms however, it also faces challenges in the context of illegal trade and illicit financial flows. The World Trade Organisation (WTO) adopted the Declaration on Global Electronic Commerce on 25 September 1998 at the second Ministerial Conference held at Geneva. The Declaration directed the WTO General Council to establish a Work Programme to examine all trade-related issues arising from electronic commerce. The Work Programme on e-commerce states that ‘exclusively for the purposes of the Work Programme and, without prejudice to its outcome, the term electronic commerce is understood to mean the production, distribution, marketing, sale or delivery of goods and services by electronic means. The Work Programme has instructed four WTO bodies to effectively regulate this sector. The Council for Trade in Goods is required to examine various aspects of e-commerce relevant to the General Agreement on Tariffs and Trade (GATT) and other WTO Agreements affecting trade in goods. The Council for Trade in Services is to examine the treatment of e-commerce in the legal framework of General Agreement on Trade in Services (GATS). Similarly, the TRIPS Council examines the issues relating to intellectual property in relation to e-commerce and the Committee on Trade and Development is responsible to examine the development implications of e-commerce considering the economic, financial and development needs of developing countries.

On the other hand, the World Customs Organisation (WCO) also has a working group on e-commerce and four sub-groups, trade facilitation and simplification of procedures, safety and security, revenue collection and measurement and analysis. Moreover, the UN Conference on Trade and Development (UNCTAD) says that the value of online trade has jumped from $16 trillion to $22 trillion between 2013 and 2015. The WCO in its Study Report on Cross-Border E-Commerce in March 2017 says that the continuous increase in online trading has raised questions regarding regulation, consumer protection, revenue collection and national security. Therefore, new rules and guidelines have become inevitable which will focus on steps meeting such challenges.

A recent move by the European Union (EU), Canada, Japan, Australia etc. to negotiate new rules on e-commerce has been rejected by India. The draft proposal says that the Working Party shall establish its own procedures and shall report to the General Council. Japan is of the view that all existing WTO agreements shall apply to electronic commerce. The developed nations want to make permanent the current ban on customs duties on global electronic transactions which were suspended in 1998.

However, fearing that new rules may give unfair market access to foreign firms hurting the growing domestic e-commerce platforms, India has insisted that the countries should stick to the existing mandate as provided in the Declaration adopted in 1998. India’s opinion is that negotiation on new rules is premature at this stage. India has also linked the extension of moratorium on e-commerce transactions till 2019 to a similar renewal of moratorium on TRIPS non-violation and situation complaints. India’s views have been supported by large number of developing nations including the African Union.

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