‘Our experience with the ITA-1 has not been encouraging’

India, and some other World Trade Organisation (WTO) members who are part of the Information Technology Agreement (ITA) group, have decided not to join negotiations on broadening the scope of the Information Technology Agreement (ITA)— citing protection of national interest.

Officials in the Commerce and Industry Ministry said that some signatories of the ITA such as the U.S., the European Union and Japan had proposed a broadening of the scope and product coverage of the ITA (it is being referred as ITA-2), on which customs duty would be bound at zero.

They said the proponents of ITA expansion had also prepared a consolidated list of IT products on which tariff reduction was being sought. These discussions were at a preliminary stage in the WTO, they added.

“India’s experience with the ITA-1 has not been encouraging as it has almost wiped out the IT industry from India. After examining the matter in consultation with the nodal Ministry i.e. Department of Electronics and Information Technology and other stakeholders, it has been decided, for the present, not to join the negotiations as it will not be in our national interest,” a senior Ministry official said.

Stating that India was an active participant in WTO trade negotiations, officials in the Commerce Ministry said that the U.S., Australia, EU, Canada, Costa Rica, Japan, South Korea, New Zealand, Hong Kong, Taiwan, Chile, Colombia, Switzerland, Pakistan, Peru, Norway, Panama, Mexico, Israel, Turkey and Iceland had been exploring a `plurilateral approach’ to a services agreement also known as International Services Agreement (ISA). This group had held several rounds of discussions to finalise the architecture and modality of the proposed agreement. “India is not part of these discussions, and these discussions are not part of the WTO Doha Round process,” the official said.

The ITA negotiations have been threatened by the reluctance of many members, including India, thereby defeating the concept of broader participation.