The proposal, backed by eighteen others, seeks to move beyond the carrier medium (bits and bytes) to explicitly cover transmitted content, including films, software, and music
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REUTERS
The US is pressing for a permanent moratorium or ban on customs duties on electronic transmissions at the upcoming 14th Ministerial Conference (MC14) of the World Trade Organisation in Cameroon. But India is digging in its heels, calling for a complete rethink of the long-standing moratorium, sources said.
New Delhi has argued that the duty-free regime, first agreed in 1998 and renewed at every Ministerial Conference of the WTO since, has tilted the playing field in favour of a handful of developed economies that dominate digital exports, while depriving developing countries of a growing and potentially significant source of revenue. As a net importer of digital products, India maintains that the fiscal burden of the moratorium falls disproportionately on the Global South.
“India argued its case strongly at a recent WTO discussion dedicated on e-commerce and underlined that the growth of e-commerce or gains from e-commerce should not be conflated with the so-called benefits of the moratorium,” a source tracking the matter told businessline.
In a draft Ministerial declaration circulated at the WTO recently, Washington demanded not only that the moratorium be made permanent, but that its scope be expanded. The proposal, backed by eighteen others, seeks to move beyond the carrier medium (bits and bytes) to explicitly cover transmitted content, including films, software, and music.
“Customs duties can be charged on the carrier medium (the bits and bytes) and/or the content (the value of the movie). One estimate is that the content is 80 per cent of the value of a recorded CD (e.g. of movie/song/ebook/computer game/computer software etc). The tariff revenue loss would then be much greater than if the moratorium merely applies to the bits/bytes,” Sanya Reid Smith from Third World Network stated. Giving up the right on taxing AI services in the future could compound these losses.
An earlier study by inter-governmental body South Centre estimated that developing countries and LDCs together lost around $56 billion between 2017–2020 in revenues due to the moratorium which has been extended continuously every two-years since 1986. India alone has lost roughly $500 million annually, and this is believed to have increased with rising digital imports.
Interestingly, while the WTO has historically extended the moratorium on e-commerce tariffs in tandem with the moratorium on the TRIPS non-violation moratorium (preventing disputes where no specific rule was broken), the US has made no mention of it.
The matter is set to take centrestage at the WTO MC14, that will take place March 26-29 in Yaoundé, Cameroon, presenting a critical test for India’s negotiators.
Other sponsors of the US proposal on permanent moratorium include Japan, Singapore, Argentina, South Korea, Mexico, Norway, Switzerland, Israel and El Salvador.
Published on March 17, 2026
