WTO to review e-commerce and farm policies of India in January 2021

India’s e-commerce and farm policies will be reviewed in the trade policy review at the World Trade Organisation scheduled for January 2021.

As per the official, the government is bracing for a series of questions on the proposed digital tax, e-commerce policy, invoking the peace clause for exceeding the subsidies for rice, higher duties on IT products as well as its farm policies regarding sugar, pulses, and lentils.

The previous trade policy review of India took place in 2015. As per the official of the government, changes in the Intellectual Property Rights Laws and Goods and Services Tax are also likely to draw attention at the trade review, which is a mechanism of scrutinising the trade policies of the WTO members.

What can be discussed during the WTO review?

Various aspects of Indian government policies related to IPRs, agricultural policies, and e-commerce that were not discussed during the last review are expected to come up. The new developments on the phytosanitary and sanitary measures as well as technical barriers to trade can also be discussed.

India’s farm policies come under scanner:

The review by WTO is likely to take place in the first week of January 2021. It comes at a time when India’s farm policies have come under the scanner of many countries.

The European Union, the United States, New Zealand, Brazil, Canada have raised questions on the quantitative restrictions on sugar subsidies, pulses, and export subsidies through its marketing and transport assistance scheme as well as the potential impact of its food stocks on the global market. Questions have also been raised if India has been breaching its support limit for other farm goods like it did for rice.

India had become the first country to invoke the peace clause to breach the subsidy limit for rice for years 2018-2019.

The government had informed the WTO that the value of the country’s rice production was $43.67 billion in 2018-2019 and that it had given subsidies worth $5 billion. The limit has been pegged at 10% of the value of food production in the case of India as well as other developing countries.

India had also extended the import restrictions on beans, lentils, peas, and other pulses till March 31, 2021. However, many countries have sought removal of these and have stated that they are no longer a temporary measure.

India’s e-commerce policy:

The e-commerce policy of India which was made public in 2019 has its focus on data localization. It emphasizes that the country and the citizens have a sovereign right to their data.

Even though the policy is yet to be made public, the Indian government in a revised draft has proposed that all the companies that mirror or store Indian users' data overseas will be subjected to periodic audits. They will also have to make any data available that the government seeks within 72 hours or pay the penalty.