tariffs: e-commerce tariffs key to ending big tech monopoly, rent-seeking behavior: India

India said on Wednesday that a G20 and OECD-style pact on levying tariffs on electronic transmissions should be considered to end monopolistic, rent-seeking and anti-competitive practices by big tech companies, and allow developing countries to share a small part of the super profits and the enormous benefits they enjoy.

New Delhi has also called for a review and revision of the 24-year-old moratorium on e-commerce transmissions, as developed countries have blocked proposals from India, the South and other poor countries to impose import duties. customs on electronic transmissions.

Arguing for the levying of these fees, Trade and Industry Minister Piyush Goyal said it would create a level playing field for domestic companies against global tech giants whose monopolistic and anti-competitive practices are already under surveillance in many large countries.

Members of the World Trade Organization (WTO) cannot impose customs duties on electronic transmissions since a temporary moratorium was put in place in 1998, to which India, South Africa and other developing countries opposed.

During a thematic session at MC12, he said that five big giant tech companies control the market, make super profits, have a high market capitalization and do not allow new entrants into this space because of their weight. finance and their influence.

He said some of these companies come from “non-transparent economies” and are able to gain wide penetration into other markets in the developing world at no cost to them, nor do they pay income tax which hopefully will now become a global minimum tax after efforts at the G20 and the OECD.

The minister suggested that a similar effort be made on the tariff component across the world to at least allow developing countries to share such a small part of the super profits and huge benefits enjoyed by these few big tech companies. .

He said MSMEs face significant challenges in selling their products through online retail platforms due to rent seeking and other business practices of some of the big tech platform owners, including squeezing profits of domestic MSMEs by retaining a disproportionate share of their sales value, leveraging access to data, often even personal data and operating as sellers themselves and forcing MSMEs to buy associated services such as payment gateways and logistics.

Instead of creating or maintaining rules for global e-commerce, developing countries should first focus on improving national physical and digital infrastructure, creating a supportive policy and regulatory framework and developing their digital capabilities, India said.

Referring to UNCTAD and South Center studies, Goyal said that some countries in global exports of digitizable products hold a 94% share while 86 out of 95 developing countries are net importers of digital products.

During the period 2017-2020, developing countries lost potential tariff revenue of $50 billion just on the import of 49 digital products and 95% of this loss in tariff revenue is borne by developing countries.

“Is it fair that the cost of the moratorium should be borne almost entirely by developing countries for the extension of duty-free quotas, quota-free market access, largely for a very small number of players” , did he declare.

Noting that by 2025 this loss of revenue is estimated at $30 billion each year, he said: “Can we justify that this wealth accumulated by big technologies at the expense of the capacity of emerging markets to generate resources , to meet the basic needs of their large population”.

Pricing discretion

Goyal said this is a customs duty and if many members feel they don’t want to impose it on electronic transmission products, they are free to do so.

“No one is forcing anyone to impose a customs duty on electronic transmission products. It is of your own volition, of your choice that you impose customs duties,” the minister said.

“Either bilaterally, suo moto, or in any way each of us wishes. India can choose to keep its electronic transmission market open, but it would be a matter of choice that India would exercise and not of compulsion,” he explained.

Global e-commerce is very unequal, he said, and a few global companies account for 90% of the value created by it.

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