India for customs duty on computer-aided design files for 3-D printing
India has proposed imposing customs duties on computer-aided design, or CAD, files, which are necessary for 3D printing, while pitching its case for countries to be able to tax electronic transmissions. Electronic transmissions are at present immune from taxation in the World Trade Organization (WTO) under a moratorium.
If the moratorium continues, India argued at the WTO, foreign firms will be able to export any software duty-free to developing countries to 3D print products that they currently manufacture. This will lead to “disruption in traditional manufacturing, resulting in job losses and declining incomes” especially in sectors such as textiles and clothing, footwear, auto-components, toys, mechanical appliances and hand tools, it said.
India and South Africa have been arguing that the e-commerce moratorium, which gives immunity to electronic transmissions, has led to loss of revenue and had taken away policy space from developing countries. “An important policy instrument available for this purpose would be to impose customs duties on CAD files necessary for 3D printing,” India said at WTO’s General Council meeting earlier this week.
A recent paper by the United Nations Conference on Trade and Development cautioned that the implications of the moratorium go much beyond customs tariff revenue losses for developing countries due to the advancement of new digital technologies like 3D printing. An earlier paper had pegged India’s potential revenue loss by not taxing electronic transmissions at around $500 million each year. New Delhi’s proposal is crucial in the wake of 13 members — including Australia, Canada, South Korea, New ..
Rejecting their proposal, which is based on an OECD study of last year, India said: “We do not agree with the OECD assessment that technologies such as 3D printing are unlikely to have far-reaching implications on trade in the near term.” If current growth of investments in 3D printing continues, 50% of the manufactured goods will be ‘printed’ in 2060 and if investments in 3D printing doubles, this target will be achieved in 2040, India said, citing studies.
“This will wipe out almost 40% of cross-border physical global trade,” it said. New Delhi also said not all software would fall within the scope of the moratorium as some of them could be delivery of services through Mode 1 or cross-border supply. It also emphasised that removal of the moratorium does not mean countries will necessarily impose customs duties across the board.