A collective of semiconductor industry groups globally is urging India to reconsider its proposal for duties on cross-border digital e-commerce and data transfers, ahead of the World Trade Organization (WTO) meeting in Abu Dhabi next week. The World Semiconductor Council (WSC) has warned India that such a stance could hamper its own chip design industry and exacerbate chip shortages. Chip giants Qualcomm, Intel, AMD, and Nvidia, represented by WSC, emphasize the detrimental impact on India’s semiconductor growth and urge support for a permanent prohibition on customs duties for cross-border data.
WTO Moratorium Debate and Economic Consequences
As ministers from various countries gather to discuss trade-related issues at the WTO meeting, developing nations, including India, are poised to oppose the extension of the moratorium on duties for electronic transmissions. The WSC stresses that the collapse of the moratorium would result in tariffs on digital e-commerce and extensive chip design data transfers, escalating costs and worsening chip shortages.
India’s Semiconductor Ambitions at Risk
The semiconductor sector is a crucial component of Prime Minister Narendra Modi’s economic agenda, with a $10 billion incentive package in place to propel India’s chip industry. The proposed duties on data transfers, however, could hinder India’s semiconductor progress and deter semiconductor investments, given that over 20% of the global semiconductor design workforce is based in India, according to the WSC’s letter to Prime Minister Modi.
Appeal for Investment-Friendly Policies
The WSC’s letter calls on India to support the renewal of the moratorium, emphasizing that it would signal to semiconductor companies that India is a favorable environment for investment. The consortium encourages India to work toward a WTO agreement permanently prohibiting customs duties and procedures for cross-border data and digital tools.