In 1997, India
signed the World Trade Organization’s (WTO) Information Technology Agreement (ITA). By doing so, India agreed to not impose any tariffs and duties on fully manufactured laptops imported into the country. At the time, it was envisaged that such a policy would benefit developing countries who could gain from the trade of IT products.
However, as the Indian government has subsequently been saying, our experience from this agreement has not been a positive one.
In 2012, at a symposium on the 15th anniversary of the ITA, India tabled a presentation explaining a “developing country’s experience”, in which it stated that the agreement had, in fact, created tech monopolies, led to a rise in India’s trade deficit, hindered innovation, and made it extremely difficult for new entrants to enter the market.
In 2015, the WTO invited countries to sign up for ITA 2, which expanded the range of IT products for free trade. India decided not to sign up for this.
“India’s experience with the ITA has been most discouraging, which almost wiped out the IT industry from India,” the Ministry of Commerce and Industry’s website
says on the matter.
“The real gainer from that agreement has been China, which raised its global market share from 2 per cent to 14 per cent between 2000-2011,” it adds.
“In light of recent measures taken by the government to build a sound manufacturing environment in the field of Electronics and Information technology, this is the time for us to incubate our industry rather than expose it to undue pressures of competition,” the ministry says. “Accordingly, and also keeping in view the opinion of the domestic IT industry, it has been decided not to participate in the ITA expansion negotiations for the time being.”