The Information Technology Agreement and the ‘Make-in-India’ Initiative

AuthorSaloni Khanderia
DOI10.1177/0015732517734749
Publication Date01 May 2018
SubjectArticles
The Information
Technology Agreement
and the ‘Make-in-India’
Initiative: Weighing the
Better Alternative for India
Saloni Khanderia1
Abstract
The World Trade Organization’s Information Technology Agreement (ITA),
which was concluded at the Singapore Ministerial Conference in 1996, is con-
sidered to be one of the biggest tariff-cutting deals by virtue of eliminating all
customs-related duties on the exportation of certain categories of information
technology products to a country, which is a member to the Agreement. Over
time, new innovations in the information and communication technology (ICT)
sector mandated the consideration of expanding the list of products covered
by this Agreement, which took place in the form of ITA-II negotiations. India,
which was an original member of the ITA-I, however, decided to opt-out of
the negotiations to expand the list of products covered by the Agreement, and
reasoned its absence by stating that the zero-tariff regime created by the ITA-I
debilitated its electronics-manufacturing sectors and on the contrary resulted in
an over-reliance on imported electronic inputs. Accordingly, providing duty-free
treatment to a further list of IT products could potentially be detrimental for the
country’s economic growth. Consequently, it preferred to give priority to its
national policy initiative, namely the ‘Make-in-India’ programme, which embarks
upon fostering domestic production of, inter alia, the ICT sector. This article
accordingly weighs the better alternative for India and analyses the prospects
of initiatives like the current one to resuscitate the ailing domestic electronics-
manufacturing sector, before it can benefit from the zero-tariff regime over the
expanding list of products covered by the ITA-II.
Foreign Trade Review
53(2) 98–115
2018 Indian Institute of
Foreign Trade
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/0015732517734749
http://journals.sagepub.com/home/ftr
Corresponding author:
Saloni Khanderia, Assistant Professor and Assistant Dean (Academic Affairs), Jindal Global Law School,
Sonipat, Haryana, India.
E-mail: skhanderia@jgu.edu.in
1 Jindal Global Law School, Sonipat, Haryana, India.
Article
Khanderia 99
JEL: K33, M15
Keywords
World Trade Organization, Informational Technology Agreement, Make in India
programme
Introduction
The Ministerial Declaration on Trade in Information Technology Products or the
Information Technology Agreement (ITA), as it is commonly referred to, was
concluded under the auspices of the World Trade Organization’s (WTO)1
Ministerial Conference in Singapore, in 1996.2 It is considered to be one of the
biggest tariff-cutting deals by virtue of eliminating all customs-related duties on
the exportation of certain categories of information technology (IT) products to a
country, which is a member to the Agreement (see WTO, 2012, p. 8). Constant
innovations in the IT sector, however, made it necessary to consider the expansion
of the product coverage of the ITA, which originally provided duty-free access to
the exportation of 217 electronic products to the territories of signatories of this
Agreement. Consequently, the decision to expand the ITA, in the form of ITA-II
was reached on 24 July 2015 (see WTO, 2015) after 17 rounds of negotiations.
A timeline for the elimination of tariffs in this expanded list of products was thus
decided in the recent Ministerial Conference in Nairobi.3
India, which was a member to the ITA-I, decided to opt-out of negotiations
to expand the product coverage of the Agreement, in the form of ITA-II,4 implying
that the country would not be required to provide tariff-free access to the
expanded group of IT products. India reasoned its absence by stating that it was
unable to sustain itself in a world of zero-tariffs on IT products insofar as it
debilitated its electronics-manufacturing sector, and on the contrary resulted in
an over-reliance on imported electronic inputs.5 Hence, providing duty-free
access to a further list of IT products could potentially be detrimental for the
country’s economic growth. Consequently, it preferred to give priority to its
national policy initiative, namely the ‘Make-in-India’ (MiI) programme, which
embarks upon fostering domestic production of, inter alia, the information and
communication technology (ICT)6 sector.7
This article accordingly analyses India’s decision to opt-out of ITA-II negotia-
tions, against the backdrop of the programme, and explores whether initiatives
like the current one should rather be given priority, in order to resuscitate its ailing
domestic electronics-manufacturing sector, before it can benefit from the latter’s
zero-tariff regime. In order to answer these questions, the second part of this article
discusses in brief, the tariff-elimination strategies of the ITA; before proceeding
to throw light upon India’s decision to become a member of the ITA, in 1997, as part
of its liberalization strategies and accordingly discusses its experiences thereof.
Considering that India’s decision to opt-out of ITA-II deliberations was due to its
inability to sustain itself in a zero-tariff regime, resulting in a plunge in domestic

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