New Delhi, Feb 24 (KNN) A global coalition of semiconductor industry organisations has urged India to reconsider its proposal to impose tariffs on cross-border digital e-commerce and data transfers, cautioning that such measures could stifle the nation’s chip design sector.

Ministers from various countries will gather for a World Trade Organization (WTO) meeting in Abu Dhabi next week to address numerous trade-related matters, including the potential extension of a long-standing moratorium on levying duties on electronic transmissions, in place since 1998, reported TT.

India, along with South Africa and Indonesia, is poised to resist attempts by the US and Europe to prolong the moratorium. 

Failure to reach an agreement would result in the expiration of the moratorium, leading to tariffs on digital e-commerce and countless chip design data transfers between nations, subsequently raising expenses and exacerbating chip shortages, as highlighted in a letter sent by the World Semiconductor Council (WSC) to Prime Minister Narendra Modi.

The semiconductor industry is a cornerstone of Modi’s economic growth strategy, as evidenced by a USD 10 billion incentive package aimed at bolstering the sector. 

However, imposing duties on data transfers could hinder India’s semiconductor advancement and investment attraction, particularly given that over 20 per cent of the global semiconductor design workforce is located in India, emphasised the WSC.

The WSC, which comprises chip industry associations from the US and China representing major players like Qualcomm, Intel, AMD, and Nvidia, stressed the significance of India’s backing for renewing the moratorium to semiconductor companies.

(KNN Bureau)