India Shows Willingness to Extend Digital Trade Tariff Ban After Initial Opposition

India has indicated it may support a two-year extension of a global agreement preventing tariffs on digital services like streaming and downloads. The shift comes after initially opposing U.S. efforts for a permanent extension during World Trade Organization talks in Cameroon.

India appears ready to compromise on a worldwide agreement that prevents countries from imposing tariffs on digital services, according to two senior diplomatic sources.

The development comes after India’s Commerce Minister Piyush Goyal questioned American proposals for making the digital tariff ban permanent during World Trade Organization discussions in Cameroon on Thursday, stating the matter required “careful reconsideration.”

But by Friday evening, Indian representatives told WTO delegates they would support a two-year continuation of the moratorium, marking the first indication of flexibility in their stance before Saturday’s formal meeting on the issue.

The United States may not find a short-term solution acceptable, however. U.S. Trade Representative Jamieson Greer stated Thursday that Washington wanted only a permanent extension, not a temporary one.

Corporate executives emphasize that continuing the agreement is essential for maintaining stability, worrying that fees could be imposed if the deal expires.

Two senior diplomatic sources confirmed that American and Indian negotiating positions remain significantly different.

A third senior diplomat revealed that WTO members are attempting to find a compromise by extending the moratorium for five to 10 years, beyond the next ministerial conference. Whether either the U.S. or India would accept such a middle-ground approach remains uncertain, the diplomat noted.

The outcome of discussions on the digital commerce moratorium at the Yaounde meeting is viewed as a crucial measure of the WTO’s continued importance, following a period marked by trade disputes driven by tariffs and significant disruptions to shipping, energy costs, and supply networks caused by Middle Eastern conflicts.

“I think for some countries it’s actually quite existential to prolong the moratorium for a significant time,” Norwegian Foreign Minister Espen Barth Eide commented, noting it would help show that officials could achieve tangible results at the Yaounde gathering.

The digital commerce moratorium has been repeatedly renewed for almost 30 years, continuing until each subsequent ministerial conference. The United States seeks to ensure major American technology companies including Amazon, Microsoft, and Apple operate in a predictable regulatory framework without concerns about potential tariffs that nations might impose on international digital commerce.