New Delhi, March 20 The Swadeshi Jagran Manch (SJM) has called for an end to the suspension of customs duties on the e-transmission of digital products, stating that it is undermining the push for self-reliance, causing revenue losses, and limiting the country's ability to tax emerging technologies like artificial intelligence (AI).
The RSS affiliate's fresh demand for an end to the moratorium comes ahead of the 14th Ministerial Conference of the World Trade Organisation (WTO) in the last week of March, where a decision on the extension of the e-commerce moratorium is expected to be one of the key issues.
The e-transmission of digital products refers to the online delivery of products such as software, music, videos, or ebooks.
SJM national co-convener Ashwani Mahajan said that the duty-free regime on digital imports is weakening India's "Atmanirbhar Bharat" ambitions by discouraging domestic production.
"Our start-ups and software companies are able to produce a variety of electronic products, including movies and other entertainment products domestically. However, if all such products are imported without tariffs, there is little incentive to produce them domestically.
"This moratorium on e-products is actually hindering our efforts of 'Atmanirbhar Bharat', benefiting the US, European countries, and China," he said in a statement.
Mahajan said that the moratorium is also eroding India's ability to tax new-age digital sectors, particularly AI, and may further exacerbate the monopoly of the US and China.
"As expected, the share of AI in GDP will be significant in the future. The moratorium on customs duty on e-transmission will cause a huge revenue loss, and may further exacerbate the monopoly of the US and China, which in turn will affect the very heart of national economic sustainability, and thereby political sovereignty," Mahajan said.
"Today, the issue is no longer limited to traditional electronic transmissions. Artificial intelligence is emerging as a dominant force, and if AI products are allowed to enter India without any customs duties, we will lose a critical opportunity to tax these services and regulate their impact," he added.
Mahajan warned that this will also have serious implications for employment and policy-making.
"If we allow digital products via e-transmission to enter Indian territory without customs duties, it will impact domestic enterprises, mostly start-ups, and it will also take away an opportunity to tax AI services, which is essential for saving the population from unemployment," he argued.
Highlighting the risk posed by the growing adoption of 3D printing, Mahajan pointed out that India may lose huge customs duties, as designs will replace physical goods' imports, free from payment of customs duties.
"With widespread adoption of 3D printing, products like auto parts, medical devices, toys, and machinery components can be traded as design files instead of goods. Customs authorities may lose the ability to track and tax trade. Manufacturing may shift to distributed digital production networks," he said.
Citing NITI Aayog estimates, Mahajan said that India's imports of digitally delivered services have grown sharply in recent years, but due to the moratorium, no customs duties are levied on these imports, resulting in significant revenue losses for the country.
"According to NITI Aayog's estimates, India imported USD 116.9 billion worth of digitally delivered services in 2024, up from USD 41.4 billion in earlier years, which shows an accelerated growth.
"Though for 2017, the revenue loss was estimated at USD 500 million but it's likely to be much higher now due to the explosion in streaming movies, digital books, SaaS, AI tools, gaming imports (video games) etc. With rising import base of USD 117 billion, even the most conservative estimates put this loss to be USD 2 billion annually," he added.
Tracing the background, Mahajan noted that the moratorium was introduced in 1998 when digital trade was at a nascent stage and was meant to be temporary.
"The moratorium made sense in 1998, when digital trade was limited. However, it has been repeatedly extended at successive WTO ministerial conferences despite the massive expansion of digital trade. It is now time to review and end this provision," he told