Wt/tpr/M/313/Add. 1 31 July 2015
PART II: QUESTIONS ON THE GOVERNMENT REPORT (WT/TPR/G/313)
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- Bu səhifədəki naviqasiya:
- 2 ECONOMIC ENVIRONMENT 2.6 Major Challenges 2.6.1 Agriculture and Food Security Page 10, paragraph 2.31
- Reply
- 3.3 Reforms in FDI Policy Page 12, paragraph 3.5
- 3.4 Introduction of Goods And Services Tax Page 12, paragraph 3.6
- 3.5 Skill Development Page 12, paragraph 3.8: Question 170
- 3.8 Rationalizing Subsidies Page 13, paragraph 3.11
- Page 13, paragraph 3.12
- 4 TRADE POLICY 4.1 Foreign Trade Policy Page 14, paragraph 4.1
- Page 14, paragraph 4.4
- 5 INDIA AND THE WTO 5.1 WTO Negotiations Page 16, paragraph 5.6
- Question 176
- ADDITIONAL QUESTIONS Question 178
- Annexure-1 India’s crop production from 2010-11 to 2014-15
| PART II: QUESTIONS ON THE GOVERNMENT REPORT (WT/TPR/G/313)
1 INTRODUCTION Page 4, paragraph 1.2: The Government's Report claims that India intends to create a predictable and clean tax policy environment. Question 164: Please explain how India plans on accomplishing this, given ongoing tax disputes involving transfer pricing, retrospective taxation, and the minimum alternate tax. Reply: As outlined in the Budget Speech, 2014 and 2015, the Government policy in respect of direct taxes is to provide a stable and non-adversarial tax regime with a focus on widening of tax base while moderating the tax rates coupled with gradual phasing out of profit linked deductions and replacing them with investment linked deductions in critical sectors only. Thus the policy objective is to make tax laws clear, stable and equitable. Some measures in this regard are as follows:
2 ECONOMIC ENVIRONMENT 2.6 Major Challenges 2.6.1 Agriculture and Food Security Page 10, paragraph 2.31: The Government's Report states that "future agricultural growth is contingent on increasing agricultural productivity" and that the agriculture and food sectors "need huge investment in research, education, extension, fertilizers, and laboratories to test soil, water, and commodities, and warehousing, and cold storage." Question 165: First, please explain India’s plans to expedite and expand nationwide field trials and approvals on genetically engineered crops such as rice, chickpeas, maize, brinjal (eggplant), and cotton. Reply: With the objective to increase agricultural productivity, government is exploring all avenues including genetically engineered crops that would help in meeting the food security needs of the country. Question 166: Second, does India recognize the potential beneficial interlinkages between foreign direct investment and trade, as outlined in numerous studies, including the 1996 WTO report on "Trade and Foreign Direct Investment" (https://www.wto.org/english/news_e/pres96_e/pr057_e.htm)? Reply: Yes In this direction, India has been liberalizing FDI norms across sectors. 3 THE NEW REFORM AGENDA 3.1 Ease of Doing Business Page 11, paragraph 3.2: The Government’s Report discusses measures taken to improve the ease of doing business. Question 167: Please explain the Government’s role in the proposed "e-Biz" platform, how it will ease doing business in India, and when it will be fully implemented and operational. Reply: The eBiz portal provides a facility to obtain information on a number of permissions/approvals required from Central, State and para-statal Governments for starting a business. The portal is currently operational with 14 Central Government services and is expected to be fully operational along with state Government services during the year. Only when the portal is fully operational along with state Government services, it will be possible to gauge the impact of the portal in terms of transaction costs and time. 3.3 Reforms in FDI Policy Page 12, paragraph 3.5: The Government's Report states that India has liberalized the FDI policy in the defence and insurance sectors by raising the FDI cap from 26 to 49%. Question 168: Please explain why investment in these sectors is restricted to only allow for majority Indian ownership. Please also explain if there are further restrictions on non-India management and control in these sectors. Reply: Since these sectors are crucial with respect to national interest & security and are of sensitive nature with its social and economic impact of wide nature, FDI is allowed in these sectors with certain restrictions in terms of control in these sectors. Recently FDI limit has been raised in the Defence sector from 26% to 49%. As per para 6.2.6 of Consolidated FDI Policy (12th May, 2015), FDI up to 49% under Government route is permitted in Defence Industry subject to Industrial license under the Industries (Development & Regulation) Act, 1951. Above 49% to Cabinet Committee on Security (CCS) on case to case basis, wherever it is likely to result in access to modern and ‘state-of-art’ technology in the country. As per para 6.2.18.7 of Consolidated FDI Policy (12th May, 2015), FDI under automatic route up to 26% and Government route beyond 26% and up to 49% is allowed in Insurance Sector. Further, the FDI policy is reviewed on an ongoing basis, with a view to making it more investor friendly. 3.4 Introduction of Goods And Services Tax Page 12, paragraph 3.6: The Government’s Report highlights efforts to implement a goods and services tax (GST). Question 169: Please identify what existing taxes will comprise the GST. Reply: As already stated in Para 5, Page 12, paragraph 3.6 of the Indian Government report: "A major game changing reform in the near future would be the introduction of the Goods and Services Tax (GST) effective from 1 April 2016. The implementation of the GST would lead to the elimination of other taxes such as Central Excise duty, Service tax, State Value-Added tax, octroi, Central Sales Tax, State-level sales tax, entry tax, stamp duty, turnover tax, tax on consumption or sale of electricity and taxes on transportation of goods and services, thus removing the multiple layers of taxation that currently exist in India." 3.5 Skill Development Page 12, paragraph 3.8: Question 170: Please explain how skills development will fit into India's overall education curriculum. Will states take the lead in implementing skills development? Also, given India’s imperative for developing a skilled workforce, please explain why India only grants higher education licenses to Indian universities. Reply: The Preamble to the National Policy for Skills Development, 2009 cites one of the challenges as creating effective convergence between school education and skill development. The new National Policy on Skills Development and Entrepreneurship 2015 which seeks to have a fresh look at the 2009 Policy will deliberate on all issues including the linkage with the school curriculum. Moreover, there is a centrally sponsored scheme of vocationalization of school education administered by the National Skills Development Council (NSDC). NSDC has also worked towards vocationalization of higher education and developed a unique model to integrate skill based trainings into the academic cycle of the Universities. 3.8 Rationalizing Subsidies Page 13, paragraph 3.11: The Government's Report mentions the provision of subsidies through direct cash transfers. Question 171: Has India expanded or is India planning on expanding direct cash subsidy payments beyond the cooking gas subsidy referenced in the Government's Report? Does India have the technological reach to replace fertilizer and food subsidies with direct cash transfers, as several of these recipients are in rural areas? Reply: Direct Benefit Transfer (DBT) is an attempt to reform the Government delivery processes where cash/benefit is transferred directly to bank account of beneficiaries preferably Aadhaar seeded, cutting down several intermediary layers, thus ensuring timely and more frequent payment to intended beneficiaries. DBT will infuse efficiency, transparency and accountability in the system and by removing fake, ghost and duplicates it will enhance the outreach of the welfare programmes besides substantial saving to the Government. Direct Benefit Transfer in LPG (DBTL) was launched w.e.f. 1.6.2013 in 20 districts and was expanded to 291 districts in phased manner. Now, Modified DBTL (PAHAL) has been relaunched in 54 districts w.e.f. 15.11.2014 and has now been rolled out across the entire country w.e.f. 1.1.2015 covering 12.87 Cr. consumers and transferred Rs. 12,243 Cr. as subsidy in bank accounts of beneficiaries as on 25.5.2015. So far DBT has not been started in PDS and Fertilizer sector but Government is planning to introduce DBT in PDS and Fertilizer sector in phased manner. Digitization of PDS beneficiary database and putting it on PDS portals, opening bank account and Aadhaar seeding is going on. Under the Fertilizer framework, the use of IT tools for disbursement of subsidy in supply chain is being planned. Page 13, paragraph 3.12: The Government's Report mentions that the MSP scheme has been an important policy instrument used to support farmers. Question 172: What research has India conducted to determine whether MSP prices upset market signals which are vital for rational economic decision-making by agricultural producers? Reply: The Minimum Support Price (MSP) is fixed to protect farmers from distress sale of their produce and to protect them from exploitation. The Commission for Agricultural Costs and Prices (CACP) recommends MSP considering various factors; including the cost of cultivation/production, changes in input prices, input/output price parity, inter-crop price parity, effects on the cost of living, effects on general price level, parity between prices paid and prices received by farmers etc. The Government of India considers all the relevant facts before accepting the recommendation. 4 TRADE POLICY 4.1 Foreign Trade Policy Page 14, paragraph 4.1: India's foreign trade policy does not appear to provide for the withdrawal of subsidies currently given to Indian textile and apparel products that are export competitive. Question 173: Please identify what specific programs currently benefitting the textile and apparel sector will be terminated, given that the sector is export competitive. Reply: A number of schemes for various sectors including textiles and apparel sector are in the nature of remission or refund of duties on inputs used in exported goods and thus are not export subsidy schemes. Some of the other schemes have also been discontinued since October 2011 and a number of them have been removed in the Foreign Trade Policy (FTP) 2015-2020, announced on 1 April 2015. Schemes have been rationalized in the FTP, 2015-20. All these schemes are available in the public domain and can be seen at http://www.dgft.gov.in. India believes that the eight-year phase out period for export subsidies to textile and apparel sector will be over on 31 December, 2018. India is fully committed to meeting its obligations under the ASCM and will certainly fulfil its commitment in time. Page 14, paragraph 4.4: The Secretariat's Report notes India's desire to achieve growth through a focus on exports of value-added agricultural products. Question 174: Please identify the specific products that India intends to benefit from these efforts. Reply: The specific markets and products are indicated in the FTP documents available on the DGFT website (www.dgft.gov.in). These include agricultural and processed food products. Page 14, paragraph 4.5: The Government's Report states that "[w]hile several countries resorted to various forms of protectionist trade measures such as liberal doses of subsidies to their enterprises, restrictions on imports, fiscal incentives, and promoting the purchase of domestically produced goods and services, India, on the other hand, resorted to few trade restrictions during the crisis; and even these measures were temporary and quickly dismantled." Question 175: Please explain why India imposed non-temporary requirements promoting the purchase of domestically produced goods and services in the information technology, solar, single brand retail, and multi-brand retail sectors. Reply: Preference for domestically manufactured goods and services under the Electronics and telecom policies limited to Government procurements, which is well within the exemptions allowed under WTO. 5 INDIA AND THE WTO 5.1 WTO Negotiations Page 16, paragraph 5.6: The Government's Report states that "India is in the process of finalizing its categorization of commitments under the [Trade Facilitation Agreement (TFA)] and would be filing the notification in keeping with the provisions of [the TFA]." Question 176: In light of this, where is India in its process for notification of acceptance of the TFA and when is India likely to submit its Category A notifications? Reply: The preparation for notification of category A commitments and ratification of TFA are currently underway. No specific dates have been fixed for the same. Page 16, paragraph 5.8: The Government Report indicates that "[t]he historically high domestic support and export subsidies available to farmers in the rich countries are a matter of grave concern to the developing countries." Question 177: What does India consider a high-level of domestic support given that publicly available Indian official data indicates that Indian federal and state fiscal support for agriculture in 2013/14 represented 29.8 percent of the nation’s gross agricultural product? Reply: The total domestic support given by India is very little as compared to the US or EU. The per capita subsidy given by India is not significant as compared with the developed countries. The high subsidization and entitlements owing to Uruguay Round Agreement have created imbalance in the global agricultural trade. ADDITIONAL QUESTIONS Question 178: The United States notes that despite the fact that India is providing officially supported export credits for agriculture, India did not report this support in either the 2013 or 2014 WTO Committee on Agriculture Export Competition questionnaires (TN/AG/S/27/Rev.1 and G/AG/W/125/Add.2, respectively). Does India intend to report this support in the 2015 Questionnaire on Export Competition (dated 26/11/2014) and, if so, when will this be submitted? Reply: India is in the process of gathering data from various sources which would be notified as per rules of the WTO. Question 179: The United States understands that India requires foreign education providers to register as nonprofit entities under Section 25 of the Companies Act of 1956. Under Section 25, nonprofit entities may receive FDI but are restricted from profit distribution, meaning that foreign universities cannot repatriate any money earned. Is this understanding correct? Do you foresee any changes to this restriction? Reply: India requires foreign education providers to register as non-profit entities under Section 25 of the Companies Act of 1956 (Now Section 8 under Companies Act, 2013). No profit can be generated. Moreover, any surplus that is generated cannot be repatriated and also cannot be used for any purpose other than for investing in that educational institution. Any change to these regulations will be taken in consultation with all concerned stakeholders. Question 180: The United States could not find any information in the Secretariat's Report indicating whether any restrictions exist on the use of other countries providing export credit financing to support Indian enterprises importing products into India. Please provide information on whether any restrictions exist on the use of credit to support the import of products into India. Reply: Authorised Dealers (i.e., Scheduled Commercial Banks authorised to deal in forex in India) are authorised to allow credit for imports of value up to US$ 20 million under automatic route, subject to the following conditions:
It may be noted that the trade credits as allowed above do not constitute External Commercial Borrowings. Indian importers are allowed to borrow from abroad, on support of guarantees from domestic banks, subject to the condition that the tenor of such borrowings does not exceed three years. Select borrowers such as (i) corporates registered under the Companies Act 1956, operating in manufacturing and infrastructure sectors; (ii) special purpose vehicles, etc., are allowed to avail External Commercial Borrowings (ECB) from recognised lenders for the purpose of importing capital goods subject to the following conditions:
The details on extant guidelines on Trade Credit and ECB are attached as Annex II. Annexure-1 India’s crop production from 2010-11 to 2014-15 in million tons
Source: Dte of Economics and Statistics # in lakh bales ( 1 bale = 170 kgs) # # in lakh bales ( 1 bale= 180 kgs) UNITED STATES Follow-up Questions Yüklə 1,57 Mb. Dostları ilə paylaş:
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