World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Reply: Government undertook a major exercise on consolidation of all existing regulations on FDI, with the aim of integration of prior regulations on FDI, contained in various sources, such as the Foreign Exchange Management Act (FEMA), Reserve Bank of India (RBI) circulars, various Press Notes etc., into one consolidated document, so as to reflect the current regulatory framework. The final document in this regard was released on 31 March 2010. Such consolidation is intended to ensure that all information on FDI policy is available at one place, which is expected to lead to simplification of the policy, as well as greater clarity and understanding of foreign investment rules among foreign investors and sectoral regulators.

Investments can be made by non residents through two routes: the automatic route and the government route. Under the automatic route, the non resident investor or the Indian company does not require prior approval of the Government of India, through the FIPB (Foreign Investment Promotion Board), for the investment. Under the government route, prior approval of the Government of India, through the FIPB, is required.

China 10:

Report by the Secretariat (WT/TPR/S/249):III. TRADE POLICIES AND PRACTICES BY MEASRUE: (2) Measures Directly Affecting Imports:

Question:

(1) Does India take such a view that due to domestic judicial proceedings in the anti dumping investigations the duration of temporary anti dumping measures and the investigation period could exceed six months and eighteen months respectively? Are these in conformity with Article 5.10, Article 7.4 and Article 7.5 of the Agreement on Anti dumping Measures?

(2) Is there any such practice in anti dumping investigations in Chinese products? If so, please provide details.

Reply (1): India's Investigating Authority is aware of the time limit prescribed under the WTO Agreement and the Anti dumping Rules of India. However, due to judicial interventions in the case of imports of R 134a from China PR and Japan, exceptional circumstances were created due to which anti dumping investigation could not be completed within the time frame.

Reply (2): There is no such general practice in India's anti dumping investigations. This case is the sole exception and full reasons and circumstances of the judicial interventions in this case leading to the extended time have been explained in the final findings issued by the DGAD. A copy of the final findings can be downloaded from the website www.commerce.nic.in.

China 11:

Report by the Secretariat (WT/TPR/S/249):III. TRADE POLICIES AND PRACTICES BY MEASRUE: (2) Measures Directly Affecting Imports:

Question: Since 2008, India has initiated several anti dumping investigations as well as taken anti dumping measures against textile products of China. Please provide details on production and sales of the relevant products in India and the import and export data after anti dumping measures were taken.

Reply: Data relating to production and sale of domestic industry and import and export data is given in the final findings issued by the investigating authority. The information sought by China relates to period after the anti dumping measures were taken. Generally such kind of data is not maintained by the investigating authority. However, the concerned domestic industry has been requested to provide data relating to production and sale of the relevant products. As regards import and export data, the same can be found at the website www.dgciskol.nic.in.

China 12:

Report by the Secretariat (WT/TPR/S/249):SECTION IV: TRADE POLICIES BY SELECTED SECTORS:

Question 4: Please provide information concerning all policies supporting the textile industry issued by the Indian Central Government from 2008 to 2011 and the effects of these policies.

Reply: The Government introduced National Textile Policy in 2000 with a vision to develop a strong and vibrant textile industry. Some of the objectives of the policy are to facilitate the textile industry to attain and sustain a pre eminent global standing in the manufacture and export of clothing; liberalise controls and regulations so that the different segments of the textile industry are enabled to perform in a greater competitive environment; enable the industry to build world class state of the art manufacturing capabilities in conformity with environmental standards, and for this purpose to encourage both foreign direct investment as well as research and development in the sector.

For further details refer www.texmin.nic.in.

China 13:

Report by the Secretariat (WT/TPR/S/249):SECTION IV: TRADE POLICIES BY SELECTED SECTORS:

Question: Please provide details of the export control measures that the Indian Government has taken on cotton between 2009 and 2011, including export price ceiling, export registration procedures, etc., as well as the reform process of these measures, if any. Please explain the contract registration procedures for cotton and cotton yarn exporters at the Directorate General of Foreign Trade (DGFT). Please also explain the Textile Commissioner's policy orientation on cotton export between 2009 and 2011.

Reply: Export of cotton has been free since 2009 except during the period April 2010 August 2011 when cotton exports were subjected to quantitative restrictions. Quantitative restrictions on export of cotton for the cotton year 2010 11 has been removed till 30.09.2011, subject only to the condition of registration of contracts for export of cotton with the Directorate General of Foreign Trade, as per DGFT Notification No. 62 dated 02.08.2011. The detailed procedure for registration of contract is given in the DGFT Notification No. 63 dated 4 August 2011 and is available at website http://dgft.gov.in.

China 14:

Report by the Secretariat (WT/TPR/S/249):SECTION IV: TRADE POLICIES BY SELECTED SECTORS:

Question: Please share with us India's definition of courier service. Please also provide information regarding approval procedures, qualification requirements and the current commercial presence of foreign investment in the courier service in India.

Reply: The Post Office Amendment Bill which deals with the subject is presently under the consideration of the Parliament.

China 15:

Report by the Secretariat (WT/TPR/S/249):SECTION IV: TRADE POLICIES BY SELECTED SECTORS:

Question: Please describe the development of India's radio and television industry. What are the policies with respect to foreign investment, equity and acquisition as well as broadcasting of foreign programs? Please also describe the development of India's cable network industry, including its relationship with the radio stations and television stations.

Reply: The Broadcasting industry in India is in the realm of both public and private sector. The public sector broadcasting is the mandate of All India Radio (AIR) and Doordarshan (DD) which are governed by Prasar Bharati (PB), an autonomous body set up under Prasar Bharati Act 1990 a copy of which is available on the Ministry's website at www.mib.nic.in.

Private television operators are not allowed to enter in the terrestrial broadcasting sector as it is an exclusive domain of the public broadcaster i.e. Prasar Bharati, however companies can operate satellite television channels after obtaining necessary permission from the Ministry of Information and Broadcasting as per the Policy Guidelines for Uplinking/Downlinking for TV Channels. A copy is available on the Ministry's website. Companies desirous of downlinking a foreign uplinked channel in India have to register their channel with the Ministry of Information and Broadcasting as per the Downlinking Guidelines.

There is no restriction with regard to the telecast of foreign content on channels permitted by the Government; however the telecast content should be in accordance with the Programme Code as provided in the Cable Television Networks (Regulation) Act 1995.

So far 745 TV channels have been permitted out of which 366 are news and current affairs channels and 379 are non news and current affairs channels. Teleports (earth stations) are permitted as per the provisions contained in the uplinking guidelines.

With regard to foreign investment policy in the broadcasting sector, it can be seen from the consolidated FDI Policy document available at www.dipp.nic.in.

The Cable operations in India are governed by the Cable Television Networks (Regulation) Act, 1995 and the Cable Television Networks Rules, 1994. To operate a cable television network, the operator has to be registered with the registering authority (head post master of the head post office of the area) as a cable TV operator. Cable services are predominantly analog in nature and nearly 68 million i.e. over 93 % of the cable homes receive TV signals though analogue mode. Different categories of cable operators have developed over the years. There are multi system operators (MSOs) who set up their own headend for reception, aggregation and retransmission of signals from the broadcasters and further distribution to local cable operators (LCOs) or to the subscribers. There are independent cable operators (ICOs) who have their own Headends and distribute directly to the subscribers only.

The Ministry has embarked on an ambitious digitalization project for introducing digital addressable system in the cable TV sector with a sun set date for switching off analogue services by December 2014. This will be implemented in four phases covering all metros by March 2012.

China 16:

Report by the Secretariat (WT/TPR/S/249):SECTION IV: TRADE POLICIES BY SELECTED SECTORS:

Question: Please provide information on the policies and practices of India in new audio visual media such as webcast, IPTV and mobile TV, particularly with respect to market access, content requirements for programs and supervision.

Reply: Unified access service provider licensee can provide voice, data and video including IPTV and mobile TV. Internet service provider may also provide IPTV. However, content requirements for programs are governed by Ministry of Information and Broadcasting guidelines. The Government on 08.09.2008 has put in place a policy on IPTV enabling another mode of distribution of permitted satellite TV channels the telecom and cable networks. This segment is still nascent in India and Industry estimates suggest that there will be less than one million IPTV users across India. A copy of the Policy for IPTV is available on this Ministry's website at www.mib.nic.in.

This Ministry of I and B has not yet framed a Policy on Mobile TV. The Ministry in consultation with the stakeholders is working presently on laying down a suitable policy framework for enabling the private players to provide mobile TV services through terrestrial route.

Regulation of internet is the domain of the Ministry of Communications and Information Technology. Web casting issues are therefore governed by them.

China 17:

Report by the Secretariat (WT/TPR/S/249):SECTION IV: TRADE POLICIES BY SELECTED SECTORS:

Question: Does India plan to gradually relax restrictions on visa for foreign labours?

Reply: No such proposal is currently under consideration.

China 18:

Report by the Government of India (WT/TPR/G/249): Paragraph 60:

"The Micro, Small and Medium Enterprise Development (MSMED) Act 2006 redefined micro, small and medium enterprises on the basis of the level of investment."

Question: Could the Indian delegation please share with us what kinds of help have been provided to micro, small and medium enterprises to enhance their global competitiveness? How effective are they?

Reply: The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, which came into force in 2006, provides the first ever legal framework for recognition of the concept of "enterprises" (comprising both manufacturing and services). Apart from clear and more progressive classification of each category of enterprises, the Act provides for a statutory consultative mechanism at the national level with wide representation of all sections of stakeholders, particularly three classes of enterprises, and with a wide range of advisory functions. Notification of schemes/programmes for this purpose, progressive credit policies and practices, preference in government procurements to products and services of the micro and small enterprises and more effective mechanisms for mitigating the problems of delayed payments to micro and small enterprises among others have been provided in this Act. In addition, the Government announced the "Package for Promotion of Micro and Small Enterprises" in parliament on 27.2.2007, which, inter alia, provides for legislation, credit support, fiscal support, support for cluster based development, technology and quality upgradation, marketing, entrepreneurial and managerial development and strengthening of data base for MSME sector. Government has also kicked off National Manufacturing Competitiveness Programme to enhance the competitiveness of the MSMEs.

China 19:

REPORT BY THE SECRETARIAT: SECTION II: TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES: (4) INVESTMENT REGIME

Question 19: Please explain the Indian policies on establishing representative offices (not for operation or investment) by foreign companies in India. What are the specific application procedures and related time limit? Please also provide information on other countries' representative offices in India.

Reply: A foreign entity wishing to establish a representative office or a liaison office in India is required to apply through an authorised dealer bank to the Reserve Bank of India for approval. The RBI may consult the Government.

The permission is granted for a period of three years subject to renewal. However, no extension would be considered for LOs of entities which are NBFCs and those engaged in construction and development sectors (excluding infrastructure development companies). Upon expiry of the validity period, these entities have to either close down or be converted into a joint venture (JV)/wholly owned subsidiary (WOS), in conformity with the extant foreign direct investment policy.

China 20:

REPORT BY THE SECRETARIAT: SECTION II: TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES: (4) INVESTMENT REGIME

Question 20: Please explain the detailed policies and regulations for foreign information technology service companies to set up branches in India or to form joint ventures with Indian companies to undertake outsourcing business.

Reply: For setting up of IT/ITES companies, 100% FDI is permitted on automatic route. Setting up of branch office for rendering services in IT and development of software in India is permissible with the approval of Reserve Bank of India. Joint ventures are also permitted under the policy with the approval of Government of India.

China 21:

REPORT BY THE SECRETARIAT: SECTION II: TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES: (4) INVESTMENT REGIME

Question 21: Please provide the latest changes in the measures adopted by India in recent years for encouraging or restricting FDI.

Reply: The latest version of the updated Circular on FDI policy (i.e. "Circular 1 of 2011"), effective from 1.4.2011, contained a number of significant policy changes, including:

1. 
   pricing of convertible instruments upfront, on the basis of a conversion formula, instead of price;
   
2. 
   inclusion of fresh items for issue of shares against non cash considerations, including import of capital goods/machinery/equipment and pre operative/pre incorporation expenses;
   
3. 
   removal of the condition of prior approval in case of existing joint ventures/technical collaborations in the "same field"; and
   
4. 
   development and production of seeds and planting material, without the stipulation of having to do so under "controlled conditions".
   

China 22:

REPORT BY THE SECRETARIAT: SECTION III: TRADE POLICIES AND PRACTICES BY MEASURE: (1) INTRODUCTION: Paragraph 2

"To determine the 'effective' applied tariff rate (i.e. basic duties and other customs duty) on a particular product, separate customs and excise tax schedules must be consulted, which adds to the complexity of the tariff."

Question 22: Please provide more information on "separate customs and excise tax schedules" and how they are applied in different situations.

Reply: The tariff structure has been simplified considerably in recent years. However, this is an on going process. The present duty structure is simple though there are certain exemptions.

Basic customs duties are applied as per the rates in the Schedule to the Customs Tariff Act, 1975 read with any exemption notification. The rates of additional customs duty, equivalent to the excise duty on domestically produced goods, is as per the schedule to the Central Excise Tariff Act, 1985 read with any exemption notifications. Both the tariff schedules are based on the Harmonized System of Nomenclature and adopt eight digit tariff headings.

China 23:

REPORT BY THE SECRETARIAT: SECTION III: TRADE POLICIES AND PRACTICES BY MEASURE: (2) MEASURES DIRECTLY AFFECTING IMPORTS:

Question 23: In India, the tariff rate for passenger cars could be as high as 100% while the average rate is 56.7%, both being higher than for other types of cars. In view of the rapid development of the auto industry in India in recent years, is India considering reducing the tariff rates for passenger cars in order to make the automobile industry more open and competitive?

Reply: There is no such proposal at present.

China 24:

REPORT BY THE SECRETARIAT: SECTION III: TRADE POLICIES AND PRACTICES BY MEASURE: (2) MEASURES DIRECTLY AFFECTING IMPORTS: Paragraph 8:

"Importers (Indians and foreign nationals), with a few exceptions, must register with the Directorate General of Foreign Trade (DGFT) and obtain an importer exporter code (IEC) number to be able to import commercially."

Question 24: Please clarify which of the following understandings best describes how importers can be allowed to engage in import and export business: 1) Registering with the DGFT and obtaining an IEC number; 2) Registering with the DGFT and then registering with the customs to obtain another code.

Reply: No export or import shall be made by any person without an IEC number unless specifically exempted under paragraph 2.8 of the Handbook of Procedure related to the Foreign Trade Policy. These publications are available in the DGFT website http://dgft.gov.in. Once IEC is received, the same becomes applicable for import and export clearance at the customs end.

China 25:

REPORT BY THE SECRETARIAT: SECTION III: TRADE POLICIES AND PRACTICES BY MEASURE: (2) MEASURES DIRECTLY AFFECTING IMPORTS: Paragraph 12

"In addition, importers with a good track record and complying with qualifying criteria, are entitled to be accredited for special clearance procedures under the Accredited Client's Programme (ACP). As at early 2011, 250 ACP importers are allowed to self assess their consignments with no need for examination, in line with India's commitments to simplify and harmonize Customs' procedures under the revised Kyoto Convention."

Question 25: Please clarify whether the ACP was formulated in accordance with the WCO's AEO system and make further elaborations on the ACP, including its criteria, accredited procedures and relevant facilities.

Reply: The ACP is an equivalent of the WCO's AEO programme.

The importers with clean compliant track record are identified by this programme and their imports are exempted from normal customs control measures. Presently, 279 importers avail of this facility and they contribute to nearly 13% of the total imports. The imports of ACP clients are exempted from document verification (assessment) and goods verification (examination).

The importers desirous of availing the facility as "accredited clients" are required to apply for registration. Importers meeting the qualifying criteria are eligible under the programme. Secretariat's report at page 37 provides the list of qualifying criteria. Customs Circular Nos. 42/2005 dated 24.11.2005 and 29/2010 dated 20.08.2010 provide the details of the programme as also the qualifying criteria (may be viewed at www.cbec.gov.in).

China 26:

REPORT BY THE SECRETARIAT: SECTION III: TRADE POLICIES AND PRACTICES BY MEASURE: (2) MEASURES DIRECTLY AFFECTING IMPORTS: Paragraph 22:

"The Central Board of Excise and Customs is authorized, by notification in the Gazette of India, to fix 'tariff values' (reference prices) for any type of imported (exported) good."

Question 26: Please explain the consistency between such practice and Article 1.1 of the Agreement on Customs Valuation.

Reply: Under Section 14(2) of the Customs Act, 1962 tariff values can be fixed for any class of imported goods or export goods having regard to the trend of value of such or like goods. Tariff values are currently being fixed only in respect of palm group of oils, crude soybean oil, poppy seeds and brass scrap. These values are fixed on the basis of prevailing international prices of these goods as observed from the various reputed international journals and other publications.

The tariff values are neither arbitrary or fictitious values nor minimum customs values. As these values on identified goods are computed based on the prevailing international prices, that is to say, the prices at which these goods are sold or offered for sale in the ordinary course of international trade under fully competitive conditions, such values are not inconsistent with Article VII of the GATT 1994. These values are in fact floating values and are frequently reviewed and revised so as to keep them closer to the transaction values under Article 1.1 of the CVA.

China 27:

REPORT BY THE SECRETARIAT: SECTION III: TRADE POLICIES AND PRACTICES BY MEASURE: (2) MEASURES DIRECTLY AFFECTING IMPORTS: Paragraph 26:

"India does not apply non preferential rules of origin."

Question 27:

Please clarify

(1) According to which rules does India issue the certificate of origin for MFN imports?