World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

The policy measures include permission for FDI in townships, housing, built up infrastructure, and construction development projects, including SEZs, under the automatic route, which has attracted foreign investors into this sector.

IT and ITeS

The Government has been supporting the IT and ITeS sector in many ways including support for development of state of the art infrastructure.

RandD Services

The Government has taken many measures to encourage RandD like enhancing the weighted deduction on expenditure incurred on in house RandD from 150% to 200% for the manufacturing business and from 125% to 175% for payments made to national laboratories, research associations, colleges, universities, and other institutions for scientific research, and allowing a 125% weighted deduction for approved associations engaged in research in social sciences or statistical research, besides exemptions in the income from approved research associations in the Budget 2010 11.

China 43:

REPORT BY INDIA: Paragraph 66

"India has put in place a policy for developing special economic zones (SEZs), with the main objectives of development of infrastructure facilities, generation of additional economic activity, promotion of exports of goods and services, promotion of investment from domestic and foreign sources and creation of employment opportunities."

Question 43: Please explain in more detail the policy for SEZs.

Reply: The main objectives of the SEZ Scheme are:

1. 
   generation of additional economic activity;
   
2. 
   promotion of exports of goods and services;
   
3. 
   promotion of investment from domestic and foreign sources;
   
4. 
   creation of employment opportunities;
   
5. 
   development of infrastructure facilities.
   

Special economic zones (SEZs) and SEZ units are governed under the provisions of SEZ Act, 2005 and SEZ Rules, 2006, which may be viewed on www.sezindia.nic.in.

COLOMBIA

SECRETARIAT REPORT (WT/TPR/S/249)

III. TRADE POLICIES AND PRACTICES BY MEASURE

(2) Measures Directly Affecting Imports

(i) Customs procedures

(a) Registration and documentation

Colombia 1:

Paragraph 12 of the Secretariat Report states that importers with a good track record may apply for accreditation under the Accredited Client's Programme (ACP).

1. Would India please specify what obligations this entails and what are the benefits granted to such importers? What steps and other measures have been taken or are being envisaged by India in order to improve and simplify customs procedures for the purposes of trade facilitation?

Reply: The importers with clean compliant track record are identified by the ACP programme and their clearances are exempted from normal customs control measures. Other than the compliance with all Custom laws, there is no other obligation for the Accredited Client's Programme (ACP) clients. The imports of ACP clients are exempted from document verification (assessment) and goods verification (examination). The containers belong to ACP importers are delivered directly at the port/CFS itself.

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).

Other Measures for trade facilitation include introduction of "Self Assessment" for importer and exporters:

1. 
   Self Assessment has been introduced for both import and export clearance.
   
2. 
   A risk management system is in use for selective scanning of containers.
   
3. 
   RMS for customs clearance of courier cargo and exports will be introduced shortly.
   

(vi) Import prohibitions, restrictions, and licensing

(b) Import licensing

Colombia 2:

According to paragraph 59 of the Secretariat Report: "Licences are subject to a licence application fee, which varies according to the c.i.f. value of imports."

2. Is this fee consistent with the provisions of Article VIII:1(a) of the GATT and Article 3.2 of the Agreement on Import Licensing Procedures?

Reply: The actual cost of services rendered is much higher than the existing application fee. However, the application fee is being reviewed.

Colombia 3:

According to paragraph 62 of the Secretariat Report, imports of certain goods are restricted (i.e. subject to a licence) when the c.i.f. price is lower than the minimum import price.

3. Is the importer given the opportunity to prove the amount paid or payable? If it is shown that the value to be declared is actually that which has been negotiated   whether paid or payable, must the importer in any event adjust this value to the minimum price in order to obtain the licence? If determination of the customs value of such goods is based on minimum prices, would this not be inconsistent with Article 7 of the Agreement on Customs Valuation?

Reply: All goods imported into India are valued for customs purposes under section 14 of the Customs Act, 1962 read with the Customs Valuation Rules, 2007. Under the said Rules, there is no provision for imposing minimum prices for the purpose of customs valuation.

The import of the afore cited provision (ref: paragraph 62) is that imports above a CIF price are free and imports below the CIF price are restricted.

(viii) Contingency measures

(a) Anti dumping and countervailing measures

Overview

1. Representativeness of the domestic industry for initiating an investigation

Colombia 4, 5:

According to paragraph 73, page 60, of the Secretariat Report: "Anti dumping investigations may be initiated by the Directorate General of Anti Dumping and Allied Duties (DGAD), in the Department of Commerce, upon a written application by or on behalf of domestic industry, or on its own initiative if there is justification to launch an investigation. An application is scrutinized by the DGAD to ensure it is adequately documented and provides sufficient evidence for initiation. If the evidence is not adequate, a 'deficiency letter' is issued, normally within 20 days of the receipt of the application. For an investigation to be initiated, the investigation petitioners must account for at least 25 per cent of total domestic production of the like article; and the domestic producers expressly supporting the application must account for more than 50 per cent of the total production of the like article by those expressly supporting and opposing the application."

With reference to Article 5.4 of the Anti Dumping Agreement, Colombia wishes to ask India the following questions:

4. At what point in time does the Investigating Authority determine that the application has been made by the domestic industry?

Reply: This determination is made before the initiation of anti dumping investigation.

5. In order to determine serious injury for the purposes of initiating an investigation, does the Investigating Authority make its determination based on the economic and financial figures presented for 25 per cent or for 50 per cent of domestic production? Does representativeness of 25 per cent of the domestic industry at the time of initiating the investigation apply solely in the case of fragmented or atomized industries, or is this a provision of a general nature?

Reply: As per the Anti Dumping Agreement and India's Anti dumping Rules, anti dumping investigation can be initiated where the domestic producers account for not less than 25% of total production of the domestic like article. It is the endeavour of the Investigating Authority to make the injury determination based on examination of as large number of domestic producers as possible. The representativeness of 25% of the domestic industry applies to all types of industry in accordance with the Anti dumping Agreement.

2. Review of the margin of dumping

Colombia 6, 7:

According to paragraphs 87 and 88 of the Secretariat Report: "As of 30 June 2010, the average length of an anti dumping measure applied by India was 56.7 months. The longest lasting measure was 161 months (acrylonitrile butadiene rubber from Korea); 18 duties had been in place for over 10 years, and 81 measures for at least 5 years.

During 2006 10, 113 sunset reviews were initiated. They resulted in the elimination of the measure in 38 cases, and in re imposition in 57 cases; the remaining cases were pending as of late 2010."

6. In the case of sunset reviews of anti dumping measures, does the Investigating Authority perform new calculations in order to establish dumping and modify the margin of dumping and hence the corresponding anti dumping duty?

Reply: During the sunset review investigations, the Authority performs new calculations of dumping margin for the period of investigation of the review. The dumping margin of the review investigation can be modified, or may remain the same depending upon the outcome of the review investigation.

7. What is the established time period for conducting the prospective analyses of serious injury and causal link?

Reply: In review investigation, the time period for conducting prospective analysis of likelihood of dumping and injury is mentioned in the exporters' questionnaire (part 2) and is generally up to two years after the period of investigation (POI) of review.

(b) Safeguards

Legislative and administrative framework

1. Proceedings of the Standing Board on Safeguards

Colombia 8:

According to paragraph 92 of the Secretariat Report: "The Director General (Safeguards), in the Department of Revenue has responsibility for hearing the petitions and conduct investigations on safeguards. The Director General is also responsible for carrying out recommendations under the Indo Singapore Trade Agreement (Safeguard Measures) Rules 2009. A request for a safeguard investigation must be made in writing to the Director General, by or on behalf of the domestic industry. The Director General may also self initiate an investigation upon information received from any Commissioner of Customs. If the safeguard measures are requested to be imposed for more than a year, details of efforts made or planned in order to adjust positively to import competition, including details of progressive liberalization, must be provided, under the Safeguard Duty Rules 1997. Thereafter, the Director General may initiate an investigation to determine the existence of serious injury or threat thereof to the domestic industry, caused by the import of an article in such increased quantities, absolute or relative to domestic production. A safeguard investigation must be completed and notified publicly within eight months of initiation of the investigation (or within the period allowed by the Central Government). The proceedings of the Standing Board on Safeguards are not open to the public."

8. What legal provisions preclude the opening of such proceedings to the public, since this could violate the principle of transparency and the right of defence established in WTO law in this type of investigation?

Reply: Safeguard investigations are conducted by DG Safeguards as per the Safeguard Duty Rules which are available on the website of DG Safeguards. All interested parties are provided adequate opportunities to present their views as per the requirement of Article 3 of the Safeguard Agreement. India makes notifications to the Safeguard Committee as per the requirement of Article 12 of Safeguard Agreement to ensure transparency of the measures being taken. The functioning of the Standing Board on Safeguards is an inter ministerial consultation process on the recommendation of the DG Safeguards to facilitate the decision making by the Central Government.

2. Exemption from duty

Colombia 9:

According to paragraph 92 of the Secretariat Report: "Its views are placed before the Finance Minister for approval in respect of safeguard duties and before the Commerce Minister for imposition of quantitative restrictions. If the Central Government, after conducting a safeguard investigation, is satisfied that any article is imported into India in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic industry, it may, by notification in the Official Gazette, impose a safeguard duty on that article. The Central Government may exempt any article from payment of the whole or part of the safeguard duty upon notification in the Official Gazette. The notification must include the article exempted, the quantity exempted, and the article's origin."

9. What criteria and conditions does the Central Government take into account for granting this type of exemption for certain products? Is this extended to a particular country, and under what conditions would a country be granted such an exemption?

Reply: India's Safeguard Legislation under Section 8B of the Customs Tariff Act 1975 contains provisions regarding the power of Central Government to impose safeguard duty, which inter alia includes a provision regarding exemption of certain developing countries from safeguard duty as per Article 9.1 of the WTO Safeguard Agreement.

3. Critical circumstances

Colombia 10:

According to paragraph 93 of the Secretariat Report: "If a request is made for provisional safeguard measures, full and detailed information regarding the existence of critical circumstances and how a delay in applying the measures would cause damage difficult to repair needs to be considered. The Director General may record preliminary findings in such cases and issue a public notice. These preliminary findings are placed before the Central Government through the Board on Safeguards. Provisional measures may be imposed by the Central Government for up to 200 days."

10. What have been the main critical circumstances criteria for establishing provisional measures, and among these criteria has any kind of exemption been envisaged for the developing countries?

Reply: Under Rule 2 of Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 (Safeguard Duty Rules), "critical circumstances" have been defined. The criteria of "critical circumstances" is considered on merits by the Investigating Authority after examining the evidence in this regard. Provision regarding exemption to developing countries as per Article 9.1 of Safeguard Agreement is contained in Section 8B of Customs Tariff Act, 1975.

4. Quantitative restrictions

Colombia 11:

According to paragraph 95 of the Secretariat Report: "Until 2010, safeguard measures could only take the form of duty surcharges. The Foreign Trade (Development and Regulation) Amendment Act 2010 (No. 25 of 2010) amended India's safeguard legislation to allow for the use of quantitative restrictions as remedy measures. The amendment allows 'the Central Government, after conducting such enquiry as it deems fit, is satisfied that any goods are imported into India in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic industry, it may, by notification in the Official Gazette, impose such quantitative restrictions on the import of such goods as it may deem fit'. The quantitative restrictions may not be applied on imports of goods originating from a developing country if the share of imports does not exceed 3 per cent; or on imports of goods originating from more than one developing country so long as the aggregate of imports from all countries does not exceed 9 per cent of the total imports of such goods into India."

11. What are the criteria in India's legislation for applying quantitative restrictions on imports? What mechanism is used to establish the level of imports subject to a quantitative restriction and how is this maximum level divided across the various exporting countries?

Reply: The Foreign Trade (Development and Regulation) Act,1992 has been amended in August 2010 to provide safeguard measures consistent with WTO Agreement on Safeguards and the corresponding Rules are being formulated. The criteria for applying such quantitative restrictions will be in accordance with the WTO Agreement on Safeguards.

(x) Sanitary and phytosanitary measures (SPS)

India has a coordinated system of inspection, surveillance and control in the sanitary and phytosanitary sphere. The Report notes that India has nominated three institutions as national enquiry points under the WTO SPS Agreement, namely the Department of Animal Husbandry, Dairying, and Fisheries for animal health and related issues; the Department of Health for food safety related issues and plant protection; and the Department of Agriculture and Cooperation for plant health or phytosanitary issues. Between 1996 and February 2011, India made 71 notifications to the Committee on Sanitary and Phytosanitary Measures.

Imports of animal products require sanitary import permits issued by the Department of Animal Husbandry, Dairying, and Fisheries, once the relevant risk analysis has been conducted. These sanitary import permits are not licences, but certificates verifying that India's sanitary requirements are fulfilled.

In this connection and given the information contained in the Report, we have no specific questions or comments on SPS matters for this TPR.

(2) Measures Directly Affecting Exports

(viii) Export promotion and marketing assistance

Colombia 12, 13:

According to paragraph 170 [Translator's note: paragraph 169] of the Secretariat Report, the Department of Commerce has provided support for trade facilitation, such as the single window for clearance of goods and e trading facilities.

12. How many entities are involved in the issuing of documents via the single window? What trade transactions can be conducted through this window? Has this portal made it possible to reduce the costs and time involved in foreign trade operations?

Reply: As an important partner in the "eTRADE" project, the endeavour is to successfully integrate with all relevant network partners. Department of Commerce has implemented an automated environment for web based electronic filing and provided a retrieval and authentication system of electronic documents based on an agreed protocols and message exchange with its community partners primarily customs, banks and export promotion councils, other export promotion bodies at all the regional offices of the DGFT. Payment of authorization fee is made through the electronic fund transfer mode (EFT). Digital signature has been integrated into the authorization application processing. Message exchange on Registration Cum Membership Certificate (RCMC) data with Export Promotion Council's has been started in August 2010.

Significant progress has been made to implement e trade project in a time bound manner to bring all stakeholders including Customs, DGFT, banks, ports, airlines etc. on a common platform. This will obviously add to our endeavour to achieve the objective of single window concept for foreign trade, which will further reduce the cost and the transaction time.

13. In order to streamline procedures, does India have or envisage having goods simultaneously inspected by all control bodies involved in export and import procedures? What has been its experience in this regard?

Reply: To the extent possible, Customs tries to ensure that examination, if any for customs purposes is carried out in the presence of other regulatory bodies. As such, it is Government's endeavor to ensure that the imported goods and export goods are inspected, where necessary by all regulatory bodies simultaneously.

(3) Measures Affecting Production And Trade

(vi) Intellectual property rights

(i) Trade secrets

Colombia 14:

According to paragraph 297 of the Secretariat Report: "India has no specific legislation regulating the protection of trade secrets; hence enforcement measures/penalties for violations of trade secrets are available through common law. Trade secrets are protected either through contract law or through the equitable doctrine of breach of confidentiality. The Indian Contract Act (Section 27) provides some sort of limited protection as it bars any person from disclosing information acquired as a result of a contract. It is also common to insert a confidentiality clause in a technology transfer or other licence agreement to maintain the confidential nature of the subject matter, not only during the employment period of the employees and contractors but also after its termination, though for a fixed period. Aggrieved parties may seek action through the civil courts by obtaining an injunction preventing a third party from disclosing the trade secrets, return of all confidential information and proprietary information, and compensation for any loss suffered due to disclosure of trade secrets."

Bearing in mind that Article 39 of the TRIPS Agreement establishes that for confidential information to be subject to protection it must possess three characteristics, namely that it "(a) is secret in the sense that it is not, as a body or in the precise configuration and assembly […], generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; (b) has commercial value because it is secret; and (c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret":

14. How does India ensure the consistency of its domestic legislation with the aforementioned conditions? Does its domestic legislation include these characteristics?

Reply: Article 39 of TRIPS provides flexibilities to the members on enforcement of protection of undisclosed data. Our existing domestic laws are protecting the undisclosed data.

IV. TRADE POLICIES BY SELECTED SECTOR

(2) Agriculture

(ii) Agricultural policy objectives

Colombia 15:

According to paragraph 11, page 128, of the Secretariat Report: "Agricultural policy is formulated and implemented mainly by the Ministry of Agriculture at the central level with the assistance of other institutions [...]. India's current agricultural policy is outlined in the 11^th Five Year Plan (2007 12), which identified three core policy objectives: food security, food self sufficiency, and income support for farmers.² In order to meet these objectives, India actively intervenes in the agriculture sector, including in production, marketing, consumption, and international trade."

15. Would India please provide details concerning the intervention mechanisms used in the case of marketing of agricultural production?