World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

WTO Secretariat's report, page 4, para. 7 and table I.2

The paragraph states that agriculture continues to be the mainstay of the majority of the population, occupying some 52% of the total workforce (including non organized labour). In the table below data only for organised employment is provided.

5. 
   Would it be possible to receive separate data for organised and unorganised labour?
   

Reply: An important characteristic of employment in India is the predominance of the unorganised sector. The size of the organised sector, characterised by higher earnings and job security is small. It accounted for less than 6% of the total employment in 2004 05. Over the years, organised sector employment has grown slowly than the growth in total employment, reflecting the faster growth of the unorganised sector. As a whole, about 96% of female employment is in the unorganised sector as against about 91% of males. In urban areas, the percentage of unorganised sector workers is close to 65 70%.

WTO Secretariat's report, page 6, para, 11

It is mentioned that no complete employment figures are available. The authorities have indicated that this is due to the relatively large segment of non organized (not formally employed) workers, and that only figures for organized employment are available.

6. 
   Would it be possible to receive an estimate of a proportion of unorganised employment?
   

Reply: Unorganized sector in the country constitutes about 94% of the work force.

The report indicates that agriculture accounts for just over 5% of total organized employment but this figure is misleading, as most agriculture labourers are not unionized or otherwise organized.

7. 
   What is the proportion of unionised labour in India? In this context, what is the current situation of India concerning possible ratification of ILO Conventions: C 98 Right to Organise Collective Bargaining and C87 Freedom of Association and Protection of the Right to Organise?
   

Reply: As estimated in 2006, the number of worker members of central trade unions and state trade unions was around 12 lakh and 77 lakh, respectively.

Conventions No. 87 and 98 are yet to be ratified due to conflicts with existing domestic laws and Constitutional provisions.

WTO Secretariat's report, page 6, para.12

It is mentioned that data from the Planning Commission show that 27.5% of the population lived under the poverty line in 2004/05, down from 36% in 1993/94. However, a 2009 study by an expert group, found a 37.2% poverty ratio for 2004/05. It is stated that although these levels are considerably below those of a decade ago, there is still a large number of poor, especially in the rural areas.

8. 
   What is the presumed reason for the large difference in data for 2004/2005 given by the Planning Commission and the expert group? On which basis is it concluded that poverty levels are considerably below those of a decade ago since the expert group study found that they did not change in years 1993/94   2004/05?
   

Reply: The expert group under the Chairmanship of Shri Suresh Tendulkar was constituted in 2009 to re examine the poverty estimates. The expert group recommended that the rural poverty line should be recomputed to reflect money value in rural areas of the same basket of consumption that is associated with the existing urban poverty ratio. The expert group recalibrated the rural poverty line in all States, which increases the population counted below the new poverty line. This explains the difference in data for 2004/2005 given by the Planning Commission and the expert group. As such, Planning Commission estimates and the expert group estimates cannot be compared with each other due to different ways of computing rural poverty.

(5) BALANCE OF PAYMENTS

WTO Secretariat's report, page 12 13

India continues to use both capital and current account controls, which are not contained in the reports.

9. 
   Could India provide an overview of these conditions, including on free repatriation of profits and divestment of FDI (as referred to in paragraph 38 of Secretariats report) and its plans for future, if any?
   

Reply: India is fully convertible on the current account since 1994. However certain quantitative restrictions have been placed on small list of current account transactions. Repatriation of profits in the form of dividend payments on foreign investments in India are treated as current account transactions and as such there are no restrictions on remittance of the same subject to payment of applicable taxes and tax laws in the matter. As regards capital account convertibility, India has followed a gradualist approach and capital controls are being liberalized in a calibrated manner. Foreign investment under the foreign direct investment (FDI) route is very liberal wherein FDI is allowed in almost all sectors (barring a few sensitive sectors) under the 100% automatic route for FDI (subject to the reporting requirements, pricing guidelines and other terms and conditions stipulated under the relevant FEMA regulations). Further transfer of shares under the FDI scheme from non residents to residents or divestment of shares/FDI investment by non resident investors is also under the automatic route subject to the respective reporting requirements, pricing guidelines and other relevant terms and conditions under the extant FEMA regulations.

II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES

(2) TRADE POLICY FORMULATION AND IMPLEMENTATION

WTO Secretariat's report, page 24, para. 14

10. 
    Would India explain what – if anything   it is doing to help its producers:
    

1. 
   Produce goods which are environmental and socially sustainable
   
2. 
   Access niche markets overseas through adherence to voluntary sustainability standards (for example, Fair Trade, UTZ Certified, Global G.A.P.)?
   

Reply: There is no internationally agreed definition of environmental goods (EGs), nor are there any agreed criteria for their classification. Given the challenges in defining and classifying these goods, there has been lack of convergence amongst WTO Members in defining or developing modalities for identification of environmental goods.

To increase consumer awareness, the MoEF, Government of India launched the voluntary eco labeling scheme known as "Ecomark" in 1991 vide Notification No. GSR 85(E) dated 20 February, 2011 for easy identification of environment friendly products. Any product which is made, used or disposed of in a way that significantly reduces the harm it would otherwise cause the environment could be considered as environment friendly product. The specific objectives of the scheme are as follows:

• 
  To provide an incentive for manufacturers and importers to reduce adverse environmental impact of products.
  
• 
  To reward genuine initiatives by companies to reduce adverse environmental impact of their products.
  
• 
  To assist consumers to become environmentally responsible in their daily lives by providing information to take account of environmental factors in their purchase decisions.
  
• 
  To encourage citizens to purchase products which have less harmful environmental impacts.
  
• 
  Ultimately to improve the quality of the environment and to encourage the sustainable management of resources.
  

So far, the Government of India has notified the final criteria for the following 16 product categories which also include processed fruits and vegetable under food items:

1. Soaps and detergents	2. Paper
3. Food items	4. Lubricating oils
5. Packaging material/package	6. Architectural paints and powder
7. Batteries	8. Electrical/electronic goods
9. Food additives	10. Wood substitutes
11. Cosmetics	12. Aerosol propellants
13. Plastic products	14. Textiles
15. Fire extinguishers	16. Leather

We are pleased to note that India has ratified four of the core ILO Conventions and three of the priority Conventions.

11. 
    Would India please indicate its intentions in relation to the ratification of the following core ILO Conventions which it has not yet ratified: Conventions 87, 98, 138, 182?
    

Reply: This has already been replied in questions 1 and 7 above.

(3) REGIONAL TRADE AGREEMENTS

(ii) Preferential and regional trade agreements

WTO Secretariat's report, page 27, para. 20

The report points to certain reservations by India regarding regionalism "because of its complexity and possible trade diversion".

11. 
    Could India elaborate further on these reservations, and the causes of such concern? How does India reconcile these concerns with its on going regional trade policy?
    

Reply: India believes that RTAs complement the multilateral rule based trading regime. India's concerns on regionalism stem not from possible trade diversion but from the multiple tariff differentials, complicated rules of origin and the duty inversion effect of RTAs and how these could act as a disincentive for local manufacturing.

WTO Secretariat's report, page 200 201, Table AII.3

According to our information, India's FTA with Japan, which was signed in February 2011, has entered into force on 1 August.

11. 
    Could India explain the main objectives pursued with this FTA? In addition, could India share information regarding the tariff coverage of this agreement? When does India plan to notify this FTA to WTO?
    

Furthermore, India has recently signed two bilateral FTAs with two ASEAN members, namely Malaysia and Thailand. These agreements have not yet been notified to WTO.

Reply: A Comprehensive Economic Partnership Agreement (CEPA) between India and Japan was signed on 16 February 2011. This Agreement has come into force from 1 August 2011. The main objectives pursued with this Agreement are to:

1. 
   liberalize and facilitate trade in goods and services between the Parties;
   
2. 
   increase investment opportunities and strengthen protection for investments and investment activities in the Parties;
   
3. 
   ensure protection of intellectual property and promote cooperation in the field thereof;
   
4. 
   promote cooperation for the effective enforcement of competition laws in each Party;
   
5. 
   improve business environment in each Party;
   
6. 
   establish a framework to enhance closer cooperation in the fields agreed to in this Agreement; and
   
7. 
   create effective procedures for the implementation and application of this Agreement and for the resolution of disputes.
   

The total coverage of liberalisation under this Agreement from Indian side is 87.16% and from Japanese side is 92% of tariff lines at 6 digit level.

The process to notify this Agreement to WTO is under way.

11. 
    Could India indicate when it plans to notify these two agreements to WTO?
    

Reply: The agreement with Malaysia will be notified shortly.

The agreement with Thailand covers only 82 tariff lines and is part of the Early Harvest Scheme under the Framework Agreement for Establishing a Free Trade Area between the Republic of India and the Kingdom of Thailand. The FTA is still under negotiation and would be notified to the WTO in due course.

WTO Secretariat's report, page 28, para. 21

Further to these two bilateral agreements, India concluded an FTA with another ASEAN Member, namely Singapore, which has been in force since 2005. These three bilateral agreements do co exist with the FTA that India signed with ASEAN in 2007 and which entered into force in 2010. According to the report, the Indian authorities noted that "tariff concessions under bilateral agreements with countries that also belong to regional agreements to which India is a party, are generally wider and deeper than those under the regional agreements and that the trader can choose which preference to use". Concerning rules of origin, it is stated that these are not necessarily the same in the bilateral and regional agreements but that the "origin criterion for products not covered by specific rules have, by and large, been harmonized".

11. 
    Could India spell out the reasons for having negotiated in parallel bilateral and regional agreements with the ASEAN Members?
    

Reply: Negotiations on the bilateral and regional agreements commenced at different points of time. While the bilateral with Singapore was concluded before the regional agreement with ASEAN gained traction, the other bilateral negotiations took a back seat when the ASEAN negotiations took off. The bilateral agreements are more ambitious than the regional agreement with ASEAN.

11. 
    Could India explain how it ensures that exporters are well informed about their respective advantages, and by which agreement can they benefit most from?
    

Reply: The information on RTAs is published in the official website of the Department of Commerce. In addition, the Department of Commerce organises outreach programmes in different parts of the country in partnership with industry associations and chambers of commerce.

11. 
    Is India working towards further harmonization of its rules of origin applied to bilateral and regional trade agreements?
    

Reply: Yes.

11. 
    Would India elaborate on the extent to which, and how, social and labour issues are addressed within each of the FTAs signed during the reviewing period?
    

Reply: India considers RTAs as instruments for increasing bilateral and regional trade with its partners with the aim of developing industry. India believes that social and labour issues are better dealt with by directly addressing them through targeted policy interventions and schemes and not by linking them with trade.

(4) INVESTMENT REGIME