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Maritime transport (WT/TPR/S/249, p.162, para.136)
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Maritime transport (WT/TPR/S/249, p.162, para.136)We noted that the Draft Policy (Revised) for the Maritime Sector 2005 outlining the maritime transport development plan up to 2025 has not be implemented and was reshaped into the India Maritime Agenda 2010 2020. We would like to know if there is any initiative for liberalization of the sector under the plan. Please share with us more details of such initiative, including its implementation schedule. Reply: Government of India has released a comprehensive vision document on maritime sector for the next ten years as Maritime Agenda, 2010 2020. The liberalisation policy in the port sector was initiated in 1996. With the opening up of the Indian economy, under the liberalised policy, the Government of India has allowed private sector participation in major ports to infuse funds, induct latest technology, improved management practices and above all addition of capacity. Foreign direct investment up to 100% is permitted for construction and maintenance of ports and harbours. As per the Maritime Agenda, 2010 2020, following policy directions have been envisaged: The Major ports have been working towards implementing "landlord port" concept duly limiting their role to maintenance of channels and basic infrastructure leaving the development operation management of terminal and cargo handling facilities to the private sector. This approach will continue and total realisation of this concept is expected by 2020. Public private partnerships will be the preferred mode for the development of port terminals and other commercially viable activities in the major ports. The standardization of RFQ, RFP and MCA and the formulation of guidelines for fixation of upfront tariffs have served to make the PPP process transparent and to give confidence to the investors. These documents will be reviewed periodically. Hong Kong China 7: Tourism (WT/TPR/S/249, p.174, para.183; and p.176, para.187) The Secretariat report mentions that there is no specific legislation to regulate the tourism sector and other related activities in India. However, we also note that there is a voluntary based licence scheme for travel agents, tour operators and tourist transport operators. According to the report citing information of the Indian authorities, "a foreigner may not operate as a travel agent, tour operator or tourist transport operator" under this licence scheme. In this regard, we would like to know whether a foreigner, or a foreign company, could operate as a travel agent, tour operator, or tourist transport operator in India without the "voluntary" licences. If not, what is the legal basis of such a restriction? Reply: The Ministry of Tourism grants approval/recognition and not licencing to the various service providers in the categories of inbound tour operators, domestic tour operators, tourist transport operator, adventure tour operator and travel agencies as per the revised guidelines dated 18.07.2011. The aims and objectives of the scheme for recognition of service providers in all the said five categories are to improve their quality standards and service so as to promote tourism in India and abroad. This is a voluntary scheme open to all bonafide service providers in India to bring them in organized sector. The approval/recognition is given by Ministry of Tourism only to those service providers who are in operation/business in India for more than a year. However, the service provider has to obtain license/permission from various Central Government and state Government authorities on case to case basis to start their business. INDONESIA Indonesia 1: Report by the Secretariat: INVESTMENT REGIME: Foreign Investment Regime: Since 1 April 2010, foreign direct investment (FDI) has been regulated by the Consolidated FDI Policy issued by the Department of Industrial Policy and Promotion (DIPP). The first Consolidated FDI Policy was issued in 1 April 2010 to reflect the current regulatory framework by consolidating all prior regulations on FDI contained in the Foreign Exchange Management Act (FEMA) 1999, the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations 2000, and the Reserve Bank of India circulars and press notes. Could India please elaborate further the arrangement under this policy and would there be a significant change under this new FDI Policy? (WT/TPR/S/249, Page 31, Para 35) 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 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. The policy on FDI is reviewed on a continuing basis, with a view to its further liberalization and increasing its investor friendliness. The review is carried out through a consultative process, with the involvement of stakeholders, both from within and outside the Government. It may, therefore, not be possible to specify future changes at this stage. Indonesia 2: Report by the Secretariat: MEASURES DIRECTLY AFFECTING IMPORTS: Tariffs As noted in the report by Secretariat, in year 2010/11, tariffs range from zero to 150%. The majority of lines (71% or 8,042) carry a rate greater than 5% but less than 10%, while 12.8% of total lines have a tariff rate greater than zero but less than 5%. This is a major change from 2006/07, when 65% of all lines were within the 10 15% range, and 10.4% of lines at 25 30%. In reality, the Indonesian exporters are still experiencing problems to export paper products due to high tariff imposed by India. Does this policy still exist and if it does, could India please provide further explanation? Does India also have a program to reduce high tariff? (WT/TPR/S/249, Page 44, Para 30) Reply: Paper products, in general, attract basic customs duty of 10% only. Newsprint and light weight coated paper for printing of magazines are fully exempt from this duty. Newsprint is also exempt from additional custom duty and special additional duty (SAD) of 4%. Indonesia 3: Report by the Secretariat: MEASURES DIRECTLY AFFECTING IMPORTS: Tariffs Preferential rates are granted for certain articles under GSTP, regional (SAFTA, APTA, MERCOSUR, and ASEAN), and bilateral agreements (Singapore, Korea, Rep. of Chile, and Sri Lanka). Under the GSTP, India has granted tariff concession to 12 countries on a limited number of products. With regard to differences in applied tariff, the Indonesian tire producers were still subject to 10% of tariff, while the same products imported from some other countries enjoyed benefit from lower tariffs. Could India please explain the reason of implementing different treatments under the policy? (Referred to document WT/TPR/S/249, Page 49, Para 41) Reply: The basic customs duty on tyres is currently 10%. Since free trade agreements or preferential trade agreements are negotiated bilaterally on the principle of reciprocity, the coverage of products and extent of tariff reductions committed under each may vary. Indonesia 4: Report by the Secretariat: MEASURES DIRECTLY AFFECTING IMPORTS: Technical Regulations and Standards Para 106 stated "Fees under the Foreign Manufacturers Certification Scheme, in place since 1999, are: Rs 1,000 for the application, US$300 for processing, US$2,000 for marking, and a unit rate fee, which varies according to the product"; and further in the foot note 123 stated that "The renewal application fee is Rs 500, the license fee is Rs 1,000 per year, and there is a minimum annual marking fee of US$2,000 and a marking fee based on production marked during the preceding operative year of license payable in U.S. dollars less the amount already paid on quarterly basis. Based on the above mentioned figures, Indonesia would like to seek further clarification from India to ensure that the scheme would not create burdensome to particular industries. (WT/TPR/S/249, Page 69, Para 106) Reply: No reply is being furnished as no specific query has been raised. Indonesia 5: Report by the Secretariat: MEASURES DIRECTLY AFFECTING IMPORTS: Technical Regulations and Standards As mentioned in para 108 "BIS laboratories have test facilities for most under the Certification Marks Scheme. In addition to the BIS laboratories, services are provided by 115 national laboratories recognized under the BIS Laboratory Recognition Scheme". In that regard, Indonesia would like to request India to elaborate further the BIS Laboratory Recognition Scheme, considering that the Indonesian National Accreditation Body (KAN) has not signed MoU with BIS. The Indonesian laboratories testing result had apparently been rejected by the Indian authorities. In response to this problem, we would recommend if India could accept the APLAC/ILAC MRA scheme. (WT/TPR/S/249, Page 70, Para 108) Reply: Accreditation is one of the requirements of the BIS Lab Recognition Scheme. Accreditation by signatories to APLAC/ILAC is acceptable. The details of the BIS Lab Recognition Scheme are available at BIS Website http://www.bis.org.in. Indonesia 6: Report by the Secretariat: MEASURES DIRECTLY AFFECTING IMPORTS: Technical Regulations and Standards As noted in the report by Secretariat, The Legal Metrology Act and The Legal Metrology (Packed Commodities Rules 2011 implemented as of 1 April 2011, replaced the Standards of Weights and Measures Act 1976, the Standard of Weights and Measures (enforcement) Act 1985 and the Standards of Weights and Measures (Packaged Commodities) Rules 1977, which regulated labelling requirements in India. Labelling requirements are uniform across all states and for all foreign suppliers. Labels must be in Hindi (Devnagiri script) and in English, they must be written in the language of the locality where the products is ultimately sold. This increases distribution cost, since India has 16 official languages, and food processing companies often do not know which pallet of food products will be transported to a specific State. We are of the view that the labelling requirements may create barriers to trade because it would increase distribution cost, particularly to those foreign suppliers. Hence we would like to know if the Government of India had also implemented any other policy in this regard? (WT/TPR/S/249, page 70, Para 112 and Para 114) Reply: Rule 9(4) of Legal Metrology (Packaged Commodities) Rules 2011 lay down that labelling declaration on "a package" shall either be in Hindi in Devnagri script or in English. Thus, it is clear that even a single declaration in English is adequate to meet the requirements. Indonesia 7: Report by the Secretariat: MEASURES DIRECTLY AFFECTING IMPORTS: Sanitary and Phytosanitary Measures (SPS) Imports of animal products into India require sanitary imports permits issued by the Department of Animal Husbandry, Dairy and Fisheries; permits must be obtained prior to shipping from the country of origin. The Department approves or reject the application after an import risk analysis on a case by case basis. Could India please provide further explanation concerning the mechanism of approval and rejection on a case by case basis? Are the import risk analysis based on commodity kind, country, kind of animal disease, or other parameters? (WT/TPR/S/249, Page 73, Para 121). Reply: The sanitary import permit is issued for import of livestock products if, after a detailed import risk analysis, it is found that the import of the consignment will not adversely affect the health of the animal and human populations of the country. The import risk analysis is conducted by a committee of officers of the Department on the basis of internationally recognized scientific principles of risk analysis. The analysis is conducted with reference to the specific product and the disease situation prevailing in the exporting country vis à vis the disease situation in India. Indonesia 8: Report by the Secretariat: MEASURES AFFECTING PRODUCTION AND TRADE: Incentives As noted in the report by secretariat, the central government allocates funds to subsidize interest rates, including to exporters managed by Ministry of Finance, and of Heavy Industries and Public Enterprises. Preferential interest rates to exporters, was given to many sectors during 1 April 2007 up to 31 March 2011. Could India please provide further explanation to ensure that the allocated funds to subsidize interest rate to Indian exporters are still in accordance with WTO Rules (SCM Agreement). Does India intend to maintain its policy in the future? (WT/TPR/S/249, Page 92, Para 181). Reply: The Benchmark Prime Lending Rate (BPLR) system was replaced by the Base Rate System with effect from 1 July 2010. Banks may choose any benchmark/methodology to arrive at the Base Rate that may be disclosed transparently. Banks may determine their actual lending rates on loans and advances with reference to the base rate and by including such other customer specific charges as considered appropriate. Accordingly, under the Base Rate System interest rates applicable for all tenors of fresh/renewed rupee export credit advances are at or above base rate. Therefore, the interest rates on export credit based on the Base Rate System do not lead to subsidy as per ASCM. OTHERS: Indonesia 9: Pneumatic tyres and tubes for automotive vehicles (G/TBT/N/IND/20 and Add.1: G/TBT/N/IND/40 and Rev.1) Indonesia would like to seek clarification from India whether there are only two laboratories approved by the Indian authorities to conduct conformity assessments. Indonesia would recommend if India could accept the result of laboratories accredited by the accreditation body where they have already signed APLAC/ILAC MRA. Reply: Yes, at present there are only two laboratories approved by BIS for testing of pneumatic tyres and tubes. Recognition of one additional lab is under process. The results of such laboratories can be accepted provided they are recognized by BIS. Indonesia 10: Drugs and Cosmetics Rules 2007 (G/TBT/N/IND/33) Indonesia would like to seek further clarification from India on whether there is a different treatment on the validity period of Cosmetics Registration Certificates between foreign and domestic manufactures as well as import licensing requirements. Reply: The domestic manufacturers of cosmetic products are required to get manufacturing license, which is valid for five years. They are subject to stringent quality checks whereas imports are free without any requirement of such conditions. JAPAN The Secretariat Report (WT/TPR/S/249) III. TRADE POLICIES AND PRACTICIES BY MEASURE (2) MEASURES DIRECTLY AFFECTING IMPORTS (iv) Tariffs (c) Tariff rate quotas (Question 1: Page 48, paragraph 37) The WTO secretariat's report states that "the authorities noted that the fill ratio of these quotas is low, apparently because of lack of demand". According to the trade data (WTO IDB data), however, there are substantial amounts of imports for some of the products listed in Table III.6 (Skimmed milk powder/whole milk powder) even though the secretariat's report says the amount of in quota total imports are zero. Could India kindly explain more in detail why the amount of in quota total imports are zero according to the secretariat's report while there are substantial amounts of imports according to the IDB data? Reply: As per our record, imports of skimmed milk took place only in one year as reflected in the TPR Report at Table III.6. (v) Other charges affecting imports (Question 2: Page 50, paragraph 42) As to the Indian Education Cess referred to in Chapter Ⅲ (2)(ⅴ), Japan understands that the Standing Committee on Finance in the Indian Parliament discussed its policy on the Cess in 2010, including the possibility of abolishing it. Japan would like to request India to give more information on the current situation in the discussions and the future prospects in the matter. Reply: There was no such discussion in the Standing Committee on Finance. (viii) Contingency measures (Question 3: Page 61, paragraph 74, 75) (An anti dumping measure on 1,1,1,2 Tetrafluoroethane or R 134a of all types from Japan) (1) The Indian Regulatory Authorities (The Directorate General of Anti Dumping and Allied Duties (DGAD)) initiated investigations into this product on 19 August 2009. A preliminary determination was made on 19 February 2010. On 30 July 2010, DGAD issued a public notice to extending the investigation for another 6 months, to 18 February 2011. Despite the time frame set by DGAD, it came to its final determination on 10 May 2011, more than 20 months after the initiation. According to Article 5.10 of the Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (herein after referred to as " the AD Agreement"), "[i]nvestigations shall, except in special circumstances, be concluded within one year, and in no case more than 18 months, after their initiation." However, DGAD made the final determination more than 20 months after the initiation. Could India explain how this practice is consistent with Article 1 and Article 5.10 of the AD Agreement, which precludes WTO members from imposing anti dumping duties without conducting an investigation in accordance with the provisions of the Agreement? (2) Article 5.10 of the AD Agreement stipulates that "investigations shall, except in special circumstances, be concluded within one year". Neither in the notice of extension issued on 30 July 2010 nor in the final determination issued on 10 May 2011 did DGAD explain explicitly what "special circumstances" existed in this case. Could India give the "special circumstances" which prevented the investigation from concluding within one year? (3) In its final determination issued on 10 May 2011, DGAD states that "pursuant to the orders dated 6 January 2011 of the Hon'ble Division Bench of the Madras High Court and orders dated 3 February 2011 of the Hon'ble Supreme Court, the subject investigation continued beyond the maximum time limit prescribed under the AD Agreement i.e. 18 February 2011". Could India explain how this practice is consistent with the WTO Agreements? (4) Article 6.9 of the AD Agreement stipulates that "the authorities shall, before a final determination is made, inform all interested parties of the essential facts". In this case, neither the Government of Japan nor those Japanese companies identified as interested parties had been informed of the essential facts before the final determination, which prevented them from defending their interests as is guaranteed under the AD Agreement. This means that, the Government of Japan and the Japanese companies involved were deprived of an opportunity to defend their interests. Could India explain how this practice is consistent with the AD Agreement? Reply: Japan had also raised these questions in the Committee on Anti Dumping Practices. India has very recently provided responses which have been circulated vide WTO document G/ADP/Q2/IND/5 dated 22 August 2011. (An anti dumping measure on Polyvinyl Chloride Paste Resin (PVC Paste Resin) from Japan) (5) The Indian Regulatory Authorities (DGAD) initiated an investigation into this product on 3 November 2009. A preliminary determination was made on 11 June 2010. Since then, there had been no announcement from DGAD until the Embassy of Japan in India received a disclosure of the essential facts on 27 April 2011, which indicated the intention of DGAD to issue its final determination on 2 May, two working days after the disclosure of the essential facts and the last day before the investigation would have exceeded 18 months. On 2 May 2011, DGAD made its final determination. Article 5.10 of the AD Agreement stipulates that "investigations shall, except in special circumstances, be concluded within one year". In this case, DGAD did not issue a notice of extension as it had done for the investigation into 1,1,1,2 Tetrafluoroethane or R 134a of all types. Could India explain the "special circumstances" which prevented the investigation from concluding within one year? In addition, please explain why there was no public notice of extension in this case while DGAD had issued one for the investigation of 1,1,1,2 Tetrafluoroethane or R 134a. (6) Article 6.9 of the AD Agreement stipulates that the disclosure of the essential facts under consideration "should take place in sufficient time for the parties to defend their interests". Could India explain how the above practice is consistent with the AD Agreement? (7) According to the public notice on the imposition of provisional measures issued on 26 July 2010," the anti dumping duty imposed under this notification shall be effective up to and inclusive of 25th January 2011." In spite of this notice, Indian customs continued to collect a provisional anti dumping duty even after 25th January 2011. Article 7.4 of the AD Agreement stipulates that "[t]he application of provisional measures shall be limited to as short a period as possible, (...), to a period not exceeding six months". Could India explain how this practice is consistent with the AD Agreement? (8) In this case, the imports from Japan turned out to be negligible, 0.19 per cent of the total imports, in the final determination. In the preliminary determination, DGAD recommended the imposition of an anti dumping duty on the imports from Japan, and the Ministry of Finance issued a notice to impose US$111.63/MT in anti dumping duty. Article 10.3 of the AD Agreement stipulates that "[i]f the definitive duty is lower than the provisional duty paid or payable, (…), the difference shall be reimbursed." Could India ensure that the duties collected will be promptly reimbursed? Reply: Japan had also raised these questions in the Committee on Anti Dumping Practices. India had provided responses which were circulated in WTO document G/ADP/Q2/IND/5 dated 22 August 2011. (Sunset Review of Anti dumping duties on Styrene Butadiene Rubber (SBR) 1900 series from Japan) (9) The Indian Regulatory Authorities (DGAD) made the final determination of the second sunset review of this product on 30 June 2010, and recommended an extension of the anti dumping duty to the Ministry of Finance. However, even though one year has passed, the Ministry of Finance has not yet published the extension notification. Could India indicate when the Ministry of Finance will publish the notification? In addition, please explain why the Ministry of Finance could not publish it for such a long period. (10) In this case, it is not clear whether the anti dumping duty was collected or not during the period from the final determination by DGAD to the notification of the Ministry of Finance. Could India clarify this? Reply: Though the DGAD had made recommendation in the sunset review for continuation of anti dumping measures, the Ministry of Finance did not impose measures and confirmed to this effect on 21 April 2011. Accordingly the anti dumping duty on styrene butadiene rubber (SBR) has been terminated with effect from 27 June 2010. This has been informed by India in the semi annual report for period 1 July–31 December 2010. (ix) Technical regulations and standards (a) Standards (Question 4: Page 67, paragraph 99) (Background) In regard to the conformity assessment procedure on India's mandatory certification on iron and steel products, Japan understands that India has postponed the enforcement of the "Second Order" since February 12, 2009. However, Japan has heard that the Indian government adopted a mandatory standard for the "Second Order" on June 24, 2011. Japan has managed to achieve the safety and protection of consumers by implementing many strict regulations on finished products, e.g. the Building Standard Law or the Electrical Appliance and Material Safety Act. The Japanese government has not implemented mandatory certification regulations on intermediate products, but only on finished products, because certification on intermediate products is not useful. Japan would like to remind India that even if such a regulation is enforced, it should be implemented in a way that is consistent with Article 2.2 of the TBT Agreement which stipulates that "technical regulations shall not be more trade restrictive than necessary to fulfil a legitimate objective", reflecting the spirit of the series of G 20 Commitments, as well as giving adequate consideration to actual business transactions. Japan would like to request India to seriously review the need for its current technical regulations on iron and steel products from the point of view on both their political objectives and actual economic effects. Then, Japan expects that imposed technical regulations on steel products will be eliminated as soon as possible and no more technical regulations on steel products will be imposed in the future. From the above mentioned point of view, Japan would like to ask the following questions; (1) Japan is aware that the government of India understands this position and Japan believes that India will not establish any further mandatory standards for intermediate products. Japan would like to know the development of Indian Standard (IS) on steel since last February. (2) If mandatory standards are applied to a broader range of steel materials, Japan asks India to consider introducing an exemption mechanism for steel materials that conform to internationally recognized standards like JIS that are equal to or stricter than BIS. Indonesia, Malaysia and other ASEAN countries have already enacted such exemption mechanisms. Reply: Decision regarding notifying Indian standards on steel and steel products, or for any other products, for mandatory compliance under a licence from BIS rests with the Central Government/regulatory body. The list of Indian standards on steel and steel products established since Februarz 2011 is given below:
Section 14 of the BIS Act 1986, empowers the Central Government to notify, in the public interest, any article of any scheduled industry which shall compulsorily conform to Indian standard under a licence from BIS. This provision does not permit accommodation of any other standard, whether equal or stricter. We cannot agree to the suggestion of Japan since we believe that JIS is not a relevant international standard. (c) Certification and conformity assessment (Question 5: Page 69, paragraph 105) With regard to the mandatory certification system for automobile tyres, Japan has indicated the problems several times at WTO/TBT Committee and bilateral meetings. The Indian government has already implemented their system, while Japanese tire manufacturers have not yet had several tires certified due to insufficient capacity of the certification authorities, such as the Bureau of Indian Standards, and two testing laboratories. Due to these circumstances, the relevant Japanese companies have been forced to suspend exports from Japan to India and this situation is tantamount to building a technical barrier to trade. Japan would like to know what the Indian government thinks of this situation in the context of WTO rules. Reply: BIS as a certification authority has sufficient capacity. BIS till date has received 12 applications for grant of license for pneumatic tyres from Japanese manufacturers. Out of these, licenses have been granted in 11 cases. Only in one case, the application is pending as the visit was delayed because of the natural calamity in Japan. Presently, the samples are being tested. (Question 6: Page 69, paragraph 105) The Government of India amended the Unified Access Service License Agreement for security related concerns for the expansion of Telecom Services in various zones of the country on 31 May 2011. Article 41.6 A (iii) of this amendment prescribes that "[f]rom 1st April 2013 the certification shall be made only through authorized and certified agencies/labs in India," although before 1st April 2013 foreign labs can certify conformity. Please explain the reasons why the Government of India will narrow down the scope of certified labs. From the beginning, regarding the conformity assessment system based on ISO/IEC standards (e.g. ISO/IEC15408 and ISO/IEC27001), mutual recognition of these conformity assessment results has already been operated and is now established by an international framework. (For ISO/IEC15408, CCRA is already in operation. For ISO/IEC27001, IAF is now establishing a multilateral recognition program.) Japan knows that India is also joining these international frameworks. So, Japan is worried that if the Indian domestic rules which authorize only Indian agencies/laboratories come into effect in April 2013, it will be in contradiction to international rules. (If this domestic rule comes into effect, a mutual recognition system will not be able to work.) Please describe how the government of India will deal with these problems. Furthermore, please make clear the reason why the foreign conformity assessment body (CAB) will be excluded from the scope of certified agencies/labs. Please describe whether the government of India will accept the conformity assessment results of ISO/IEC15408 and ISO/IEC27001 by these foreign CABs. Please explain the background of this stipulation and decision making process. Even if these domestic rules come into effect in April 2013, please make sure that foreign funded CABs in India will be treated equivalently as well as Indian domestic CABs. In addition to the questions in the previous paragraphs, Japan has two more questions about the amendment. First, Article 41.6 A (vi) stipulates that "[t]he Licensee shall … ensure that all the documentation, including software details are obtained from manufacturer/vendor/supplier in English language''. Please describe what "software details" means and the difference from the source code. Second, Article 41.6 A (viii) prescribes that ''[t]he licensee … shall ensure that the Vendor/Supplier allow the Telecom Service Provider, Licensor/DoT, and/or its designated agencies to inspect the … software." Please describe details about the inspection of software and the relationship between the deposition of a source code and this inspection. Reply: There is no intention of not recognising the process based conformance test conducted by international labs for general IT products. The license amendment is clear in itself which implies that documents should be in English which is also a WTO official language. For ensuring that hardware and software being supplied are safe, right of inspection is normal in buyer supplier relationship. (3)MEASURES DIRECTLY AFFECTING EXPORTS (iv) Export prohibitions, restrictions, and licensing (Question 7: Pages 78, 214 215, paragraph 135 – 138, Table A III.5) Concerning paragraphs 135 to 138 of Article III and Table AIII.5 in the Appendix Tables, India has been imposing some export prohibitions. Could India please answer the following points: (1) Has India notified the WTO of these measures? And if not, when is India going to notify them? (2) Has India held consultations with other members as is stipulated in Article 12.1(b) of the Agreement on Agriculture? (3) Which article of the WTO agreements are these measures based on? (4) concerning these measures (i) exceptions on certain products Concerning paragraph 136 and Table AII.5, some products (e.g. basmati rice, organic non basmati rice and organic wheat) are not subject to export prohibitions. What are the reasons for these exceptions? (ii) exceptions for certain members Concerning Table AIII.5, exports to some Members are not subject to export prohibitions. What are the reasons for these exceptions, and what are the legal bases for these exceptions? (5) As an exporting Member, what does India think about the ramifications which export prohibitions have on importing Members? Reply: The various measures by India to, inter alia, address domestic concerns of inflation, ensuring domestic supply and food security, are taken in terms of relevant GATT/WTO provisions. (4)MEASURES AFFECTING PRODUCTION AND TRADE (v) Government procurement (Question 8: Page 106, paragraph 219) India is currently an observer to the WTO Agreement on Government Procurement (hereinafter referred to as "GPA"). Does India intend to accede to the GPA in the near future? If so, does India have any specific time line in view for accession? Reply: Issue of India commencing accession to GPA is under examination. At present, any commitment on this issue is not feasible. (vi) Intellectual property rights (Question 9: Page 112, paragraph 245) The Secretariat report mentions that India is making efforts to build public awareness to facilitate the enforcement of IPR. Japan would like India to show the effects of the public awareness activities by providing data, if any, for example the results of the public questionnaires. Reply: Since 2006 07 till March 2011, 505 awareness programmes were conducted and approximately 47000 people participated in these programmes. (Question 10: Page 113, paragraph 247) According to the Secretariat Report, "The Intellectual Property Appellate Board (IPAB) was constituted in 2003 to hear appeals against the decisions of the registrar of trademarks and geographical indications. However, as of 2007 the IPAB has also heard appeals regarding patents". It is known that almost 75% of its judgments were reversed by the High Court last year and a writ petition challenging the legality of the IPAB has been filed with the Madras High Court. So please explain a) the measures IPAB has taken or will take in order to develop its expertise on IPR, also b) any institutional or other systemic backgrounds for the high unsuccessful rate of its judgments and c) specific issue concerning the legality of IPAB. Reply (a) and (b): IPAB is a specialized appellate body to hear and decide appeals against the decisions of the Registrar of Trade Marks and under section 116 of the Patents Act against the decisions of the Controller of Patents. It exercises the powers and functions previously exercised by the high courts. The Board consists of a Chairman, Vice Chairman and three technical members whose qualifications are commensurate with their judicial responsibility. It is at present chaired by a retired Judge of the High Court of Madras. Reply (c): IPAB was established under Section 83 of the Trade Marks Act, 199. There are no issues about its legality. (Question 11: Page 113, paragraph 249) According to the Secretariat Report, "There are patent offices in Chennai, Delhi, Kolkata, and Mumbai that deal with patent applications originating within their respective territorial jurisdictions." Please explain the measures CGPDTM has taken or will take in order to harmonize criteria for the prosecution of patent applications between Offices. Reply: Patent applications are received and prosecuted according to their appropriate jurisdiction. The procedure adopted for prosecution of patent applications is same at all patent office locations as these procedures are strictly within the framework of Patents Act and Patent Rules. If any modifications are required to be incorporated in the patent procedures by virtue of amendments in the Patents Act and Patent Rules, the same are implemented equally at all locations. Thus, the criteria for the prosecution of patent applications between offices has been the same over the years. Further, electronic patent database has been created by digitizing the patent records and the same has been made available to users in the official website. From July 2009, the CGPDTM has implemented patent prosecution through application software modules by introducing Patent Office Procedure (POP) in all Patent Office locations in order to make patent prosecution speedier, transparent and user friendly. To bring further consistency in the office procedures, the CGPDTM published the Manual of Patent Office Practice and Procedure on 22 March 2011, after considering views of all the stakeholders. (Question 12: Page 114, paragraph 250) With Regard to the protection of Traditional Knowledge (TK), the Japan Patent Office (JPO) has utilized a Traditional Knowledge Digital Library (TKDL) in its substantive patent examinations as a reference tool, and has regularly reported the number of times the content of the TKDL was cited by the JPO examiners during the search process to the Council for Scientific and Industrial Research (CSIR) under the access agreement of the TKDL between the JPO and the CSIR in April 2011. In this connection, Japan would like to know how much TKDL is used in the substantive patent examinations by the Controller General of Patent, Design, and Trade Marks (CGPDTM). Reply: TKDL is used in the substantive patent examinations in Indian Patent Office as and when such use of TKDL is necessary for examination of patent application by virtue of the subject matter of the invention. (Question 13: Page 114, paragraph 250) According to the Secretariat report, "Section 3(d) of the Patent Act refers to the scope of patentability of pharmaceutical and other chemicals and calls for proof of the efficacy of the substance." Japan would like to know how ''efficacy'' is measured. (1) According to the explanation of Section 3(d) in India's "MANUAL OF PATENT OFFICE PRACTICE AND PROCEDURE" published in last March which says that "In a recent case in relation to a pharmaceutical substance, the Madras High Court held that efficacy means therapeutic efficacy". With regard to pharmaceutical substance related inventions, please indicate whether "efficacy" means only therapeutic efficacy, or not. (2) Please indicate whether there are any differences between the definition of efficacy for pharmaceutical substance related inventions and that for other chemical substance related inventions. Reply: According to Section 3(d) of the Indian Patents Act, the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance is not an invention and hence not patentable. The explanation given under Section 3(d) of the Indian Patents Act further elaborates on application of efficacy criteria to salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance. The explanation to Section 3(d) further clarifies that these substances may be considered as patentable only if they differ significantly in properties with regard to efficacy. The Examiner on a case to case basis applies the test as to what constitutes such salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives to differ significantly in properties with regard to efficacy from the known substance. The complete specification may bring out clearly and categorically in the description, as to how the subject matter differs significantly in properties with regard to efficacy from the known substance thereof. In a recent case (Novartis AG Vs. Union of India, W.P. No. 24760/06), the Madras High Court held that in relation to a pharmaceutical substance, the efficacy means therapeutic efficacy. It was held that: "… what the patent applicant is expected to show is, how effective the new discovery made would be in healing a disease and having a good effect on the body? In other words, the patent applicant is definitely aware as to what is the "therapeutic effect" of the drug for which he had already got a patent and what is the difference between the therapeutic effect of the patented drug and the drug in respect of which patent is asked for." In respect of inventions related to other fields of science the Court has held that: "Due to the advanced technology in all fields of science, it is possible to show by giving necessary comparative details based on such science that the discovery of a new form of a known substance had resulted in the enhancement of the known efficacy of the original substance and the derivatives so derived will not be the same substance, since the properties of the derivatives differ significantly with regard to efficacy." (Question 14: Page 115, paragraph 257) The Indian Patent Act provides that "parallel imports are allowed when authorized under the law." The Secretariat Report says that "the authorities noted that: "under the law" should be interpreted as the law of the country where the item is being produced." However, there is no citation supporting the Indian authorities' view. Since Article 107a can be interpreted as Indian law instead of "the law of the country where the item is being produced," Japan would like to make sure whether the Indian authorities' view on the interpretation of Article 107a is that "under the law" should be interpreted as the law of the country where the item is produced or not. Reply: The words "under the law" in section 107 A(b) of the Patents Act should be interpreted as the law of the country where a person is duly authorized under the law to produce, sell or distribute the product. (Question 15: Page 115, paragraph 258) The Secretariat Report mentions that "the number of patents granted relative to the number of patent applications has increased." However, according to the annual report of CGPDTM, the number of examined patent applications has been decreasing since 2006/07 and fell to 6069 applications in 2009/10, so a considerable number of backlog cases must have accumulated. Please describe what measures CGPDTM has taken or will take in order to deal with the backlog. Reply: It is generally true that "the number of patents granted relative to the number of patent applications has increased." However, the number of examined applications in a year may vary according to the availability of technical officers. Backlog of pending requests of examinations is about one lakh. In order to deal with the backlog, 248 additional examiners in various disciplines have already been selected on the basis of a competitive examination and these will be inducted during this year itself. (Question 16: Page 115, paragraph 260) The criminal punishment for patent offenders are mentioned in paragraph 260 of the Secretariat Report. It is provided that statements as to the extent to which a patented invention has been sold on a commercial scale in India shall be furnished and that any person who refuses or fails to furnish a statement shall be punishable with a fine which may reach ten lakh rupees. Both of them are stipulated in Indian patent act articles 146 and 122, respectively. Please describe what the interests are which are aimed to be protected by imposing a punishment against a breach of administrative obligation. Reply: The general principles of working of patented inventions are given in Section 83 of the Patents Act and, for fulfilment of these objectives, it is imperative that patented inventions are worked in India. Section 146 and Section 122 of the Act enable effective implementation of the general principles as the patented inventions which are not worked in India can be made available to the third party through compulsory license under certain terms and conditions. (Question 17: Page 116, paragraph 261) It is mentioned that "This amendment will enable India to accede to the Madrid Protocol." Please describe the anticipated date on which India will accede to the Madrid Protocol. Reply: The Trade Marks Amendment Bill to enable India to accede to the Madrid Protocol was passed by both Houses of Parliament. Presidential assent has also been received. The amendment will be notified only after Trade Marks Rules required for implementing the amendments in the legislation are notified. The amended Act and the Rules would be brought into force thereafter simultaneously after the infrastructure, manpower and other support systems are in place at the Trade Marks Registry. It is therefore not possible to anticipate the date on which India will accede to Madrid Protocol. (Question 18: Page 116, paragraph 264) According to the Secretariat's Report, "A trade mark application may be filed in any of the Registry offices in Ahmadabad, Delhi, Chennai, Kolkata or Mumbai, based on the territorial jurisdiction." Please describe what measures CGPDTM has taken or will take in order to harmonize criteria for the prosecution of trademark applications between Offices. Reply: The five trades marks offices in the country at Ahmadabad, Delhi, Chennai, Kolkata and Mumbai have been established only for the purpose of facilitating the registration of trade marks for the common man as per territorial limits defined in the rules. The procedure for prosecuting trade marks application is identical at all offices and the same Act, Rules and procedure are applied at all offices. The perception that different offices follow different practices is a wrong understanding. The branch offices are not intended to function independently but under the superintendence and directions of the Registrar. Under the scheme of the Act, the branch office functions include receiving applications for registration, offering hearing at the application or opposition stage and passing final order after hearing the parties. The function of the branch offices are not to be considered parallel or at par with those to the Head Office (Mumbai)which is responsible for the overall administration of the Act and Rules. In matters not specifically provided in the Act or Rules, the Registrar is considered to have the discretion or the final say for proper administration of the Act. (Question 19: Page 116, paragraph 265) According to the Secretariat's Report, "The Trade Marks Office reviews filed applications to ensure that they are complete. When an application for the registration of a trademark has been accepted, it is published", though according to the notice "CG/F/Public Notice/2011/360" by the CGPDTM 8183 files are still missing in the CGPDTM. Please describe what measures the CGPDTM has taken or will take to find the missing files as well as measures CGPDTM has taken or will take to avoid any unreasonable disadvantage for right holders during the stage of enforcement, etc. Reply: The CGPDTM has issued a Public Notice originally on 25.4.2011 and subsequently on 28.7.2011 concerning the loss of 8183 registered trade marks files that were missing as of that date. Physical Files have been reconstituted or reconstructed on the basis of documents furnished by the registered proprietors or his agent on record and uploaded in the official website. It may also be mentioned that CGPTDM in Misc. Petition No. O.A.109/2004/TM/DEL and O.A.110/2004/TM/DEL has informed IPAB that "most of the missing files have now been duly reconstituted or recovered or traced and the current position as of date (5.9.2011) in respect of missing registered trade marks files is as given below:
The last date for reconstitution of records has been extended up to 31.10.2011. Critical information in respect of every registered trade mark missing physical file are already available in the system. Such information include the trade mark applied for, the name of original proprietor, his address, the product or services in respect of which the trade mark is registered, the class in which the goods/services fall, the length of use of the registered trade mark extracted from the trade marks journal. Since critical information in respect of all missing physical records are available in the system, there is no likelihood of any disadvantage to the right holders during the stage of enforcement as apprehended India has put in public domain all the trade marks published in the trade marks journal right from Journal No. 1 till date. Publication of every trade marks before its registration is a mandatory requirement. The e register of trademarks has also been put in the public domain which contains, inter alia, the following information:
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