World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Reply: In the very preamble of the Competition Act, the Competition Commission of India has been empowered to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interest of consumers and to ensure freedom of trade carried on by other participants in markets, in India. Since the export of goods and services would be affecting markets in foreign countries and not in India, hence the Competition Commission of India cannot take action in those matters as they fall outside India. However, other jurisdictions can take action if they find any violation of their respective acts.

Mexico 21:

In Paragraph 207, sub section iii) Competition Policy, it is pointed out that the Competition Act of 2002 covers all the business activities of the entities linked to the Government. However, special exemptions may be granted for reasons of safety or public interest or obligations under international treaties, agreements or conventions, and when a company meets sovereign functions on behalf of central government or a state government. No antitrust exemptions apply to the Central Public Sector enterprises, including in price preferences or in acquisitions. The absence of such express exemption is a positive element of the Competition Act, as are references to the Commission's role in promoting competition. However, the OECD notes that the Act does not impose any obligation on government agency to refer matters to the Commission (in the promotion of competition), and that the Commission's opinions are not binding.

Qn. Has India considered including provisions in the Competition Act which empowers the Competition Authority so that its advice to other government agencies are made binding?

Reply: Similar provisions are there even in the Acts of other countries/jurisdictions. The government agencies are independent bodies. However, the Government takes decision in totality.

NEW ZEALAND

Tariffs

New Zealand 1:

Report by the Secretariat (WT/TPR/S/249):pg xi, para 12:

New Zealand welcomes India's ongoing unilateral reductions in tariffs. The report notes that the average tariff line for WTO agricultural products is 33.3%, which is significantly higher than its average for WTO non agricultural productions (8.9%). While the report also states India considers it necessary to apply higher tariffs to agricultural products due to the strategic importance of the sector, does India plan further unilateral tariff reductions in the agricultural sector in the longer term to align them more closely to non agricultural products?

Reply: Food security and livelihood security are primary considerations for India. India has unilaterally reduced its applied tariffs on many agricultural items from time to time. India also undertakes temporary tariff reductions on a case to case basis whenever the domestic production of essential commodities falls significantly on account of drought or other natural calamities.

New Zealand 2:

Report by the Secretariat (WT/TPR/S/249): pg 44, para 29: Non ad valorem rates apply to 690 tariff lines, of which five are specific rates, while 685 are alternate rates affecting textiles and clothing. The report notes that the use of specific rates can increase considerably protection for certain products, in some cases to around 600%. Is India considering changing non ad valorem tariffs to ad valorem in the interests of greater transparency?

Reply: India is a demandeur of tariff simplification and less than 6% of its tariff lines have specific duty, which compares well with many other members.

New Zealand 3:

Report by the Secretariat (WT/TPR/S/249): pg 132 (paras 20 22) and pg 175 (paras 134 137): New Zealand notes India's application of a range of additional duties and charges on imports which are intended to be in line with internal taxes charged on domestically manufactured products. New Zealand also notes that India is working to introduce a Goods and Services Tax (GST). New Zealand is interested to know what internal taxes the GST will replace, and whether any of the additional duties currently charged at the border (such as the additional customs duty, the special additional duty, the education cess and the secondary and higher education cess) will be simplified as a result of the move to GST? And, if so, which additional duties will be simplified? New Zealand would also like to know when the GST is likely to be introduced.

Reply: Since GST is likely to affect the taxation system of both the Centre and the States, its design and structure is being finalized through a process of discussion between the two. These discussions are still in progress. GST is likely to replace the central taxes, viz. central excise duty, excise duties levied on medicinal and toilet preparations, service tax, additional duty of customs (CVD), special additional duty of 4% (special CVD) and surcharges and cesses. Amongst the state taxes that will be subsumed, the important ones are: VAT/sales tax and state cesses and surcharges.

The GST would apply to imports, but the imported goods would no longer attract CVD and special CVD.

New Zealand 4:

Report by the Secretariat (WT/TPR/S/249): pg 179, para 147: New Zealand would be interested in clarification about which "restricted items" referred to in paragraph 147 have an automatic import licensing system and which have a non automatic import licence? If any products have a non automatic licensing system, New Zealand would be grateful for an explanation about the approval process for the non automatic licences.

Reply: India will be notifying the same shortly. Details of the import restrictions are stated in the ITC(HS) classification book and paragraphs 2.10, 2.31 to 2.42 of the Handbook of Procedure, Volume 1. These documents are available in the website: dgft.gov.in.

New Zealand 5:

Report by the Secretariat (WT/TPR/S/249): pg 172, para 129: Does the Directorate General or Foreign Trade (DGFT) automatically approve applications by eligible entities to import product under the TRQs? If an application is not automatically approved, we would be grateful for an explanation about the criteria used in assessing an application. Have any applications by an eligible entity to import product under India's TRQs ever been turned down and if so on what basis?

Reply: List of eligible entities for allocation of quota have been stated in paragraph 2.59.1 of the Handbook of Procedure, Volume I and is available in the website: http://dgft.gov.in. All eligible entities are eligible to avail quotas as per request of applicants received and they may make application to DGFT in the prescribed format. Completed application forms along with prescribed documents must reach on or before 1 March of each financial year preceeding to the year of quota. Imports have to be completed before 31 March of financial year i.e. consignments must be cleared by customs authorities before this date. No such application has been turned down in the recent past.

New Zealand 6:

Report by the Secretariat (WT/TPR/S/249): pg 256, para 410 notes that initially sugar was only able to be imported under India's TRQ by four companies but this restriction was removed. New Zealand would like to know on what basis the restriction on the number of eligible entities was removed?

Reply: Sugar is now freely importable and the customs duty has been brought down to NIL.

Inflation

New Zealand 7:

1.Report by the Secretariat (WT/TPR/S/249): pg 129, para 10: The report notes an Inter Ministerial group was set up in early 2011 under the Ministry of Finance, to review the overall inflation situation, with particular reference to primary food articles. Is there a time frame for when the group may make recommendations and will the recommendations be publicly available?

Reply: The Inter Ministerial Group (IMG) was constituted on 2 February 2011, under the Chairmanship of the Chief Economic Adviser, "to review the overall inflation situation, with particular reference to primary food articles and suggest corrective measures". Based on the deliberations in the first four meetings of the IMG, a position paper (Position Paper No. 1) has been put on the Ministry of Finance website (http://www.finmin.nic.in/WorkingPaper/
index.asp).

Non Tariff Measures

New Zealand 8:

Report by the Government of India (WT/TPR/G/249): pg 22, para 72:

New Zealand shares India's concern about the danger of non tariff measures (SPS/TBT) increasing. We look forward to continuing to work constructively with India's SPS competent authorities to ensure measures taken to protect human, animal or plant life or health are based on scientific evidence and are applied in a manner that is least trade restrictive. We note that the WTO report, pg xii, para 17: states that in 2006 India passed the Food Safety and Standards Act to consolidate separate laws and to establish an institution to deal with SPS issues. New Zealand understands that as a result of this Act, the Food Safety and Standards Authority of India (FSSAI) has been established and that the Food Safety and Standards Regulations 2011 have just been published. New Zealand would be grateful for India's confirmation that this is the case and advice on whether there are any notifications outstanding in this regard.

Reply: Food Safety and Standards Rules 2011 and Food Safety and Standards Regulation, 2011 were notified vide Gazette Notification dated on 5 May 2011 and 1 August 2011 respectively by the Government of India and are available on the FSSAI website: fssai.gov.in. The FSS Act came into effect from 5 August 2011.

Government Procurement

New Zealand 9:

What steps has India taken towards development of professional procurement capability in government agencies?

Reply: The Ministries and Departments have been delegated full powers to make their own arrangements for procurement of goods and services as per the guidelines content in the GFRs A Ministry or Department may also project its indent to the Central Purchase Organisation (e.g. DGSandD), who have the dedicated expertise in the relevant technical fields. Improvements in the procurement procedures and systems is an ongoing exercise.

New Zealand 10:

Report by the Secretariat (WT/TPR/S/249): pg 235, para 322: The report notes that "rate contracts" are concluded by inviting bids from suppliers, including foreign suppliers and their Indian agents, registered with the DGSandD, the National Small Industries Corporation (NSIC) and the Ministry of Defence. What is the registration procedure for foreign suppliers?

Reply: The detailed procedures and guidelines for registration of suppliers including foreign suppliers with DGSandD is given in DGSandD website www.dgsnd.gov.in link registration forms and guidelines. Ministry of Micro, Small and Medium Enterprises (MSME), through National Small Industries Corporation (NSIC), registers domestic micro and small enterprises (MSEs).

New Zealand 11:

Report by the Secretariat (WT/TPR/S/249): pg 233, para 319, regarding selection of bidders, notes that "only the winning bidder is informed of the result of the bid evaluation. The reasons for selecting bidders are recorded but not disclosed". As a healthy culture of transparency in procurement as well as supplier development would be supported by requirements for publication of contract award information and debriefing of unsuccessful suppliers on request, we strongly urge India to include such measures in its procurement reforms.

Reply: The suggestion has been noted, however most tenders are opened publicly and the participating suppliers are present at the bid opening.

New Zealand 12:

Report by the Secretariat (WT/TPR/S/249): pg 237, para 333: New Zealand notes the progress by DGSandD on developing the e procurement system to promote efficiencies and transparency; will India continue to develop this to promote a standardised procurement system across all levels of government?

Does the DGSandD use a programme/website to advertise all GP contracts as part of its E Government mandate?  Is procurement of personnel/services covered by E Government mandates?

Reply: As per Rule 150 of the GFR, 2005, an organisation having its own website should also publish all its advertised tender enquiries on the website and provide a link with National Informative Centre (NIC) website. DGSandD has its own e procurement portal.

New Zealand 13:

Report by the Secretariat (WT/TPR/S/249): pg 235, para 325:

Does the Indian Government envisage a need in the near future to phase out preferential treatment of SMEs in order to facilitate eventual accession to the GPA?

Reply: Carve outs and S and D flexibilities are available under GPA.

Technical Regulations and Standards

New Zealand 14:

Report by the Secretariat (WT/TPR/S/249): Standards: para 193 194:

In paragraph 193, it states that about 84% of the 18,623 Indian standards are harmonised with international standards. This means that almost 3,000 Indian standards are unique. Paragraph 194 states that most Indian standards are voluntary.

• 
  Could India provide a breakdown of these statistics by sector? In which sectors are standards most and least harmonised?
  
• 
  We would like to know approximately how many of these unique standards are mandatory and how many are voluntary.
  

Reply: It may be clarified that out of those Indian Standards for which corresponding ISO or IEC standards exist, about 84% are harmonized (not 84% of 18623 Indian standards). In actual about 4800 Indian standards are harmonised to ISO or IEC standards.

The Indian standards have been categorized into 14 broad sectors. The number of Indian standards harmonized for each of these sectors is given in Annex 1 (file attached).

Annex 1

Harmonization status (as on 31 March 2011)

Sectors	No. of Indian standards harmonized with ISO/IEC
Civil engineering	69
Chemical	108
Electro technical	681
Food and Agriculture	223
Electronics and information technology	1216
Mechanical engineering	251
Medical equipment and hospital planning	178
Management and systems	83
Metallurgical engineering	206
Petroleum, coal and related products	342
Production and general engineering	723
Transport engineering	336
Textile	354
Water resources	51
Total	4821

New Zealand 15:

Report by the Secretariat (WT/TPR/S/249): Certification and conformity assessment: para 197:

BIS is India's national certifying body, according to paragraph 197. It appears that it is not accredited as a certification body, however – the NABCB website states that accreditation as a product certification body was withdrawn at BIS's request in March 2008.

• 
  We would like to know why BIS withdrew from this quality assurance framework.
  
• 
  In lieu of accreditation against international standards, what mechanisms has the Indian government put in place to ensure the competence and quality of BIS's certification scheme?
  

Reply: BIS never sought accreditation for its product certification scheme from any accreditation body.

BIS is a statutory body under an Act of parliament for the purpose of standardization and certification. BIS adheres to the prescribed statutory mechanism, which is based on international standards, to ensure the competence and quality of its certification scheme.

New Zealand 16:

Report by the Secretariat (WT/TPR/S/249): para 198:

The BIS product certification scheme allows some participation by foreign producers, as described in paragraph 198. They must be assessed and licensed by BIS. It does not appear that there is any provision for recognising foreign certification bodies as competent to certify that the requirements of relevant standards and technical regulations have been met. In particular, there is no reference to use of international systems of accreditation – i.e. recognising or designating certification bodies accredited under the umbrella of the peer reviewed IAF⁶ multilateral recognition arrangement (MLA).

• 
  We would appreciate hearing why India does not recognise foreign certification bodies through relying on the assurances of competence provided by the IAF system.
  
• 
  In the context of steadily increasing international trade, is India considering moving to rely on the IAF system?
  

Reply: As per provisions of BIS Act, 1986, the statutory powers of granting a licence to use the standard mark rests with BIS only. However, provisions exist in the BIS Act to recognize agents for carrying out inspection and/or testing activities.

New Zealand 17:

Report by the Secretariat (WT/TPR/S/249): para 199, 200, 203:

On the same theme, the BIS product certification scheme, as described in paragraphs 199 200 and 203, appears to require laboratory testing of products in Indian laboratories only. Paragraph 199 states that India recognises foreign laboratories under the provisions of the BIS Act 1986. We found lists of recognised laboratories on the BIS website, but all were located in India.

• 
  We would appreciate receiving a list of foreign laboratories that have been recognised.
  
• 
  We would also like to receive the criteria that they were required to meet in order to be approved.
  

Reply: Till date, no foreign laboratory has filed an application for recognition under BIS Lab Recognition Scheme. Any lab that qualifies the criteria set by the Lab Recognition Scheme (LRS), can apply to BIS and after satisfactory audit by BIS, recognition can be granted to foreign lab also.

Criteria for recognition of laboratories by BIS are available on BIS website (www.bis.org.in).

New Zealand 18:

Report by the Secretariat (WT/TPR/S/249):

The BIS scheme does not appear to provide for recognition of the competence of foreign laboratories through reliance on the peer reviewed ILAC⁷ arrangement among laboratory accreditation bodies worldwide.

• 
  As above, we would appreciate hearing why India does not recognise foreign laboratories through relying on the ILAC system, and whether it is considering such a move in the interest of facilitating trade.
  

Reply Accreditation is one of the requirements of the BIS Lab Recognition Scheme. Accreditation by signatories to APLAC/ILAC is acceptable.

New Zealand 19:

Report by the Secretariat (WT/TPR/S/249): para 201  203:

The BIS laboratory certification scheme appears to sit beside the NABL laboratory accreditation system. The NABL is internationally recognised by APLAC⁸ (and thus ILAC) as meeting the requirements of an accreditation body (international standard ISO/IEC 17011) and its laboratory accreditation system is in accordance with international standard ISO/IEC 17025 (paragraphs 201 202). BIS has a separate recognition scheme for laboratories that is 'in line with' ISO/IEC 17025 (paragraph 203), which appears to partially replicate the accreditation scheme run by NABL.

• 
  We would like to know what the relationship between the two schemes is; in particular, what degree of replication is there in the BIS scheme of the NABL scheme?
  
• 
  We would like to know what additional assessment against ISO/IEC 17025 is required for BIS 'recognition' for a laboratory that already has NABL accreditation to ISO/IEC 17025, and what value India believes the additional layers of assessment and surveillance add.
  

Reply: NABL accreditation is test wise. BIS recognition is generally product wise. Sometimes a labl may not have all tests for a product covered under their accreditation so BIS may undertake additional assessment. BIS Lab Recognition Scheme is a scheme to support BIS product certification while NABL is the accreditation body.

NORWAY

Please find below questions from Norway on the occasion of the Trade Policy Review of India. All questions relate to the Secretariat report.

Norway1:

III. Trade Policies by Measure:

III. 2.i – Customs Procedures, page 37, para 12:

According to the text, India Customs grants special clearance procedures under the Accredited Client`s Programme (ACP) to importers with a good track record and complying with the qualifying criteria, allowing them to self assess their consignments with no need for Customs examinations. Has India considered applying the same clearance procedures to exporters, in order to enable exporters to make a self declaration for instance on the origin of their consignments.

Reply: The Risk Management System has not been launched on the export side. The export RMS will be launched shortly. It is expected that the Accredited Client's Programme will be introduced for exports after the launching of RMS.