World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

I. ECONOMIC ENVIRONMENT

Brazil 3:

According to the WT/TPR/G/249, pages 14 and 15, §§ 34 and 37, inflation and fiscal deficit in India during 2010 11 were 9.5% and 4.7% of GDP, respectively. Which is the highest priority to India: inflation control or GDP growth? Can the control of the public deficit be the determinant of this choice?

Reply: GDP growth is the major economic objective in the long run. The inter se prioritization in the short run is to strike a balance between higher growth and acceptable levels of inflation, which in inevitable in a growing economy. Fiscal policy and consequently consolidation is a major instrument for achieving macroeconomic dividends of growth and stability in prices.

II. Trade POLICY REGIME

Brazil 4:

According to the WT/TPR/S/249, page 29, § 28, "[…] Industries, other than micro and small enterprises, established in a free trade zones are exempt from the licensing obligation." What are the other exemptions/incentives related to the industries established in a free trade zone?

Reply: Facilities available to industries established in a special economic zone are given in SEZ Act, 2005 and SEZ Rules, 2006. SEZ Act and Rules are available on website www.sezindia.nic.in.

Brazil 5:

According to the WT/TPR/S/249, page 33, § 39, "[…] In sectors where FDI is capped, prior approval from the FIPB is required. […]" In this respect, what are the requirements that the foreign investor have to comply with in each sector?

Reply: The requirement for Government approval, through FIPB, is not necessarily linked with the FDI cap, if any. For example, there is an FDI cap of 49% in respect of "scheduled air transport services" and 26% for insurance. FDI in these sectors/activities, however, does not require Government approval, through the FIPB.

The extant policy on FDI is available as a consolidated document, in the public domain at www.dipp.nic.in.

Brazil 6:

According to document WT/TPR/S/249, pages 32 33, § 36, "The three main institutions that handle FDI related issues in India are the Foreign Investment Promotion Board (FIPB), the Foreign Investment Implementation Authority (FIIA), and the Secretariat for Industrial Assistance (SIA). The FIPB, under the Ministry of Finance, chaired by the Secretary of Economic Affairs and consisting of senior secretaries, is in charge of examining and approving foreign investment proposals in sectors w[h]ere investment is not allowed through the automatic route. Investment above a specific threshold requires additional approval from the Cabinet Committee on Economic Affairs." and § 39, "Most sectors are at least partially open to FDI, subject to a cap and specific conditions [...]. There are two entry routes for FDI in India. In sectors where FDI is allowed up to 100%, FDI enters under the automatic route, subject to sectorial regulations and other conditions [...]. In sectors where FDI is capped, prior approval from the FIPB is required. [...]"

Could India provide details on the criteria that the Foreign Investment Promotion Board (FIPB) uses to screen foreign investment?

Reply: FIPB examines the proposal within the framework of FDI policy, including compliance with specified sectoral conditions based on the inputs provided by the concerned administrative Ministries. Details are available at the website www.dipp.nic.in.

III. TRADE POLICIES AND PRACTICES BY MEASURE

(2) Measures Directly Affecting Imports

Customs procedures

Registration and documentation

Brazil 7:

Paragraph 17 of page 39 of the Report by the Secretariat states that "if an importer is not satisfied with the assessment (i.e. the classification, rate of duty or valuation) by the customs officer, the importer may appeal against the 'assessment order' (i.e. a decision made in writing by an officer)".

Could India explain in more detail how its appeal system for customs matters works, especially the procedural steps involved and the expected timelines for issuing appeal decisions?

Reply: The procedure of appeals is dealt with under Chapter XV of the Customs Act, 1962. Section 128 of the said Act provides for filing an appeal with the Commissioner (Appeals) where the importer is not satisfied with the assessment order passed by an officer of customs lower in rank than the Commissioner (Appeals). The appeal is to be filed within a period of sixty days and extendable by a further period of thirty days on sufficient cause being shown.

Section 128A of the Customs Act, 1962 enjoins the Commissioner (Appeals) to give an opportunity to the appellant to be heard if he so desires. The section further provides that the Commissioner (Appeals) shall pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. The order shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision. The appeals are required to be heard and decided within a period of six months from the date on which it is filed where it is possible to do so. The details may be viewed at www.cbec.gov.in.

Further appeals lie to the Customs, Excise and Service Tax Appellate Tribunal.

Customs valuation and clearance

Brazil 8:

Paragraph 22 of page 40 of the Report by the Secretariat indicates that the reference prices for customs valuation of imported edible oil remain unchanged since 2006, despite Indian authorities' claim that reference prices are revised every two weeks and are adjusted to align with international market prices.

Brazil would like to ask India if it intends to review those reference prices in light of the changes that may have occurred in international prices for those products since 2006.

Reply: Tariff values are currently being fixed only in respect of palm group of oils, crude soybean oil, poppy seeds and brass scrap. These values are frequently reviewed and revised on the basis of prevailing international prices of these goods as observed from the various reputed international journals and other publications. The tariff value of edible oils is reviewed along with other goods that are subject to tariff values.

Rules of origin

Brazil 9:

According to document WT/TPR/S/249, page 42, § 26, the Secretariat reports that India does not apply non preferential rules of origin. In contrast, the Secretariat reports that "India is one of the most active users of anti dumping measures among WTO Members. Since its last Review in 2007, India has also imposed several safeguard measures". (page 25, § 3). How does the Indian government implement anti dumping duties and safeguard measures without a non preferential rules of origin regime?

Reply: Article 2 of Anti dumping Agreement contains clear rules regarding determination of dumping. Article 2.1 and 2.5 provide guidance regarding determination of dumping margin having regard to the country of origin. As per Article 2.2 of the Safeguard Agreement, safeguard measures are to be applied to a product being imported irrespective of its source.

Tariffs

Brazil 10:

According to document WT/TPR/S/249, page 49, § 41, India has 3 PTAs – limited in scope – signed with Mercosur, Thailand and Chile. Does India intend to discuss widening the product coverage and deepening preferences of these PTAs?

Reply: Negotiations with MERCOSUR, Thailand and Chile for widening and deepening the tariff concessions are underway.

Import prohibitions, restrictions, and licensing

Brazil 11:

According to paragraph 53 of page 53 of the Report by the Secretariat, "import prohibitions [in India] are generally for health and safety reasons". However, the Report also points out that certain mobile handsets and mobile phones have been included in the list of prohibited goods.

Could India clarify the reasons for prohibiting the importation of those specific products?

Reply: Import of mobile handsets without IMEI No. and CDMA mobile phones without ESN/MEID is prohibited due to security risk involved in such imported mobiles.

Technical regulations and standards

Brazil 12:

According to Article 6.1 of the TBT Agreement, "Members shall ensure, whenever possible, that results of conformity assessment procedures in other Members are accepted, even when those procedures differ from their own, provided they are satisfied that those procedures offer an assurance of conformity with applicable technical regulations or standards equivalent to their own procedures".

Could India provide information on its initiatives, if any, to recognize equivalence to other Members' technical regulations or standards?

Reply: In pursuance of Article 6.1 of the TBT Agreement, the national standards body viz the Bureau of Indian Standards has entered into memorandum of understanding (MoU) for conformity assessment with their counterpart bodies from other members.