World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Report by the Secretariat: III. Trade policies and practices by measure:  (4) Measures affecting production and trade: (vi) Intellectual property rights:  General question:

The Report of the Secretariat does not explicitly mention the protection of undisclosed information as provided for in Article 39.3 of the TRIPS Agreement. We would like to ask the following question related to the marketing approval of pharmaceutical or of agricultural chemical products, which utilize new chemical entities:

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  If a private party submits its undisclosed test data to the marketing approval authorities of India, under what legal regime and how are these test data protected against unfair commercial use as required by Article 39.3 of the TRIPS Agreement? Could the Indian authorities indicate the relevant national legislation and how it implements Article 39.3 of the TRIPS Agreement.
  

Reply: India implements Article 39.3 of the TRIPS Agreement through the existing legal mechanisms which are the common law, principles of equity and the law of breach of confidence developed through case law. Protection is also provided through the provisions of Law of Torts and the Indian Contract Act, 1872 where remedies are available. Section 5 of the Official Secrets Act provides that unauthorized disclosure of official secrets is a punishable offence. This provision is also applicable to government employees.

Switzerland 24:

Report by the Secretariat: IV. Trade policies by selected sector:  (2) Agriculture: (ii) Agricultural policy objectives: (a) Measures affecting imports: Para. 20:

7. The Secretariat's report shows that India links the use of export restriction and export licensing as well as other non tariff measures (NTMs) to domestic policies, for example by relaxing NTMs when imports are desired. It seems that these measures are rather unpredictable due to numerous changes in short frequency. What is the reasoning behind this practice, bearing in mind the costs, risks and lack of predictability for national and international actors on the market? Does India envisage de coupling NTMs from domestic policy objectives?

Reply: The NTMs are maintained to fulfil the legitimate concerns in terms of Article XX of GATT, TBT and SPS.  The changes in NTMs on a given item are not made as frequently as projected in the report.

Switzerland 25:

Report by the Secretariat: IV. Trade policies by selected sector:  (2) Agriculture: (ii) Agricultural policy objectives: (b) Measures affecting exports: Para. 25:

8. The Secretariat's report describes the provision of "tax incentives" in order to promote exports. Could India describe the scope, coverage and budget for these "tax incentives". How is the incentive level determined? What are the effects of such measures on the prices of exported goods on foreign markets?

Reply: Schemes available to exports are in the form of duty neutralization schemes (rebating/exempting indirect taxes/duties) such as duty drawback, Advance Authorisation, Duty Free Import Authorisation (DFIA) and Duty Entitlement Passbook (DEPB) schemes; incentive/reward schemes (to promote exports of specified goods) such as Vishesh Krishi and Gram Udyog Scheme (VKGUY), Focus Market Scheme (FMS), Focus Product Scheme (FPS), Market Linked Focus Product Scheme (MLFPS) etc. These schemes have been given in detail in India's Foreign Trade Policy, 2009 2014, which has been notified to WTO and is also available at http://dgft.gov.in.

Switzerland 26:

Report by the Secretariat: IV. Trade policies by selected sector:  (2) Agriculture: (ii) Agricultural policy objectives: (b) Measures affecting exports: Paras 26, 27, 28:

The Secretariat's report shows a large variety of instruments used by India to control and influence exports. Those are, for example: Export restrictions and prohibitions; export taxes; export quotas; state trading enterprises. The products concerned are relevant products for net food importing countries. How are the thresholds for the utilization of those instruments determined? What is the role of the world market prices for the application of those instruments? How does India ensure that the use of these instruments does not contribute to speculative market price increase on world markets? How does India ensure that negative effects of the use of such instruments on net food importing countries are avoided? Does India envisage changes in its export control instruments?

Reply: While India is conscious of the above factors, it also has to remain mindful of its internal situation like the rising prices and demand in the domestic market and food security concerns while tailoring its policies. The sizeable poor and vulnerable section of the population need protection from inflation and price volatility. These restrictions are applied as India has to ensure food security for its people as well as to keep the domestic prices in control. Currently there is no export duty applicable to food items.

THAILAND

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

III. TRADE POLICIES AND PRACTICES BY MEASURE

(2) Measures Directly Affecting Imports

(a) Registration and documentation

Page 37, Paragraphs 10 12

Thailand 1:

We understand that India has implemented the electronic data interchange (EDI) and risk management systems (RMS) as measures for trade facilitation. We would like to learn more about your system.

  How has the trade facilitation system been improved after India started to apply these two systems? Please share with us any statistical or procedural information.

  Please elaborate on remaining trade facilitation problems in the customs procedure given the implementation of these systems.

Reply: The EDI and RMS are important trade facilitation measures. After introduction of these measures, the clearance time of cargo has been reduced considerably. Prior to introduction of RMS almost all import declarations were subjected for assessment and examination; after the introduction of RMS, only 50% of the import declarations are subjected for assessment and examination.

Trade facilitation is an ongoing process; it would not be possible to enumerate the remaining problems of trade on customs procedures after implementation of the EDI and RMS.

TURKEY

Turkey 1:

Report by the Government of India (WT/TPR/G/249)

Could India share its assessment how the rising inflationary pressure has affected the competitiveness in its services sector?

Reply: In so far as non tradable services are concerned, there is some impact in terms of slowdown in housing and real estate sectors and financial services in the last 2 quarters; but intense competitiveness among firms remain intact in view of large number of market playeRs In so far as tradable services are concerned, competitiveness is linked closely to REER. But there is also the fact that the present inflation calculation does not include the services sector inflation.

Turkey 2:

Report by the Secretariat (WT/TPR/S/249): SUMMARY: Page 10, Para. 7

As stated in the Secretariat Report, "India's short term objective, in accordance with the latest FTP, is to achieve annual export growth of 15%; the long term objective is to accelerate export growth to 25% per annum and double India's share in global trade by 2020. In order to meet these objectives, India implements a mix of policies including tax incentives, export promotion, and credit facilitation schemes, to "neutralize" the cost of imported inputs used in exports."

Could India explain what is meant by the neutralization of cost of imported inputs?

Could India explain whether the above mentioned mix of policies are applied to all or specific export sectors?

Reply: Neutralisation of the cost of inputs refers to duty neutralisation by way of rebate or exemption from the indirect taxes on the inputs used in the manufacture of the export product or creating a level playing field. Details are given in the Foreign Trade Policy (2009 2014), which has been notified to WTO and is also available at http://dgft.gov.in.

Turkey 3:

Report by the Secretariat (WT/TPR/S/249): III. TRADE POLICIES AND PRACTICES BY MEASURE: (2) Measures Directly Affecting Imports: (iv) Tariffs: page 43, para. 28:

As stated in the Secretariat Report, "India provides a number of exemptions on imported inputs for certain sectors or importers, depending on the industrial use of the import. As a result of these exemptions, the effective applied tariff is considerably lower than the simple average standard rate."

Could India specify exactly the sectors that are subject to the above mentioned exemptions and provide clarification on the criteria for the determination of the sectors at issue?"

Reply: Exemptions from customs duties have been extended to sectors such as infrastructure (e.g. road construction), petroleum exploration, water supply, telecom, power, information technology, lifesaving drugs, agriculture, food processing, horticulture etc. These sectors are identified as thrust sectors in the context of overall development of the country.

Turkey 4:

Report by the Secretariat (WT/TPR/S/249): III. TRADE POLICIES AND PRACTICES BY MEASURE: (2) Measures Directly Affecting Imports: (iv) Tariffs: page 45, para. 31:

It is stated that despite the decline in average tariff protection for non agricultural products to 8.9%, from 12% in 2007, transport equipment still bears above average tariff protection of 21.5%.

Could India indicate whether above average tariff production for transport equipment will be maintained?

Reply: India has been reducing its applied tariff autonomously over the years. Any further reduction has to be judged against the sensitivities of the sector, its stage of development and the likely impact on employment and revenue. Hence it would be difficult to predict the future action at this stage.

Turkey 5:

Report by the Secretariat (WT/TPR/S/249): III. TRADE POLICIES AND PRACTICES BY MEASURE: (2) Measures Directly Affecting Imports: page 72, para. 119:

Could India clarify if rules and regulations concerning the Food Safety and Standards Act are being implemented?

Reply: Yes, The FSS Rules, 2011 were notified on 5 May 2011 and FSS Regulations, 2011 were notified on 1 August 2011, The FSS Act has been implemented with effect from 5 August 2011.

Turkey 6:

Report by the Secretariat (WT/TPR/S/249): III. TRADE POLICIES AND PRACTICES BY MEASURE: (3) Measures Directly Affecting Exports: page 84, para. 156:

Could India confirm if the exports to domestic tariff area (DTA) from the export oriented units are subject to the excise and/or additional duties, fees and charges besides the 25% basic customs duty and 100% additional customs duty?

Reply: Clearances from the export oriented units to DTA attract excise duty equivalent to the aggregate of customs duties. The effective rate however is 50% of basic customs duty plus full additional customs duty. Education cess at the rate of 3% of these duties is also applicable.

Turkey 7:

Report by the Secretariat (WT/TPR/S/249): III. TRADE POLICIES AND PRACTICES BY MEASURE: (3) Measures Directly Affecting Exports: page 79, para. 140:

Could India clarify if the exports of cotton and cotton yarn are still subject to export restrictions as explained in para. 140?

Reply: Cotton and Cotton yarn are now freely exportable subject to registration by Directorate General of Foreign Trade (DGFT) in the Department of Commerce. The detailed procedure for registration is given in the DGFT Notification No. 63 (RE 2010)/2009 2014, dated 4 August 2011 and is available at website http://dgft.gov.in.

UNITED STATES

US 1:

Report by the Government (WT/TPR/G/249): Page 13, Paragraph 28:

The Secretariat mentions the Government's focus on youth education and employment, stating that education is free and compulsory until age 14 and that the Government is focused on creating educational programs geared toward job training. What types of measures or programs has the Government enacted or undertaken to ensure children under 14 both stay in school and are not employed, particularly with regard to hazardous work?

Reply: Indian Constitution states that the State shall provide free and compulsory education to all children between the age of 6 and 14 years in such manner as the State, by law, may determine. In 2009, the Right to Education Act was enacted to provide free and compulsory education to all children between the age of 6 and 14 years.

"Sarva Shiksha Abhiyan" to universalize primary education, Mid Day Meal scheme, schemes to provide food and shelter to the children withdrawn from work, and various income and employment generation schemes covering the families of these children for their economic rehabilitation are some of the initiatives in this direction.

Under the project based plan of action, Government announced National Child Labour Programme in 1988 in districts of high child labour concentration. 330,000 children have been mainstreamed during 11^th five year plan.

Presently, as per Child Labour (Prohibition and Regulation) Act, 1986, children below the age of 14 years are prohibited for employment in hazardous occupations/processes specified in the Act.

US 2:

Report by the Government (WT/TPR/G/249): Page 25, paragraph 93:

India notes that in the period under review, "…several safeguard investigations were terminated without imposing duty. Similar restraint was shown in respect of anti dumping investigations." Given its status as a significant user of trade remedies, could India please describe the process whereby restraint is reflected in its initiation procedures?

Reply: The designated authority (DA) initiates anti dumping investigation under Rule 5 of the Anti Dumping Rules after being satisfied with the adequacy and accuracy of information as regards prima facie evidence of dumping, injury and a causal link furnished in the application . During the period under review, all the applications were scrutinised in terms of the relevant rules and the relevant provisions of the Agreement on Anti Dumping. There has not been a single case of suo moto initiation of anti dumping investigation. Further, there were cases where the anti dumping investigation were not initiated as the DA after examination came to the conclusion that there was no prima facie evidence of dumping, injury and causal link between such dumped import and alleged injury.

In respect of safeguard investigations, the DG Safeguards did not initiate safeguard investigations in respect of nine applications submitted by the domestic industry during the period 2008 2010.

US 3:

Report by the Government (WT/TPR/G/249): Page 22, paragraph 76:

India appears to suggest that trade liberalization is inconsistent with the development interests of micro, small and medium sized enterprises, and that therefore India must "protect" its enterprises. Given that tariffs and other trade barriers can often have a disproportionately adverse effect on the ability of such enterprises to reach foreign markets, how does India see trade liberalization hurting the interests of its enterprises?

Reply: Special and differential treatment provisions for developing countries are an essential part of the ongoing Doha Round of trade negotiations in recognition of the fact that developing countries must be able to take care of their development needs and concerns. Developing countries need to be able to take part in global trade on equitable and fair terms, by provisions that allow their nascent industries to grow and flourish and to become competitive enough to make use of the opportunities provided by trade liberalisation.

US 4:

Report by the Government (WT/TPR/G/249): Page 25, paragraph 95:

In its report, India states that it has "unilaterally roll[ed] back its trade defence measures." Does this mean that India has declined to impose trade defence measures even where the conditions for imposition under the WTO Agreement have been met? Or does this refer to trade defence measures that were terminated because they did not meet the conditions for imposition?

Reply: As reported by India in the semi annual report for following periods, 51 anti dumping measures were terminated either after review or the measures were allowed to lapse without initiating review:

January June 2008	10
July–December 2008	4
January–June 2009	4
July–December 2009	11
January–June 2010	6
July–December 2010	16

In two cases the Central Government did not impose anti dumping measures despite the recommendations of the Designated Authority.

As regards safeguard measures, restraint was exercised by imposition of lower rate of safeguard duty and for a shorter duration of time than recommended by the investigating suthority (IA). In one case, the safeguard measure was limited to the period of provisional safeguard measure.

US 5:

Report by the Secretariat (WT/TPR/S/249): I. ECONOMIC ENVIRONMENT: (1) Overview: page 1, paragraph 3:

In addition to the government's decision to increase investor limits in the corporate bond and government bond markets, what additional policies is India considering to attract more medium – and long term capital, "particularly given India's infrastructure and general investment needs"?

Reply: In order to attract more foreign funds in the medium to long terms for financing of infrastructure the Government has announced that it would create special vehicles in the form of notified infrastructure debt funds. The interest payments on the borrowings of these funds would be subjected to a reduced withholding tax rate of 5% instead of the current rate of 20% and the income of such funds would be exempt from tax. The government is encouraging increased reliance on public private partnerships (PPPs) and has put in place policy and regulatory framework for PPPs for all infrastructure sectors that can be commercialized.

US 6:

Report by the Secretariat (WT/TPR/S/249): I. ECONOMIC ENVIRONMENT: (2) Recent Economic Developments: Page 3, paragraph 5:

According to the Secretariat, "The IMF estimates India's GDP growth potential to be some 8.5% per year; the authorities consider the post global crisis growth potential to be of some 8%. Achieving this in a context of a lesser reliance on public consumption and investment will imply boosting private investment, which, over the medium run will require a simplification of the business and regulatory environment, as well as facing the challenges of improving infrastructure to overcome the current shortcomings." What are India's plans to address these challenges?

Reply: The Indian economy was among the first economies to recover from the 2008 09 global economic and financial crisis. After recovering to a growth rate of 8.0% in 2009 10, it has registered a growth of 8.5% in 2010 11. Prior to the global crisis the Indian economy had averaged growth in real GDP close to 9.0%. The OECD's Second Economic Survey of India (June 2011) places India's growth potential close to 9%. Long run GDP growth would be around that and accordingly, the Twelfth Five Year Plan is likely to target 9% plus growth.

The Government is in the process of implementing several real and financial sector reforms and this will further improve the economic environment in the country. The regulatory architecture is being made more amenable for sustainable growth. The policy environment has been made more conducive for the spread of public private partnership in the infrastructure sector.

US 7:

Report by the Secretariat (WT/TPR/S/249): I. ECONOMIC ENVIRONMENT: (2) Recent Economic Developments: Page 5, paragraph 10:

The Secretariat says: "Trade related administrative measures have also been used, such as export prohibitions (e.g. on non basmati rice, onions, and edible oils (see Chapter IV(2)) and minimum export prices (onions and basmati rice). The authorities have indicated that these measures were taken in view of the emerging scenario of scarcity and the consequent rise in prices of essential commodities." How did these restrictions and government interventions succeed in achieving India's objectives and how did they contribute to India's global competitiveness?

Reply: The measures were meant to address the issue of critical shortages of essential commodities and this objective was achieved through these interventions. The export restriction on non basmati rice has been removed vide DGFT notification No. 71 dated 09.09.2011.

US 8:

Report by the Secretariat (WT/TPR/S/249): I. ECONOMIC ENVIRONMENT: (2) Recent Economic Developments: Page 6, paragraph 11:

According to the Secretariat, "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." Do these workers have the right under Indian laws to unionize or organize?

Reply: There is no bar in unionisation of agriculture labour. Labour unions do exist in agriculture plantations like tea and coffee plantations where there are large number of agriculture labour employed.

The Trade Union Act, 1926 has empowered the workers of the country including agriculture workers to form associations in the form of trade unions. In India, the number of agricultural workers employed in the Central sphere is negligible and the bulk of enforcement in the agricultural sector rests with the State Government. As per the statistics available in trade unions in India, 2006 (labour bureau), the number of unions submitting returns under agriculture, hunting and forestry is 274 with membership of 13,11,424 (men: 8,20,290 and women: 4,90,504) for the year 2006. We have also ratified ILO Conventions No. 11 (Right of Association (Agriculture), 1921) and No. 141 (Rural Workers' Organization, 1975).