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China 17:

Report by the Secretariat (WT/TPR/S/249):SECTION IV: TRADE POLICIES BY SELECTED SECTORS:

Question: Does India plan to gradually relax restrictions on visa for foreign labours?

Reply: No such proposal is currently under consideration.

China 18:

Report by the Government of India (WT/TPR/G/249): Paragraph 60:

"The Micro, Small and Medium Enterprise Development (MSMED) Act 2006 redefined micro, small and medium enterprises on the basis of the level of investment."

Question: Could the Indian delegation please share with us what kinds of help have been provided to micro, small and medium enterprises to enhance their global competitiveness? How effective are they?

Reply: The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, which came into force in 2006, provides the first ever legal framework for recognition of the concept of "enterprises" (comprising both manufacturing and services). Apart from clear and more progressive classification of each category of enterprises, the Act provides for a statutory consultative mechanism at the national level with wide representation of all sections of stakeholders, particularly three classes of enterprises, and with a wide range of advisory functions. Notification of schemes/programmes for this purpose, progressive credit policies and practices, preference in government procurements to products and services of the micro and small enterprises and more effective mechanisms for mitigating the problems of delayed payments to micro and small enterprises among others have been provided in this Act. In addition, the Government announced the "Package for Promotion of Micro and Small Enterprises" in parliament on 27.2.2007, which, inter alia, provides for legislation, credit support, fiscal support, support for cluster based development, technology and quality upgradation, marketing, entrepreneurial and managerial development and strengthening of data base for MSME sector. Government has also kicked off National Manufacturing Competitiveness Programme to enhance the competitiveness of the MSMEs.

China 19:

REPORT BY THE SECRETARIAT: SECTION II: TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES: (4) INVESTMENT REGIME

Question 19: Please explain the Indian policies on establishing representative offices (not for operation or investment) by foreign companies in India. What are the specific application procedures and related time limit? Please also provide information on other countries' representative offices in India.

Reply: A foreign entity wishing to establish a representative office or a liaison office in India is required to apply through an authorised dealer bank to the Reserve Bank of India for approval. The RBI may consult the Government.

The permission is granted for a period of three years subject to renewal. However, no extension would be considered for LOs of entities which are NBFCs and those engaged in construction and development sectors (excluding infrastructure development companies). Upon expiry of the validity period, these entities have to either close down or be converted into a joint venture (JV)/wholly owned subsidiary (WOS), in conformity with the extant foreign direct investment policy.

China 20:

REPORT BY THE SECRETARIAT: SECTION II: TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES: (4) INVESTMENT REGIME

Question 20: Please explain the detailed policies and regulations for foreign information technology service companies to set up branches in India or to form joint ventures with Indian companies to undertake outsourcing business.

Reply: For setting up of IT/ITES companies, 100% FDI is permitted on automatic route. Setting up of branch office for rendering services in IT and development of software in India is permissible with the approval of Reserve Bank of India. Joint ventures are also permitted under the policy with the approval of Government of India.

China 21:

REPORT BY THE SECRETARIAT: SECTION II: TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES: (4) INVESTMENT REGIME

Question 21: Please provide the latest changes in the measures adopted by India in recent years for encouraging or restricting FDI.