World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Reply: The latest version of the updated Circular on FDI policy (i.e. "Circular 1 of 2011"), effective from 1.4.2011, contained a number of significant policy changes, including:

1. 
   pricing of convertible instruments upfront, on the basis of a conversion formula, instead of price;
   
2. 
   inclusion of fresh items for issue of shares against non cash considerations, including import of capital goods/machinery/equipment and pre operative/pre incorporation expenses;
   
3. 
   removal of the condition of prior approval in case of existing joint ventures/technical collaborations in the "same field"; and
   
4. 
   development and production of seeds and planting material, without the stipulation of having to do so under "controlled conditions".
   

China 22:

REPORT BY THE SECRETARIAT: SECTION III: TRADE POLICIES AND PRACTICES BY MEASURE: (1) INTRODUCTION: Paragraph 2

"To determine the 'effective' applied tariff rate (i.e. basic duties and other customs duty) on a particular product, separate customs and excise tax schedules must be consulted, which adds to the complexity of the tariff."

Question 22: Please provide more information on "separate customs and excise tax schedules" and how they are applied in different situations.

Reply: The tariff structure has been simplified considerably in recent years. However, this is an on going process. The present duty structure is simple though there are certain exemptions.

Basic customs duties are applied as per the rates in the Schedule to the Customs Tariff Act, 1975 read with any exemption notification. The rates of additional customs duty, equivalent to the excise duty on domestically produced goods, is as per the schedule to the Central Excise Tariff Act, 1985 read with any exemption notifications. Both the tariff schedules are based on the Harmonized System of Nomenclature and adopt eight digit tariff headings.

China 23:

REPORT BY THE SECRETARIAT: SECTION III: TRADE POLICIES AND PRACTICES BY MEASURE: (2) MEASURES DIRECTLY AFFECTING IMPORTS:

Question 23: In India, the tariff rate for passenger cars could be as high as 100% while the average rate is 56.7%, both being higher than for other types of cars. In view of the rapid development of the auto industry in India in recent years, is India considering reducing the tariff rates for passenger cars in order to make the automobile industry more open and competitive?