World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

India has strong enforcement clauses in the domestic laws which are TRIPS compliant.

IV. TRADE POLICIES BY SECTOR

(2) Agriculture

(ii) Agricultural policy objectives

WTO Secretariat's report, page 137, para. 49

It is mentioned that in 2008, India implemented the Agricultural Debt Waiver and Debt Relief Scheme, under which some 36.9 million farmers have had their debts waived or have been granted some kind of relief. According to the authorities this programme is not in force.

11. Could India provide more information on the operation of this scheme? In particular, when was the programme in force and what the grounds for its introduction and timeline were?

Reply: The Agricultural Debt Waiver and Debt Relief Scheme 2008 was a one time scheme. The Scheme covered all agricultural loans, disbursed by scheduled commercial banks, regional rural banks and cooperative credit institutions up to 31 March 2007 and overdue as on 31 December 2007. Implementation of the Scheme was by and large completed with respect to small and marginal farmers by 30 June 2008. Repayment period under one time settlement applicable to other farmers was extended till 30 June 2010.

(3) SERVICES

(i) Overview

(ii) Financial services

WTO Secretariat's report, page 140, paragraphs 58 and 62

It is noted that financial services, especially banking and insurance, continue to be dominated by state owned companies, despite measures to promote competition from the private sector.

11. 
    What additional measures is India minded to take in order to increase competition?
    

Reply: In order to achieve greater competition and ensure financial inclusion, Reserve Bank envisages issuing licences to a few more new banks in the private sector. For the purpose, Reserve Bank had studied the international practices and considered the Indian experience and released a discussion paper on entry of new banks in the private sector on 11 August 2010. The draft guidelines on licensing of new banks have also been released on 29 August 2011 for comments. On examination of the feedback and after certain vital amendments to the Banking Regulation Act, 1949 are carried out, final guidelines would be issued and the process for granting licences to new bank in the private sector would be initiated.

Further, to promote competition in the banking sector, RBI gives a single class of banking licence to the foreign banks which allows them to carry on both retail and wholesale banking. RBI has on 21 January 2011 issued a "Discussion Paper on Presence of Foreign Bank in India", inviting comments/suggestions from all stakeholders. The Discussion Paper proposes possible autonomous liberalisation for foreign banks, permitting presence in India by way of wholly owned subsidiary (WOS). Further in the insurance sector an amendment bill is under consideration.

WTO Secretariat's report, page 141 146, paragraphs 61, 62, 70 and 78,

The Reserve Bank of India is encouraging foreign banks to incorporate as wholly owned subsidiaries instead of operating as direct branches. However, several restrictions on business scope and in particular the limitation on number (18 20) of local branches (geographical operations) is still applied to foreign banks while has been removed from Indian owned banks. The recent discussion paper issued by RBI has suggested national treatment.

11. 
    Could India confirm whether it will provide full or partial national treatment to foreign owned bank subsidiaries on all restrictions currently in place?
    

Reply: RBI has on 21 January 2011 issued a "Discussion Paper on Presence of Foreign Bank in India", inviting comments/suggestions from all stakeholders. At this stage, it will be premature to comment on the final outcome.

WTO Secretariat's report, page 141, paragraphs 65

According to the report, the ATM penetration in India remains low. According to information available to EU, RBI considers every ATM of a foreign bank as a new branch and hence restricts the number installed in a given year.

11. 
    Does India intend to change its definition of bank branches as not to include ATMs and back  offices in different geographical locations in order to encourage ATM penetration?