World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Establishment and functioning of SEZs are governed under the provisions of SEZ Act, 2005 and SEZ Rules, 2006, which may be viewed on www.sezindia.nic.in.

12. As a result of progressive tariff reductions and exemptions, collection of customs duties, as a percentage of the value of imports has fallen quite quickly, which is an indicator of liberalization. What has India done to compensate for this 'shortfall'? What other funding mechanisms or income is driving India to continue its policy of economic development? (Page 25, paragraph 68)

Reply: India's tax reforms essentially focused on reducing the cascading nature of indirect taxes and greater reliance on direct taxes. This process began in the 1990s as a part of economic reforms. Corporate income tax has by and large grown in sufficient measure and together with growth in service tax has compensated this shortfall.

13. Given the implications on trade, can you explain the reason for the increased use of sanitary measures or technical barriers? (Page 26, paragraph 72)

Reply: As per our experience and various studies, global trade has witnessed increased use of non tariff barriers in the form of sanitary and phytosanitary measures and technical barriers to trade. The reasons for such an increase have been documented in different studies.

14. What are the quotas granted by India to the LDCs? Are they currently in place? What is the method of distribution? (Page 27, paragraph 78)

Reply: In addition to the preference allowed under the bilateral agreements, India has announced its Duty Free Quota Free Scheme namely Duty Free Tariff Preference (DFTP) Scheme and is in operation since August 2008 allowing duty free or preferential access for goods for all LDCs. Details of the scheme is available at the URL address http://commerce.nic.in/
trade/international_tpp_DFTP.pdf.

15. The maximum term provided for Duty Free Preferential Tariff Scheme (DFTP) of India to Least Developed Countries is five years, which began in April 2008. Do you plan to validate this scheme for a further period after it expires? If so, for how long? (Page 27, paragraph 78)

Reply: India's Duty Free Tariff Preference (DFTP) Scheme for LDCs came into effect since August 2008 with tariff reductions spread over five years and the tariff reductions shall be completed by 2012. There is no expiry time for the scheme.

16. The report states that "India believes that trade agreements should be the basic elements (building blocks) to achieve the overall objective of trade liberalization and complement the multilateral trading system". Would India be willing to consolidate agreements with a broader scope, covering areas beyond the access of goods and investment with Latin American partners? (Page 27, paragraph 79)

Reply: India has concluded several agreements which go beyond the traditional market access in goods by including trade in services and investments. India is also negotiating several other comprehensive agreements covering goods, services and investments. Any agreement with Latin American partners would depend on the perceived mutual benefits arising out of such an arrangement and agreement of all partneRs

17. Could India provide more information about the variables considered in determining the degree of deepening of trade agreements with different partners? (Page 27, paragraphs 80 and 81, and page 28, paragraphs 82, 86 and 87).