World Trade Organization Organisation Mondiale du Commerce Organización Mundial del Comercio

Mexico 6:

Paragraph 149 states that under the National Maritime Development programme infrastructure in both major and minor ports develop through partnerships between the private and public sectors and Indian private partners are fully exempt from income tax for 10 years.

Qn. Does the Government of India plan to either remove this incentive in the future or extend it to foreign private partners as well?

Reply: According to existing policy, tax incentive/tax holiday is available for the infrastructure sector. In order to become eligible for tax incentive/tax holiday, the investment made in infrastructure shall be considered irrespective of whether Indian investors or foreign private partners.

TRADE POLICIES BY SECTOR / 3) Services / iv) Transport b) Air Transport

Mexico 7:

According to Paragraph 157, 100 per cent of FDI by the automatic route for new airport projects are allowed, similarly 100 per cent FDI is allowed for existing projects. Investments in excess of 74 per cent need prior approval and are subject to sectoral regulations notified by the Ministry of Civil Aviation and Safety Certification (Table AII.4). Private domestic partners of airport projects receive a total tax exemption for 10 years.

Qn. Mexico wants to know about the main objective of this incentive and if there are plans to extend this incentive to foreign private partners.

Reply: The main objective of the tax exemption on profits is to promote development of infrastructure facilities. The incentive is available to any business undertaking which undertakes an airport project. The information regarding policy on ownership and investment structure of the business as regards foreign investment may be accessed from the website of Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry: www. dipp.nic.in.

Mexico 8:

In Paragraph 160, "handling (other) services are open to FDI, up 74 per cent, subject to sectoral regulations notified by the Ministry of Civil Aviation and a security certificate. However, FDI is permitted only up to 49 per cent through the automatic route. FDI in excess of 49 per cent requires the approval of the Foreign Investment Promotion Board. Furthermore, NRIs may invest up to 100 per cent in the handling. "

Qn. Mexico wants to know the criteria that the Foreign Investment Promotion Board has to approve FDI over 49 per cent.

Reply: FIPB, as an inter ministerial body, would seek comments of concerned administrative departments, including Ministry of Civil Aviation and based on the inputs received from them, would make a recommendation for approval. The details are at www.dipp.nic.in.

Mexico 9:

Paragraph 164 indicates that India has signed bilateral air services agreements with 108 countries to improve international air link. There are 74 foreign airlines from 51 countries that operate flights to and from India, and operate 1486 international flights weekly. India maintains a limited open skies policy. In 2008, in order to promote tourism, India liberalized operation of charter flights to and from India, allowing the 'all inclusive packages' and eliminating other restrictions.

Qn. Mexico wants to know the approximate volume of passengers who have benefited by this liberalization.