Reply: Import of most of the items is free. Hardly a few items, as stated above, are subject to import restrictions including minimum import price. These are the items considered sensitive predominantly on account of chances of variation of the price, public morals, environment grounds or permitting quality materials imports etc. Sometimes it could be for temporary period and subject to revision/ withdrawal. Requirement of MIP, if any, are well documented and available in the public domain.
Procedure for import of restricted items has been stated in paragraph 2.50 (related to "Import of Restricted Items") of the Handbook of Procedure, Vol. 1 (2015-20). This is available in the public domain and can be seen at http://dgft.gov.in.
Question 7: In accordance with page 73, paragraph 3,124, with regard to the minimum export prices: "Under the Export Policy Schedule (Foreign Trade Policy 2009-14), India maintains minimum export prices (MEP) for exports of onions and edible oil with a view to ensuring adequate availability at reasonable prices of certain items considered essential for domestic consumption (Table 3.13). The MEP and the items to be subject to it are decided by the Government after consultation with relevant ministries and departments, and the DGFT notifies these decisions."
Could inform India, what variables are used to calculate the price of export price, if the international prices are below this minimum export price? Are there any restrictions to exports similar to the mechanism of minimum price of importation? If it is the case, how are the export restrictions justified under WTO rules?
Reply: Minimum Export Price (MEP) has/had been imposed on export of certain staple food items like onion, edible oils in consumer packs and potato. The MEP is imposed with a view to ensure adequate availability of the item for domestic consumption and to contain inflation. MEP on export of onion and edible oils is reviewed by the Inter Ministerial Committee from time to time, keeping in view the availability of the item in the domestic market, its domestic and international prices among other factors and wherever required, MEP is adjusted and notified by the competent authority by way of a notification in the official Gazette.
Question 8: In accordance with the page 75, paragraph 3,132, in connection to the export subsidy commitments : In its schedule of concessions part IV, section II, India does not maintain commitments in respect of export subsidies. However, India will have reserved the right to use the exception provided for in paragraph 4 of the article 9 of the agreement on the Agriculture during the period of implementation. In agricultural subsidies to exports, the last agricultural notification, India notified values in respect of subsidies to the exportation covered in paragraphs d) and e) of paragraph 1 of the Article 9.
Could inform India, how these subsidies to the exportation are in accordance with the multilateral rules on agriculture; This type of measure of subvention, it seems, not to be subject to export performance?
Reply: India has reserved the right to use export subsidies under the Uruguay Round Agreement on Agriculture. The Hong Kong Ministerial Declaration makes it clear that developing countries would continue to be exempt from reduction commitments on export subsidies listed in subparagraphs (d) and (e) of paragraph 1 of Article 9 of the Agreement on Agriculture. Therefore, Members which are benefiting from S&D treatment during the implementation period would continue to benefit from such provisions till a new agreement is in place.
Question 9: In accordance with page 97, paragraph 3,219. "Section 92A of the Indian law states that a compulsory licence shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector that need them to address public health problems.."
Could inform India, how this provision is adjusted to the multilateral rules, paragraph f TRIPS - Article 31, in regard to the authorization of the use without the authorization of the holder of the rights of the patent if, as you can see, the law would allow the national expedition of a compulsory license for the manufacture and export of patented pharmaceutical products?
Reply: Under section 92A, request would need to be placed before the Controller General by the country seeking to get the medicine. CL will issue only for supply to the market of the requesting country. This is completely compliant with Art 31 f of TRIPS
Question 10: In accordance with the pages 115 and 116, paragraph 4.20 .: "Purchasing prices of sugarcane are subject to the fair and remunerative price (FRP)12; a minimum price set at the central level, below which no sugar mill may purchase sugarcane from a farmer. State governments also set a state advisory price (SAP) for sugarcane. If the SAP is higher than the FRP, the State Government bears the loss.".
Apparently, it would be a measure of price support, has India thought include this measure in its notification of domestic support measures, whether this measure is justified under the provisions of agricultural domestic support measures?
Reply: India has been submitting its notifications in accordance with the relevant provisions relating to agricultural domestic support.
Ecuador
Additional Questions
Report by the Secretariat:
Question 1: In accordance with page 37, paragraph 3.12, India Could you explain how the reference prices are set and whether they are in a database?
Reply: Tariff values have been notified for certain goods that are prone to undervaluation. Tariff values are fixed on the basis of prevailing international prices of these goods as observed from various reputed journals and other publications. These values are floating values and are frequently reviewed and revised.
The tariff values are notified from time to time and the same is available at: http://www.cbec.gov.in
Question 2: In accordance with page 88, paragraph 3.180, India Could tell where you can get information on minimum export prices and sustainability of the products covered by these measures?
Reply: Minimum export prices are available at www.dgft.gov.in and these are based on the prevailing domestic and international prices of the products, for the purpose of price stabilization.
Question 3: In accordance with page 48, paragraph 3.33, the Secretariat report states:
The DGFT is the body responsible for allocating quotas and importers eligible for quotas are state enterprises such as the National Development Board Dairy Industry (NDDB), the National Federation of Agricultural Cooperative Marketing India (NAFED ), the State Trading Corporation of India (STC), the Trading Corporation of Minerals and Metals (MMTC), Projects and Equipment Corporation of India (PEC), Spices Trading Corporation Limited (STCL) and state federations of cooperatives marketing, depending on the product. These importers may only make effective imports on behalf of users and the goods must be cleared through customs before March 31 of each fiscal year
In relation to the administration of those quotas, India Could you tell us in more detail, the way how the DGFT allocated tariff quotas to state enterprises, there are special considerations on production and consumption? And why imports can be conducted before March 31
Reply: Detailed procedure by the DGFT for imports under tariff rate quota is given in para 2.60 of the foreign trade policy 2015-20, available at http://www.dgft.gov.in.
Question 4: According to page 56, footnote to paragraph 3.56, the Secretariat report states:
The state import trade has the stated purpose of ensuring, inter alia, that farmers get income" reasonable ", as well as food security, supply of fertilizers to farmers, and that the national system of support prices for kerosene and liquefied petroleum gas (LPG) is correctly applied, relying on importation into a single agent. The government buys food grains and certain agricultural producers at a minimum support price to ensure small farmers and marginal Indian producers a fair return for their investment.
These cereals and agricultural products are sold, in turn, through the public distribution system at varying prices: some at market prices, and other subsidized for those living below the poverty line prices. State trading enterprises buy from producers in the country or imported in accordance with the situation of market supply and demand. It is considered that such operations of these companies allow effective monitoring of the supply situation, which, in turn, ensures that the concerns relating to food security are duly taken into account. In the case of petroleum products, the imports / exports are made at prices determined by the market. As for fixing the domestic price, domestic support system applies in the case of kerosene and liquefied petroleum gas (used as domestic fuel).
Regarding fertilizers, state trading objective is to secure and manage their supply to farmers. "(Emphasis added).
In the footnote on page paragraph 3.56, the phrase in bold claims that: "The STEs buy from producers in the country or imported in accordance with the situation of market supply and demand". In this regard, India Could you tell us if there is exclusivity in the import of cereals and other agricultural products subject to purchases by state trading enterprises? In terms of supply and market demand, the STEs manage import volumes of these products? And private operators are allowed to import such products in parallel with purchases of state trading enterprises?
Reply: As per the current policy, the products which are under the STE category can be imported only by the concerned STEs or by other entities given NOC by these STEs. Policy also provides that STEs shall make any such purchases or sales involving imports or exports solely in accordance with commercial considerations including price, quality, availability, marketability, and other conditions of purchase or sales in a non-discriminatory manner and shall afford enterprises of other countries adequate opportunity, in accordance with customary business practices, to compete for participation in such purchases or sales.
Question 5: According to page 115, paragraph 4.19, the Secretariat report states:
Farmers are guaranteed the minimum support prices through price support program: when the prices of the products covered by the program fall below the minimum support prices in the market involved bodies designated by the Government to buy the minimum support prices. Agencies designated under the price support program buy specific products. In some cases, it also authorizes the Food Corporation of India (FCI) to sell their stock on the open market, including for export. For example, the government authorized the export of 4.5 million tons of wheat in 2012-2013 and 2 million tonnes in 2014-2015. Sales in the domestic market are carried out at predetermined prices; in 2012-2013 and 2013-2014 were sold respectively 7 million and 6 million tons of cereales.11 The Secretariat is not clear how prices for sales in the domestic market are set free, and who sold grain. (Emphasis added).
As part of the support programs for agricultural products, the FCI has exported products acquired from farmers under the price support programs, sometimes at subsidized prices. Could India inform us, if authorized for export products, the minimum support prices are set based on the behaviour of domestic prices and international markets?
Could India report, in the case of authorized for export, which was the relative product prices in domestic market and international market?
Reply: The price support mechanism for specific commodities is intended to protect farmers from having to undertake distress sales and not for mobilizing stocks for the purpose of export. The stock of wheat and rice so procured from farmers is utilized for food security programmes. When any surplus stock is sold in the domestic market, the sale is finalized on the basis of a reserve price fixed by the Govt. and bids below the reserve price are invariably rejected. Price discovery is done based on competitive bidding. During 2012-14, the Govt. had decided to sell a definite quantity of wheat in the international market also through competitive bidding and the price for export was also discovered through open tenders. The export prices were above the MSP and the global prices. No export has taken place at the subsidized prices.
Question 6: Pursuant to page 68, paragraph 3.104 the Secretariat report states:
"The main changes relating to sanitary and phytosanitary (SPS), which entered India since 2011 are the full application (the August 5, 2011) of the Law of standards and food safety (FSSA) 2006 through various measures, including the adoption of four related regulations, namely Regulations and safety standards and food (food standards and food additives)."
Could India give us the law of standards and food safety (FSSA) 2006?
Reply: Food Safety and Standards Act 2006 is available at http://www.fssai.gov.in and Food Safety and Standards Rules made thereunder are also available at http://www.fssai.gov.in.
Question 6: In relation to sanitary and phytosanitary measures:
Could you tell us if the plant products that enter India require an import permit? What are the rules for registering companies to fumigate disinfection plant products at entry points of the country?
Reply: Plant Quarantine regulatory measures are operative through the "Destructive Insects & Pests Act, 1914" (Act 2 of 1914) in the country. The purpose and intent of this Act is to prevent the introduction of any insect, fungus or other pest, which is or may be destructive to crops. The import of agricultural commodities is presently regulated through the Plant Quarantine (Regulation of Import into India) Order, 2003.
Issue of Import Permit: An Importer intending to import agricultural commodities has to apply in advance for the issue of Import Permit in respect of the commodities listed in Schedule V and VI of PQ Order, 2003 in the prescribed form. The procedure to be followed has been shown in the flow chart at http://ppqs.gov.in/image002.gif.
The import clearance involves various steps from receipt of reference from Customs until recommendation for its release or otherwise to the Customs including sampling, detail testing viz., bacteriological, mycological, entomological, nematological, etc., besides the post entry quarantine (PEQ) testing at the importers premises under the PEQ facility. The flow chart for import inspection and clearance is available at http://ppqs.gov.in/image003.gif. The post entry quarantine inspections which are required in case of cuttings, saplings and bud woods are carried out by the Designated Inspection Authorities constituting mainly the head of the Department of Entomology/Plant Pathology of the State Agricultural Universities/ICAR Institutions.
Report India
Question 7: According to page 17, paragraph 4.14 the country report states:
"The increasing incidence of non-tariff barriers such as sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT), remains a serious commercial concern. While tariffs have been declining worldwide (also due to the increasing number of FTAs) has increased the use of technical / mandatory rules and regulations that constitute barriers have multiplied procedures conformity assessment. Increased transaction costs arising from compliance with these regulatory requirements increases the costs of exports from India and reduces the competitiveness of their prices. "
What it is the internal proceeding is carried out to establish entry requirements in agriculture in India?
Reply: General conditions for Import of plants, plant products are as under:
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No consignment of plants and plant products and other regulated articles (hereinafter referred to as "consignments") shall be imported into India without a valid permit issued under this Plant Quarantine (Regulation of Import into India) Order, 2003.
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No categories of plant materials in respect of the plant species or variety mentioned in Schedule IV of the Plant Quarantine (Regulation of Import into India) Order, 2003 shall be allowed to be imported into India from the countries mentioned against each in column (4) of the said Schedule.
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Every applications for a permit under this clause sha ll be made at least one month in advance to the Issuing Authority as listed in Schedule-X, in Form PQ 01 for the import of plants and plant products for consumption and processing and in form PQ 02 for import of seeds and plants for propagation covered under Schedule-V, VI and VI Plant Quarantine (Regulation of Import into India) Order, 2003 I.
Further details of the Plant Quarantine (Regulation of Import into India) Order, 2003 are available at: http://dbtbiosafety.nic.in/act/Plant%20Quarantine%20_order_2003.pdf.
European Union
WT/TPR/S 313- Report by the Secretariat
Page 10, Para 21 and Table 3.18 page 74 and Government Report para 3.8
The EU considers that the report does not cover subsidies in a comprehensive manner. As reported, the situation is that subsidies can be granted at several levels, such as the State level. Subsidies often consist in tax exemptions that are difficult to identify. In its report, in para 1.2 India commits to rationalize subsidies. The EU notes that subsidies continue being the third most important element in the budget.
EU Question 1: Could India provide further information on efforts to simplify and streamline subsidies schemes, reducing their market distorting impact and ensuring that support is received by the intended beneficiary? Could India give more information on the fiscal subsidies it grants in particular those that are related to export?
Reply: Government is taking various steps to enhance the efficiency of procurement and public distribution systems. The objective is to ensure that the right amount of subsidy reaches the right people at the right time. Details of fiscal subsidies are available in India's budget documents (www.indiabudget.nic.in). India is also in the process of collecting information for its notifications to the WTO.
Page 30 para 2.24 - Bilateral trade policy. The report mentions an internal study on the impact of India's FTAs on its industry.
EU Question 2: Could India elaborate on its strategy for bilateral trade agreements and its intentions in the near future in light of the results of the study mentioned in the WTO Secretariat report? Has the government for example attributed priorities for the conclusion of certain ongoing negotiations?
Reply: India's strategy for bilateral trade negotiations is determined inter alia by a number of factors such as the reciprocity by trading partner, export interests in the trading partner, domestic sensitivity for stakeholders, overall ambition in other areas of negotiations etc.
Page 30 para. 2.28 - business climate
"Investment and incorporation of companies is regulated by the Companies Act, 2013. The Act regulates the establishment of domestic and foreign companies, the power and responsibilities of senior management as well as details relating to audits and accounts. Other key legislation includes the Industries (Development and Regulation) Act 1951 which guides Government industrial policy objectives. The Indian Contract Act 1872 governs transactions relating to industry and trade, while the Industrial Disputes Act 1947 determines the settlement of industrial disputes. Other Acts that are relevant for business are the Competition Act of 2002, and laws and regulations relating to intellectual property rights (see further details in Section 3.3.5)."
EU Question 3: "Based on the World Bank report, India dropped to 142 place out of 189 countries in the "Ease of Doing Business." What measures is India undertaking to attract international companies beyond the relative opening up of some sectors described in the WTO Secretariat report?
Reply: In addition to opening up of economy through easing the FDI regime, Government has taken up reforms in the regulatory environment. These initiatives, updated as on 20.5.2015 can be accessed at http://dipp.nic.in/English/Investor/EoDB_Intiatives_20May2015.pdf.
Page 30, para 2.30- Legal framework for business
The last TPR in 2011 highlighted that at least 12 procedures were required to set up a business in India. The situation has clearly worsened as it has been stated by the World Bank. But not only the extraordinary amount of paperwork and administrative hurdles involved, resulting in long delays, is an obstacle for doing business in India. Once a foreign company is set up, they face several specific problems from the legal framework perspective (bidding, land acquisition to mention a few). Regarding the set up of facilities, land acquisition is a very lengthy and costly process. The land acquisition Bill has recently entered into the Parliament but it will take time until it is approved.
EU Question 4: Does India intend to take steps in the near future to reduce the current very long period of time needed for land acquisition?
Reply: Efforts to improve the ease of doing business in the country is an on-going process. Improving land laws is also a part of the endeavour wherein measures to streamline laws on land acquisition, digitisation of land records that would facilitate easy and faster land acquisition, at the same time ensure fair compensation to farmers have been initiated.
From experience, it is a common understanding that the public procurement model has not met expectations.
EU Question 5: Does India have a clear strategy about the model to adopt for financing infrastructures? Could India clarify whether, in the framework of its wider policy to foster Infrastructure Development, it is ensuring that there is no discrimination between national and foreign investors?
Reply: The Government has outlined a new vision for putting India on a high and sustained growth trajectory of 7-8 percent in the next 3-4 years through enhanced investments in infrastructure, focus on creation of an investor-friendly environment, fostering social inclusion and fiscal consolidation.
The Government had projected an investment requirement of US $ 1 trillion (~ INR 60 lakh crore) in the infrastructure over the XII Five Year Plan (2012-17) which is about 10 per cent of GDP, a significant scaling up from the XI Five Year Plan (2007-2012) which was US $ 514 billion (about 9 percent of GDP).
Given the enormity of the investment requirements and the limited availability of public resources for investment in physical infrastructure, effort has been made to explore avenues for increasing investment in infrastructure through a combination of public investment, Public Private Partnerships (PPPs) and occasionally, exclusive private investment wherever feasible. The private sector is expected to contribute at least half of the over $1 trillion dollar (Rs. 60 lakh crore) infrastructure investment in the XII plan.
As preliminary estimates indicate a potential funding gap of 25-30% in the XII Plan target, innovative measures have been taken to bridge the financing gap in infrastructure through:
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Viability Gap Funding (VGF)
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Take-out finance to reduce long term cost of debt.
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Multilateral Agencies are allowed to raise Rupee Bonds and carry out Currency Swaps to provide long term debt.
Dedicated Infrastructure Funds are being encouraged for equity flows:
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Infrastructure Bonds
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Infrastructure Debt Funds (IDFs)
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Infrastructure Investment Trust (InvITs)
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Real Estate Investment Trust (REITs)
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Use of FE reserves – offshore SPV by IIFCL etc.
India does not discriminate against foreign investors, In so far as infrastructure and PPP projects are concerned, these are competitively bid out and the qualification criteria are laid down in the model RFQ. There is no bar on foreign participation in the bidding for projects in the different sectors which are governed by the FDI policy.
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