Wt/tpr/M/313/Add. 1 31 July 2015

EU Question 49: Are Indian authorities considering the use of other fumigants as per international standards?

Reply: Yes. India is open to any alternative suggestions as per International Standards.

Page 65 para 3.122 - export taxes

EU Question 50: Further to the information provided on export taxes, could India provide additional information on the preferential transport fees applicable for the export of certain raw materials?

Reply: Issues related to transport fees are not a taxation matter.

Page 68 para 3.134 - subsidies.

EU Question 51: Could India provide updated information on how it determines its current per capita GNI in constant 1990 dollars?

Reply: As per the provision stated in Article 27.6 of ASCM, per capita GNI in 1990 dollars is being provided by the WTO Secretariat based on the data released by the World Bank.

Page 71 para 3.148 - duty drawback

The duty drawback brand rate scheme showed a significant increase form 2011-12 (Rs 2.2 B) to 2013-14 (Rs 3.2Bn).

EU Question 52: Could India provide further information for the reasons and the possible underlying trade patterns of this significant increase?

Reply: Reasons for increase in quantum of brand rate disbursals over .time would include more exporters opting for it on account of inapplicability, non-availability or insufficiency of all industry rates, migration of exports to Duty Drawback Scheme, better levels of documentation, enhanced time frames for filing of applications, greater emphasis on timely verification, etc.

Page 72. chapter 3.2.7 -export finance

Contrary to the this chapter of the report, WTO Secretariat's background document G/AG/W/125/Add.2 on Export Credits, Export Credit Guarantees or Insurance Programmes provides no data on export financing schemes applied by India.

EU Question 53: When will India provide detailed data on its applied export financing schemes?

Reply: Data on outstanding export credit are published regularly in the Economic Survey, GoI and also in the "Statistical Tables Relating to Banks in India", RBI (Table 16. Database on Indian Economy is available at http://dbie.rbi.org.in). Data on Export Credit Refinance (ECR) limit set by the RBI from time to time and utilization of the ECR facility by banks to access liquidity from the RBI are published regularly in RBI's Monthly Bulletin (Table No. 5).

Page 73, Para 3.156 - export finance
EU Question 54: The EU welcomes the inclusion of export credit under the revised Priority Sector Lending guidelines for banks.  Could the authorities clarify whether they expect the overall quantum of lending in this area to rise as a result given the relatively low limits on this line of lending?

Reply: Priority Sector loans are competitive loans without any price cap. Guidelines are revised as per the needs of the Indian economy.
The Export Credit extended as per the details below would be classified as priority sector:

Domestic banks	Foreign banks with 20 branches and above	Foreign banks with less than 20 branches
Incremental export credit over corresponding date of the preceding year, up to 2 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher, effective from April 1, 2015 subject to a sanctioned limit of Rs. 25 crore per borrower to units having turnover of up to Rs. 100 crore.	Incremental export credit over corresponding date of the preceding year, up to 2 percent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is higher, effective from April 1, 2017 (As per their approved plans, foreign banks with 20 branches and above are allowed to count certain percentage of export credit limit as priority sector till March 2016).	Export credit will be allowed up to 32 percent of ANBC or Credit Equivalent Amount of Off Balance Sheet Exposure, whichever is higher.

Export credit includes pre-shipment and post shipment export credit (excluding off-balance sheet items) as defined in Master Circular on Rupee / Foreign Currency Export Credit and Customer Service to Exporters issued by RBI's Department of Banking Regulation.

Page 75, para 3.164 - banking regulation

EU Question 55: Could India provide further information on what measures are taken in case a bank does not meet the priority sector lending targets?

Reply: Scheduled Commercial Banks having any shortfall in lending to priority sector shall be allocated amounts for contribution to the Rural Infrastructure Development Fund (RIDF) established with NABARD and other Funds with NABARD/NHB/SIDBI, as decided by the Reserve Bank from time to time. The interest rates on banks' contribution to RIDF or any other Funds, tenure of deposits, etc. shall be fixed by Reserve Bank of India from time to time.

Non-achievement of priority sector targets and sub-targets will be taken into account while granting regulatory clearances/approvals for various purposes.

Page 79 para 3.184- price controls/patents/pharmaceutical pricing policy

EU Question 56: Could India provide further information on whether it plans to expand the existing National Pharmaceutical Pricing Policy and Drugs (Price Control) Order? Does India consider covering medical devices (such as stents) and patented drugs? If so could India provide a timeline on the implementing such measures?

Reply: The Government has constituted a Core Committee to review and recommend the revision of National List of Essential Medicines, 2011 (NLEM) in the context of contemporary knowledge of use of therapeutic products. Once the revision takes place, the proposal for including the list under price control would be initiated. The revision of the NLEM list is expected in the current years. Presently no patented drugs are included in the NLEM. Further only two medical devices viz. Intra-Uterine Device (IUD) and Condoms are in the list of Essential Medicines and are under price control.

Page 81, para 3.191 - 3.196 public procurement.

India conducted a public consultation on a draft public procurement bill.

EU Questions 57: Could India provide further information on the intentions of modernizing its public procurement system and taking up the draft public procurement bill? When does India expect the new comprehensive legislation for central level to be adopted? In light of the fact that India is intending to make its legislation GPA compatible – what are India's intensions as regards the reservations for policy purposes currently included in the draft law?

Reply: India is in the process of formulating a comprehensive government procurement legislation. It is yet to be considered and passed by the Indian parliament. Once it is passed and implemented, issue of India acceding to GPA of the WTO would be examined. As bill is yet to be introduced before the parliament, further details about the contents of the bill cannot be provided.
Page 82, Para 3.196- regulatory framework for public procurement

The current regulatory framework for India's public procurement includes the General Financial Rules (GFRs), 2005; the Delegation of Financial Powers Rules (DFPR); the Manual on Policies and Procedures for Purchase of Goods issued by the Ministry of Finance; Government orders regarding price or purchase preference or other facilities to sellers in the handloom sector, cottage and small-scale industries and to CPSEs; and the guidelines issued by the Central Vigilance Commission to increase transparency and objectivity in public procurement. There are also sectorial laws such as the Telecom Regulatory Authority Act 2000, the Electricity Act 2003, and the Petroleum and Natural Gas Board Act 2006, which also regulate public procurement. In addition, various Government instruments and agencies including ministries and departments (e.g. the Public Works Department and the National Highways Authority of India) have their own public procurement system.

EU Question 58: Are there any steps by the Indian government to make the tender process for the government projects easier for international companies to bid for? What are the current issues that the government faces with regards to tender bids from international companies?

Reply: As of now, there is no bar on international companies to bid for participation in tendering process in India. International companies which are ready to do business in Rupees terms for domestic purchases do not face any problems. Many of the international companies have their Indian subsidiaries who bid in the domestic government procurements in Rupee terms. The International Companies can also participate in Global Tenders floated by the Government agencies.

Page 83 para 3.201 -preferential policies at Central government level

EU Question 59: Could India provide statistical information of the current share of MSEs in public procurement in India at central level? Could India also provide further information on how the 20% value reservation for MSEs will be implemented? Will targets established at the level of individual procurement projects or separate procuring entities or at central level?

Reply: The procurement from MSEs by Central PSUs is around 15% of total procurement by them.

Each Central Ministry/Department/PSU will ensure achievement of minimum of 20% procurement from MSEs. Targets will be fixed for their total procurement not at individual procurement project level. The 20% procurement from MSEs has become mandatory from 1st April, 2015.

Page 83, para 3.205 – government procurement
EU question 60: Could India give the list of states where procurement is governed by general financial rules?

Reply: The General Financial Rules cover procurements in the Central Government, its attached offices, autonomous bodies and Public Sector Undertakings etc. All the States have their own financial rules for procurement of goods, services and works. Some of these rules are modelled on the lines of the Central General Financial Rules.

Page 84; section 3.3.5 - IPR policy

EU Question 61: When will the next iteration of the Policy be released and will it be the final version? Have plans been developed to achieve the aims set out in the Policy and, if so, when will they be made public? Is India considering a higher level protection of patent than currently?

Reply: The final draft of the National IPR Policy as submitted by the IPR think tank is under active consideration of the Government.

Page 85, para 3.213.
While the number of patent applications has been steadily increasing, the number of patents granted has decreased by one-third. This may indicate that the backlog of patent applications is growing.
EU Question 62: Can India clarify if the backlog of patent applications is growing and what actions it is taken to address this problem?

Reply: With a view to speed up the disposal of patent applications, additional 252 posts of Examiners and 76 posts of supervisory officers (Controllers) have been approved by the Government in the 12^th Plan. The Government is making all out efforts to complete the recruitment of all the vacant posts of Examiners and Controllers in the current year itself.
Besides, as a short-time measure, 263 Contract Examiners of Patents (equally qualified as regular Examiners) are also being recruited and their process of selection is ongoing. Further streamlining the functioning of Patent Office by simplifying the patent procedures and regulations along with inculcating more automation and IT enablement in the patent work-flow has been accorded top priority
Page 86 para 3.216.
The Supreme Court of India in its judgement [Novartis A.G. vs. Union of India] said that "The amended portion of Section 3(d) clearly sets up a second tier of qualifying standards for chemical substances/pharmaceutical products in order to leave the door open for true and genuine inventions but, at the same time, to check any attempt at repetitive patenting or extension of the patent term on spurious grounds." Further it was said that "efficacy" should be understood as "therapeutic efficacy", which must be judged "strictly and narrowly". In paragraph 190 of the judgement, the Court held that "in whichever way Section 3(d) may be viewed, whether as setting up the standards of "patentability" or as an extension of the definition of "invention",
EU Question 63: Can India clarify how it ensures that the interpretation of section 3(d) of India's Patent Act does not introduce a patentability criterion ("enhanced therapeutic efficacy") additional to the three provided for under the Agreement on Trade-Related Aspects of Intellectual Property Rights TRIPs which in Article 39.3 requires that "any inventions … in all fields of technology" to be patentable "provided that they are new, involve an inventive step and are capable of industrial application"?

Reply: The provision Section 3(d) applies to all fields of technology. As per section 3(d) of the patents Act, efficacy requirement is invoked when the subject matter involves "mere discovery of a new form of a known substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus". Unless the requirement of the efficacy is met with, a new form of a known substance or mere use of a known process, machine or apparatus is not an invention -meaning thereby that the criteria of patentability are not fulfilled. Thus, the efficacy requirement is the inventive step.
The Hon'ble Court states in this regard that "efficacy means the ability to produce a desired or intended result. Hence the test of efficacy in the context of section 3(d) would be different depending upon the result the product under consideration is desired or intended to produce. In other words, the test of efficacy would depend upon the function, utility or the purpose of the product under consideration. Therefore, in the case of a medicine that claims to cure a disease, the test of efficacy can only be 'therapeutic efficacy'."
Page 85 para 3.218.
Another important development in the area of patents since the last Review is the issuance in March 2012 of India's first and only compulsory licence so far. The Controller General of Patents, Designs and Trade Marks issued a compulsory licence under Section 84 of the Patents Act deciding that the reasonable requirements have not been satisfied with respect to the patented invention; the patented invention is not available to the public at a reasonable price; and that the patented invention has not been worked in the territory of India as required by the law.
EU Question 64: Can India clarify how it ensures that the interpretation being worked in the territory of India reflects the text of the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") that eliminates discrimination based on whether inventions are produced locally or imported in Article 27.1 which states that "… patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced")

Reply: Article 27 relates to patentable subject matter and states that patents shall be available in all fields of technology provided they are new, involve an inventive step and are capable of industrial application. The issue in question relates to "Nexavor" which is an existing patent in India. The patent was given after evaluating it against the Indian patent law which is compliant with TRIPS Article 27.
However, Article 31 of TRIPS allows members States to issue compulsory license. Article 31 concerns only those inventions on which a patent has been granted. The authorizations are to be considered on individual merits. In addition Article 8 of TRIPS mandates countries to adopt measures to protect public health and nutrition and the Doha declaration on TRIPS and Public Health clearly states that WTO member States are free to set down conditions to enable issue of compulsory license. Section 84 of the Patent Act is therefore compliant with Articles 8, 31 and the Doha declaration. Since it can only apply after the patent has already been granted, it is erroneous to link Art 27.1 with Section 84 of the Patent Act.
In keeping with the provision, India's section 84 sets down conditions when such a grant of compulsory license could be considered. The Compulsory license was issued in the case of "Nexavor" as it did not meet the reasonable requirements of the public, was exorbitantly priced and was not worked in the territory. The interpretation of the term "working of the patent" has been given by the Intellectual Property Appellate Board (IPAB) in the Bayer Vs Natco case and has been upheld by the hon'ble High Court.(this decision has been explained in detail in Q39 raised by Mexico, may not be required here because the import of the question is different)
Page 88 para 3.225 3.225.

India's National Manufacturing Policy of 2012 the Fund will have the option to approach the Government for issue of a compulsory licence for the technology which is not being provided by the patent holder at reasonable rates or is not being worked in India.

EU Question 65: Can India clarify how it ensures that the interpretation being worked in the territory of India reflects the text of the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") that eliminates discrimination based on whether inventions are produced locally or imported in Article 27.1 which states that "…patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced)".

Reply: Same as in reply to Q. 65. Compulsory license can only issue under the relevant provisions of the Patent Act. These provisions of the Act are compliant with TRIPS provisions

Page 88 para 3.225 - IPR and climate change

EU Question 66: Could India provide information if the technology Acquisition and development Fund (TADF) has purchased IP rights? If so could India provide further information on what kind of IP rights were acquired and how these were utilized by TADF?

Reply: No the TADF has not purchased any IP right

Page 89 para 3.3.5.3 on Trademarks

EU Question 67: Is India planning to accede to the Nice Agreement concerning the international classification of goods and services for the purpose of registration of marks?

Reply: The matter is under active consideration by the Government.

Page 91 para 3.3.5.4 Industrial designs

EU Question 68: Is India planning to accede the Hague Agreement concerning the international deposit of industrial designs?

Reply: There is no decision on this issue.

Page 97 para 3.267 - customs and IPR registration

EU Question 69: Could India provide information as to the reasons why no Geographical Indications were registered by the customs authority? Is India planning accession the WIPO administered Lisbon Agreement for the Protection of Appellations of Origin and their International Registration?
Reply: The right holders need to give a notice for registration manually or online using Automated Targeting and Recordation System (ARTS) available at http://ipr.icegate.gov.in/IPR/index.jsp to the Commissioner of Customs at any Customs Station where allegedly infringing goods are likely to be imported.

There is no decision on accession to the WIPO administered Lisbon Agreement.

Page 94 para 3.3.5.7 Protection of new plant varieties

EU Question 70: Is India considering the extension of the list of crop species/genera for which plant variety protection can be granted to all plant species/genera?

Reply: Ninety two botanical genera/ species have so far been notified by the Govt. of India on the recommendation of Authority which are eligible for registration and protection under the Protection of Plant Variety and Farmers Right (PPVFR) Act, 2001.

Further, the Authority has also prioritized list of crops/species for protection in future.

Page 95 para 3.261 on Trade secrets and test data protection

There is no statute in place in India at this time for the protection of pharmaceutical, agrochemical and traditional medicine-related data against disclosure and reliance by third parties. Such test data is said to be protected under the Official Secrets Act. However, it is not clear how India implements the second obligation under Article 39.3 of the TRIPS Agreement, which is in addition to the obligation to provide protection against disclosure, namely, protection of such data against unfair commercial use.

EU Question 71: Can India clarify how it implements the second obligation under Article 39.3 of the TRIPS Agreement to protect test data against unfair commercial use?

Reply: Article 39.3 relates to the specific case when data pertinent for seeking approval of the authority is shared with the marketing regulator. The text of this Article does not specifically state that member countries would need to comply with the requirement of data exclusivity. It only states that the regulator will need to protect it from unfair commercial use. Therefore, no additional obligations which are not present in text can be interpreted. The obligation on the authorities is to keep the test data secret and not allow it to be accessed by third parties through unfair means. India complies completely with its obligations under Article 39.3 of TRIPS.

Page 96 para 3.262 In 2004, an Inter-Ministerial Committee was set up to make recommendations on test data protection. In its report submitted on 31 May 2007, the Committee recommended, inter alia, that the term of data protection for agricultural chemical products should be three years from the date of marketing approval in India; that the term of data protection for traditional medicines should be five years from the date of marketing approval and that there should be an indefinite transition period for pharmaceuticals. After the transition period, the term of data protection would be five years from the date of the first marketing approval anywhere in the world. These recommendations are reportedly being considered by the Ministry of Commerce and Industry, Ministry of Agriculture and Ministry of Health.
EU Question 72: Can India indicate if it intends to adopt the recommended provisions on test data protection for agricultural chemical products? And what it plans for pharmaceuticals?

EU question: Can India clarify how provisions allowing generic applicants to rely on proprietary test data submitted to regulatory authorities in other countries during the relevant protection period complies with the second obligation under Article 39.3 of the TRIPS Agreement to protect test data against unfair commercial use?