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



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Question 7: Does India plan to promote services trade and attract increased services sector FDI by making commitments that reflect its applied regime and future autonomous liberalisation; so as to provide greater certainty for foreign investors and services providers to operate in India?
Reply: India has a liberal FDI Policy for Service Sectors. In many service sectors, FDI is permitted up to 100% on automatic route, subject to sectoral guidelines and regulations. However, services sectors subject to FDI caps and other conditionalities are covered from Paras 6.2.7 to 6.2.18 of the Consolidated FDI Policy, 2015 available on the official website of the Department of Industrial Policy and Promotion i.e., http://www.dipp.nic.in . Further, it has been the endeavour of the Government of India to improve the ease of doing business in India through, inter-alia, providing a stable policy environment.
As regard to reflecting the applied regime and future autonomous liberalization in FDI in our commitments in services, the decision is taken after consultation with all concerned stakeholders.
Norway

Trade Facilitation:
Question 1: The report states that India continues to have a complex import regime (Intro para. 10) ("especially its licensing and permit system, and its tariff structure, which has multiple exemptions, with rates varying according to product, user or specific export promotion programme"). Since India is in the process of "streamlining customs procedures and implementing trade-facilitation", is India now pursuing these reforms based on international best practices and standards? Will all customs offices be using the same procedures, including EDI, by a certain date ("as at end October 2014, 126 customs offices out of the total of 377 offices had electronic data interchange (EDI) facilities") to increase the uniform application of trade facilitation measures?

Reply: Post Economic Liberalization, of the early 90s, India has a considerably liberalized and simplified import regime. India's autonomous reforms for streamlining custom procedures and implementing trade facilitation are based on international best practices & standards. Indian Customs Administration has introduced trade facilitation measures based on global best practices such as self-assessment, Authorised Economic Operators (AEO) scheme, Risk Management System (RMS) for both export and import, Post Clearance Audit/on site Post Clearance Audit, Time Release Study etc. All EDI and non EDI ports in India follow the same procedures. While it may be true that out of 377 declared custom stations only 126 are EDI enabled, this has to be appreciated in the right perspective as at the end October 2014, 98% of declared documents were processed electronically through EDI only. Also, many of the Non EDI Custom station are non – operational or have been declared custom stations for limited purpose/specific period, and therefore has very little trade. Expansion of Customs Stations under EDI is on-going process.
Question 2: In para 2.17 and 3.9 in the Secretariat's report (WT/TPR/S/313), it is noted that India has not yet submitted its Category A notification to the WTO Secretariat. What is the schedule for India's process towards ratification and acceptance of the WTO Trade Facilitation Agreement?

Reply: India intends to notify its category A commitments and ratify the TFA shortly. The date for notification will be decided by the competent authority.
Question 3: In para 3.4 and 3.5 of the Secretariat's report (WT/TPR/S/313), it is noted that India uses a Risk Management System which covers 99.6 % of India's imports, whereas 97.6% of India's imports are processed via RMS. What obstacles prevent India from reaching 100% processing through RMS?

Reply: Some of the minor Customs locations are not EDI enabled and hence RMS is not operational at these locations. Coverage of EDI and hence RMS at these locations is being enhanced based on IT priortisation schedule of CBEC.
Question 4: Reference is made to para 3.1.1.1 of the Secretariat's report (WT/TPR/S/313), where it is noted that India still maintains Preshipment Inspections (PSI). What is the purpose of these Preshipment Inspections? Will the system change when WTO's Trade Facilitation Agreement comes into force for India? Which control aspects are taken care of by PSI which could not be taken care of in ordinary customs controls?  Are PSIs required also for ACP companies (ACP = Accredited Client's Programme)?

Reply: Presently Pre – Shipment Inspection (PSI) is prescribed for metallic waste and scrap. The purpose behind Pre-shipment Inspection is to confirm that the consignment does not contain any type of arms, ammunition, mines, shells, cartridges, or any other explosive material in any form either used or otherwise. It also checks and ensures that it does not contain radiation level (gamma and neutron) in excess of natural background. This is not against the WTO's Trade Facilitation Agreement. According to Article 10.5.1 of TFA "Members shall not require the use of pre-shipment inspections in relation to tariff classification and customs valuation". India does not resort to PSI either for tariff classification or custom valuation. Since the intended purpose for PSI is national security it is not linked to Accredited Client Programme (ACP).

The ACP is designed to provide recognition and the incentive of facilitation to clients who maintain high levels of compliance. Under this programme, clients who are assessed as highly compliant would be given assured facilitation by the Risk management System. The objective of ACP is to create a climate of voluntary compliance.


Question 5: According to para 3.7 in the Secretariat's report (WT/TPR/S/313) the mean clearance time is more than one week. What is the clearance time expected to be after the listed measures are introduced (EDI, RMS, e-Payment, ACP)?

Reply: Measures such as EDI, RMS, e-payment, ACP etc. have already been implemented. As reported, Time Release Study (TRS) conducted for the period July 2013 –December 2013 at JNCH reveals the following key finding in respect of RMS (Risk Management System) facilitated Bills of Entry (B/E) [requiring no examination and assessment by Customs):
i. To decide an RMS facilitation 3.86 minutes

ii. To give out of Charge after registration is 4 hours 59 minutes

iii. Hence, the average total time taken by Customs is 5 hours 2.86 minutes

Question 6: Does India have or plan to introduce special measures for expediting clearance procedures for food and other kinds of perishable goods, like the provisions set forth in WTO ATF Article 7.9?

Reply: India is mostly compliant of the provisions of the various sub paras of Article 7.9 of TFA. India is also in the process of augmenting the existing facilities.
Telecom:
Question 7: Reference is made to para 4.103 of the Secretariat's report (WT/TPR/S/313), regarding the guidelines for the development of the telecom sector in India.

The Merger & Acquisition Policy applies a market based charge on administratively allocated GSM Spectrum, albeit on a pro – rata basis for the balance period of the previous license (Unified Access Services License – UASL). The spectrum was bundled in this license prior to 2012. However, charging at market based spectrum for the remainder period without any promise of spectrum being made available post expiry of the UASL period would put in jeopardy any investment in such spectrum for a partial period. The entire UASL (license along with the entity) should be allowed to be transferred to a new entity/merged entity under M&A policy to create a stimulus for M&A. Only if the period of license or spectrum allocation sought is 20 years post Merger and Acquisition should a market based pricing be applied to any administratively allocated 'GSM/CDMA' spectrum. Will such changes in the treatment of spectrum allocation be considered to promote M&As?



Reply: The allocation of spectrum is delinked from the licenses and has to be obtained separately as per prescribed procedure. At present, no such change is under consideration.
Question 8: The NIA's for spectrum auction states that any spectrum acquired through auction will have a lock in period of three years or until Minimum Roll out obligation is completed. The tenure of the Roll out obligation is five years. The M&A policy has also formed a linkage to this. When spectrum is acquired through a market based auction this clause inhibits M&A activities. While the roll out obligation should clearly be transferred to the new entity there is a perceived ambiguity in the Department of Telecommunication on the applicability of the 3 year lock in for sale of equity of a licensee. Will the three year lock in period apply for M&As as long as the roll-out obligations are transferred to the Merged or Acquiring entity?

Reply: No such proposal is under consideration.
Question 9: When are the Spectrum Sharing and Spectrum Trading guidelines going to be finalized and released?
Reply: Spectrum Sharing and Trading guidelines are under consideration of the Government.
Question 10: Active infrastructure sharing (radio access network) reduces the operating expense and the capital expenditure for faster network penetration in rural areas. The DoT policy dated 1 April 2008 and further the NIA in 2012 stated Active infrastructure sharing would be permitted. When is infrastructure sharing likely to be allowed?

Reply: Active infrastructure sharing will be considered only after the finalization of policy on spectrum sharing. However, Telecom Service Providers (TSPs) are free to provide bandwidth to other TSPs.
Question 11: Reference is made to para 4.107 of the Secretariat's report (WT/TPR/S/313), regarding India's framework for allocation of licenses and spectrum. When is the spectrum in 700 MHz band going to be approved for commercial mobile use? And when is its auction expected?

Reply: Spectrum in 700 MHz band for commercial mobile use is under consideration of the Government.
Question 12: Spectrum in 2.5 GHz is already allocated to state owned Telecom operators in India and to ISRO. When is spectrum going to be made available for auction for BWA/LTE for broadband?

Reply: The Regulator's recommendations are awaited in this regard.
Finance sector:
Question 13: Reference is made to para 4.60 of the Secretariat's report (WT/TPR/S/313), regarding policies towards financial inclusion. How many Payment Banks and Small Banks will be granted the permission to operate in India? What is the criteria for shortlisting the same?

Reply:
1. Small Finance Banks:
As per the Guidelines for Licensing of "Small Finance Banks" in the Private Sector, Resident individuals/professionals with 10 years of experience in banking and finance; and Companies and Societies owned and controlled by residents will be eligible as promoters to set up small finance banks. Existing Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs), and local area banks (LABs) that are owned and controlled by residents can also opt for conversion into small finance banks. The minimum paid up voting equity capital for small banks shall be Rs. 100 crore.
2. Payments Banks:
As per the Guidelines for Licensing of "Payments Banks", the existing non-bank Pre-paid Payment Instrument (PPI) issuers authorized under the Payment and Settlement Systems Act, 2007 (PSS Act); and other entities such as individuals; Non-Banking Finance Companies (NBFCs), corporate banking correspondents (BCs), mobile telephone companies, super-market chains, companies, real sector cooperatives that are owned and controlled by residents; and public sector entities are eligible to set up payments banks. Existing PPI licence holders could opt for conversion into payments banks. A promoter/promoter group can have a Joint Venture with an existing scheduled commercial bank to set up a payments bank. The minimum paid up voting equity capital of the Payments Bank shall be Rs. 100 crore.
Promoter/Promoter Groups should be "fit and proper" in order to be eligible to promote small finance banks/payment banks. RBI would assess the "fit and proper" status of the applicants on the basis of their past record of sound credentials and integrity; financial soundness and successful track record of professional experience or of running their businesses, etc. for at least a period of five years.

Further, the applicants were required to furnish their business plans along with project reports with their applications. The business plan was required to address how the bank proposes to achieve the objectives behind setting up of these banks.


The process of scrutiny of applications is underway for evaluation of the applicants based on the above criteria. Banking being a highly leveraged business, licences shall be issued on a very selective basis to those who conform to the above requirements, who have an impeccable track record and who are likely to conform to the best standards of customer service and efficiency.
Number of Payments Banks and Small Finance Banks to be licensed under these guidelines would depend on the conformity of the applicants to the requirements as above.
Bilateral Investment Treaties:

Question 14: India has released a Draft Indian Model Bilateral Investment Treaty Text for comments by 10 April. When is the revision process expected to be completed? What policy implications will the revision have for future BIT negotiations?

Reply: The Draft Indian Model Bilateral Investment Treaty (BIT) is awaiting the approval of the Competent Authority. Once the model BIT text is approved, BITs would be negotiated on the basis of this model.
Agriculture – Domestic support:
Question 15: Norway has taken note of recent Indian media stories that suggest India may be preparing reforms to domestic support of agriculture. Such reforms are reported to be shifting from price support that is considered to be trade distorting support in the Agreement on Agriculture, to non- or minimally trade distorting support in the green box. Norway is encouraged by these reports, and would appreciate any further information on the proposed changes.

Reply: India has been notifying its domestic support from time to time in accordance with the WTO Agreement on Agriculture. Reforms in agriculture sector is an ongoing process and all options of efficient and WTO compliant delivery of domestic support are considered and adopted, wherever required. The fact that India is still home to largest malnourished population of 194.6 million as per recent report of FAO, should worry as collectively and strengthen our resolve to food security measures.
Fertiliser Control Order:
Question 16: It is our understanding that all fertilisers that are to be sold in India have to be registered under the Fertiliser Control Order (FCO). The registration process is, however, seen as unclear and quite cumbersome. Our reports say that it usually takes more than three to four years to get a new product registered under the FCO due to fact that companies are required to do trials over multiple locations and seasons with Indian Council of Research (ICAR)/ICAR recognised institutes, thereafter submit the report to a committee which reviews the trial reports and then approves/disapproves. The resulting delays in supplying new fertiliser solution has an impact on yields and income levels for Indian farmers.

Question 17: Would the Indian Government consider simplifying these procedures, for instance by issuing a general guideline wherein the minimum percentage level of various nutrients would be laid out to facilitate quicker approval for sales to the local market?
Reply: Suggestion by Norway is well received and has been forwarded to relevant department for their examination.

Oman



Question: 25% of India's tariff lines are unbound. Is India planning to bind them soon?
Reply: There is no plan presently under consideration in this regard.
Peru

Based on what is stated in document WT / TPR / G / 313 of April 28, 2015, Peru has the following questions:

2. ECONOMIC ENVIRONMENT

2.4. Exports, imports and trade balance

2.4.5. Trade in services
Paragraph 2.25.- A new annual initiative to promote the export of services is the Conclave on Services, which to date has been held twice and whose purpose is to bring together all partners on a single platform, identify problems and prepare a roadmap for the promotion of exports of services.

Question no. 1: Can India provide more information about the Conclave on Services: who participates, what are the dates on which these have been held, what is the date of the next Conclave? If there is a site about the Conclave, the Peru would appreciate it.

Reply: With a view to providing an interactive platform, the Services Conclave was organized for the first time in 2013. The primary aim of the Conclave is to address issues and bottlenecks affecting international trade, including the need for necessary domestic regulatory reforms in various service sectors and to develop a roadmap for augmenting international trade in consultation with concerned stakeholders. The conclave seeks to bring together all stakeholders, such as domain experts, academicians, industry practitioners as well as government representatives, under one umbrella for maximizing benefit to industry, business and economy.

Two editions of services conclaves have been held so far. These were organized during November 2013 and November 2014 respectively. The next edition of the Conclave is likely to be held on the sidelines of the Global Exhibition on Services scheduled during February 24-26, 2016.



There is no specific website for the Conclave but the information about the conclave can be accessed on the website of the Department of Commerce, Ministry of Commerce and Industry, Government of India at http://www.commerce.nic.in

2. ECONOMIC ENVIRONMENT

2.6. Main challenges

2.6.3. Infrastructure development
Question 2: Paragraph 2.41 states that the program of special economic zones in India will be strengthened in the future. Preliminarily, how India would strengthen that program and when is it expected?

Reply: Special Economic Zone Policy is an open platform where concerned stakeholders including SEZ developers, units, state Governments, Central Govt. Ministries/Departments, Trade Bodies/Associations etc. are free to give their inputs/feedback/suggestions on the basis of which necessary changes are incorporated with the SEZ policy. In order to resolve problems/issues faced by stakeholders, necessary instructions/guidelines/circulars have been issued from time to time. The practice will be followed in future as well in order to further strengthen the SEZs in India.

3. THE NEW REFORM PROGRAM

3.8. Rationalisation of subsidies
Question 3: Paragraph 3.12 states that food grains are procured from farmers at the minimum support price for the Public Distribution System. Who and how the minimum support price is determined? How often the minimum support prices are reviewed?

Reply: The Minimum Support Price (MSP) is fixed to protect farmers from distress sale of their produce and to protect them from exploitation. Minimum Support Prices (MSPs. MSP is announced by the Government following the recommendations of the Commission for Agricultural Costs and Prices (CACP). The CACP takes into account various factors including the cost of cultivation/production, changes in input prices, input/output price parity, inter-crop price parity, effects on the cost of living, effects on general price level, parity between prices paid and prices received by farmers etc. MSP is announced for both the Kharif, the two crop seasons every year.

4. TRADE POLICY

4.1. Foreign trade policy
Question 4: Paragraph 4.3 states that the foreign trade policy for 2009-2014 included several measures to stimulate exports, which provided greater diversification of export destinations in Latin America. What were these measures to stimulate exports and which sectors were targeted? Indicate, if appropriate, whether these measures have been notified to the WTO under the Agreement on Subsidies and Countervailing Measures and provide its notification number etc.

Reply: Exports to Latin American countries were facilitated through schemes like the Focus Market Scheme etc. Details of these schemes are available in Chapter 3 of the Foreign Trade Policy for 2009-2014, which is in the public domain & can be seen at http://www.dgft.gov.in. Most of these schemes have been removed in the Foreign Trade Policy 2015-20. Government of India is in the process of consolidation of information for notifying to the WTO SCM Committee.

5. INDIA AND THE WTO

5.1. WTO Negotiations
Question 5: Paragraph 5.6.-India is finalizing the categorization of its commitments under the Agreement, and would be filling the notification in accordance with the provisions therein. It is also creating the National Trade Facilitation Committee.

When would India report its commitments in category A under the Agreement on Trade Facilitation? Can you provide more information on the creation of the National Trade Facilitation Committee (at what stage is the process of creation and who would form the National Committee)?



Reply: India is in the process of consulting all stakeholders and finalizing the category A commitments. The National Trade facilitation Committee is being constituted by the Department of Commerce, Government of India. It will be an inter-departmental committee with adequate representations from all stakeholders.

Based on what is stated in document WT / TPR / S / 313 of April 28, 2015, Peru has the following questions:

2. TRADE AND INVESTMENT REGIME

2.2. Development and trade policy objectives

2.2.1. Formulation of trade policy
Question 6: According to paragraph 2.11, the Agricultural and Processed Food Products Export Development Authority (APEDA) is responsible for promoting the export of 14 agricultural products and processed food products and to monitor the importation of sugar. What are the agricultural products under its jurisdiction? What are the specific actions taken by the APEDA to promote these exports?

Reply: The 14 scheduled agricultural products under the jurisdiction of APEDA are:

    1. Fruits, Vegetables and their products

    2. Meat and Meat Products

    3. Poultry and Poultry Products

    4. Dairy Products

    5. Confectionery, Biscuits and Bakery Products

    6. Honey, Jaggery and Sugar products

    7. Cocoa and its products, Chocolates of all kinds

    8. Alcoholic and Non Alcoholic Beverages

    9. Cereal & Cereal products

    10. Groundnuts, Peanuts and Walnuts

    11. Pickles, papads and Chutneys

    12. Guar Gum

    13. Floriculture and Floriculture products

    14. Herbal and Medicinal Plants.

Specific actions taken by APEDA to promote these items include: promotion of Export oriented production, support for R&D and quality assurance, fixing of quality standards and Specifications for the Scheduled products, Inspection & Certification of Processing Plants, Storage & Transportation Points for Meat products, Infrastructure for Transportation, Handling and Storage, Improving Packaging of products, Market Development and Promotion, Market Intelligence (which includes Undertaking Surveys & Feasibility Studies), and Training in Various Aspects of the Scheduled products industries.

2. TRADE AND INVESTMENT REGIME

2.3. Trade Agreements and Arrangements

2.3.2. Regional and preferential agreements
Paragraph 2.24. There have been concerns expressed in recent years regarding the potentially negative impact of RTAs, notably on Indian industry. The Department of Commerce recently conducted an internal analysis of various FTAs, and found that the utilization of several FTAs by India's FTA partners was not significant.21 Given the low impact of FTAs on Indian industry, it is not clear what the immediate benefits of existing FTAs are and what if any implications for India's policy there may be on its current RTA negotiations. According to the authorities each negotiation is driven by the overall balance of interests with the specific trading partner(s).
Question 7: In light of internal analysis by the Commerce Department, what would be the reasons why Indian partners in several LAC lot of them will not be worth? What are the reasons why FTAs ​​have little impact on the Indian industry? What action is the Government of India to reverse this situation?

Reply: The internal analysis has only covered countries in East Asian region which whom India has an FTA. It is for the trading partners to analyse the level of preferential imports vis a vis the total imports into India. However, some of the possible reasons could be the low level of awareness among exporters of the FTA, administrative issues such as the procedure for obtaining the certificate of origin, tariff liberalization may not have been completed etc. The Government of India is engaged in the task of increasing the awareness of the FTAs for the domestic stakeholders. In this context, the Government of India has conducted FTA outreach programmes across the country, facilitated the development of a trade information portal and disseminated information on FTAs on its website.

2. TRADE AND INVESTMENT REGIME

2.4. Investment regime

2.4.1. Legal framework for business

2.4.1.2. Micro, small and medium enterprises
Question 8: With regard to paragraph 2.35, how Micro and Small and Medium Enterprises Development Act, 2006 (Section 3) defines micro, small and medium enterprises?

Reply : Section 7(1) of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 categorized the enterprises into manufacturing and services, which are further classified as micro, small and medium enterprises (MSMEs) based on the investments in "Plant and Machinery" and in "Equipments" respectively as under:

a.In the case of the enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the Industries (Development and Regulation) Act, 1951, as –

i.A micro enterprise, where the investment in plant and machinery does not exceed twenty five lakh rupees;

ii.A small enterprise, where the investment in plant and machinery is more than twenty five lakh rupees but does not exceed five crore rupees; or

iii.A medium enterprise, where the investment in plant and machinery is more than five crore rupees but does not exceed ten crore rupees;

b.In the case of the enterprises engaged in providing or rendering of services, as:

i.a micro enterprise, where the investment in equipment does not exceed ten lakh rupees;

ii.a small enterprise, where the investment in equipment is more than ten lakh rupees but does not exceed two crore rupees; or

iii.a medium enterprise, where the investment in equipment is more than two crore rupees but does not exceed five crore rupees.

3. TRADE POLICIES AND PRACTICES BY MEASURE

3.1. Investment regime

3.1.11. Anti-dumping, countervailing and safeguard measures

3.1.11.1. Antidumping and countervailing measures
Paragraph 3.59.- During the period under review, significant changes were made to the anti dumping legislation India: (...) ii) changes in the definition of domestic industry for flexibility; (...)

Question 9: What were the changes in the definition of domestic industry and how these changes contributed flexibility?

Reply: Vide Notification No.86/2011 - Customs (N.T.) dated 1st December, 2011, Rule 2(b) of the Anti-dumping Rules was amended as follows:

2(b) "domestic industry" means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in such case the term 'domestic industry' may be construed as referring to the rest of the producers.



The amendment provides flexibility to the Designated Authority to decide whether to include or exclude a domestic producer as domestic industry, even though it is related to the exporter/importer or itself an importer, keeping in view the factual matrix of the case.

3. TRADE POLICIES AND PRACTICES BY MEASURE

3.1. Investment regime

3.1.11. Anti-dumping, countervailing and safeguard measures

3.1.11.1. Antidumping and countervailing measures
Paragraph 3.62- Under Article 5 of Regulation Customs Tariff, the Directorate General of Antidumping and Allied Duties (DGAD), established within the Department of Commerce may initiate an antidumping investigation upon receipt of a written request a domestic industry or on behalf of, or on its own initiative if there is justification to launch.

Question 10: As set in Indian legislation, what are the justifications that may apply to the Directorate General of Antidumping and Allied Duties (DGAD) under which it can initiate an antidumping investigation on its own initiative?

Reply: Rule 5(4) of the Anti-Dumping Rules provides for suomoto initiation of anti-dumping proceedings by the Designated Authority on the basis of information received from the Commissioner of Customs or from any other source. In such circumstances, the Authority can initiate an anti-dumping investigation on its own without any complaint/petition filed by the domestic industry in this regard, provided the Authority is satisfied that sufficient evidence exists as to the existence of dumping, injury and causal link between the dumped imports and the injury caused to the domestic industry.

3. TRADE POLICIES AND PRACTICES BY MEASURE

3.1. Investment regime

3.1.11. Anti-dumping, countervailing and safeguard measures

3.1.11.2. Safeguards
Question 11: Is there a specific policy framework for research and application of safeguard measures in the framework of preferential trade agreements? Will the same rules apply as for the case of the WTO safeguard?

Reply: In addition to Global Safeguard Measures under the WTO agreement on safeguard, Bilateral Safeguard mechanism is a part of almost all Free Trade Agreements (FTAs) India has signed so far and these are governed by the rules framed to that extent under the respective FTAs. Bilateral safeguard mechanism under FTAs is available in the Public domain and can be seen at http://commerce.gov.in.

3. TRADE POLICIES AND PRACTICES BY MEASURE

3.1. Investment regime

3.1.11. Anti-dumping, countervailing and safeguard measures

3.1.11.2. Safeguards
Paragraph 3.79.- The Director General (Safeguards) in the Department of Revenue is responsible for hearing petitions and carry out investigations on safeguards. The request for an investigation on safeguards must be submitted in writing to the Director General by the domestic industry concerned or on their behalf. The Director General may also initiate an investigation on its own initiative in response to information received from a Commissioner of Customs (...) An interministerial body (the Permanent Board of Safeguards), chaired by the Secretary of Commerce, examines the recommendations of the Director General (Safeguards) (...).

Question 12: What kind of information is received by the Director General (Safeguards) from Commissioner of Customs that forms the basis of initiating an investigation on its own initiative? Who makes up the Standing Board on Safeguards? On whom or who bears the ultimate decision to apply a safeguard measure?

Reply: Under the domestic law, Global safeguard investigations are governed by Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997. Sub Rule (4) of Rule 5 states that "Notwithstanding anything contained in sub-rule (1), the Director General may initiate an investigation suo motu if he is satisfied with the information received from any Commissioner of Customs appointed under the Customs Act, 1962 (52 of 1962) or any other source that sufficient evidence exists as referred to in clause (a), clause (b) and clause (c) of sub-rule (3)". Clause (a), (b) & (c) of sub-rule (3) refers to the requirement of sufficient evidence regarding -

a.increased imports;

b.serious injury or threat of serious injury; and

c.a causal link between increased imports and alleged injury or threat of serious injury.

Standing Board on Safeguards is an inter-ministerial committee chaired by the Commerce Secretary. It has representatives from the Department of Revenue (Ministry of Finance), Department of Industrial Policy & Promotion, Department of Agriculture & Cooperation, Ministry of External Affairs and any other as co-opted by the chairperson. Ultimate decision to apply a safeguard rests with the Department of Revenue in the Ministry of Finance.

3. TRADE POLICIES AND PRACTICES BY MEASURE

3.3. Measures affecting production and trade

3.3.1. Incentives

3.3.1.2. Explicit subsidies
Question 13: Regarding paragraph 3.160, who are regarded as poor and traditional coastal fishermen? Is there a definition in the national legislation? What kind of gear, appliances, utensils and fishing techniques are made available to them? Are these fishermen subject to some type of fisheries management?

Reply: "Poor Fishermen" covers fishermen belonging to "poor community" who require up-liftment socially or economically. Traditional coastal fishermen are those who do fishing activities within the territorial waters of India and carry out only day long fishing. There is no specific definition of poor and traditional coastal fishermen in the National Legislation. These fishermen mostly use gill-nets, hand-lines and at times also undertake hand operated small trawls. The vessels used by them mostly are in the range of 9-13 meters of overall length (OAL). These vessels are without wheel houses. Fishermen are regulated by the Governments of the respective State/Union Territories through their Marine Fishing Regulations Act (MFRA), and the rules and regulations promulgated thereunder. MFRAs have provisions on elements of fisheries management which inter alia cover elements of fishing management like registration and licensing of fishing vessels and earmarking areas for fishing vessels; gear and craft management; season and area (zonation) control, access conditions, prohibition on harvest of certain fish species and trade thereof etc.

Peru

Additional Questions

TRADE POLICY REVIEW OF INDIA
Question 1: Could the India: How is implementing projects in agriculture competitiveness? (Paragraph 4.1.1.1, Report of Secretariat)
Reply: It needs to be kept in view that the cost of cultivation for the farmers is high in India due to the small size of farm holdings. The small farmers generally produce for themselves and sell the limited surplus in the market. Therefore, adopting appropriate import and export policies (such as suitable tariffs, state trading of some items and tariff rate quota etc.) are of great significance for sustainability of farming in India.
Question 2: Could India explain what criteria changes tariff rates for agricultural products? Do you have scheduled additional modifications? (Paragraph 4.4, Secretariat Report).
Reply: The effective tariff rate of agricultural products is fixed in response to the price volatility in the domestic market and as a measure of balancing the interests of consumers and domestic farmers.
Question 3: Could India explain the reasons for the implementation of measures to support prices of cotton, rice and sugar? (Paragraph 4.17, Secretariat Report).
Reply: Agriculture in India is not remunerative. The share of agriculture and allied sector in gross domestic product (GDP) in 2013-14 was 13.9 % while it contributed 54.6% to the total employment of the country. About 99% of farm holding have less than 10 hectares of land which does not to generate enough income to maintain a minimum standard of living. India's agriculture is subjected to structural disadvantages arising out of small and fragmented land holdings, depletion in soil fertility, lack of access to markets and technology, low level of productivity and incomes.
Question 4: Could India elaborate what were the benefits of implementing improvements in the procedures for Customs valuation? How does it benefit exports from third countries? (Paragraph 3.1.1, Secretariat Report).
Reply: Measures such as EDI, RMS, e-payment, ACP etc. to improve customs procedures have already been implemented. These have helped customs authorities to reduce the time required to clear an import consignment. Time Release Study (TRS) conducted for the period July 2013 –December 2013 at JNCH (Jawaharlal Nehru Customs House), which is a major Customs House, reveals the following key finding in respect of RMS (Risk Management System) facilitated Bills of Entry (B/E) [requiring no examination and assessment by Customs):
i.To decide an RMS facilitation: 3.86 minutes

ii. To give out of Charge after registration is: 4 hours 59 minutes

iii.Hence, the average total time taken by Customs is: 5 hours 2.86 minutes

Question 5: Could you point out India What are the criteria for preferential quotas on imports of sugar and onions traded as State? (Paragraph 4.11, Secretariat Report).
Reply: Most of the items can be imported into India without any restrictions. Only a few items are under State Trading Enterprises (STE) category. The exclusive right to export or import is granted to an enterprise under the provisions of the Foreign Trade Policy (FTP). These STEs work purely on commercial considerations. Para 2.20 of FTP 2015-20 , which is in public domain prescribes the details.

Philippines



Under Trade Policies and Practices by Measure in paragraph 3.59, the Secretariat report that during the period under review, significant changes were made to India's anti-dumping legislation, in particular adjustments to the rules governing mid-term and sunset reviews.
Question 1: Could India please provide updates on the mid-term and sunset reviews that were conducted? What were the results of these reviews? Could India please provide statistics on continuation or recurrence of dumping and injury?
Reply: During the period of review, India initiated 55 Nos. of sunset reviews and 14 Nos. of mid tem reviews. Out of these initiated review investigations, 39 Nos. of sunset reviews and 13 Nos. of mid-term reviews have been completed by giving findings. All these findings are available in the public domain and can be seen at http://www.commerce.nic.in/traderemedies.
Russian Federation

QUESTIONS REGARDING THE SECRETARIAT REPORT (WT/TPR/S/314)
3 TRADE POLICIES AND PRACTICES BY MEASURE

3.1.13 Sanitary and Phytosanitary requirements

3.106. p 62
The authorities state that, with the aim of aligning India's SPS-related standards with the Codex, the scientific review has been conducted and the formal adoption procedure of standards is continuing. In the Committee on SPS Measures, concerns were raised regarding, inter alia, import restrictions on apples, pears and citrus, import conditions for pork and pork products, and import requirements for blueberries and avocados during the period under review.
Question1: Could you please specify the Indian SPS-related standards, which were mentioned in the paragraph above, and what was the basis for the mentioned scientific review?
Reply: The contents of the source para emanate from the exercise undertaken for harmonisation of Indian standards for Additives, Heavy Metals, mycotoxins, naturally occurring toxic substances etc. with those of Codex and the same may be read to this limited extent only.
3.109. p 63
Imports of animal products into India require sanitary import permits (SIPs) issued by the Department of Animal Husbandry, Dairying and Fisheries; permits must be obtained prior to shipping from the country of origin. The Department issues SIPs for livestock products based on an import risk analysis. Permits are valid for one year or six months depending on the nature of the products, and may be used for multiple consignments. A SIP is not a licence, but a certificate verifying that India's sanitary requirements are fulfilled. Imports of live animals and animal products falling under the restricted items as per Export-Import Policy require an import licence issued by the Director General of Foreign Trade after an import risk analysis is conducted by the Department of Animal Husbandry, Dairying and Fisheries for such import. Imports of animal products are only allowed through designated ports where animal quarantine and certification services are available (Amritsar, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, and Mumbai). Imports of fish products are allowed through the sea port of Vishakhapatnam (in the State of Andhra Pradesh), the sea port and airport of Kochi, and the land customs station at Petrapole (for imports from Bangladesh only).
Question 2: Please specify the internet site or other sources of information where it is possible to find the said import risk analysis.
Reply: The health certificates for import of livestock and livestock products are available at http://www.dahd.nic.in
Question 3: Please explain the reasons why the land customs station at Petrapole is restricted only for imports from Bangladesh?
Reply: As the Petrapole is located on the borders of India and Bangladesh, hence it is restricted only for import from Bangladesh.
3.110 p. 63
Imports of plants and plant materials are regulated under the Destructive Insects and Pests Act 1914, the Plant Quarantine (PQ) (Regulation of Import into India) Order 2003, and international conventions. During the period under review, Plant Quarantine (Regulations of Import into India) (Second Amendment) Order 2014 and Plant Quarantine (Regulation of Import into India) (Third Amendment) Order 2014 were issued. The Directorate of Plant Protection, Quarantine & Storage is entrusted with the implementation of Plant Quarantine Regulations issued under the Act.
Question 4: Please elaborate whether the import requirements differ from the national ones for animal and plant products. If yes, please explain the reasons and the rationale for such difference?
Reply: Import guidelines for animal and animal products mainly envisage the restriction of movement of the products from the country, zone and compartments infected with diseases. The diseases listed in the import guidelines are OIE listed diseases which are also notifiable diseases in India in accordance with the provision in the "The prevention and Control of Infectious and Contagious diseases Act., 2009". According to this act, interstate movement of animals and animal products are restricted at the time of outbreak of disease in any part of India.
As far as the import requirements for plants and plant materials are concerned, they are strictly in line with the IPPC provisions and in accordance with the ISPMs.
3.2.5 State trading enterprises

3.130. p.67
State-trading export privileges for some agricultural and forest produce, including sugar (for exports under preferential regime), onions, and gum karaya, have been accorded to STEs with a view to enabling better marketing, realization of better prices, ensuring a steady domestic supply and preventing wide domestic price fluctuations. Similarly, with a view to ensuring a reliable supply of kerosene and liquefied petroleum gas (LPG), which are used as household fuels, exports are allowed only through STEs. Further, exports by STEs are deemed necessary for conservation and proper utilization of some ores of metals.
Question 5: We are concerned about the mechanism of Indian wheat export through Open Market Sales Schemes (OMSSs) which is implemented by State Trading Corporation of India (STC) as well as with Indian wheat subsidies bill. Could India please elaborate on the said supportive measures in order to clarify the estimated distortive effect on the global wheat market? Would the Indian government please further indicate the amounts of exported wheat during the review period?
Reply: There were supportive measures provided to STC for export of food grains by FCI. The STC facilitated the tendering process and handled the export operations for FCI on payment basis. The export was done on the basis of competitive tendering and discovery of best international price.  Government has in all sold only 57.97 million MT of wheat over three years through FCI in the international market in this manner.

3.3.1.3. Credit policies.

Table 3.19 Preferential interest rates to exporters, 2014 p.75
Question 6: Indian textile industry is one of the most competitive at the global market furthermore the Indian textile products represent the major articles of Indian export to Russia. Taking this into account the preferential interest rate (2%) granted by the Central Government to Indian textile exporters for as long as 6 years is considered as the important subsidy with considerable effect to the global textile market. Could India please explain how the said measures comply with its commitments regarding export subsidies?
Reply: With effect from 1 July, 2010, the interest rates are based on base rate system and there is no difference between the interest rates charged for export activities vis-à-vis the other activities. Moreover, at present, there is no interest subvention being provided.
Export subsidies, if any, being provided by India is not a prohibited subsidy as India is Annex VII country. So far as, textiles and apparel are concerns, it is understood that India has to phase out all export subsidies for the sector by 31 December, 2018.
Kingdom of Saudi Arabia

These questions and comments are based on information in the cited sections/paragraphs of the WTO Secretariat Report ("SR"), WT/TPR/S/313.


1. Trade Remedies (SR Section 3.1.11, pages 53 to 57)
The Kingdom would like to have clarifications on several aspects of India's trade remedies practice:
1.1 The Secretariat Report provides that "As at the time of the previous review, India is one of the most active users of anti-dumping measures among WTO Members."
Question 1: Could India please explain why it continues to place such high level of imposition of anti dumping measures during the review period and the extension of anti-dumping measures?
Reply: When Anti dumping petition is filed by the domestic industry substantiating through evidence the dumping, injury and the casual link between the dumped imports and the alleged injury, the DGAD has to initiate the investigation after examining the accuracy and adequacy of the evidence provided. Accordingly, India considers that the anti-dumping measures taken were well within the provisions of Anti-Dumping Agreement.

1.2 Targeting chemicals: According to SR Chart 3.4, "chemicals and products thereof" accounted for 49.4 percent of India's anti-dumping investigation initiations since the last TPR. No other product was above 15 percent. India's continued heavy emphasis on chemicals is a serious concern for the Kingdom.
Question 2: Could India please explain why it's trade remedies tended to fall so heavily on chemicals?
Reply: DGAD is required to initiate the AD investigation once the petition is filed with complete evidence, irrespective of the product under consideration.
1.3 Transparency: Exporters have expressed concerns relating to lack of transparency and consistency in the application of trade measures by India. India, as an exporting country, has a major stake in the maintenance of strong disciplines to ensure that trade remedies are used only to discipline unfair trade, not to restrict fair trade.
Question 3: What has India done since the 2011 TPR to improve transparency of its trade remedy proceedings? In particular, how does the DGAD ensure that its findings are consistent with:


    • Articles 5.2, 5.3, and 6.6 of the AD Agreement, which require that an investigating authority ensure that its determinations have a sufficient factual basis.

    • Article 6.9, which requires investigating authorities, before a final determination is made, to "inform all interested parties of the essential facts under consideration which form the basis for the decision whether to apply definitive measures. Such disclosure should take place in sufficient time for the parties to defend their interests."

    • Article 12 of the AD Agreement, which requires an investigating authorities to make available "in sufficient detail the findings and conclusions reached on all issues of fact and law considered material by the investigating authorities," including "the margins of dumping established and a full explanation of the reasons for the [dumping] methodology used."

Reply: India has been constantly improving its procedures on anti-dumping by way of easy access to various documents including domestic industry petition, timely notification to the interested parties as well to the WTO on various stages of AD proceedings etc. The final disclosure statements containing all essential facts required under the investigation are forwarded to all interested parties well within the time for their comments. Once received, the same is analysed and indicated in the final findings, circulated to all interested parties, made available in the public domain as well as notified to the WTO in time.
2. Other Trade Policies and Practices

2.1 CENVAT (SR paragraphs 3.19, 3.27): CENVAT rates range from zero to 14% and in the case of petroleum products have compound rates of duty (with an ad valorem rate of 16%).


Question 4: Could India please explain the compound rates of CENVAT as applied to petroleum products and why they are applied to petroleum products?
Reply: Compound rates of CENVAT (excise duty) are presently applicable to Light Diesel Oil (LDO) only. While the ad valorem component maintains the tax buoyancy, the specific rate ensures certainty and ease of administration.
2.2 National Calamity Fund charges (SR paragraph 3.28): There is a charge for the National Calamity Fund for goods falling under the Seventh Schedule, which includes petroleum oils (1%). The addition of these duties and charges to the applied tariff raises the actual duty paid by the importer significantly above the effective applied tariff rate.
Question 5: Could India please explain whether various additional duties and charges applicable to imported products generally and to imported petroleum products specifically raise the effective import duty rates above India's tariff bindings?


    • Could India please explain the justifications for these additional duties and charges, and how they are consistent with India's WTO obligations?

Reply: The duties and charges mentioned in para 3.27 and 3.28 of the Secretariat Report are levied on imports in lieu of internal taxes and other internal charges applied to like domestic products as permitted in GATT Article III.2.
2.3 Solar Power/Local Content: SR paragraph 4.45 discusses subsidies contingent on local content in the solar power industry.
Question 6: Could India please explain (a) how the contingency works and (b) whether this program is a trade-related investment measure?
Reply: 30% Local Content Requirement indicated in the Secretariat's report, was stipulated only in respect of tenders issued for allocation of Solar Thermal Projects. There is no proposal for allocating solar thermal projects as of now. The DCR Content was miniscule as compared to the total capacity added under such projects. Government of India (GOI) has a policy to support Domestic Manufacturing on one side while encouraging oversees manufacturing units to supply solar products of latest technology and competitive price. GOI has also extended custom and excise duty exemption on supply of plant & machinery required for setting up of solar power projects in the country. Details of all such schemes are available in the public domain and can be seen at http://www.mnre.gov.in.
2.4 State Trading Enterprises (STEs): SR paragraph 4.11, footnote 6 states: "As regards non agricultural goods and exports of certain ores are also subject to state trading."
Question 7: Could India please clarify (a) whether "subject to" means that state trading is a requirement in all cases for these products, and (b) whether state trading of crude oil and ores supplies not only household consumers and farmers but non-agricultural industrial users as well?
Reply: State trading means that exports of the specified commodities (under STE) can be made only by those State Trading Enterprises which have been authorized for this purpose.
Singapore


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