Wt/tpr/M/313/Add. 1 31 July 2015
PART I: QUESTIONS REGARDING THE Secretariat Report
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| PART I: QUESTIONS REGARDING THE Secretariat Report
II TRADE policy regime: Framework and objectives Trade Policy Goals, page 26 (para 2.13) Question: Could India elaborate on its policy plans for the promotion of its "foreign merchandise and services trade", especially in the sectors of telecoms, transport and research and development (R&D) services? Reply: India is committed to its obligation under multilateral and bilateral agreement. Moreover, India is unilaterally opening its merchandise and services sector beyond its commitment. For promotion of international trade in services, the Government of India follows a multi-pronged strategy of negotiating commercially meaningful market access through multilateral, plurilateral and bilateral trade agreements, trade promotion through participation and organization of international fairs/exhibitions, focused strategies for specific markets and sectors, increasing competitiveness through domestic regulatory reforms and provision of fiscal benefits through schemes like Service Exports from India Scheme (SEIS). The SEIS applies to many service sectors such as business services, including Research and Development Services, audio-visual services, construction, educational and environmental services, health related, tourism, recreational and transport services. The details of the new Foreign Trade Policy (2015-20), including the SEIS and other schemes to promote merchandise trade are available at the website of the Department of Commerce (http://www.commerce.nic.in). Legal Framework for Business, page 30 (para 2.29) Question: We note that there are "certain advantages to incorporation as a domestic company". Could India elaborate on what these advantages for foreign investors that incorporate as a domestic company in India are? Reply: The conditions/restrictions provided in the FDI Policy can be imposed on foreign investment only on pre-establishments basis. Once, foreign investment comes in India in a company (JV), the JV with foreign investment will be treated as Indian Company and it enjoys the same advantages so as an Indian company does. FDI Policy does not make any discrimination on post-establishment. Applied Tariffs, page 41 (para 3.23) Question: We would appreciate India's clarification on the procedures for application of "end-user exemptions", the different types of end-use exemptions, and if there are any specific criteria to meet in addition to "end-use"? Reply: End use based exemptions are available if the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. Anti-Dumping and Countervailing Measures, page 56 (para 3.69) Question: We understand that the Directorate General of Anti-Dumping and Allied Duties (DGAD) is required to carry out a review for determining margins of dumping for new export or producer from a country that is subject to anti-dumping, provided that the exporters or producers are new and not related to any of the other exporters. On this, could India clarify the following:
Reply: The rules governing new shipper reviews laid down under Rule 22 of the Anti-dumping Rules provides are as follows: Margin of dumping, for exporters not originally investigated. – (1) If a product is subject to anti-dumping duties, the designated authority shall carry out a periodical review for the purpose of determining individual margins of dumping for any exporters or producers in the exporting country in question who have not exported the product to India during the period of investigation, provided that these exporters or producers show that they are not related to any of the exporters or producers in the exporting country who are subject to the antidumping duties on the product. (2) The Central Government shall not levy anti-dumping duties under sub-section (1) of section 9A of the Act, on imports from such exporters or producers during the period of review as referred to in sub-rule (1) of this rule: Provided that the Central Government may resort to provisional assessment and may ask a guarantee from the importer if the designated authority so recommends and if such a review results in a determination of dumping in respect of such products or exporters, it may levy duty in such cases retrospectively from the date of the initiation of the review Accordingly replies to the three questions are:
Special Economic Zones (SEZs), page 68 (para 3.136) Question: Paragraph 3.136 seems to suggest that manufacturing is allowed in SEZs in India. We would appreciate India's clarification on whether (i) this is the correct understanding; and if so, (ii) the other types of activities which are allowed in India's SEZs. Reply: Yes, manufacturing activities are allowed in SEZs in India. All sorts of business activities are allowed to be undertaken in SEZs except restrictions prescribed under Rule 26 of SEZ Rules, 2006. Trade Secrets and Test Data Protection, page 96 (para 3.261) Question: Does India's IP regime relating to patents and marketing approval cover patent linkage? Reply: India's IP regime relating to patents and marketing approval does not cover patent linkage. Air transport, page 127 (para 4.133) Question: We note that the Airports Economic Regulatory Authority (AERA) is responsible for economic regulation of airports. This includes "aeronautical services charges, the passenger service tax, and airport and user-development fees for major airports; and monitoring the quality and reliability of services rendered at airports", and airport operators are responsible for collecting the charges, fees and taxes. However, we also note that airport operators often require airlines to assist with collection of these charges, fees, and taxes fixed by AERA, for which a percentage is then due to airlines as taxable commission. We would like to (i) better understand the considerations for taxation of airline commissions for assisting in the collection of taxes and (ii) whether this policy will be applied to the non-major airports, or those not governed by AERA. Reply: The information sought is available on the website of the Ministry of Civil Aviation and of the DGCA. Pages 128 (Para 4.136) Question: We note that the Value Added Tax (VAT) on Aviation Turbine Fuel (ATF) varies from 4% to 30% in different states and that, in general, the cost of ATF in India is 40-45% higher than international averages. Does India have any plans to reduce the level of variance of the VAT on ATF among different states? Also, what are the steps being taken to rationalize the relevant taxes to reduce the cost of ATF in India? Reply: The policy for Goods and Services Tax is under formulation. The VAT of ATF will depend on the contours of this Policy. Page 128 (Para 4.138) Question: We note that the operation of charter flights to/from India is liberalized for all "inclusive tour packages". Could India clarify its policy for other forms of non-scheduled flights, for which no traffic rights are exercised? Reply: The information sought is available on the website of the Ministry of Civil Aviation and of the DGCA. Switzerland Report by the Secretariat 1. Economic Environment 1.1 Recent Economic Developments Question No 1: The agriculture sector contributes 18.2% to the current GDP, while employing "some 56% of the total workforce" (para 1.2). This relationship reflects the low labor productivity in the agriculture sector. What is the strategy of the Indian government to increase the labor productivity in the agriculture sector? Reply: The Government supports the farm sector in India through various programmes for agricultural research and education, extension, irrigation and for facilitating easier and cheaper access to inputs such as seeds, fertilizers and credit. Question No 2: Does India share the view of the WTO secretariat regarding the identified structural bottlenecks mentioned in para 1.3? What are the proposed reforms by India to tackle these structural bottlenecks? Reply: Government announced various steps in order to achieve a sustained growth of 7 8% or above within the next 3-4 years along with macro-economic stabilization. These include promoting agricultural growth by supporting micro-irrigation and watershed development ; fillip to industry and infrastructure through fiscal incentives and concrete measures for transport, power, and other urban and rural infrastructure and promoting micro and small enterprises by setting up Micro Units Development Refinance Agency Bank ; fiscal reforms with emphasis on consolidation, expenditure reforms and rationalization of tax structure; liberalization of foreign direct investment in selected sectors, reduction in corporate tax rate in a phased manner and increased public investment to catalyze investment ; simplification of tax procedures with a stable tax policy and efforts to implement GST ; Skill India and Digital India initiatives; measures to de-bottleneck the supply of key raw-materials like coal; "Make in India" initiative along with the attendant facilitating measures for a more conducive environment for investment; and, various measures to improve clarity and transparency in economic policy-making. Fiscal reforms have been bolstered by the deregulation of diesel prices and initiatives for direct benefit transfer (DBT). Question no: 3: India's workforce is large and still growing. However the "absence of required skills" in the workforce and strict labor regulations are mentioned as structural bottlenecks. What is the strategy of India to improve the skill matching of its workforce? Reply: The Preamble to the National Policy for Skills Development, 2009 cites one of the challenges as creating effective convergence between school education and skill development. The new National Policy on Skills Development and Entrepreneurship 2015 which seeks to have a fresh look at the 2009 Policy will deliberate on all issues including the linkage with the school curriculum. Moreover, there is a centrally sponsored scheme of vocationalization of school education administered by the National Skills Development Council (NSDC). NSDC has also worked towards vocationalization of higher education and developed a unique model to integrate skill based trainings into the academic cycle of the Universities. 1.2 Fiscal Policy Question No. 4: Para 1.6 indicates that India cut fuel subsidies in the year 2014 by a sizeable amount. We truly welcome this important policy shift towards a sustainable fiscal policy. Regarding the future, how will India tackle pressure to reintroduce fuel subsidies once world oil prices start soaring again? Reply: Government of India has decided to contain fuel subsidies by de-administering diesel prices and moving towards targeted subsidy for domestic LPG, through the Direct Benefit Transfer for LPG consumer (DBTL) scheme namely, "PAHAL". Under the scheme, at present all 150 million LPG consumers in the country have been covered. Pilot projects for similar direct transfer scheme for Public Distribution System (PDS) Kerosene is under way. In addition, there are other measures that have been put in place, such as reduction in SKO quota, implementation of natural gas network etc., which are expected to reduce the use of subsidized fuels. These measures reflect the country's commitment to reduce the fuel subsidy burden which effectively started in June 2010 with de-administration of petrol prices. It is noteworthy that all the above measures have been taken between June 2010 and October 2014 when the international oil prices were high and fairly stable. Even though the Diesel price deregulation was done in October 2014, it was the result of gradual reduction plan which started in January 2013. It may be mentioned that that the Government has been successful in continuing with the above measures without any major rollback. 1.4 Balance of Payments Question No. 5: In the reviewed period India saw "large capital inflows on average" (para. 1.14). However "capital inflows have been highly volatile in recent years" especially as portfolio investment declined substantially in 2013-14. How does India plan to tackle this volatility, while maintaining the important openness to foreign capital inflows? Reply: Both domestic and external factors have led to volatile capital inflows in recent years. The government has swiftly moved to correct the situation through restrictions in non-essential imports like gold, customs duty hike in gold and silver to a peak of 10 percent, and measures to augment capital flows through quasi-sovereign bonds and liberalization of external commercial borrowings. The RBI also put in place a special swap window for foreign currency non-resident deposit (banks) [(FCNR (B)] and banks' overseas borrowings through which US$ 34 billion was mobilized. In the recent past, India's trade deficit witnessed moderation, reflecting the impact of lower crude oil prices, among others. The lower trade and current account deficit coupled with buoyant capital inflows resulted in the increase in foreign exchange reserves in 2013-14 and 2014-15. The country's foreign exchange reserves are now at a comfortable position to buffer any external shocks. 2 Trade and Investment Regime 2.2 Trade Policy Formulation and Objectives 2.2.2 Trade policy goals Question No. 6: Para 2.13 states that trade measures in India are often used for domestic policy goals (export taxes, temporary import duties, etc.). In its evaluation of domestic policy does India also consider less trade distorting policies? What is the reason for the extensive use of trade measures for domestic policy goals? Reply: The export and import of most items is free in keeping with India's trade liberalization efforts. While using trade measures, India seeks to ensure compliance with relevant WTO rules and obligations 3. Trade Policies and Practices by Measure 3.1 Measures Directly Affecting Imports 3.1.1 Customs procedures and requirements Question No. 7: Para 3.9: Next to the implementation of the decisions taken in Bali, the timely ratification of the Trade Facilitation Agreement is one of the goals for the 10th WTO Ministerial Conference in December this year in Nairobi. When does India intend to notify its Category A commitments and to ratify the agreement? Reply: India intends to notify its category A commitments and ratify the TFA shortly. The date for notification/ratification will be decided by the competent authority. 3.1.2. Customs valuation Question No: 8: According to para. 3.11 India levies a landing charge (or loading, unloading, and handling) of 1% of the c.i.f. value, which is added to the c.i.f. value. Could India specify the policy objective of this ad valorem landing charge? What are the revenues collected from the landing charge used for? Who is in charge of collecting the landing charge? Reply: Article 8.2 of the Customs valuation Agreement (Agreement on Implementation of Article VII of GATT 1994)states that 'in framing its legislation, each Member shall provide for the inclusion in or the exclusion from the customs value, in whole or in part, of the following:
India has provided for inclusion of the landing charges in the assessable value as per the Customs valuation Agreement of WTO. "Landing charge" is not a charge paid to Customs Authorities but represents the cost of loading, unloading and handling charges associated with the transport of the goods to the time and place of importation. This is included in the assessable value, based on which Customs Duty is computed. Question No. 9: Para. 3.16 indicates that importers may file an appeal against customs decisions on valuation matters to the Appeals Commissioner or the Customs, Excise, and Service Tax Appellate Tribunal. Could India indicate how many appeals where logged since 2011? Reply: Separate data on the number of appeals filed against Customs decisions on valuation is not maintained. However, the details of the total appeals is as under: Year 2012-13
Year 2013-14
3.1.3 Rules of origin Question No. 10: According to para. 3.17 India does not apply non-preferential rules of origin. In the case the preferential origin of goods or the exact origin of a good cannot be determined, how and based on which criteria does India determine the MFN origin of a good? Reply: The criteria for issuance of non-preferential certificate of origin in para 2.108 of the Handbook of Procedures (Vol 1) under the Foreign Trade Policy 2015-2020. The twin criteria includes manufacture of a product and exceeding some minimal operations. 3.1.4 Tariffs 3.1.4.1 Applied tariffs Question No. 11: According to para. 3.18, the effective tariffs of India vary throughout the year due to changes which add to the complexity of the tariff and uncertainty for traders. Could India specify which measures have been taken and put in place since 2011 to simplify this complex system and provide for more predictability for the traders? Reply: Changes in Tariff rates of Customs Duty are carried out by amendment in the Customs Tariff Act, 1975 which is generally done at the time of passing of the Union Budget. However, in response to certain emergent situations the effective (MFN) rate of duty may be changed in between the year. The current rate of Customs duty for each tariff line is available at the ICEGATE "Customs Duty Calculator" [https://www.icegate.gov.in/Webappl] as well as at Central Board of Excise & Customs website (http://www.cbec.gov.in/cae1-english.htm). Question No. 12: According to para. 3.23 there seems to be an inverted duty structure in several industries in India and the Tariff Commission has made a number of recommendations to rectify this. Further reductions are announced in the Budget 2015-2016 to address the problem of inversion. Could India provide more details as to the inputs that will benefit from those further reductions (HS code, product description, current and revised rate)? Reply: It has already been mentioned in the secretariat report that there has been concern about inverted duty structure and tariff commission had made some recommendations in this regard. Some of the products where inverted duty structure correction has been carried out are: Aluminium Ingots (76011010) - Duty on one of its inputs i.e. Coal tar pitch has been reduced to 5%. MEG (Mono Ethylene Glycol) (29053100) - Duty on its input i.e. denatured ethyl alcohol has been reduced to 5%. Back sheet for use in PV solar modules (39201099) - Duty on its inputs has been reduced to Zero with actual use conditions. 3.1.5 Other charges affecting imports Question No 13: Para 3.27-3.27: Could India inform whether AD charges and the Education Cess as well was the Higher Education Cess are also levied on domestic products and if the rates are the same? Reply: Additional Duty of Customs (CVD) is levied at a rate equivalent to the rate of excise duty charged on the domestic production of a similar item. Similarly, Education Cess and Higher Education Cess charged as a percentage of the Excise Duty for domestic goods was also charged on similar imported goods. However, w.e.f 01.03.2015, Education Cess and Secondary & Higher Education Cess leviable on all excisable goods has been fully exempted. Simultaneously, the standard ad valorem rate of duty of excise (i.e. CENVAT) has been increased from 12% to 12.5%. Similarly, Special Additional Duty (SAD) is charged on imported goods in lieu of sales tax/value added tax charged on the domestic sale of goods. Both these taxes are in the nature of countervailing/equalizing taxes and thus would apply to imported goods so as to provide a level playing field for domestic industry. Moreover, the credit of these additional duties is available to be set-off against domestic taxes such as Central Excise Duty and Service Tax under the CENVAT Credit Rules. Likewise, a full refund of the SAD can be claimed by an importer once the imported goods are sold in the domestic market on payment of State VAT. Question No. 14: Para 3.29: This paragraph explains the composition of the actual duties paid by importers. Due to different additional charges and taxes the paid duties lie above the effective applied tariff rate for all imports, unless exempt. How does India justify the application of this practice? Are changes in the current regime envisaged for the near future with a view to simplify the system? If yes, what changes are planned? Reply: Additional Duty of Customs (CVD) is levied at a rate equivalent to the rate of excise duty charged on the domestic production of a similar item. Similarly, Special Additional Duty (SAD) is charged on imported goods in lieu of sales tax/value added tax charged on the domestic sale of goods. Both these taxes are in the nature of countervailing/equalizing taxes and thus would apply to imported goods so as to provide a level playing field for domestic industry. Moreover, the credit of these additional duties is available to be set-off against domestic taxes such as Central Excise Duty and Service Tax under the CENVAT Credit Rules. Likewise, a full refund of the SAD can be claimed by an importer once the imported goods are sold in the domestic market on payment of State VAT. 3.1.11 Anti-dumping, countervailing, and safeguard measures 3.1.11.1 Anti-dumping and countervailing measures Question No. 15: Para 3.57 and Chart 3.4 refers to initiated anti-dumping investigations against Europe. Could India specify, which products are concerned? Reply: These products are:Pentaerythriotol, Phenol, Acetone, Bulk Drug Cefadroxil Monohydrate, Polyvinyl Chloride, Sodium Nitrite, Methylene Chloride, Sodium Nitrate, Flexible SlabstockPolyol, Morpholine, Purified Terephthalic Acid, Cold rolled flat products of stainless steel, Potassium Carbonate, Phenol, 2-Ethyl Hexanol, Normal Butanol. 3.1.12 Standards and other technical requirements 3.1.12.3 Certification and conformity assessment Question No. 16: Para. 3.95: For specific low-risk electric and telecom products India requires in-country testing, compulsory registration and repeated licensing. Switzerland would be interested to understand whether less trade restrictive measures, such as the recognition of foreign tests based on international standards, were considered? Reply: There is no scheme of repeated licensing. It is for information that BIS Registration Scheme which is self-declaration of conformity involving independent testing from BIS recognized lab and market surveillance is the simplest and less time consuming certification. As per BIS rules, testing in the laboratories in other countries is acceptable if they are covered under a mutual recognition agreement with BIS. 3.1.12.5 Labelling Question No. 17: Para. 3.103: Regarding India's labelling requirements set out in the Food Safety and Standards (Packaging and Labelling) Regulations 2011, Switzerland would appreciate to better understand India's reasoning for demanding additional specific product information other than those set out in international standards (i.e. Codex Alimentarius)? Could India specify which of this supplementary information may not be provided on non-permanent product labels (such as stickers) and explain why? Reply: As per the Indian Law, additional information is required on (i) FSSAI logo and license number, and (ii) Name and address of the importer. This information is considered important for traceability requirements. In addition, (iii) depiction of Veg./Non veg. logo is a requirement arising from cultural sensitivities in the country. It is for this reason that these three are treated as rectifiable labelling deficiencies and the information on the above three counts is allowed to be affixed in the form of an additional sticker in the custom bonded warehouse if the same is not provided at the end of the original manufacturer/ exporting entity. Any other labelling defects are non-rectifiable. In case there are any other deviations, the same may be pointed out specifically for consideration of the FSSAI. 3.2 Measures Directly Affecting Exports 3.2.3 Minimum Export Prices Question No. 18: As indicated in para 3.124 of the Secretariat's report, India has maintained minimum export prices for several foodstuffs of relevance to net food importing countries such as edible oil. Other instruments which directly affect exports of important foodstuffs such as quantitative restrictions have also been implemented. Could India provide further detail on how decisions on implementation of such measures are made? Which institution is responsible for making these decisions and what specific criteria are applied? Does the implementation of such measures depend on world market prices? If yes, what are the threshold levels which trigger implementation? 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 DGFT by way of a notification in the official Gazette. The details of all such notifications are available on the website of DGFT. In view of exceptionally high prices of potato, MEP was imposed on export of potato in June, 2014 and it was removed on 20.02.2015. 3.2.6 Export support and promotion 3.2.6.1 Special economic zones (SEZs) Question No. 19: Para. 3.136 indicates that firms located in SEZs have a large number of benefits. What is the main purpose for the existence of SEZs? Are there any plans to extend structural reforms successfully tested in SEZs to the rest of the country? And if so, in which areas? Reply: Special Economic Zones have been established with the following objectives:
As per the SEZ Policy, SEZs are treated as entities to be outside the Customs territory of India with different set of provisions viz SEZ Act & Rules. Therefore, they have been granted certain benefits which are not available to entities situated in the Domestic Tariff Area. There is no proposal of extending the incentives provided in SEZs to the rest of the country. 3.3.2 Competition policy and price controls 3.3.2.1 Competition policy Question No. 20: Para 3.170: The report states that the Competition Commission of India (CCI) is an independent authority. How is it organized? Is it the same body that conducts the inquiries and takes the decisions or is there a separation between these different stages? It is mentioned that the CCI may self-initiate investigations. Does this mean that the majority of the investigations are initiated upon a complaint or a denunciation? Reply: As per the Competition Act, the Competition Commission of India (CCI) shall consist of a Chairperson and not more than six other Members to be appointed by the Central Government. There are various Divisions headed by the Advisors to help the Commission in carrying out its activities. These Divisions are Anti-trust Division, Economic Division, Legal Division, Combination Division, Investigation Division, Advocacy Division and Capacity Building & International Cooperation Division. The CCI also has a Secretariat headed by the Secretary which acts as a link between the Commission and the outside world. To undertake investigation of various alleged cartel and abuse of dominance cases, there is a separate investigating arm in the form of office of Director General. The office of Director General undertakes the investigation of alleged violation of provisions of the competition law based on the direction of the Commission. Administratively, office of the Director General is a part of the CCI, however, in the matter of investigations it works on the arm's length principle. CCI may take up a case suo moto on the basis of references from government/statutory authorities. However, majority of the investigations are initiated upon a complaint called information under the Indian competition law. So far less than 5 per cent cases have been taken up on suo moto basis. Question no: 21: Can the sector-specific regulations mentioned in para. 3.171 deviate from the main (and general) competition regulations, such as the Competition Act 2002? Do these regulations contain exceptions to the provisions of the main competition regulation? Reply: Some sector-specific regulations (Act) do have provisions related to competition in the sector. However, sector specific regulations (Act) and competition regulations (Act) are complementary in nature. As per Section 60 of the Competition Act, "the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force." Provisions of the Competition Act, 2002 are applicable to all the sectors, unless exempted by the Government under the provisions of the Competition Act. Question no: 22: It is mentioned in para. 3.178, that the authorities are currently formulating a National Competition Policy. What will be the scope and coverage of this policy? What are its intended outlines? Reply: National Competition Policy is under consideration of the Ministry of Corporate Affairs. The basic objective is to create a culture of competition in the country. 3.3.5 Intellectual property rights 3.3.5.2 Patents Question No: 23: Para. 3.216: The Secretariat's Report makes reference to the Supreme Court's reading of the term "efficacy" to be understood as "therapeutic efficacy". It further cites the Court that Section 3(d) clearly sets up a second tier of qualifying standards for chemical substances/pharmaceutical products. Can India explain how that additional criterion and the second tier of qualifying standards required for pharmaceutical products is compliant with the three patentability criteria and the obligation to make patents available without discrimination as to the field of technology under Art. 27.1 TRIPS? Reply: The Supreme Court of India has not set up an additional criterion for grant of a patent beyond that prescribed under Art 27.1 of the TRIPS Agreement. 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. Section 3(d) sets up the standard for patentability as mentioned by the Court. The provision Section 3(d) applies to all fields of technology. 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'." Question no: 24: In 2012, India issued a compulsory license for the anti-cancer drug patent sorafenib tosylate. The Report summarizes in para 3.218 the Controller General's decision and makes reference to the legal grounds for the issuance of the compulsory license under Section 84 of the Patents Act, including the ground that the patented invention was not worked in the territory of India as required by the law. The legal basis for this ground is Section 84(1)(c) Patents Act. Could India provide clarification with regard to the scope and application of Section 84(1)(c)? Under this provision, does the importation of a patented product satisfy the working requirement? Please explain how Section 84(1)(c) relates to the requirements under Section 84(1)(a) in conjunction with 84(7)(e)? Reply: The interpretation of the term "working of a patent" has been dealt with in the Bayer Vs Natco Compulsory License case by the Intellectual Property Appellate Board (IPAB) which was later upheld by the High Court of Bombay. The hon'ble court stated that "…when a patent holder is faced with an application for compulsory license, it is for the patent holder to show that the patented invention/drug is worked in the territory of India by manufacture or otherwise. Manufacture in all cases may not be necessary to establish working in India as held by the Tribunal. However, the patent holder would nevertheless have to satisfy the authorities under the Act as to why the patented invention was not being manufactured in India keeping in view Section 83 of the Act. This could be for diverse reasons but it would be for the patent holder to establish those reasons which makes it impossible/prohibitive for it to manufacture the patented drug in India. However, where a patent holder satisfies the authorities, the reason why the patented invention could not be manufactured in India then the patented invention can be considered as having been worked in the territory in India even by import. This satisfaction of the authorities is necessary particularly when the petitioner admittedly has manufacturing facilities in India." Question No. 25: Para 3.225: In Section 4.4.3, India's National Manufacturing Policy provides for the option for the "Technology Acquisition and Development Fund" to request from the Government the issuance of a compulsory license if the patented green technology is not being worked in India to meet the domestic demand in a satisfactory manner. The policy paper states that compulsory licenses will be issued only within the provisions of TRIPS. Can the Indian Government confirm that under the policy, the working requirement can be met by the importation of the patented technology? Can India clarify how the requirements under Section 4.4.3 of the Manufacturing Policy relate to the requirements under Section 84 Patents Act? Reply: Any issue of Compulsory license will only be as per the provisions of the Indian patent Act. As far as the 'interpretation of the term "working of a patent" has been dealt with in the Bayer Vs Natco Compulsory License case by the Intellectual Property Appellate Board (IPAB) which was later upheld by the High Court of Bombay. The hon'ble court stated that "…when a patent holder is faced with an application for compulsory license, it is for the patent holder to show that the patented invention/ drug is worked in the territory of India by manufacture or otherwise. Manufacture in all cases may not be necessary to establish working in India as held by the Tribunal. However, the patent holder would nevertheless have to satisfy the authorities under the Act as to why the patented invention was not being manufactured in India keeping in view Section 83 of the Act. This could be for diverse reasons but it would be for the patent holder to establish those reasons which makes it impossible/ prohibitive for it to manufacture the patented drug in India. However, where a patent holder satisfies the authorities, the reason why the patented invention could not be manufactured in India then the patented invention can be considered as having been worked in the territory in India even by import. This satisfaction of the authorities is necessary particularly when the petitioner admittedly has manufacturing facilities in India." 3.3.5.8 Trade secrets and test data protection Question No. 26: Para 3.261: The Report indicates that there is no specific legislation in place to protect test data submitted for regulatory approval of pharmaceuticals and agricultural chemicals against disclosure and reliance by third parties. Some general protection is provided by Indian law against disclosure of test data under the Official Secrets Act and common law principles, but not against reliance. How does Indian law and practice comply with the obligation to also protect test data against unfair commercial use pursuant to Article 39.3 TRIPS? How is reliance by a second applicant being prevented? Further to the Inter-Ministerial Committee's recommendations of 2007 to introduce a protection period for test data for agrochemical products and medicines of three and five years respectively, can India indicate a timeline by when the implementation of such a protection regime is expected? Are there any other legislative plans to ensure protection against reliance as per Article 39.3 TRIPS? Reply: Article 39 of TRIPS relates to protection of undisclosed information. It deals with protection of such information when it is a trade secret and its protection when shared with the marketing regulator for seeking approval. 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. There are no bills in the Parliament on this issue. 4 Trade Policies by Sector 4.1 Agriculture 4.1.1 General Policy Framework 4.1.1.2 Measures affecting exports Question No. 27: Para. 4.14 of the Secretariat's Report indicates that export prohibitions and quotas for agricultural products are notified annually and in general for specific time periods. However, these measures may be subject to change even during the specified time period. As the Secretariat notes, these changes can diminish the predictability of the regime. How does India ensure that relevant national and international actors are not negatively affected by this lack of predictability? Does India envisage to make changes to the current regime in the near future? Reply: India's export policies are reviewed from time to time in consultation with the line ministries/departments concerned keeping in view the availability of the item, its domestic and international prices among other factors. Wherever required, export prohibitions/restrictions/export quotas are notified by DGFT by way of a notification in the official Gazette. The details of all such notifications are available at http://www.dgft.gov.in. Except for prohibition on export of pulses and edible oils, which were in place since 2006 and 2008 respectively, export of all agricultural products viz. rice, wheat, milk powders including casein, cotton etc.; have been made free as a result of such review. In the last few years, export quota was notified only for export of cotton, cotton yarn and edible oil in branded consumer packs. As on date there is no export quota for any product. 4.1.1.3 Internal measures Question no: 28: In para. 4.17 the Secretariat's report states that a key objective of India's domestic agricultural policy is stability of food supply and income support for the nearly 60% of the population that is dependent on agriculture and that this policy is implemented by price support, market intervention schemes, in-put subsidies and food subsidies. From an economic point of view, such policy measures directly affecting agricultural and food markets can lead to inefficiencies in the agricultural sector and to unintended outcomes such as increasing food price variability on international markets. In which way does India assess the efficiency of these policy tools? Is India conducting any monitoring on possible negative effects of such measures on international markets, particularly if such commodities are exported? Do the Indian authorities consider agricultural policy reforms towards less market distorting and more targeted policy measures? Reply: In view of the objectives of agricultural policy, the Government of India, from time to time review the performance of various programmes to ensure that these are met and takes corrective measures wherever required. Question no: 29: In para. 4.19 of the Secretariat's Report it is stated that the Food Cooperation of India (FCI) which assists the Ministry of Agriculture in implementing agricultural policy is occasionally authorized to sell from its stock through open market sales, including for export. Are these stocks acquired by the FCI at minimum support prices? Which criteria are applied for authorization for export of such stocks? Reply: FCI maintains public stocks for food security programmes, which are acquired by it at MSP. Government allows FCI to dispose surplus stocks into the domestic market through competitive bidding. Occasionally Government has also permitted FCI to export certain quantity from the central stock. However, due to targeted procurement for food security, the stocks of food grains are within manageable limits obviating any need for exports. Switzerland Follow-up Questions Report by the Secretariat 3.3.5 Intellectual property rights 3.3.5.2 Patents Para 3.218 Re. Reply to Question 24 by Switzerland (p. 164/165; RD/TPR/432): Do we understand India's response correctly that under Indian law a local working requirement applies in the sense that a patent holder is required to manufacture the patented product in India, with the exception that the holder is able to show/prove that local manufacturing was impossible/prohibitive for him to do? Can India explain how this condition complies with Article 27.1 TRIPS which requires non-discrimination as to whether products are imported or locally produced? Reply: Article 27.1 of the TRIPS Agreement states that patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application and 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. It may be noted that Article 27(1) also offers some flexibility as it does not define the parameters of novelty, inventive step and industrial applicability, giving WTO members the scope to determine the criteria for how these should be interpreted and applied. Moreover, Article 27 should not be read in isolation and other relevant provisions of the TRIPS like preamble of the TRIPS (which recognizes the public policy objectives of national systems while adopting TRIPS), Article 7 and 8 of TRIPS and provisions of Article 30 (Exceptions to Rights Conferred) and 31 (Other Use Without Authorization of the Right Holder) need to be read conjointly with the Article 27. This conjoined reading makes clear the true aspects of some of the flexibilities to the member countries to safeguard the public policy objectives of national system. Chinese Taipei Yüklə 1,57 Mb. Dostları ilə paylaş:
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