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

3.1.11.1 Anti-dumping and countervailing measures
3.57. As at the time of the previous review, India is one of the most active users of anti-dumping measures among WTO Members; between 2011 and 2014, India initiated 82 anti-dumping investigations against 23 trading partners (Chart 3.4). The authorities state that anti-dumping investigations are initiated and conducted in accordance with the established rules under relevant legislation.
Question: Malaysia is concerned on the growing number of anti-dumping investigation cases initiated by India. To date, 6 Malaysian products are imposed with AD duty and 4 products are currently under investigation.
As a Member of the WTO and the global trading system, how does India ensure AD investigations are not conducted to accord protection of its Domestic Industries?
Reply: Presently, 5 products originating in or exported from Malaysia are having anti-dumping duty in force and 3 products are under anti-dumping investigation.
The anti-dumping investigations are conducted in India by DGAD in terms of Customs Tariff Act and Anti-dumping Rules framed thereunder, which are in consonance with the WTO Agreement to provide a level playing field to the domestic industry vis-à-vis injurious dumping and to prevent the unfair trade thereof.
3.59. During the period under review, significant changes were made to India's anti-dumping legislation. These changes include: (i) adjustments to the rules governing mid-term and sunset reviews; (ii) changes to the definition of domestic industry to bring in flexibility47; (iii) new rules defining situations that are considered to represent the circumvention of anti-dumping duties, and providing for anti-circumvention investigations to address such circumvention; and (iv) elaboration of a refund procedure applicable where an importer considers that the amount the duty paid is in excess of actual margin of dumping. The authorities state that these changes were adopted mainly to bring clarity and to align them with provisions of the WTO Agreement. These involved amendments to the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995 in March 201148 and in January 2012.49
Question: Can India explain further on what the new rules defining situation that are considered to represent the circumvention of anti-dumping duties are and how effective has the rules been in curbing circumvention since its introduction in 2012?
Reply: The rules concerning circumvention of anti-dumping duties were notified vide Notification No. 6/2012-Customs (N.T) dated 19th January, 2012 by introducing Rule 25 to 28 in the Anti-dumping Rules and can be seen at www.cbec.gov.in. These also have been notified to WTO vide WTO document No. G/ADP/N/1/IND/4 dated 1 March, 2012Under the said Rules, the following types of activities amount to circumvention of anti-dumping duty when goods are imported into India:
a.Import of goods in an unassembled, unfinished or incomplete form and assembled, finished or completed in India or in such country to avoid payment of anti-dumping duty.

b.Imports of goods by altering the description, name or composition of an article.

c.Imports of goods subject to anti-dumping duty through exporters or producers or countries not subject to anti-dumping duty.

India has not initiated any anti-circumvention investigation so far and hence it will be premature to judge the effectiveness of the said Rule.

3.61. On 19 January 2012, rules regarding the determination of the amount paid in excess of the actual margin of dumping and circumvention of anti-dumping duty were issued.51 The rules stipulate inter alia that if an importer considers that he/she has paid any anti-dumping duty imposed in excess of the actual margin of dumping, he/she may file an application for determination of the actual margin of dumping before the authority; various specific procedural rules and principles concerning the calculation of such margin are also stipulated. The rules also provide definitions of circumvention of anti-dumping duty. In addition, rules regarding refund of anti-dumping duties paid in excess of actual margin of dumping were issued on the same date. Under the rules, an importer who has paid any anti-dumping duty in excess of the actual margin of dumping in relation to any imported goods may submit an application to the authorities to claim refund. The application will be scrutinized by the authorities for a refund, which must be made within 90 days of the receipt of the application if the authorities find the application satisfactory.
Question: Can India provide some clarification on how circumvention of anti-dumping duty is defined under the rules which were introduced from 19 January 2012?
Reply: The relevant rules concerning circumvention of anti-dumping duties were notified vide Notification No. 6/2012-Customs (N.T) dated 19thJanuary, 2012 by introducing Rule 25 to 28 in the Anti-dumping Rules and can be seen at http://www.cbec.gov.in. These have also been notified to WTO available in WTO document no. G/ADP/N/1/IND/4 dated 1 March, 2012. Under the said Rules, the following types of activities amount to circumvention of anti-dumping duty when goods are imported in to India:

1. 
   Import of goods, subject to anti-dumping duty, in an unassembled, unfinished or incomplete form and assembled, finished or completed in India or in such country to avoid payment of anti-dumping duty.
   

2. 
   Imports of goods, subject to anti-dumping duty, by altering its description, name or composition.
   

3. 
   Imports of goods subject to anti-dumping duty through exporters or producers or countries not subject to anti-dumping duty.
   

The domestic industry is the eligible party to apply for circumvention investigation under the Rules. So far, India has not initiated any anti-circumvention investigation.

3.62. Under Article 5 of the Customs Tariff Rules, anti-dumping investigations can be initiated by the Directorate General of Anti-Dumping and Allied Duties (DGAD), in the Department of Commerce, upon a written application by or on behalf of domestic industry, or on its own initiative if there is justification to launch an investigation. The authorities state that, during the review period, no anti-dumping investigations were initiated by the DGAD suo moto; all investigations were initiated based on applications by or on behalf of domestic industries. An application is scrutinized by the DGAD to ensure it is adequately documented and provides sufficient evidence for initiation. If the evidence is not adequate, a "deficiency letter" is issued. For an investigation to be initiated the petitioners must account for at least 25% of total domestic production of the like article; and the domestic producers expressly supporting the application must account for more than 50% of the total production of the like article by those expressly supporting and opposing the application. Dumping per se is not actionable. For a petition to proceed, the DGAD must examine the accuracy and adequacy of the evidence provided and determine that there is sufficient evidence of dumping, injury, and causal link between the dumped imports and alleged injury, before initiating an investigation. In addition, other injury causes have to be investigated so that they are not attributed to dumping.
Question: Can India clarify if the DGAD provides initial advisory services to the domestic industry before official submission of a petition is made by a petitioner? If not, where would the prospective petitioner go to for help before putting together his petition?
Reply: No initial advisory services to the domestic industry are provided by DGAD before official submission of a petition and the petitioner has to prepare its petition taking into account the parameters and substantiated facts and sufficient evidence required under the Antidumping Agreement
3.65. Indian legislation provides for levying anti-dumping duty retrospectively, where it is deemed that there is a history of dumping that caused the injury or when the injury is caused by massive dumping, in a relatively short time. The retrospective application may not go beyond 90 days of the date of imposition of a provisional duty. No retrospective application prior to the date of initiation of an investigation is allowed. The authorities state that no retrospective application of duties took place during the period under review.

Question: Can India clarify if it has levied anti-dumping duty retrospectively for any of its cases so far?
Reply: No, India has not levied anti-dumping duty retrospectively.
3.71. Anti-dumping duty is not payable on products imported by units in special economic zones (SEZs) or export-oriented units (EOUs), or on products imported under the Advance Authorization Scheme. The final anti-dumping duty paid on imported goods used in the manufacture of export goods may be refunded as brand rate of duty drawback in accordance with the drawback rules.55
Question: Can India explain if the exemption of anti-dumping duty (on products imported by units in Special Economic Zones or exported oriented units or on products imported under the Advance Authorization Scheme) is regulated by any law or regulation?
Reply: Exemption from Antidumping duty is allowed on inputs being imported for export production under the schemes like Advance Authorization Scheme, EOU and SEZ schemes. The relevant provisions for Advance Authorization Scheme and EOU Scheme are available in the Foreign Trade Policy (FTP) and that of SEZ Scheme in the SEZ Rules, 2006 as amended. These can be seen at http://www.dgft.gov.in and http://commerce.gov.in.
3.1.11.2 Safeguards
3.80. If a request is made for provisional safeguard measures, full and detailed information regarding the existence of critical circumstances and how a delay in applying the measures would cause damage difficult to repair needs to be considered. The Director General may record preliminary findings in such cases and issue a public notice. These preliminary findings are placed before the central Government through the Standing Board on Safeguards. Provisional measures may be imposed by the central Government for up to 200 days.
Question: Can India explain if provisional safeguard measures are imposed for cases other than those the petitioner specifically filed?
Reply: Yes. Under Sub Rule (4) of Rule 5 read with Sub rule(1) of Rule 9 and Rule 10 of the Safeguard Rules, Director General of Safeguards may in critical circumstances, record the preliminary findings regarding serious injury or threat of serious injury for imposition of provisional safeguard measures. Subsequently, Central Government may impose the provisional duty on the basis of the recommendation of the Director General in its Preliminary findings. So far, no such provisional safeguard measures have been imposed. .
3.82. In accordance with the Foreign Trade (Development and Regulation) Amendment Act 2010 (No. 25 of 2010), safeguard measures can take the form of duty surcharges or quantitative restrictions.60 Such quantitative restrictions may not be applied on imports of goods originating from a developing country if the share of imports does not exceed 3%, or on imports of goods originating from more than one developing country so long as the aggregate of imports from all countries does not exceed 9% of the total imports of such goods into India. The public notice recording the final findings under Rule 9(3) of the Act is published in the Official Gazette.
Question: Can India explain which is the more common form of measures applied whether it is duty surcharge or quantitative restriction?

Reply: As of now, Safeguard Duty is the common form of Safeguard measure being applied.. So far as quantitative restrictions are concerned, no such investigation has been initiated so far.

3.1.9 Import prohibitions, restrictions, and licensing
3.39. Import restrictions may be imposed under Section 3 of the Foreign Trade (Development and Regulation) Act 1992 and through notifications in the Official Gazette, under Section 11 of the Customs Act 1962, declaring the importation or exportation of any good as prohibited or restricted. Import restrictions may be imposed for security, self-sufficiency, balance-of-payments, health, and moral reasons.
Question: The Food Safety and Standards of India has banned the usage of Sodium Acid Pyrophosphate in biscuits which is basically one of the main ingredients used by Malaysian companies. However, this acid is allowed in breads. This acid is also widely used in other countries.
Are there plans for the FSS of India to review the ban applied to biscuits any time soon?
Reply: As per the existing FSS (Food Product Standards and Food Additives) Regulations, 2011, Sodium Acid Pyrophosphate is not permitted. However, the issue will be placed before the Scientific Panel for its consideration and review.
Table A3. 2 Safeguard investigations, 2011-14
Question: On the case of saturated fatty alcohol, the recommendation by DGS is 20% (first year), 18% (second year), and 12% (third year –six months only).
However, the final decision is Safeguard duty is 20% (for 200 days from 28.08.14).
Can India confirm whether the imposition of safeguard on saturated fatty alcohol is only limited to 200 days from 28.08.2014, and not in a three year stage as per recommendation by DGS?
Going back to the conduct of investigation on the case of saturated fatty alcohol, as an interested party, the Government of Malaysia had highlighted in a timely manner and in clear terms the violations to WTO Agreement on Safeguards, including Articles 2, 3, 4(2a), 6 and 9.1. However, those issues remain unaddressed and unanswered by the Indian investigation authority while it went forward with the final decision and imposition of the safeguard duty.
Reply: Preliminary findings of DG(Safeguards) was issued on 26 May, 2014 and available in the public domain. It was also notified to WTO (WTO Document No. ----- dated 3 June, 2014) proposing SG duty of 20%. Subsequently, final findings were issued on 9 October, 2014 and can be seen at http://www.dgsafeguards.gov.in as well as the WTO Document G/SG/N/11/IND/12/Suppl.1 dated 22.10.2014. Hence, the Government of India, vide Notification No. 1/2015-Customs (SG) dated 13 March, 2015 imposed Safeguard duty with effect from the date of the imposition of provisional safeguard duty, i.e. 28 August, 2014 up to 27 February, 2017 based on the final findings. Accordingly, the SG duty is placed for a period of three years w.e.f. 28.08.2014.
As regards Malaysia's query on the violation of provisions of Agreement on Safeguards including Articles 2, 3, 42(a), 6 and 9.1, Government of India would like to state the following:
Final findings of the DG (Safeguards) is available in the public domain and can be seen at http://www.dgsafeguards.gov.in. The same has also been communicated to all interested parties and notified to WTO (WTO document No. G/SG/N/11/IND/12/Suppl.1 dated 22.10.2014). So far as the specific Articles indicated by Malaysia is concerned, Government of India would like to state the following:-
i.Article 2 of Agreement on Safeguards

Para L, Clause(44) to (48) of the Final Findings provides in detail that there is a surge in imports during the Period of Investigation, both in absolute terms as well as in relation to production and consumption as per the mandate of Article 2 of Agreement on Safeguards.

ii.Article 3 of Agreement on Safeguards

The investigating authority has followed the provisions of Article 3 of Agreement on Safeguards by giving public notice of the Initiation of Investigation, Preliminary Findings and Final Findings. Sufficient opportunities were also provided to all the interested parties including the Embassy of Malaysia through Public Hearing and receiving their written submissions, each of which has been examined and duly incorporated in the Final Findings..

iii.Article 4(2a) of Agreement on Safeguards

Requirement of Article 4(2a) of Agreement on Safeguards have been followed during the investigation and the same has been mentioned in details at Para L, Clause (39) to (64) of the Final Findings.

iv.Article 6 of Agreement on Safeguards

The observation on "critical circumstances" has been stated in details in Para G of the preliminary findings as required under Article 6 of Agreement on Safeguards. The provisional measure so applied also meets other requirements under Article 6, as would be evident from the preliminary findings.

v.Article 9(1) of Agreement on Safeguards

Para L, Clause (83) of the final findings clearly mentions that as the imports from developing nations except Malaysia, Thailand and Indonesia do not exceed 3% individually and 9% collectively, the import of product under consideration originating from developing nations except Malaysia, Thailand and Indonesia, will not attract Safeguard Duty in terms of proviso to Section 8B of the Customs Tariff Act, 1975.

Chapter (3 Trade Policies and Practices by Measure)
3.1.9.4 Import quotas
3.51. India maintains import quotas for marble and similar stones (HS 25151100 and 25151210) and for sandalwood (HS 44039922). Quotas are established annually and administered on an MFN basis. There is no maximum limit to be allocated per applicant. Applications are examined upon receipt and assessed according to the criteria stated in the notifications and circulars issued by DGFT on a yearly basis.
Question Appreciate if India could provide reason as to why quotas is imposed on sandalwood (HS44039922) and how much is the annual quotas?
Reply: Import of Sandal wood is "Restricted" and subject to a ceiling in each licensing year (Present ceiling is 4795 MT, subject to modification, if any, to be notified from time to time). Imports will be permitted only against an Import Authorisation issued in consultation with the Ministry of Environment and Forest (see Procedure is (I) below). The ceiling of Sandal wood for each financial year will be monitored by the Ministry of Environment and Forest to ensure that it is not exceeded. The license will be valid for a period of one year from the date of issue.
3.2.4.2 Export licensing quotas
3.129. Exports of milk powder, wheat, edible oil, pulses, and non-basmati rice were subject to quantitative restrictions between 5 December 2011 and 13 June 2014.99 Exports of sugar (by state-trading enterprises) are subject to quota under preferential regimes with the United States and the European Union and exports of stone aggregates to the Maldives were made subject to export quotas on 1 January 2014.100 On 4 July 2014, quantitative export restrictions on organic sugar were eliminated.101 Exports of brown seaweeds and sandalwood oil are subject to export

quotas set by the DGFT.

Question: Appreciate if India could provide details of the export quotas imposed on sandalwood oil and the reasoning for the imposition?
Reply: No export quotas have been notified.
3.2.5 State trading enterprises
3.130. 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.102 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: What kind of privileges/ incentives is given by the Indian government to state-trading forest product export companies? Is the privileges/incentives also extended to the foreign-based companies operating in India?
Reply: No state-trading forest product export companies have been set up by Government of India.
Chapter (4 Trade Policies by Sector)
4.1.1.1 Measures affecting imports
4.3. There are significant differences in applied tariff rates for specific agricultural products within product groups. For example, among vegetable fats and oils, the applied MFN tariff rate on crude palm oil and edible margarine is 7.5% and that on crude soybean is zero. Similarly, vegetable oils (HS 1507-HS 1515) have traditionally been protected by high applied MFN tariffs. The average applied MFN tariff rate on animals and animal products is 30.4%, with most products subject to a 30% tariff.2 Imported fresh and frozen chicken cuts are subject to a 100% applied MFN tariff rate. Applied MFN tariff rates on oats and rye are zero, while rates on other cereals, such as some types of rice and wheat (of seed quality) are 80% and 50%, respectively.
Question: Appreciate India to provide further clarification on the difference of tariff between 7.5% for crude palm oil and edible margarine compared to zero for soybean?
Reply: All crude edible oils, including crude soyabean oil attract basic customs duty of 7.5%. Further, all refined edible oils, including refined soyabean oil (edible grade), attract basic customs duty of 15%.

Mexico

Questions based on REPORT OF INDIA (W/TPR/G/133)

3. New reform program. 3.1 (P. 11)

Question 1: Is the new reform agenda includes the signing of labor agreements of the ILO?

Reply: India is a founding member of ILO and has deep and abiding respect for International Labour Standards (ILS). ILO prescribes ILS in form of Conventions and Recommendations. There is no as such concept as "Labour Agreements" available with ILO. However, Conventions are subject to ratification by member countries which is a voluntary process. In India, we ratify an ILO Convention only when our national law and practices are in full conformity with the provisions of the Convention.

3.6 Reforms of the labor sector. Point 3.9 (P. 14)

Question 2: What does the alignment of labor laws with the requirements of the labor market mean?

Reply: Labour Law reforms is a continuous process. Labour Laws in India are enacted after the detailed consultations with the stake holders and due consideration is given to the requirements of the Labour market. As there is constant changes in the requirements of the labour market, the Labour Laws in India also amended time to time. At present, a detailed and extensive review of Labour Legislations is being undertaken in the light of the contemporary requirements of the labour market.

4.2 Trade facilitation measures. Point 4.11 (p. 16)

Question 3: Regarding the "Standards Conclave" 2014, What reforms, legislative and institutional, have been carried out according to the deliberation of the "Standards Conclave" last year?

Reply: The Standards Conclave 2014 was an exercise to raise awareness among stakeholders about Standards & technical regulations etc. The necessary reforms in pursuance to the deliberations and assessment of gaps is an on-going and long drawn process. It is premature to report legislative or institutional reforms of this exercise at this stage.

REPORT OF THE SECRETARIAT (W/TPR/S/133)