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

PART I: REGARDING THE SECRETARIAT REPORT (WT/TPR/S/313)
SUMMARY

Page 8&9 (Para 8)
India's trade policy objectives are stipulated in its Foreign Trade Policy (FTP), which is issued every five years, but revised periodically to take into account internal and external factors. The new 2015-20 FTP, released on 1 April 2015, aims to make India a significant participant in international trade and to raise its share of global exports to 3.5% in 2020. This is expected to be achieved by providing a sustainable and stable policy environment for foreign merchandise and services trade; linking rules, procedures and incentives for trade with other recent initiatives such as "make in India", "digital India" and "skills India"; promoting the diversification of India's exports by assisting key sectors to become more competitive; and creating an architecture for India's engagement with key regions of the world.
Question 1: Does India have its overall "National Development Plan"? If so, could India please introduce about how to formulate it and its main points? How does India coordinate "National Development Plan" with "Foreign Trade Policy"?
Reply: A number of initiatives have been taken such as "Make in India", "Digital India" and "Skill India" to re-energise the Indian economy, spur manufacturing, promote employment, develop infrastructure, improve connectivity, develop a skilled workforce etc. As explained in the Foreign Trade Policy (FTP) Statement 2015 and other documents on the new Foreign Trade Policy for 2015-2020, (available at http://www.dgft.gov.in), there is a synergy between these initiatives and India's foreign trade policy. Successful implementation of these will lead to promotion and diversification of India's exports.

II.TRADE policy regime

(3) Trade Agreements and Arrangements

(2) Regional and preferential agreements

Page 29 (Para 2.23)
In services, India's agreements are largely based on a GATS positive list approach and they have made incremental improvements to its GATS commitments. However, as stated by India in its most recent services agreement with ASEAN "all the schedules tabled by India are well within the existing autonomous regime of India", suggesting that while commitments on services go beyond its GATS commitments, India's applied regime remains more liberal.
Question 2:
a.Since India's current applied regime is more liberal than its commitments in GATS and recently signed FTAs, are there any plans for India to further liberalize the services sector under regional or multilateral regimes?

b.If so, could India please elaborate on these plans and the anticipated time frames?

Reply: India has a liberal FDI Policy for Service Sectors. In many service sectors, FDI is permitted up to 100% on automatic route. 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 in our commitments in regional or multilateral agreements, the decision is taken after consultation with all concerned stakeholders.

(4) Investment Regime

(1) Legal framework for business

Page 32 (Para 2.33)
The NIMZ must be declared so by the relevant State Government under the Constitution so that it can function as a self-governing and autonomous body.
Question 3:
a.Could India indicate that foreign investors may engage in NIMZ development?

Reply: No
b.Since NIMZs are important for implementing the National Manufacturing Policy (NMP), does India have any plans to provide a legal basis for NIMZs' development (such as SEZ Act 2005 for SEZs)?

Reply: The policy is this regard has been notified. However, the procedures are in the process of formulation.
c.If not, could India please provide detailed information regarding the rights and obligations of NIMZs? Can they function as self-governing and autonomous bodies?

Reply: The details of the NIMZ policy is available at the following link: http://dipp.nic.in/English/Policies/NIMZ_Guidelines_21032013.pdf
(4) Investment Regime

(2) Foreign Investment

Page 34 (Para 2.43)
A number of investment incentives are provided both by the central and State Governments to encourage investment in certain regions or activities (Section 3.3.1). In September 2014, the Government launched the "Make in India" programme which encourages investment in industry and services.
Question 4:
a.In the "Make in India" programme, which services has India targeted for attracting more investment?

b.Could India please elaborate on the measures it has implemented to encourage more investment in services?

Reply: Out of the 25 sectors that have been identified under the "Make in India’ initiative, services like tourism, wellness, media and entertainment, ICT etc. have been targeted for attracting more investment. All measures being undertaken under the "Make in India" initiative are also extended to these services sectors. More details of the of the initiative is available at the following link: http://www.makeinindia.com
III. TRADE POLICIES AND PRACTICES BY MEASURE

(1) Measures Directly Affecting Imports

(11) Anti-dumping, countervailing, and safeguard measures

Page 57-58 (Para 3.79)
The Director General (Safeguards) in the Department of Revenue is responsible for hearing the petitions and conducting investigations on safeguards. A request for a safeguard investigation must be made in writing to the Director General, by or on behalf of the domestic industry. The Director General may also self-initiate an investigation upon information received from any Commissioner of Customs. If the safeguard measures are requested to be imposed for more than a year, details of efforts made or planned in order to adjust positively to import competition, including details of progressive liberalization, must be provided, under the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules 1997. Thereafter, the Director General may initiate an investigation to determine the existence of serious injury or threat thereof to the domestic industry, caused by the import of an article in such increased quantities, absolute or relative to domestic production. A safeguard investigation must be completed and notified publicly within eight months of initiation of the investigation (or within the period allowed by the central Government). Recommendations of the Director General (Safeguards) are examined by an inter ministerial body (i.e. Standing Board on Safeguards) chaired by the Commerce Secretary. The proceedings of the Standing Board on Safeguards are not open to the public. Its views are placed before the Finance Minister for approval in respect of safeguard duties and before the Commerce Minister for imposition of quantitative restrictions. If the central Government, after conducting a safeguard investigation, is satisfied that any article is imported into India in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic industry, it may, by notification in the Official Gazette, impose a safeguard duty on that article. The central Government may exempt any article from payment of the whole or part of the safeguard duty upon notification in the Official Gazette. The notification must include the article exempted, the quantity exempted, and the article's origin. Matters related to quantitative restrictions are conducted by the authorized officer in the DGFT in accordance with the Safeguard Measures (Quantitative Restrictions) Rules 2012.
Question 5: As indicated in the Report, the central Government may exempt any article from payment of the whole or part of the safeguard duty upon notification in the Official Gazette. The notification must include the article exempted, the quantity exempted, and the article's origin.
Please explain in which circumstances the central Government would exempt an article from payment of the whole or part of safeguard duty. Also, please explain the factors to be considered with regard to the article exempted, the quantity exempted and the article's origin respectively.
Reply: Imports affected for export production under certain schemes including Advance Authorization Scheme are exempted from payment of safeguard duty. In this regard, the relevant customs notifications are Notification Nos.20/2015-Customs, 21/2015-Customs and 22/2015 Customs, all dated 01.04.2015.
(1) Measures Directly Affecting Imports

(12) Standards and other technical requirements

Page 59 (Para 3.89.)
It also has bilateral cooperation agreements (BCAs) on conformity assessment with the national standards body of Israel, Pakistan and Sri Lanka.
Question 6:
a.Do the BCAs that India signed with national standards bodies of Israel, Pakistan and Sri Lanka involve mutual recognition of conformity assessment results for the BIS Mark?

Reply: Within the framework of the conditions mentioned in the agreements, provision exists for mutual recognition of inspection and test reports.
b.If yes, what are the product scopes? Does the recognition of conformity assessment bodies rely on the international accreditation arrangements, such as IAF MLA and ILAC MRA?

Reply: The list of products will be decided after ascertaining that both the parties have technical competence and experience in conformity assessment of the relevant product.
Page 60 (Para 3.95)
Conformity assessment procedures in India have largely remained unchanged since its previous Review; a major exception is the adoption of a new set of rules stipulating a compulsory registration scheme under the BIS for various electronic and information technology goods under Electronics and Information Technology Goods (Requirements for Compulsory Registration) Order 2012, dated 7 September 2012 (Department of Electronics and Information Technology, Ministry of Communication and Information Technology). In addition, regulations stipulating mandatory BIS certification on various products have been introduced; these included the Steel and Steel Products (Quality Control) Order 2012 (Ministry of Steel), Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) Order 2009 (Department of Industrial Policy and Promotion, Ministry of Commerce and Industry), and Food Safety and Standards (Licensing and Registration on Food Business) Regulation 2011 (Department of Health, Ministry of Health and Family Welfare)
Question 7:
For obtaining BIS licenses and certificates for steel and steel products and for pneumatic tyres and tubes for automotive vehicles, what are the other requirements set by Quality Control Orders (Orders 2012 and 2009) in addition to other relevant Indian standards?
Reply: The Quality Control Orders for Steel & Steel products are available on www.steel.gov.in -the official website of Ministry of Steel and may please be referred to. The other Quality Control Orders for various products are available on BIS website http://www.bis.org.in.
Page 61 (Para 3.98)
The products are tested in BIS laboratories and in accredited laboratories, recognized by BIS, to ensure standard conformity of certified products to relevant Indian standards.
Question 8:
a.What are the criteria that an accredited laboratory shall meet in order to be recognized by BIS?

Reply: The criteria that an accredited laboratory is required to meet in order to be recognized by BIS is detailed on BIS website under the URL:  http://www.bis.org.in/lab/lrsIntro.asp.
b.For countries that have not concluded BCAs or MRAs (Mutual Recognition Agreement) with BIS, how do laboratories located in those countries obtain recognition by BIS? Are there any such foreign laboratories?

Reply: Countries with which BIS has not entered into Mutual Recognition Agreement are at liberty to apply to BIS for recognition under the Laboratory Recognition Scheme for all products other than the electronic & IT products covered under Chapter-IV, Rule 16 of the BIS Rules, 1987. The condition of signing of mutual recognition agreement is indirectly applicable only in the case of electronics & IT products. At present, no foreign laboratory has been recognized under the Laboratory Recognition Scheme of BIS.
Page 62 (Para 3.103)
The Legal Metrology Act 2009, the Legal Metrology (Packing Commodities) Rules 2011, and Food Safety and Standards (Packaging and Labelling) Regulations 2011 regulate labelling requirements in India. There is no mandatory labelling requirement for genetically modified products. The Food Safety and Standards (Packaging and Labelling) Regulation 2011, notified on 10 July 2013, stipulates that domestic manufacturers are obliged to display the licence number and the FSSI logo on the label from 1 January 2015. The authorities state that the Regulations are not notified to the WTO since they are not intended to be applied to India's trading partners. If relevant products are imported, importers are allowed to affix labels with respect to the licence number and FSSI logo on the products.
Question 9: "The Legal Metrology Rules" of India, in terms of the rules of showing date of production, date of import, date of expire on the imported items, the time period between date of import and date of expire have to be kept below 60% of the total preservation period, and the Maximum Market Price (MRP) price must be shown on the imported items. With the influences of shipping date, weather condition, difficulty of counting MRP price and other man-made or non man-made factors, the date of import and MRP price cannot be predetermined before the shipping date. If the required information provided by exporters fails to meet the requirements shown due to the predetermination difficulties, does the India authority provide any remedies for the foreign exporters? Or the penalties will be implemented directly?
Reply: Rule 33 of the Legal Metrology (Packaged Commodities) Rules, 2011 grants the Central Government the power to relax the rules after ascertaining the genuineness permit a manufacturer or a packer to pack for sales the packages for reasonable period by relaxing one or more provision of these Rules with such corrective measures as may be specified.
(1) Measures Directly Affecting Imports

(13) Sanitary and phytosanitary requirements

Page 63 (Para 3.111)
The authorities consider it imperative to conduct all plant quarantine inspections as per international standards/guidelines. Accordingly, the National Standards for Phytosanitary Measures for Important Activities have been developed and adopted to facilitate the export and import of agricultural commodities. To streamline plant quarantine activities, efforts have been made to fully computerize plant quarantine stations for speedy and transparent functioning. The web-based Plant Quarantine Information System (PQIS) is operational and providing online plant quarantine services.
Question 10: Our exporters have expressed concern about different provinces having different import requirements on the same plant products when applying for the import permits before exporting. Could India explain why the same plant commodity may need different phytosanitary requirements stated on the import permits among the different provinces?
Reply: The country specific Phytosanitary import conditions are arrived based on Pest Risk Analysis (PRA) and hence the conditions may vary from country to country based on the pest prevalence.
(1) Measures Affecting Production and Trade

(4) Government procurement

Page 81 (Para 3.190)
Since 2012, the use of e-procurement has become the norm in government procurement in India. All ministries/departments of the central government must use e-procurement to publish all tender enquiries (from 1 January 2012), CPSEs from 1 February 2012, and autonomous/statutory bodies from 1 April 2012. On 5 October 2012, the Department of Telecommunications issued a notification concerning its policy for according preference to domestically-manufactured telecom products in procurement due to security considerations.
Question 11: The Department of Electronics and Informational Technology (DeitY) published the list of products for Preferential Market Access (PMA) and noted that the list might also undergo change in July 2013. Will the India side provide any clarification on whether any change have been made and to provide the latest list of products for PMA?
Reply: The policy for providing preference to domestically manufactured electronic goods was earlier notified vide DeitY Gazette Notification dated 10.02.2012 due to security considerations and in Government procurement.
DeitY has issued revised product Notifications dated 22.05.2014 for 6 Electronic Products (Desktop PCs, Dot Matrix Printers, Tablet PCs, Laptop PCs, Smart Cards, LED Products) and product Notifications dated 01.10.2014 for three new Electronic Products (Biometric Access Control/ Authentication Devices, Biometric Finger Print Sensors and Biometric Iris Sensors).
Page 96 (Para 3.262)
In 2004, an Inter-Ministerial Committee was set up to make recommendations on test data protection. In its report submitted on 31 May 2007, the Committee recommended, inter alia, that the term of data protection for agricultural chemical products should be three years from the date of marketing approval in India; that the term of data protection for traditional medicines should be five years from the date of marketing approval and that there should be an indefinite transition period for pharmaceuticals. After the transition period, the term of data protection would be five years from the date of the first marketing approval anywhere in the world. These recommendations are reportedly being considered by the Ministry of Commerce and Industry, Ministry of Agriculture and Ministry of Health.

Question 12: As for the term of data protection, please elaborate about the indefinite transition period for pharmaceuticals and what the new development with respect to the data protection for pharmaceuticals is.
Reply: Article 39.3 relates to the specific case when data pertinent for seeking approval of the authority is shared with the marketing regulator. The text of this Article does not specifically state that member countries would need to comply with the requirement of data exclusivity. It only states that the regulator will need to protect it from unfair commercial use. Therefore, no additional obligations which are not present in text can be interpreted. The obligation on the authorities is to keep the test data secret and not allow it to be accessed by third parties through unfair means. India complies completely with its obligations under Article 39.3 of TRIPS.
IV. Trade Policy by Sectors

(4) Service

(1) Financial services

Page 113 (Para 4.70)
On 6 November 2013, the RBI announced the "Scheme for Setting-Up of Wholly-Owned Subsidiaries (WOS) by Foreign Banks in India" based on the principles of reciprocity and single mode of presence. …A foreign bank opting for the branch form of presence must convert into a WOS when such conditions become applicable to it, or when it becomes systemically important on account of its balance-sheet size in India. (Notes no.59) Foreign banks that commenced banking business in India before August 2010 have an option to continue their banking business through the branch mode.
Question 13:
a.Could India please provide us with further information regarding the implementation of the "Scheme for Setting-Up of Wholly-Owned Subsidiaries by Foreign Banks in India"? How many foreign banks have applied to set up wholly-owned subsidiaries or convert their existing branches into wholly-owned subsidiaries?

b.We would appreciate it if Indian authorities can inform us if there is any intention to allow foreign banks to establish more branches.

Reply: The Reserve Bank of India (RBI) released the framework for setting up of Wholly Owned Subsidiaries (WOS) by foreign banks in India in November, 2013. The same is available on the RBI website http://www.rbi.org.in. RBI has so far given approval to two banks –one for conversion and one for setting up of WOS in India. Further, a foreign bank currently having branch presence in India applied for conversion to WOS.
The branch expansion of both the existing foreign banks and the new entrants present in the branch mode would be subject to RBI's Branch Licencing Policy. The guidelines on branch authorization presently applicable to domestic scheduled commercial banks and as amended from time to time would generally be applicable to WOS of foreign banks. In accordance with extant guidelines, WOS would be permitted to open branches in India (except at certain sensitive locations) without having the need to take prior permission from Reserve Bank of India in each case.
(4) Service

(3) Transport

Page 124 (Para 4.114)
The Merchant Shipping Act 1958, as amended, says that the cabotage, in principle, is reserved to Indian flag vessels (Part XIV). Nonetheless, the Act, in Sections 406 and 407, enables applications to be considered for relaxation from cabotage on a case-by-case basis, subject to the guidelines prescribed for the purpose.
Question 14:
a.What are the criteria used in evaluating the application for relaxation from cabotage?

b.For a better understanding of India's shipping policy, we would like to ask India to elaborate on its policies or regulations on container repositioning and inland water transportation.

c.Is inland water transportation open to foreign vessels?

Reply:
a. The cabotage relaxation for container repositioning are given only on case- to- case basis, keeping in view any hardship caused by an collision/ accident, restrictions imposed by any particular ports due any technical /installation of RMQC, industrial action by workers of a port, or on receipt of No Objection Certificate from the Indian national Ship-owners Association [INSA] on a particular request based on some urgent requirements etc.
b. The Directorate General of Shipping, Government of India have issued guidelines for grant of licenses to foreign flag vessel under clause (3) of section 406 and clause (2) of section 407 of the Merchant Shipping Act, 1958, initially vide Shipping Development Circular No. 2 of 2002 dated 08.11.2002 which has further been revised by DGS Circulars No. 07 of 2003 dated 11.06.03, 08 of 2003 dated 14.08.03 [read with memorandum dated 21.11.03 and 31.12.03], Shipping Development Circular No. 01 of 2008 dated 25.04.08 [read with memorandum dated 13.05.08, amendment dated 22.07.08], & other later circulars. All circulars are available on the official website of the Directorate General of Shipping, Govt. of India [http://www.dgshipping.gov.in]. By clicking on "Shipping Notices" link available on the home page of the website, all DGS orders & DGS circulars pertaining to Shipping Development branch may be accessed. I t may be noted that no permission to any foreign flag vessel can be granted, unless a No Objections Certificate [NoC] is issued from the Indian National Ship-owners Association [INSA]. INSA need to ensure that no Indian flag vessel is available to carry out the work proposed to be done by foreign flag vessel. Once NoC from INSA is granted, the permission to relax cabotage [i.e. license to operate for Indian coastal trade] is granted.
c. Inland transportation is allowed only for Indian ships.
Page 125 (Para 4.122)
India has ratified 32 such IMO instruments (out of 55) with currently six others are being considered.
Question 15:
a.Following ratification, does India internalize these IMO instruments into domestic regulations for implementation?

b.What are the 6 IMO instruments being considered?

Reply:
a. Indian national legislation is suitably amended, time to time, through appropriate Parliamentary process, so as to give effect to the implementation of an International Convention/instrument, to which India becomes a party. 
b. The following are the six International Conventions which are under consideration:
i.AFS CONVENTION (International Convention on the Control of Harmful Anti-fouling Substances on Ships) 2001.

ii.Maritime Labour Convention, 2006.

iii.BWM Convention (International Convention  for Control and Management of Ship’s Ballast Water  and Sediments) 2004

iv.BUNKER CONVENTION (International Convention on Civil Liability for Bunker Oil Pollution Damage) 2001.

v.OPRC/HNS (Protocol on Preparedness, Response and Co-operation to Pollution Incidents by Hazardous and Noxious Substances) 2000.

vi.Protocol of 1996- Convention on Prevention of Marine Pollution by Dumping Waste & other matter (London Convention 1972).