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

Part III. Trade Policies and Practices by Measure: (3) Measures Affecting Production and Trade; (5) Intellectual Property Rights; (2) Patents: paragraph 3.225, page 89:
The TADF [Technology Acquisition and Development Fund] would reserve the right to license more than one company for a particular patent (Section 4.4.2); and to address the second issue, the Fund will have the option to approach the Government for issue of a compulsory licence for the technology which is not being provided by the patent holder at reasonable rates or is not being worked in India to meet the domestic demand in a satisfactory manner.
Question 39: Could India clarify the idea behind the requirement that technology must be worked in India? What if the domestic demand market can be met by working the invention outside India?
Reply: Article 7 and 8 of TRIPS set out the objectives and principles on which protection is provided to right holders, Article 31 postulate the various conditions on the basis of which an authorization could be provided without permission of the right holder and the Doha declaration on TRIPS and Public health address the issue of access to medicines. These provisions of TRIPS and the Doha Declaration on TRIPS and Public Health are enshrined in Section 83 of the Indian Patent Act that lays down the guiding principles applicable for working of patented inventions. It states that patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay; that they are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article; that the protection and enforcement of patent rights contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations; that patents granted do not impede protection of public health and nutrition and should act as instrument to promote public interest specially in sectors of vital importance for socio-economic and technological development of India; that patents granted do not in any way prohibit Central Government in taking measures to protect public health; that the patent right is not abused by the patentee or person deriving title or interest on patent from the patentee, and the patentee or a person deriving title or interest on patent from the patentee does not resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology; and that patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public.
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."
Part III. Trade Policies and Practices by Measure: (3) Measures Affecting Production and Trade; (5) Intellectual Property Rights; (5) Copyright: paragraph 3.240, page 93:
Similarly, the Indian music industry is reported to have had revenues of around US$150 million in 2013, of which over 50% was obtained through digital sales. Over 80% of music relates to film music in India; in some cases, over 10% of a producer's revenues could come from music. Digital sales and licensing revenues are expected to rise in the near future.
Question 40: Could India clarify the source of music revenue other than the 50% that was obtained through digital sales? Could India also clarify the percentage of sales that occur via online music streaming services and whether this is included in the digital sales figures?
Reply: Government of India is not in a position to comment on this issue as the data on source of music revenue including digital sale is not collected.
Part III. Trade Policies and Practices by Measure: (3) Measures Affecting Production and Trade; (5) Intellectual Property Rights; (5) Copyright: paragraph 3.245, page 93:
A compulsory licence can be issued by the Copyright Board on any work withheld from the public. Special provisions have been inserted for works relevant to the disabled. In addition, access to copyright content has been improved to broadcasting organizations through non-voluntary licences where the terms are to be fixed by the Copyright Board.
Question 41: Could India please provide more information on the role, powers, duties and operation of the Copyright Board? For example, how are the terms of broadcasting licenses set by the Board? What standards are applied to establish rates? What is the nature of the rate setting process (e.g. arbitration, quasi-judicial, etc.)?
Reply: The Copyright Board which is a statutory authority constituted under section 11 of the Act primarily to provide for specialized adjudication on the matters of compulsory licenses, statutory licenses, rectification of registration of copyright done by the Copyright Office, to decide the royalty disputes between authors and publishers and appeals on decisions of Registrar of Copyrights.
The Copyright Board sets royalties for statutory licenses for broadcasting and also sets royalties for Compulsory license for broadcasting. Copyright Board while determining royalties shall take into consideration the following factors namely, i) the retail price of earlier sound recording; ii) the prevailing standards of royalties with regard to literary, dramatic or musical work for making such recordings; iii). The nature and the class of the work, language, format and medium in which it is to be sold; and i) such other matters may be considered relevant by the Board.
Part III. Trade Policies and Practices by Measure: (3) Measures Affecting Production and Trade; (5) Intellectual Property Rights; (5) Copyright: paragraph 3.246, page 93:
Registration of copyright societies has been made mandatory and several provisions have been introduced to protect authors and improve transparency in the functioning of such societies.
Question 42: Could India outline the provisions introduced to protect authors and improve transparency? Also, could India address whether they assessed the effects of regulating copyright societies prior to enacting the provisions? If so, what were the key findings of the assessment?
Reply: The provisions relating to copyright societies to protect authors and improve transparency has been given in Chapter VII (Section 33 -36 A) of the Copyright Act 1957 as amended in 2012 read with Rule 66 of Copyright Rules 2013 (Code of Conduct for Copyright Societies), which suggest the tariff scheme administration of rights of owners and payment of remuneration including control over the copyright society by author and other owners of right, and code of conduct for copyright societies.
Before amending the provisions relating to copyright societies, the effect of regulating copyright societies was assessed by the Government as well as by the Parliamentary Committee. There was a non transparency in distribution of royalties by the copyright societies.
Part III. Trade Policies and Practices by Measure: (3) Measures Affecting Production and Trade; (5) Intellectual Property Rights; (5) Copyright: paragraph 3.247, page 93:
Fair-use clauses have been extended to cinematographic works and sound-recordings. Importation of copies of any literary and artistic works such as labels, company logos or promotional or explanatory material that is purely incidental to other goods or products being imported lawfully has been clarified not to be an infringement. Parallel imports of copyrighted works are not permitted. Fair-use has been extended to the digital environment also where temporary storage (caching) is not an infringing act. Notice and take-down procedures have been introduced to make internet service providers otherwise liable (Section 52(c)). The WIPO Marrakesh Treaty for Visually Impaired Persons has been implemented through fair-use provision to access, for example, copyrighted works in a special format.
Question 43: As part of its copyright regime, does India have a distribution right (i.e. Article 12 of WIPO WPPT, Article 6 of WCT)? If so, does India apply any conditions on the exhaustion of the distribution right?
Reply: Section 14 of the copyright Act 1957 as amended in 2012 incorporate various rights including distribute rights to issue copies of the work to the pubic not being copies already in circulation.
Question 44: Can India elaborate further on how the WIPO Marrakesh Treaty has been implemented, including through fair-use provisions?
Reply: Copyright Act 1957 as amended in 2012 has included a Section 52 (1) (zb) which deals with "activities that do not require permission from the owner of copyright for enjoyment of". It allows, the adaptation, reproduction, issue of copies or communication to the public of any work in any accessible format, by, inter alia, any person or organization to facilitate visually impaired persons the access to copyrighted works.
PART IV. TRADE POLICIES BY SECTOR; (1) AGRICULTURE; (1) GENERAL POLICY FRAMEWORK; (2) MEASURES AFFECTING EXPORTS, PARAGRAPH 4.10, PAGE 100:
The report from the Secretariat mentions that India imposes export restrictions mainly for environmental, food security, marketing, pricing, and domestic supply reasons, and to comply with international treaties.
Question 45: Can India please elaborate on what would constitute an environmental reason for imposing an export restriction? What goods would be affected by such a restriction?
Reply: The environmental reasons on which export restrictions are imposed are mainly related to controlling destruction/excessive exploitation of natural resources viz. the forest resources like wood and wood products, wildlife, ores, slags, and certain chemicals under Montreal Protocol etc. Under the Foreign Trade Policy, export of wood and wood products, wild animals, their parts, products and derivatives etc is prohibited or restricted [this also includes all the items included in Wildlife Protection Act, 1972 and Schedules of CITES]. Chemicals under Montreal Protocol are restricted and allowed for export against a license only to the state parties. The item wise list of such prohibitions/restrictions is available on the website of DGFT (http://www.dgft.gov.in)
PART IV. TRADE POLICIES BY SECTOR; (1) AGRICULTURE; (1) GENERAL POLICY FRAMEWORK; (2) MEASURES AFFECTING EXPORTS, PARAGRAPH 4.14, PAGE 101:
According to the Secretariat's report, export prohibitions and export quotas are notified annually; they are usually in place for a specific period, during which they may be subject to change.
Question 46: Can India please provide details on how long these export prohibitions are usually in place? What indicators are used to determine a change in length regarding the implementation of such a measure?
Reply: Export Policy is reviewed from time to time in consultation with the concerned administration ministries/departments keeping in view the availability of the item, its domestic and international prices among other factors and wherever required, export prohibitions/ restrictions/export quotas are notified by DGFT by way of a notification in the official Gazette. Details of all such notifications are available at www.dgft.gov.in. Except for prohibition on export of pulses and edible oils, which are in place since 2006 and 2008 respectively, export of all agricultural products viz. rice, wheat, milk powders including casein, cotton etc. which were prohibited during the past years; 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.
PART IV. TRADE POLICIES BY SECTOR; (1) AGRICULTURE; (1) GENERAL POLICY FRAMEWORK; (3) INTERNAL MEASURES, PARAGRAPH 4.19, PAGE 102:
The Secretariat report notes that the FCI is authorized to sell from its stock through open market sales including for exports.
The Secretariat report indicates that the Government authorized the export of 4.5 million metric tonnes of wheat in 2012-13, and 2 million metric tonnes in 2014-15.
Question 47: Could India please indicate if all or what portion of the 4.5 million metric tonnes authorized in 2012-13 was in fact exported, and what was the average export price per tonne?
Reply: The Food Corporation of India has exported a total quantity of 4.24 million MT of wheat against the 4.5 million MT authorized in 2012-13 at an average export price of 310.99 USD per MT.
Question 48: Could India please indicate if all or what portion of the 2 million metric tonnes authorized in 2014-15 was in fact exported, and what was the average export price per tonne?
Reply: The Food Corporation of India has exported a total quantity of 1.56 million MT of wheat against the 2.0 million MT authorised in 2013-14( not in 2014-15) at an average export price of 282.39 USD per MT.
The Secretariat also notes in its report that it was not clear how prices are set for domestic open market sales, and who the grains are sold to.
Question 49: Could India please provide details on how prices are set when a) selling stocks for domestic open market sales and b) stocks are destined for export? What are the main destinations when these stocks are sold for exports?
Reply: For sale in domestic market, the Government sets reserve price which serves as a bench mark price and the sale is conducted through open tenders in auction mode to the highest bidder. For export, the prices are discovered through open tenders in a competitive manner.
PART IV. TRADE POLICIES BY SECTOR; (1) AGRICULTURE; (1) GENERAL POLICY FRAMEWORK; (3) INTERNAL MEASURES, PARAGRAPH 4.28, PAGE 105
The Secretariat Report indicates that India sets targets for priority-sector lending to ensure that banks provide credit to specific priority sectors.
Question 50: Could India please elaborate on how these targets are set and provide examples of specific priority sectors?
Reply: The targets for priority sector are being reviewed from time to time. The present targets revised on April 23, 2015 are based on the recommendations of an Internal Working Group set up by RBI to revisit the priority sector guidelines. The report of the Group is available to the public. The broad categories of Priority Sector are as follows:
i.Agriculture

ii.Micro, Small and Medium Enterprises

iii.Export Credit

iv.Education

v.Housing

vi.Social Infrastructure

vii.Renewable Energy and

viii.Others

The details of the eligible priority sector are available in our circular on Priority Sector Lending Targets and Classification FIDD.CO.Plan.BC.54/04.09.01/2014-15 dated April 23, 2015, available at: https://rbi.org.in/Scripts/NotificationUser.aspx?Id=9688&Mode=0.
The Report of the Internal Working Group (IWG) to Revisit the Existing Priority Sector Lending Guidelines, released on March 2, 2015, provides a background of the Priority Sector Lending in India. The Report can be accessed at:

https://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=810
Part IV. Trade Policies by Sector: (3) Manufacturing, textiles and clothing: paragraph 4.48, page 109:
It is noted that India provides interest rate subsidies as part of its Technology Upgradation Scheme, which seeks to upgrade technology in machinery.
Question 51: Could India explain how these subsidies are consistent with WTO rules?
Reply: Interest rate subsidies under the Technology Upgradation Fund Scheme are available to the textile sector irrespective of whether the finished products are exported or are for domestic consumption. Since, the benefit under such program is not covered under Article 3.1 of ASCM, these are not prohibited subsidies under ASCM.
Part IV. Trade Policies by Sector: (4) services, (3) Transport, (1) maritine transport, (1) shipping, paragraph 4.114, page 109:
It is noted that Sections 406 and 407 of the Merchant Shipping Act 1958, as amended, enables applications to be considered for relaxation from cabotage restrictions on a case-by-case basis, subject to the guidelines.
Question 52: Can India provide additional information on the guidelines prescribed for relaxing cabotage restrictions on a case-by-case basis, including specific criteria that might be used in approving or rejecting applications?

Reply: 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 [www.dgshipping.gov.in]. It 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] which is a representative body of Indian ship-owners. Once the NoC from INSA is granted, the permission to relax cabotage [i.e. license to operate for Indian coastal trade] is granted.
Question 53: Can India provide the following statistics, over a 5-10 year period, related to the relaxation of cabotage restrictions under the Merchant Shipping Act 1958?

i.The total number of applications approved and rejected;

ii.The percentage of overall applications that were approved;

iii.A further breakdown of the approved and rejected applications by sector – i.e. How many applications were for bulk or container transport, ferry services, and other passenger services?  What percentage of overall applications did each sector constitute?

Reply: As explained above, based on the NOC issued by INSA, the Directorate General of Shipping issues the license as per the applicable guidelines. As the charterer verifies the requirement as per the guidelines for a license before submission, usually no rejections are made. The data for 5 10 years readily is not available. However, the details of licenses/permissions, granted to foreign flag vessels, in last two years, is as below:

Type  2013-14	Nos
Bulk Carrier	258
Acid Carrier	01
Cargo Ship	03
Chemical Tanker	182
Crude Oil Carrier	83
LPG Carrier	71
Product Tanker	42
Oil Tanker	442

 

 

 

 

 

 

 

Type  2014-15	Nos
Bulk Carrier	407
Cargo Ship	01
Container Ship	16
Chemical Tanker	189
Crude Oil Carrier	118
LPG Carrier	108
Product Tanker	15
Oil Tanker	793
Passenger Ship	01
Ro-Ro Vessel	02

Report by the Government of India (WT/TPR/G/313):
Part II. Economic Environment; 2.3 Inflation: paragraph 2.5, page 5:
It is noted that inflation has been a significant economic challenge confronting the economy since 2010-11
Question 54: Could India explain if pharmaceuticals (prescription and non-prescription medicines) have been the subject of low, moderate or high inflation since 2010?

Reply: The data in this regard is not available. However, the increase in prices of scheduled formulations (medicine) is limited to increase in WPI and in respect of medicines not under price control, manufacturers are allowed to increase maximum retail price (MRP) up to 10% annually.

Question 55: Could India explain the methodology used, if any, to control the impact of the inflation on the ex-factory prices and/or retail prices of pharmaceuticals?

Reply: Annual increase in the ceiling price is in accordance with WPI in case of scheduled formulations and up to 10% in case of medicines not under price control.

Question 56: Could India explain the policy tools used by the national regulatory authority to control the prices of pharmaceutical products?

Reply: The Essential Commodities Act provides for controlling the production, supply, distribution, trade and commerce of certain commodities and "drugs" is listed as one such commodity. The prices of medicines are fixed/controlled by National Pharmaceutical Pricing Authority (NPPA) under the powers of this Act and Drugs (Prices Control) Order (DPCO), 2013. Prices of only those medicines included in the National List of Essential Medicines (NLEM)-2011 are controlled.