Part II. Economic Environment; 2.6 Major Challenges; 2.6.3 Infrastructure Development: paragraphs 2.34-2.35, page 10:
The Government report states that "one of the major challenges to India's growth is the infrastructure deficit. Massive investment is needed to build the infrastructure required to sustain a high growth rate, including roads, railways, ports, airports, electricity, telecommunications, oil gas pipelines and irrigation." It further adds that for the period 2012-2017, "an investment of US$1 trillion is required in the infrastructure in India".
Question 57: Are foreign companies welcome to bid on the award of India’s large infrastructure projects?
Reply: Infrastructure projects under different sectors are executed as per sectoral policies and it may include implementation through PPP model.
Question 58: If so, do they face obstacles on the basis of their foreign status, e.g. such as price preference for Indian companies?
Reply: As given in reply to 57.
Part II - Economic Environment: 2.6 Major Challenges; 2.6.3 Infrastructure Development, paragraph 2.35, page 10:
It is noted that one of the major infrastructure initiatives announced for funding include a revitalization of the PPP mode of infrastructure development.
Question 59: Could India provide additional details as to how it plans to revitalize the PPP mode of infrastructure development?
Reply: In the Union Budget 2015-16, Finance Minister has announced that the PPP mode of infrastructure development has to be revisited, and revitalized, in which the major issue involved is rebalancing of risk. In pursuance of this announcement, a committee has been constituted which aims at:
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Review of the experience of PPP Policy, including the variations in contents of contracts and difficulties experienced with particular variations/conditions, if any,
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Analysis of risks involved in PPP projects in different sectors and existing framework of sharing of such risks between the project developer and the Government, thereby suggesting optimal risk sharing mechanism,
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Propose design modifications to the contractual arrangements of the PPP based on the above, and international best practices and our institutional context, and
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Measure to improve capacity building in Government for effective implementation of the PPP projects.
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The Committee may consult various stake holders in the private sector, government sector, legal experts, banking/financial institutions and academia while firming up its recommendations.
Part II - Economic Environment: 2.6 Major Challenges; 2.6.3 Infrastructure Development, paragraph 2.36, page 10:
It is noted that the five new Ultra Mega Power Projects proposed by the Government will utilize the "plug-and-play" mode and that other infrastructure projects in the future may also utilize this approach.
Question 60: Could India provide additional information on the "plug-and-play" mode that may be used for future infrastructure projects, including the clearances and linkages that would be in place before the project is awarded?
Reply: Ultra Mega Power Projects (UMPPs) are being promoted with a view of providing power to all at a reasonable rate and ensuring fast capacity addition by Ministry of Power, Government of India as an initiative facilitating the development of Ultra Mega Power Projects (UMPP) of 4000 MW capacity each under tariff based international competitive bidding route. Project specific Shell Companies (Special Purpose Vehicles) as 100% subsidiaries of Power Finance Corporation Limited have been created for carrying out developmental works consisting of tie up of inputs /clearances and the bidding process for selection of developers for the UMPPs. Various inputs for the UMPPs are tied up by the SPV with assistance of MOP & CEA for the sites which are identified by CEA in consultation with the State Government. After all the inputs are tied-up, bids are invited through ICB route based on Standard Bidding Documents (SBDs) prepared by Ministry of Power and project developer is selected based on lowest tariff quoted. Following five UMPPs are under active consideration for bidding:
i.Odisha UMPP, Sundargarh Distt. In Odisha
ii.Cheyyur UMPP, Kancheepuram distt. In TN
iii.Bihar UMPP, Banka distt. In Bihar
iv.Chattisgarh UMPP, Surguja Distt. In Chhattisgarh
v.Second UMPP (Jharkhand), Deoghar distt. in Jharkhand
Part II. Economic Environment: 2.6 Major challenges; 2.6.3 Infrastructure Development, India’s Special Economic Zones Scheme: paragraph 2.41, page 11:
It is noted that India utilizes a Special Economic Zones Scheme to further the development of infrastructure facilities as part of its Make in India plan.
Question 61: Could India affirm that this Scheme is consistent with WTO rules?
Reply: India considers that the Special Economic Zones which neutralizes the indirect taxes are consistent with the ASCM Agreement. India has notified the "Preferential Tax Programmes" to the WTO.
Question 62: Could India explain what incentives there are for attracting private international investment in these zones?
Reply: Fiscal benefits and duty concessions offered to SEZ Developers and units are attached herewith at Annexure-I.
Annexure-I
Fiscal benefits and duty concession offered to SEZ Developers and units:
i.The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment include:-
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Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
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100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
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External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
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Exemption from Central Sales Tax.
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Exemption from Service Tax.
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Single window clearance for Central and State level approvals.
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Exemption from State sales tax and other levies as extended by the respective State Governments.
ii.The major incentives and facilities available to SEZ developers include:-
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Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA.
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Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.
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Exemption from Central Sales Tax (CST).
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Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).
Question 63: Could India explain to what degree SOEs will be involved in this scheme?
Reply: There is no special dispensation for SOEs under the SEZ policy.
Part III. The New Reform Agenda: (2) Make in India: paragraph 3.3, page 12:
India’s report notes that the Make in India programme aims to facilitate investment, foster innovation, enhance skill development, protect intellectual property, and build best-in-class manufacturing infrastructure, and that information on 25 sectors has been provided on a web portal along with certain details.
Question 64: Could India explain whether and how the Make in India programme considers the role of imports of goods in the context of its objectives?
Question 65: Does India view affordable and quality imports of goods as a mean to strengthen India’s competitiveness as result of, for instance, cheaper manufacturing inputs and increased competition to stimulate productivity of domestic industry; or alternatively, are imports perceived as an impediment to domestic manufacturing, which should ultimately be substituted by domestic production?
Reply to 64 & 65: "Make in India" initiative is not an attempt at import substitution and aims at improving competitiveness of Indian industry, making India a global hub for manufacturing, design and innovation. Design and innovation are two important factors that promote manufacturing in a country in a big way. However, other inputs are also required for carrying out these manufacturing activities. These inputs are to be obtained at a competitive price whether from India or outside India.
Part IV. Trade Policy: (1) Foreign Trade Policy: paragraph 4.6, page 14:
India's report claims that import duties have been autonomously lowered over the years, and that in most cases tariffs have been reduced rather than raised and have generally been continued at the lower levels. However, paragraph 3.22 of the Secretariat report notes that India's simple average applied MFN tariff rose from 12% (in 2010-11) to 13% - with significant increases in tariffs for a number of agricultural products as well as transport equipment and a number of other non-agricultural products.
Question 66: Could India explain this discrepancy between India's claims that tariffs have been reduced over years and the Secretariat's report which illustrates that India's average applied tariffs have in fact been raised?
Reply: While India's average tariffs have slightly increased in the period between 2010-11 and 2014-15, however average tariff rates do not take into account the volume/value of trade under a specific tariff line. Accordingly, trade weighted average could be a better indicator of the same. India's trade weighted average duties were 7.0 [2012]. This compares favorably with trade weighted average duties of other comparable economies. Further the collection rate of customs duty [computed as a ratio of total customs revenue collection to the value of the imports in a fiscal year] has reduced from 7.7% in 2010-11 to 6.1% in 2013-14.
Question 67: Could India explain why tariffs on the aforementioned products have been increased?
Reply: While prescribing import tariffs on a good, the Government seeks to maintain a balance between the interests of consumers and domestic industry manufacturing/producing that good. However, it would not be possible to specify reasons for individual policy decisions.
Part IV. Trade Policy: (1) Foreign Trade Policy: paragraph 4.7, page 14:
India's report notes that tariff policy will be further optimised in order to take advantage of the manufacturing opportunities offered by regional and global value chains, while retaining the necessary policy space to strengthen and develop domestic industry.
Question 68: Could India explain specifically how it plans to optimize its tariff policy to take advantage of these manufacturing opportunities?
Reply: India does this through preferential/FTA and the policy is attuned to the domestic exigencies by incorporating necessary changes in Foreign trade Policy from time to time.
Question 69: Does India plan to reduce tariffs on certain products? If so, please provide examples.
Reply: While prescribing import tariffs on a good, the Government seeks to maintain a balance between the interests of consumers and domestic industry manufacturing/producing that good. However, it would not be possible to give specific examples.
Question 70: Does India consider raising tariffs on any products? If so, please provide examples.
Reply: While prescribing import tariffs on a good, the Government seeks to maintain a balance between the interests of consumers and domestic industry manufacturing/producing that good. However, it would not be possible to give specific examples.
Part IV. Trade Policy; (2) Trade Facilitation Measures; paragraph 4.11; page 15:
It is noted that India recognizes the synergetic relationship between standards and trade and has initiated legislative and institutional reforms identified to harmonize domestic standards with international ones, wherever possible.
Question 71: Could India provide details on the process undertaken, the reforms identified so far to harmonize domestic standards with international ones and the timelines for implementation?
Reply: The para 4.11 of the stated report does not mention about any reforms relating to harmonization of domestic standards with international standards. The harmonization of domestic standards with international standards is an evolving activity and would continue to keep pace with the dynamic changes.
Part IV. Trade Policy; (3) Trade Policy Challenges; paragraph 4.14; page 15:
It is noted that India is concerned with the rising incidence of non-tariff barriers, such as sanitary and phytosanitary measures, technical barriers to trade and conformity assessment procedures required by trading partners, which they state add costs to India's exports and erodes price competitiveness.
Question 72: How is India reflecting its recognition of the potentially negative impact of non-tariff barriers on trade in the development and implementation of its own non-tariff measures?
Reply: It is being done through promoting awareness among stakeholders about non-tariff barriers and focus on trade facilitation.
Part V. India and the WTO: (1) WTO Negotations: paragraph 5.3, page 16:
It is noted that India has undertaken a host of autonomous reforms with the objectives of simplifying laws and procedures, and ensuring greater transparency.
Question 73: Could India explain if those reforms pertain to the pharmaceutical sector?
Reply: All autonomous reforms undertaken with the objective of simplifying law and procedures are applicable to all sectors including pharmaceuticals.
Question 74: Could India explain if the timelines related to the determination of the reimbursement price of subsidized medicinal products are aligned with the EU Transparency Directive?
Reply: The Government does not subsidize the prices of those medicinal products whose prices are controlled by NPPA under the DPCO, 2013 issued under powers of the Essential Commodities Act.
Part V. India and the WTO: (1) WTO Negotiations: paragraph 5.6, page 16:
India's report notes that India is in the process of finalizing its categorization of commitments under the TFA and would be filing the notification in keeping with its provisions.
Question 75: Could India provide a tentative date for notifying its Category A commitments to the WTO?
Reply: India is in the process of finalizing its categorization of commitments and the date for notification will be decided by the competent authority.
Part VI. Regional and Bilateral Arrangements: paragraph 6.2, page 17:
Paragraph 6.2 of the Report (page 17) notes that "India has concluded 11 free trade agreements (FTAs) and 5 limited scope preferential trade agreements and is in the process of negotiating/expanding 17 more agreements." It then goes on to list a number of these agreements and negotiations, including with the Canada, the European Union, the EFTA countries (paragraph, Australia, and New Zealand, as well as the Regional Comprehensive Economic Partnership (RCEP).
Question 76: With regards to these new and ongoing negotiations, including with trading partners such as the European Union, could India inform as to whether there have been any changes in its approach to environment and sustainable development provisions in trade agreements since the 2011 TPR?
Reply: Under India-EU BTIA, a Chapter on SD is being included wherein it is committed to pursue the objective of sustainable development, whose pillars – economic development, social development and environmental protection – are interdependent and overarching objectives and essential requirements of sustainable development. The aim is to strengthen trade relations and cooperation in ways that promote sustainable development.
Question 77: Has India expanded its approach to such agreements to encompass environment and sustainable development provisions, for example commitments similar to those found in the India-Japan Comprehensive Economic Partnership Agreement? If so, can India provide more detail on what type of environment and sustainable development provisions it would be seeking? If not, can India explain what makes the agreement with Japan unique?
Reply: Sustainable development in India-EU BTIA is being negotiated wherein it is committed to pursue the objective of sustainable development, whose pillars- economic development, social development and environmental protection- are interdependent. The aim is to strengthen trade relations and cooperation in ways that promote sustainable development.
Canada
Additional questions
Follow up question to India's reply to question 8 on page 24 of RD/TPR/432:
Question 1: If municipal licensing requirements for starting a business are not covered by the services of the eBiz portal, what is the typical timeline for being granted these licenses?
Reply: Different municipal licensing bodies will have their own separate timelines for granting licenses required for starting a business.
Follow-up question to India's reply to question 27 on page 29 of RD/TPR/432:
Question 2: India states that import conditions of livestock and livestock products are based on OIE standards. For imports of live swine, India requires country-freedom or compartmentalization for Porcine Reproductive and Respiratory Syndrome (PRRS), which according to OIE reports, has occurred in India in 2014. Can India explain how its requirements are based on the OIE Terrestrial Animal Health Code?
Reply: India has revised the condition for PRRS wherein the present revised health certificate requires that the swine can be sourced from country/zone or compartment free from PRRS.
Follow-up question to India's reply to question 39 on pages 33 and 34 of RD/TPR/432:
Question 3: Could India please provide more information and clarify Section 83 of the Indian Patent Act and their position in light of TRIPS Article 27, which states: "…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"? [Emphasis Added]
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."
Follow-up questions to India's replies to questions 76 and 77 on page 44 of RD/TPR/432:
Question 4: Can India provide more detail on the provisions that will be included under the "environmental protection" pillar in the India-EU BTIA Sustainable Development chapter? Is India considering or negotiating similar provisions with other trading partners?
Question 5: The EU defines Sustainable Development as growth in trade that is in tandem with the environment, social and labour rights. Can India elaborate on how labour rights will be included in the Sustainable Development chapter that is being negotiated with the EU?
Replies to 4 & 5: India is of the view that there are alternative fora to discuss social issues including matters related to labour and environmental standards and that all the free trade agreement should focus on trade related issues only. Further, the chapter on Sustainable Development is still under negotiations and text will be finalised once the India-EU BTIA is negotiated.
Negotiating provisions with different trading partners would vary , based on mutual trade interests as well as the negotiating mandate.
Chile
Standards and other technical requirements
Technical regulations
Question 1: What is the minimum period of entry into force of technical regulations? Are the defined at the central level?
Reply: No such minimum period of entry into force of technical regulations is defined at the Central level. Reasonable time is however provided for entry into force.
Question 2:Is there a standard process for the development of technical regulations to be met by competent agencies? If so, what is the legal instrument in which it is defined?
Reply: The process of development of technical regulation is met by competent agencies as per the provisions of concerned legal instrument, under which technical regulation are notified. Although BIS Act is used as legal instrument in many cases but there are different legal instruments also.
Question 3: Is there a mechanism for internal coordination between the BIS and regulatory bodies to fulfil their obligations under the WTO TBT Agreement?
Reply: BIS regularly interacts with Regulatory Bodies and Ministry of Commerce, the nodal ministry for WTO matters in India, in different forums.
Certification and conformity assessment
Question 4: India recognizes foreign certifications?, if so, in what sectors?
Reply: It depends on each regulator. It is not automatic. For example, for components of Electronic and IT equipment, the test reports of IECEE CB and certification of foreign certification bodies are accepted by BIS and BIS recognised laboratories.
Accreditation
Question 5: Is it a requirement that laboratories must be accredited by the NABL or is it voluntary?
Reply: NABL accreditation program is voluntary in nature.
Question 6:Do all regulatory agencies recognize NABL accreditation?
Reply: Most of the regulatory agencies recognise NABL accreditation.
Labelling
Question 7: How is India's participation in international metrology?
Reply: India is signatory member of metric convention and International Organization of Legal Metrology.
Intellectual Property Rights
Paragraph 3.250:
Question 8: Are there any Special Provisions Regarding homonymous Geographical Indications?
Reply: Yes. Section 10 of the Geographical Indications of Goods (Registration & Protection) Act, 1999 allows registration of homonymous GIs if the registrar is satisfied after considering the practical conditions under which the homonymous indications in question shall be differentiated from the other homonymous indications and need to ensure equitable treatment of the producers of the goods concerned that the consumers of such goods shall not be confused or misled in consequence of such registration.
Paragraph 3.265:
Question 9: What are the Provisions/Measures Regarding goods in -transit?
Reply: Border measures in respect of IPR enforcement as stated under notification dated 8th May 2007 and its subsequent modification vide notification dated 30th June 2010 does not apply to goods in transit and is restricted to import of good meant for sale or use in India.
China
WTO TRADE POLICY REVIEW OF INDIA
2-4 JUNE 2015, Geneva
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