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

Part II. Questions based on Policy Statement by India (WT/TPR/G/313)
Page 12, Para 3.2
"…The important measures that have been undertaken are:...processing of environment and forest clearances online; ..."
Question 12: Please detail the procedures of processing environment and forest clearances online.
Reply: Detailed procedure of environment and forest clearances online are available at the Ministry of Environment, Forests and Climate Change – www.envfor.nic.in.
Part III. Other Questions
Question 13: What kinds of national treatment are granted to foreign investors establishing advertising companies in India? Are there any special stipulations in the regulatory and legal system of advertising industry in India? If yes, please introduce such regulations, especially the new ones promulgated since 2012.
Reply: Foreign investors establishing advertising companies in India are granted National treatment. The Consumer Protection Act, 1986, inter-alia, includes provisions relating to Unfair Trade Practices that includes misleading advertisements. All these regulations are applied on national treatment basis. The Consumer Protection Act, 1986, is available on the website of the Department of Consumer Affairs, Government of India.
Question 14: How long will it take on average for a patent infringement lawsuit to be completed in India? How many hearings will take place for a case? Is there any requirement in Indian laws regarding the time limit of hearing a patent infringement case? Are there any channels for the parties to inquire the progress in the hearing of a case? Are there any clear standards regarding the issue of a ban by an Indian court in a patent infringement case?
Reply: A patent infringement case is heard and decided by the District Court or by the High Court in case of counter claim for revocation of patent, according to the standard provisions of the law for hearing and disposal of cases like other cases. There are no specific legal provisions or standards in the judiciary which can be invoked for imposing the fixed time-limit for completion of any law suit or fixing number of hearings required or for issuance of ban in a case involving patent infringement. The parameters like time for completion, number of hearings etc. may vary according to the merits of a case and issues brought before the court.
The information regarding the progress of hearing in any case is generally available on the website of the concerned Court.
Colombia

Report by the Secretariat WT / TPR / S / 313
SUMMARY
Paragraph 1 of the report of the Secretariat indicates that ... "During the period under review, India has continued its efforts to liberalize and facilitate trade, for example by establishing self assessment in customs procedures and eliminating requirements on trade in some agricultural products applicable to State. India also has continued to make structural reforms, such as eliminating controls the price of diesel and the relaxation of restrictions on foreign direct investment (FDI) in some sectors. However, the tariff structure remains complex and the simple average MFN tariff rate has increased during the period under review. "
Paragraph 12 of the report of the Secretariat said that ... "India's tariff is announced in the annual budget; however, tariff rates can be modified during the fiscal year. In addition to the base rate tariff, importers must pay an additional duty and special additional duty in place of local taxes. To determine the tariff rate "effectively applied" corresponding to particular product (the basic duties and other duties) must consult different lists of customs duties and excise taxes, which accentuate the complexity of the tariff. India's tariff comprises mainly ad valorem rates (around 94% of tariff lines), which are levied on the cif value imports, and some alternative or specific (6.1% of total tariff lines) rights."
Question1: What mechanisms have been adopted by the Government of India to simplify its tariff structure in line with the principles of predictability and transparency of the WTO?
Reply: The general rate of import duty on non-agricultural goods is 10% with a few exceptions. All notifications specifying changes in effective rates of duty are made publically available by placing on the Central Board of Excise and Customs website [http://www.cbec.gov.in]. As noted in the draft TPRB report, India's tariff is announced in the annual Budget; however, individual tariff rates may be changed during the fiscal year. In all cases, the details are published immediately on the official website. It is also possible to calculate the applicable rate using the "Duty Calculator" available on the website.
Paragraph 10 of the report of the Secretariat indicates that ... "India has further streamlined its customs procedures and implementing trade facilitation measures. To that end, in 2011 the reverse was adopted in its customs procedures and about 97.6% of imports from India were processed through the system of risk management. Despite the implementation of these measures, the import regime India is still complex, especially its system of permitting and licensing and tariff structure, which has numerous exemptions, with rates that vary by product, certain users or programs to promote exports. "
Question 2: What benefits have been identified with the application of this system since 2011 to date?
Reply: Self-assessment in Customs had been introduced with an objective to curtail time taken for clearances and the associated costs by relying on the declarations filed by importers and exporters. Subjecting only those consignments that are perceived to be risky to re-assessment results in faster clearance of balance consignments, and increase overall trade efficiency.
1 ECONOMIC ENVIRONMENT

1.6 FOREIGN DIRECT INVESTMENT
1.5.3 Trade in Services
Paragraph 1.22 of the report of the Secretariat said that: "Total net FDI outflows from India decreased from US $ 17,200 million in 2010-2011 to 9,200 million US dollars 2013-2014."
Question 3: Could the Government of India clarify whether the foreign investments by public and private companies of the country require prior authorization from the Indian Government?

Reply: Overseas Direct Investment by public and private companies, within the prescribed limit and subject to the prescribed terms and conditions, does not require prior approval of RBI/Govt. of India.
Question 4: If so, what are the approved as well as prohibited sectors to make investments abroad, if there are sectors which are prohibited to make investments abroad, How much Minimum and Maximum is allowed?
Reply: The details are as under:

• 
  Approved Sector: No specific sector has been approved. It has to be a bonafide business activity.
  
• 
  Prohibited Sectors: (a) Real Estate Business, (b) Banking Business and (c) Offering financial products linked to Indian Rupee (e.g., non-deliverable trades involving foreign currency, rupee exchange rates, stock indices linked to Indian market, etc.).
  
• 
  Minimum Limit: No minimum limit has been prescribed.
  
• 
  Maximum Limit: Up to 400% of the net worth of the Indian party under the automatic route (however, any financial commitment exceeding USD 1 (one) billion (or its equivalent) in a financial year would require prior approval of the Reserve Bank).
  
• 
  Exception: ODI funded by way of EEFC balance and ADR/GDR proceeds has no limit.
  

2.2 DEVELOPMENT AND TRADE POLICY OBJECTIVES

2.2.2 OBJECTIVES OF TRADE POLICY
Paragraph 2.13 of the report of the Secretariat said that ... "The objectives of the Government's trade policy remain focused primarily on enhancing the participation of India in world exports. The main goal of the Foreign Trade Policy for 2009-2014 was that India should become a major player in world trade, doubling its share in this 2020. That goal was achieved with fiscal measures such as tax incentives, loans for export programs, institutional changes, streamlining procedures, diversification of export markets and increased market access, including in the framework of regional trade agreements. The Foreign Trade Policy is provided every five years and is reviewed and adjusted annually. The new Foreign Trade Policy for 2015-2020 was published on 1 April 2015. The aim is for India to become a major participant in international trade and increase its share in world exports of 2% to 3, 5% for 2020 is expected to get through sustainable and stable regulatory environment for foreign trade in goods and services, linking rules, procedures and market incentives with other recent initiatives, such as "Make in India", "Digital India" and "Skills India", promoting the diversification of exports from India by assisting key sectors to be more competitive, and to create a platform for collaboration in India with key regions. It is expected to increase exports by exemption and remission of indirect taxes on inputs for export production of final products, preferential import of capital goods, promotion of exports of services and the promotion of initiatives focused on specific products and markets."
Question 5: What are the sectors that the Government of India has identified as the key sectors to make them more competitive in accordance with this paragraph?
Reply: Some of the key Sectors/Products identified are:

• 
  Agricultural and Village industry products
  
• 
  Value added and packaged products
  
• 
  Eco-friendly and green products that create wealth out of waste from agricultural and other waste products that generate additional income for the farmers, while improving the environment.
  
• 
  Labour intensive Products with large employment potential and Products with large number of producers and /or exporters
  
• 
  Industrial Products from potential winning sectors
  
• 
  Hi-tech products with high export earning potential
  

Question 6: What is the "Platform for collaboration in India with key regions of the world"? How does it work? What are the sectors or areas involved?
Reply: The markets and products/sectors covered under the Merchandise Exports from India Scheme and the Service Exports from India Scheme, are available in the public domain on the DGFT website (http://www.dgft.gov.in) under Public Notice No. 2 dated 1 April 2015.
Question 7: Are the concepts of "platform for collaboration" and "Platform for cooperation" are same ?. If that is true, then, if South America be included in the aforementioned "platform" as a key region, Columbia will be automatically included or not?
Reply: Please refer to the response to Question 6 above.
Paragraph 2.15 of the report of the Secretariat said that ... "The import policy also relies heavily on considerations of domestic supply. In the case of sugar, for example, import duties were lifted temporarily in 2012 to allow an increase in imports, but were restored at a rate of 10% in July 2012. These frequent changes disrupt trade policy and make trade policy of India is little predictable. In a report on the policy on sugar, prepared by a team headed by the Chairman of the Economic Advisory Council to the Prime Minister on October 5, 2012, it stated that the policy of export and import the Government did not allow companies join long term in the international market and prevented the growth of the sector. The policies were unpredictable and created uncertainty for companies. ..."

Question 8: Which policies have been implemented to create predictability and more trade stability in India?
Reply: A key objective of India's foreign trade policy is to provide a stable and sustainable policy environment for trade in merchandise and services.
Accordingly, the export and import of most of the tariff lines is free. Only a few lines are kept under "prohibited" or "restricted" categories or for exclusive trading by State Trading Enterprises. Even in these lines (barring a few), the policy has broadly remained stable for the last ten years. In case of change in policy, there is a provision for transitional arrangement in the Foreign Trade Policy so the traders' interests are not hurt.
2.3. Trade Agreements and Arrangements

2.3.2 regional and preferential agreements

2.3.2.1 Regional trade agreements
Paragraph 2.19 of the report of the Secretariat said that ... "India continues to support multilateral trade liberalization, but like other WTO members negotiated several regional trade agreements. It currently has a network of 15 RTAs in force have been notified to the WTO. Mostly it comes to agreements with neighbouring countries and other Asian countries. It also has some RTAs with countries in Latin America (Chile, MERCOSUR), and is part of the Global System of Trade Preferences among Developing Countries (GSTP), but are of limited scope and cover very few tariff lines (Table A2.1 ). "
Question 9: The trade agenda of India to advance trade negotiations with other Latin American countries, with the aim of consolidating Regional Trade Agreements in the short term? If yes, what are these countries?
Reply: India and Peru are currently examining the proposal to establish a Joint Study Group (JSG). The JSG, if set up would explore the possibility of entering into a bilateral Free Trade Agreement (FTA).
Paragraph 2.24 of the report by the Secretariat indicates that ... "In recent years, concerns have been expressed about the negative effects that could have RTAs, especially for Indian industry. The Commerce Department did little done an internal analysis of various free trade agreements (FTAs) and found that in the case of a number of FTAs, the Indian partners in these agreements are not worth a lot from them. Since FTAs have little impact on the Indian industry, it is not clear what the immediate benefits of existing FTAs and what impact, if any, may be the current negotiations of ACR for Indian politics. According to the authorities, in every negotiation you try to get an overall balance of interests with the partner or partners in question. "
Question 10: With reference to the footnote to this paragraph Could the Government of India to indicate the percentage of exports benefiting from RTAs which have been concluded with countries like Chile, Japan, Malaysia, ASEAN, among others?
Reply: The footnote refers to the share of preferential imports to the total imports. On preferential exports, the data is still not available and India is in the process of seeking this information from the trading partners. The percentage of exports benefitting from RTAs can only be provided once this data is available.
3 TRADE POLICIES AND PRACTICES BY MEASURE

3.1 Measures directly affecting imports

3.1.1 Customs procedures and requirements
Paragraph 3.4 of the report of the Secretariat said that ... "India applies a risk management system (RMS) as a measure of trade facilitation, to select only the goods of high and medium risk to be subject to customs inspection. At the end of October 2014, 97.6% of imports from India approximately were processed by this method. The authorities noted that this processing system is operating in imports almost all customs offices. "
Question 11: What is the percentage of goods subject to physical inspection?
Reply: 51.26%
Question 12: In the case of perishable goods are they treated differently in physical inspections? What is the percentage of perishable goods subjected to physical inspection?
Reply: The examination of perishable goods is carried out expeditiously and on 24x7 basis. The data relating to percentage of perishable goods subject to physical inspection is not readily available.
3.1.12 Standards and other technical requirements

3.1.12.2 Technical Regulations
Paragraph 3.92 of the report of the Secretariat said that ... "The competent authority in each area is responsible for the formulation of technical regulations. In developing a technical regulation similar to that used in the case of standards process continues. The draft technical regulations are published for comment prior to adoption by the ministry/department/competent organization and its publication in the Official Gazette. Comments must be submitted within 60 days of publication of the notice. The draft technical regulations to the WTO Members are also notified so that they can submit comments. The competent ministry considers comments and observations received if divergent expert group examines and considers their incorporation into the final version. The process of finalizing the draft regulations, including approval by the competent authority, the review and translation into Hindi, requires between 6 and 12 months. The final rule is published by notice in the Gazette stating its date of entry into force; as authorities said at the same time is notified to the WTO. From time to time the technical regulations are modified by a similar process, depending on the needs of the industry, of scientific advances, modification of the health and environmental situation and harmonization with international standards."
Question 13: Have they published draft technical regulations developed in the last twelve months? If so, which technical regulations have been published and which sectors they belong to?
Reply: New technical regulations issued during the last 12 months have also been notified to WTO Secretariat for comments and relate to electronics sector.
3.1.5 Other charges affecting imports
Paragraph 3.29 of the report of the Secretariat said that ..."Adding these fees and charges to tariffs effective right to pay the importer is considerably higher than the actual rate applied. All imports, except they are exempt, are subject to payment of the effective rate of customs duty, additional duty and any applicable tax and the levy for teaching and higher education; then, the special additional duty of 4% of the cost of that final value is calculated..."
Question 14: Does India publish or make available information regarding these charges? Are they easily available for both foreign as well domestic investors?
Reply: Changes in Tariff rates of Customs Duty are carried out by amendment in the Customs Tariff Act, 1975 which is generally done at the time of passing of the Union Budget. Details about the changes carried out as part of the Union Budget as well as all notifications specifying changes in effective rates of duty are made publically available by placing on the Central Board of Excise and Customs website [http://www.cbec.gov.in]. The current rate of Customs duty for each tariff line is available at the ICEGATE "Customs Duty Calculator" [https://www.icegate.gov.in/Webappl]
4. TRADE POLICIES BY SECTOR

4.1 Agriculture

4.1.1.1 Measures Affecting Imports
In footnote # 3 of paragraph 4.5 of the report of the Secretariat it indicated that "...the list of designated agencies and the rate of utilization of the quotas will be WTO (2011). India introduced its latest notification of tariff quotas in 2011 (G/AG/N/IND/5 and 6 of the WTO, on March 7, 2011)."
Question 15: Could the Government of India to indicate the reasons for non-use or under filling of tariff quotas reported in the G/AG/N/IND/5?
Reply: The procedure for import under Tariff Rate Quotas may be seen in the Hand book of Procedures available on the DGFT website (www.dgft.gov.in). The eligibility and other conditions for availing of these quotas are explained in the Handbook. Apart from having to fulfil these conditions, importers are free to decide whether or not to avail of these quotas, based on demand, commercial viability and other relevant factors.
4.1.1.2 Measures affecting exports
Paragraph 4.12 of the Secretariat Report states that: "…A tenor of the Fund Regulation Sugar Sector Development (Amendment) 2014, February 12, 2014 the government approved a grant at the rate of Rs 3,300 per tonne marketing services and promotion of the production of raw sugar for the period from February to March 2014. The grant scheme will be reviewed for the sugar marketing year (2014-2015)."
Question 16: Could the Government of India confirm the motivations that have led to maintaining and increasing the subsidy for the current year 2015?
Reply: The intervention is purely aimed facilitating payment of arrears to poor farmers by Sugar mills through product diversification. The mechanism provides for passing on the incentive to the Indian sugarcane farmers, through sugar mills which are simply intermediaries in the flow of funds to the farmers. Sub-Rule (9) of the gazette notification clearly provides that the incentive shall be utilized for making payment to the farmers. Since a large amount of arrears are due to the sugarcane farmers, the incentive scheme has been maintained for the current year.
Question 17: As India has considered the fulfilment of the commitment of the Ninth Ministerial Conference to act with the utmost restraint in the use of export subsidies and all measures having equivalent effect?
Reply: India is fully aware of its international obligations and supports elimination of all forms of export subsidies as per the Hong Kong Ministerial Declaration and would urge developed countries to honour cut in the domestic support/subsidies agriculture to restore equity at least partially.
4.1.1.3 Internal Measures
Paragraph 4.19 states that: "…In some cases, the Food Corporation of India (FCI) is authorized to sell its stock on the open market, including for export. For example, the government authorized the export of 4.5 million tons of wheat in 2012-2013 and 2 million tons in 2014-2015. Sales in the domestic market are carried out at predetermined prices; in 2012-2013 and 2013-2014 they were sold respectively 7 million and 6 million tons of grain. "
Question 18:Could the Government of India state whether exports of products of the Food Corporation of India are consistent with the commitments of Article 9 of the Agreement on Agriculture of the WTO?
Reply: FCI maintains public stocks for food security programmes, which are acquired by it only at MSP. Government allows FCI to dispose surplus stocks into the domestic market through competitive bidding and it is only rarely that Government has permitted FCI to export certain quantity from the central stock. Moreover, due to targeted procurement for food security, the stocks of food grains are being kept within manageable limits obviating any need for exports.

Article 9.1 (b) of the AoA treats the sale or disposal for export by governments of non-commercial stocks of agricultural products at a price lower than the comparable price in the domestic market as a export subsidy. Exports of Wheat from FCI stocks have been made at prices which are significantly higher than the minimum support price announced by the government for the respective year. As a prevailing market price in each year is generally close to the MSP, it would be clear that disposal of FCI stocks for export purposes were done at prices significantly higher than the prevailing price in the domestic market. Thus these exports are consistent with Article 9 of the AoA.

 

4.3 Manufactures
Paragraph 4.48 of the report by the Secretariat indicates that ... "In the textiles and clothing, the government subsidizes interest rates under the Technological Improvement Program in order to upgrade technology in machinery. The government has also tried to promote industrial clusters and textiles, for example, through the Programme of Integrated Textile Technology Parks (in which 40% of the funding is provided by the remaining 60% State and the private sector), which aims to provide infrastructure for the textile industry; grants are awarded through a selection process based on budgetary constraints. In addition, the obligations apply with respect to the yarn in hanks, a mechanism established in 2013 to protect the handloom and ensure the supply of hank yarn to the handloom sector. Cotton is subject to minimum support prices. Every year before the start of the cotton campaign, the Commission of Agricultural Costs and Prices fixes minimum support prices of medium staple cotton and long ... In the textiles and clothing foreign ownership is allowed 100% by automatic means, provided that all applicable laws and regulations are met. "