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

Question 19: How can the government of India to ensure that the grants mentioned in this paragraph for the textiles and clothing, are not contrary to the agreement subsidies and countervailing measures (SCM) of the WTO?
Reply: Subsidies contingent upon exports or domestic content requirement are prohibited under ASCM. India being Annex VII country, India is exempted from the prohibitions on subsidies contingent upon exports. Moreover, none of the programmes stated in paragraph 4.48 above, are covered under any of the two categories stated above under ASCM.
Question 20: Could the Government of India to share information on the "Program Integrated Textile Technology Park", such as its overall structure, number of established parks, objective results in terms of technological upgrading of enterprises established there, perspectives of such programs, increased exports of goods produced in these technology parks, and other tax benefits you consider important?
Reply: The Scheme for Integrated Textile Park helps in setting up green field textile parks with partial capital grant from the Government towards common infrastructure such as road, compound wall, drainage, water & electricity, effluent treatment plant etc. and common facilities such as workers' hostel, crèche, canteen, labour recreation facilities, testing lab, design centre and factory building etc. Government support is limited to the 40 % of the cost subject to a ceiling of Rs 40 cr. Total 70 such parks have been approved so far out of which only 18 parks have more than 25% units are operational. Since most of the parks are still at the implementation stage, therefore, any statement on technology upgradation, export of goods produced there will be too premature. The Textiles parks do not get any tax benefit from the government.
Question 21: Can Companies with foreign capital be installed in the Technology Parks Integrated Textiles? If so, do the same condition apply as those for business capital of India?
Reply: Yes
Paragraph 4.51 of the report of the Secretariat said that ... "The automobile industry in India is protected by non-tariff measures high import duties. The average MFN tariff on motor vehicles (HS 8703) in 2006-2007 was 100%; in 2010-2011 it was reduced to 60%, but in 2014-2015 increased to 100%. Because of these high tariffs and to the fact that 100% foreign ownership is permitted, it is likely that most FDI in this industry serve the purpose of evading tariffs. Although no licensing requirements for importing new vehicles are imposed, a license for the import of cars more than three years that meet environmental and safety requirements must be obtained. Besides being taxed at a tariff of 100%, imports of vehicles can only be done through specific ports (Chennai, Calcutta and Mumbai for new vehicles, and Mumbai for second-hand cars). In December 2006, the Department of Heavy Industry issued a Mission Plan for Automobile Industry from 2006 to 2016 as a roadmap for the future development of the sector. The plan proposes a number of policy interventions. Car manufacturing is subject to various technical regulations.
Question 22: Could the Government of India further explain What is the "Mission Plan for the Automobile Industry 2006-2016"? What type of subsidies or economic or fiscal support the Government of India has been included in this Plan for 2006-2016 the automotive industry?
Reply: The Automotive Mission Plan 2006-16 is uploaded on the Ministry of Heavy Industry’s website. The objective of the Mission Plan is to chalk out a roadmap for the growth and development of the automotive industry for a 10-year period. It mainly comprises of a Vision for the industry's increasing contribution to the National GDP from a level of about 5% in 2006 to 10% by 2016, making India a Hub for manufacturing small cars, two/three wheelers and commercial vehicles, increasing the direct as well as indirect employment in the industry by an additional 25 million by 2016, skilling of personnel employed in the industry and stimulating research and technological development of the industry.
The Mission Plan does not provide for any fiscal subsidies or tax cuts on any of the segments of the industry. However, the Mission Plan does envisage incentives for manufacture and use of electric/hybrid vehicles by way of demand incentives to the consumers, infrastructure development and R&D in this area. After extensive deliberations, a Scheme called Faster Adoption and Manufacturing of Electric Vehicles (FAME) has been evolved under the guidance of the Mission Plan and has been launched w.e.f. from 1st April 2015.
Question 23: Could the Government of India share the results of this plan to date, given its proximity to the period that the plan covers? And what is the outlook for this plan after 2016?

Reply: The Automotive Mission Plan has resulted in the following major initiatives taken by Government to support the Automotive industry development:-

a.NATRIP project

b.Setting up of the Automotive Skills Development Council in partnership with Ministry of Heavy Industry for skilling people employed in the entire automotive value chain ranging from component manufacture to vehicle assembly, sales and marketing, servicing, finance, insurance, etc.

c.Introducing of the FAME Scheme to enable faster adoption of electric and hybrid vehicles on a pan-India level.

4.3 Manufactures
Question 24: Could the Government of India explain the reasons for the Secretariat report which is prepared from information provided by national authorities, does not include information regarding policies and measures and economic and trade performance one of the most important sectors of India, namely, the producers of "chemical and pharmaceutical" products?
Reply: Secretariat would be in better position to reply to this question because sectors to be covered under this section of the report were selected by the WTO secretariat.

Costa Rica

TRADE IN SERVICES

Report by the Secretariat

Page 123 (paragraph 4.109)
4.109. Development and maintenance of rural fixed-line and mobile telecom and broadband services are subsidized to allow affordable prices for customers. All service-providers, except providers of value-added services (e.g. internet, voice-mail, and e-mail services), are subject to a universal service levy of 5% of adjusted gross revenue. Funds from the Universal Service Obligation Fund (USOF) are allocated to "eligible operators" from the public and the private sectors, through a bidding process, for telecom and broadband infrastructure development projects in rural areas (e.g. provisions of village public telephones, household telephones, and infrastructure for mobile and broadband services). In 2012, the Government amended the Indian Telegraph Rules 1951 to provide funds from the USOF to create a national optical fibre network (NOFN) to extend broadband connectivity to all villages.
Question 1: Can India please provide further information on the impact of policies adopted by the Universal Service Obligation Fund (USOF)? Which public institution manages this fund? Which transparency criteria applies in order to define "eligible operators"?
Reply: Universal Service Obligation Fund (USOF) was established w.e.f. 01.04.2002 under the Indian Telegraph (Amendment) Act 2003 (further amended in 2006), to provide financial support for the provision of telecom services in commercially unviable rural and remote areas of the country.
USOF is headed by the Administrator USO Fund, appointed by the Central Government, for the administration of the Fund. It is an attached office of the Department of Telecom, Ministry of Communications and Information Technology.
Page 129 (paragraph 4.145)
4.145. The regulatory framework concerning the provision of legal services in India has remained largely unchanged over the past decade. The Advocates Act, 1961 and the Bar Council of India Rules, 1975 regulate the legal services sector. The sector is administered by the Ministry of Law and Justice. The legal profession is regulated by the Bar Council of India (BCI) (the final regulating body), and state bar councils. The bar councils set the standards for legal qualifications, validate foreign-obtained degrees, and set standards for professional conduct and etiquette. They also admit advocates on their rolls (thus allowing them to appear in court). FDI is not permitted in the legal services sector. Foreign law firms are not permitted to open offices in India and are prohibited from giving legal advice. Legal services can be provided only by natural persons who are citizens of India, and who are on the advocates roll in the State where the service is being provided. The service provider can either be a sole proprietorship or a partnership firm consisting of persons similarly qualified to practice law. To be eligible for enrolment as an advocate, a candidate must be a citizen of India or a country that allows Indian nationals to practice on a reciprocal basis; hold a degree in law from an institution/university recognized by the BCI; and be at least 21 years of age.
Questions 2: According to paragraph 4.145, providing legal services requires citizenship and the enrolment as an advocate requires either being citizen of India or of a country that allows Indian nationals to practice on a reciprocal basis. Can India please explain if there is a difference between the provision of legal services and the enrolment as an advocate or if both citizens of India and citizens of a country that allows Indian nationals to practice on a reciprocal basis have the same treatment?
Reply: As per the Indian Advocates Act, 1961, in order to be eligible for enrolment as an advocate, amongst other things, a candidate has to be a citizen of the country or a country which allows Indian nationals to practice as per the reciprocity treatment. There is no difference so far field of practice is concerned between a citizen of India and citizens of a country that allows Indian nationals to practice on a reciprocal basis.

Question 3: Does the restriction that applies to domestic legal services also apply in the case of practitioners of international law, advice on foreign law and international arbitration? If so, does India have any plans of reforming its system to allow foreign suppliers to provide such services of an international nature?
Reply: The matter regarding opening up of legal services in India to foreign lawyers/law firms, including practice in litigious as well as non-litigious matters in various fields of law is currently under consideration. Any decision in this regard will be taken by the Government of India in consultation with the Regulator, the Bar Council of India, and other stakeholders.
INVESTMENT
Report by the Secretariat

Page 30 (paragraph 2.3.3)
2.27. India has signed bilateral investment treaties with 83 countries. Double tax avoidance agreements have been signed with 71 countries.
Question 4: Can India please provide further details on how the new model BIT launched this year and the one that is currently being discussed will affect India´s existing BITs? Does India expect to renegotiate these instruments?
Reply: The Draft Indian Model Bilateral Investment Treaty (BIT) is awaiting the approval of the Competent Authority. Once the model BIT text is approved, BITs would be negotiated on the basis of this model.
INTELLECTUAL PROPERTY
Report by the Secretariat

Page 88 (paragraph 3.223.)
3.223. In June 2013, the Office of the Controller General of Patents Designs and Trademarks issued draft Guidelines for the Examination of Computer-Related Inventions.178 The law in Section 3(k) states that computer programs per se cannot be patented. These guidelines indicate that computer programs loaded on a general-purpose known computer or related devices cannot be held patentable. These guidelines go on to state that for considering the patentability of computer programs in combination with hardware features, the hardware portion has to be something more than a general-purpose machine.
Question 5: Can India please provide further information on how are the IPR of computer programs protected and whether the Guidelines are publicly available?
Reply: Under Section 3(k) of the Indian Patent Act, a computer programme per se is not patentable. The Guidelines for this purpose are under consideration.
Page 93 (paragraph 3.246)
3.246. 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 6: Can India please provide further information on the mandatory registration of copyright societies and the provisions enacted to improve transparency in the functioning of such societies?
Reply: The process to register the copyright societies by the Central Government is provided in detail vide Rule 44 to 49 under chapter XI of the Copyright Rules, 2013. A few no of applications have been received by the Central Government through the Registrar of Copyrights for registration of Copyright Societies after enactment of the amended Act. However, two societies are registered – (i) Indian Singers Right Association (ISRA), (ii) Indian Reprographic Rights Organization (IRRO). Normally, 60 day time period is required to take a final decision on such applications.

Dominican Republic

Document WT/TPR/S/313

A) Page 9, Para 10
10. India has continued to streamline customs procedures and implement trade-facilitation measures. With a view to facilitating trade, India adopted the use of self-assessment in its customs procedures in 2011, and around 97.6% of India's imports were processed via the risk management system. Despite the implementation of these measures, India's import regime remains complex, especially its licensing and permit system, and its tariff structure, which has multiple exemptions, with rates varying according to product, user or specific export promotion programme.
Question 1: What other measures are being considered to further simplify the import regime?
Reply: Indian Customs has extended 24x7 Customs Clearance Facility for specified imports and export to 18 sea ports covering all major sea ports. Similarly the facility has been extended to 17 air cargo complexes for specified imports and all exports. "Single Window Customs Clearance" by integration other regulatory agencies / Departments with Customs is also under implementation. Furthermore, to dispense with physical documents and its submission to Customs, adoption of digital signature in phases have been commenced. This will enable paperless trade and will reduce compliance cost considerably. Indian Customs has also reduced significantly the number of mandatory documents for general import and export to three each. . Further a mechanism has been put in place in form of high-level administrative body i.e. "Customs Clearance Facilitation Committee" (CCFC) at each seaport and airport with the responsibility of ensuring expeditious Customs clearance of imported and export goods. The Committee include senior functionaries of other regularity agencies/departments such as FSSAI, Plant Quarantine, Animal Quarantine, Drug Controller of India etc. The CCFC is mandated to meet regularly to remedy constraints impacting clearance of imported and export goods. A Central CCFC has also been set up to oversee expeditious clearance of import and export goods.
B) Page 59, Para 3.22:
3.22. The simple average applied MFN tariff in 2014-15 is 13%, up from 12% at the time of the last Review (2010-11). The overall increase is mainly due to a rise in tariffs in agriculture (WTO definition), whose overall average at 36.4% remains considerably higher than the average for non agricultural products (9.5%). The increase in the average tariff for agriculture is mainly due to an increase in tariffs for cereals and preparations thereof (from 30.4% in 2010-11 to 40.9% in 2014 15), oilseeds and fats (from 18.5% to 33.2%), and sugars and confectionary (from 33.4% to 41%). Above average tariff protection is also found in a number of other products such as beverages, spirits and tobacco (77.5%), and coffee and tea (74.8%). The average MFN tariff for non-agricultural products also rose from 8.9% to 9.5%, primarily due to increased tariffs on transport equipment from 21.5% to 32.1%. Average tariffs also rose for minerals and metals, chemicals, textiles, leather and rubber and electric machinery (Table 3.4).
Question 2: Are downward variations in these tariffs expected in the short term for agricultural and non-agricultural products?
Reply: Changes in import tariffs are done keeping in view interest of consumer and domestic industry. It may not be possible to discuss the reasons for specific changes.
Question 3: Could you provide explanations if these increases could be extended?
Reply: Changes in import tariffs are done keeping in view interest of consumer and domestic industry. It may not be possible to discuss the reasons for specific changes.
Question 4:- Have these increases been a response to the global crisis? that is,? Or were they purely for reasons of trade balance or as a response to protectionist policy?
Reply: The tariff rate of cereals was increased as a response to the price volatility in the domestic market and as a measure of balancing the interests of consumers and domestic famers.

Ecuador

(Originally in Spanish)

Question 1: In accordance with page 37, paragraphs 3.11 and 3.12, "the Central Board of Excise and Customs is authorized by notification in the Gazette of India to fix reference prices ("tariff values") for any type of imported (exported) goods, in accordance with Section 14(2) of the Customs Act 1962".
Could India inform us how are reference prices (tariff values) fixed, for products imported or exported? Which variables are used for this purpose?
Reply: Tariff values have been notified for certain goods that are prone to undervaluation. Tariff values are fixed on the basis of prevailing international prices of these goods as observed from various reputed journals and other publications. These values are floating values and are frequently reviewed and revised
Question 2: In paragraph 3.11 states that "Under the Act, it is stipulated that determination of value of imports should be based on the transaction value, which is defined as the price actually paid or payable for the goods when sold for export to India, including any amount paid or payable for costs and services (e.g. commissions and brokerage, royalties and licence fees, transport and insurance costs, and handling charges)".
What influences these reference prices at the time of the appraisal by customs of the imported product (determination of the value)? What price is used for determining of the customs value?
Reply: There are no extraneous factors that influence the determination of the transaction value of a commodity. Factors like commissions and brokerage, royalties and licence fees, transport and insurance costs, and handling charges that form a part of transaction value alone are included, in accordance with the GATT 1994. As far as reference prices are concerned, these are also published and available in public domain.
Question 3: In accordance with page 45, paragraph 3.27. The AD and SAD continue to be applied to imports in lieu of excise (CENVAT) and local state taxes respectively. The AD, which was introduced in 1975 to offset domestic excise taxes, is currently charged at the general rate of 12.5%, raised from 10% at the time of previous Review. Like the tariff, the CENVAT rates are also changed from time to time through notifications issued by the Government. The SAD is applied at a general rate of 4% which applies to almost the whole tariff (around 90%)… These charges vary from State to State and from product to product, but since the SAD is charged on imports at a flat rate of 4% it may not always be equivalent to these charges…"
Could explain India how application of an additional duty and a special additional duty on imports, are perceived with the objective to offset taxes on domestic consumption, are in accordance with the provisions of national treatment in the case of domestic products similar, competing and substitutes?
Question 4: In accordance with page 46, paragraphs 3.28 and 3.29: "The addition of these duties and charges to the applied tariff raises the actual duty paid by the importer significantly above the effective applied tariff rate…. Nevertheless, the authorities note that the final burden of duties borne by imported goods is considerably reduced if imported for further manufacture or provision of services. This is because the credit of these additional duties and charges is available to be set-off against domestic taxes such as Central Excise Duty and Service Tax under the CENVAT Credit Rules.
Could India inform whether, when they are similar products, does the imposition of these duties and charges, comply with the provisions of the Article I and II of GATT 1947 (issues of taxes and national treatment) because the initial applied tariff increases due to duties described in paragraph 3.28?
Reply to Q.3 & 4: Additional Duty of Customs (CVD) is levied at a rate equivalent to the rate of excise duty charged on the domestic production of a similar item. Similarly, Special Additional Duty (SAD) is charged on imported goods in lieu of sales tax/value added tax charged on the domestic sale of goods. Thus these taxes are levied on imports in lieu of internal taxes and other internal charges applied to like domestic products as permitted under GATT Article III.2.
Both these taxes are in the nature of countervailing/equalizing taxes and thus would apply to imported goods so as to provide a level playing field for domestic industry. Moreover, the credit of these additional duties is available to be set-off against domestic taxes such as Central Excise Duty and Service Tax under the CENVAT Credit Rules. Likewise, a full refund of the SAD can be claimed by an importer once the imported goods are sold in the domestic market on payment of State VAT.
Chapter 5: In accordance with the page 48, paragraph 3.33, in reference to the imports of certain products under tariff quotas, "Imports by these importers may only take place on behalf of actual users and must be cleared by customs before 31 March of each financial year." Which is the mechanism, or under which criteria, the state trading enterprises are authorized to realize/undertake the imports, assign the quotas to the effective users?
Reply: Details of the procedure has been stated in paragraph 2.60 (Procedure for import under the Tariff Rate Quota Scheme) of the Handbook of Procedure, Vol 1 (2015-20). This is available in the public domain and can be seen at http://dgft.gov.in.
Question 6: .In accordance with page 54, paragraph 3.49: "Imports of certain goods such as cashew kernel (HS 08013210 and 08013230)35, areca nuts (HS 0802 80)), and marbles (HS 25151100 and 25151210 – from 20 November 2014)36 are subject to import restrictions depending on their import price (Table 3.9). These imports are restricted (i.e. subject to a licence) when the c.i.f. price is lower than the minimum import price."
Can India explain is it justified under the WTO provisions to have minimum import prices which would allow the import restrictions CBC when the price is lower than the minimum price of important? As is justified with the multilateral regulation does not maintain restrictions on imports?
What requirements, regulatory and administrative, must be met to obtain a license? After the granting of the license, enabling the imports what if the CIF is still less than the minimum import price?