RESTRICTED  
  
S/C/W/ 454 
 
2 October 2023 
(23-6590) Page: 1/3 
Council for Trade in Services  Original: English  
 
COMMUN ICATION FROM INDIA  
REVIEW OF ARTICLE II (MFN) EXEMPTIONS  
Written answers provided by India to the questions from Hong Kong, China  
and Switzerland (S/C/W/431 ) 
The following communication  dated 29 September 2023, from the delegation of India is being 
circulated to th e Members of the Council for Trade in Services.  
 
_______________  
 
 
1  QUESTION 58 FROM HONG KONG, CHINA (S/C/W/431 , PAGE 8)  
In the third review in 2010/2011, India acknowledged that policy reforms in the telecommunication 
sector was an ongoing process, and it was examining the possibility of relaxing the exemption in 
this sector. Please give an update of the review and advise whether the conditions which created 
the need for the exemptions still prevail.  
 
Answer from India:  
Telecom sector is evolving very fast and India is framing supportive policies to promote growth of 
the sector. India is open to consider relaxing the exemptions in the sector subject to the result of 
the DDA negotiations at an appropriate time.  
 
2  QUESTION 128 FROM HONG KONG, CHINA ( S/C/W/431 , PAGE 15) 
In the last review, India indicated that the waiver on the prohi bition of the sale of lottery tickets by 
Bhutan had been listed as part of a comprehensive bilateral agreement between India and Bhutan. 
Please explain why this exemption is necessary despite the exception provided by GATS Article V.  
 
Answer from India:  
An Agreement on Trade and Commerce between India and Bhutan was first signed in 1972. Since 
then, the Agreement has been renewed/revised five times, including the agreement signed in 2016.  
 
The waiver on the prohibition of the sale of lottery tickets by Bhut an in India has been permitted as 
per the Protocol to the India -Bhutan Agreement on Trade, Commerce and Transit, which was signed 
most recently in 2016. The agreement is valid for a period of ten years, i.e. till 2026. Hence, it is 
still valid.  
 
As Articl e V of GATS imposes certain conditions, the waiver on the prohibition of the sale of lottery 
tickets by Bhutan is continued as MFN exemption in India’s Schedule of Commitments.  
 
The Government of India continues to engage proactively with Bhutan to strengt hen trade and 
economic relations.  S/C/W/ 454 
 
- 2 - 
 
  3  QUESTION 138 FROM HONG KONG, CHINA ( S/C/W/431 , PAGE 16) 
In the last review, India indicated that it did not have cargo -sharing agreements with any country. 
Is there any update since the last review? If not, does it mean that the conditions which created the 
need for such exemption is no longer prevail.  
 
Answer from India:  
India does not have cargo sharing agreement with any country as of now. However, it does not rule 
out the possibility and requirement of having any such agreement in future. Hence, India would like 
to continue with this  measure.  
 
4  QUESTION 139 FROM SWITZERLAND ( S/C/W/431 , PAGE 16) 
India has inscribed an exemption for bilateral shipping with a few trading partners. Could you 
indicat e the specific legal bases for these bilateral shipping arrangements? Have the equality targets 
in terms of liftings and revenues been reached? In this connection, is this exemption still required 
in order to fulfill the underlying policy objectives?  
 
Answ er from India:  
The MFN exemption pertains to equality in freight liftings originating in the ports of partners to the 
agreement and equality in freight earnings.  
 
As a sovereign power, Government of India is free to sign bilateral shipping arrangements with any 
country. India has taken this exemption measure so as not to violate GATS Article II obligation. 
Equality in freight liftings and equality in freight earnings are dynamic in nature and to be decided 
in the context of overall trade rel ations. Therefore, it may not be appropriate to assess whether the 
equality targets in terms of liftings and revenues have been reached or not in the context of this 
exemption. Hence, this exemption is still required.  
  
5  QUESTION FROM HONG KONG, CHINA ON AL L MEMBER’S MFN EXEMPTIONS 
(QUESTION  1, S/C/W/431 , PAGE 2)  
Please indicate whether the exemption has been used for any  actual measure since the previous 
review in 2016/17, and if so provide information on the use. If the exemption has not been used, 
please explain why the conditions which created the need for the exemption still prevail, and describe 
whether any action ha s been taken or is being contemplated to eliminate such exemption. Please 
explain why if not.  
 
Answer from India:  
India maintains 6 MFN exemptions , two each in Telecommunication and Maritime transport 
services and 1 each in A udio-visual sector  and Recreati onal Services .  
 
Telecommunication services -  India has listed two exemptions in the telecommunications, one 
related to bilateral agreements between Videsh Sanchar Nigam Limited and various foreign operators  
and other related to bilateral agreements  betwe en Government of India with Government of 
neighbouring countries. Telecom sector is evolving very fast and India is framing supportive policies 
to promote growth of the sector. India is open to consider relaxing the exemptions in the sector 
subject to the result of the DDA negotiations at an appropriate time.  
 S/C/W/ 454 
 
- 3 - 
 
  Maritime transport services - India has listed two exemptions in the shipping sector, one related 
to cargo sharing between bilateral partners and the second one to cargo reservation. India does not 
have cargo -sharing agreements with any country. However, it does not rule out the possibility and 
requirement of having any such agreement in future. Hence, India would like to continue with thi s 
exemption . 
 
Audio -visual services -  India currently ha s audio -visual co -production agreements  with the UK, 
Spain, Poland, New Zealand, Italy, Germany, France, China, Canada , Brazil, Republic of Korea and 
since 2016/17 with Bangladesh (April 2017), Israel (2018), Russia (Sept 2019) , Portugal (Feb 2020)  
and Aust ralia (March 2023).  
These audio -visual co -production agreements had been signed with the objective of contributing to 
the development of the film industry and the intensification of cultural and economic exchange 
between the Parties.  India would like to co ntinue with thi s exemption . 
 
Recreational services - The waiver on the prohibition of the sale of lottery tickets by Bhutan in 
India has been permitted as per the Protocol to the India -Bhutan Agreement on Trade, Commerce 
and Transit, which was signed most r ecently in 2016. The agreement is valid for a period of ten 
years, i.e. till 2026. Hence, it is still valid. India would like to continue with thi s exemption.  
 
__________