WT/TPR/ S/403/Rev.1  
16 March 2021  
(21-2080) Page: 1/175 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRETARIAT  
INDIA 
Revision  
This report, prepared for the seventh Trade Policy Review of India, has been drawn up by the WTO 
Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing 
the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World 
Trade Organization), sought clarification from India on its trade policies and practices.  
 
Any technical questions arising from this report may be addressed to Ms Eugenia Lizano (tel.: 022 
739 6578), Ms Rohini Acharya (tel.: 022 739 5874), Ms Stéphanie Dorange -Patoret (tel.: 022 739 
5497).  
 
Document WT/TPR/G/403 contains the policy statement submitted by India.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report was drafted in English.   WT/TPR/S/ 403/Rev.1  • India  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  8 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  14 
1.1   Main Features of the Economy  ................................ ................................ ..................... 14 
1.2   Recent Economic Developments  ................................ ................................ ................... 14 
1.3   Fiscal Policy  ................................ ................................ ................................ ............... 20 
1.4   Monetary and exchange rate policy  ................................ ................................ ............... 23 
1.5   Balance of payments  ................................ ................................ ................................ ...24 
1.6   Developments in Trade and Investment  ................................ ................................ ........ 26 
1.6.1    Trends and patterns in merchandise and services trade  ................................ ................ 26 
 Merchandise trade  ................................ ................................ ................................ .26 
 Services trade  ................................ ................................ ................................ ......28 
1.6.2    Trends and patterns in FDI  ................................ ................................ ....................... 29 
2   TRADE AND INVESTMENT REGIMES ................................ ................................ ...........  31 
2.1   General Framework  ................................ ................................ ................................ ....31 
2.2   Trade Policy Formulation and Objectives  ................................ ................................ ........ 32 
2.2.1    Trade policy formulation  ................................ ................................ ........................... 32 
2.2.2    Trade policy objectives  ................................ ................................ ............................. 34 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 35 
2.3.1    WTO ................................ ................................ ................................ ...................... 35 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 37 
 Regional trade agreements  ................................ ................................ .................... 37 
 Preferential trade agreements  ................................ ................................ ................ 38 
2.3.3    Other agreements and arrangements  ................................ ................................ ......... 38 
2.4   Investment Regime  ................................ ................................ ................................ ....38 
2.4.1    Legal framework  ................................ ................................ ................................ ......38 
2.4.1.1    Compulsory industrial licensing  ................................ ................................ ............... 39 
2.4.2    Foreign investment  ................................ ................................ ................................ ..40 
 Policy framework  ................................ ................................ ................................ ..40 
2.4.3    Investment incentives  ................................ ................................ .............................. 41 
3   TRADE POLICIES AND PRACTICES BY MEASURE  ................................ ........................  43 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 43 
3.1.1    Customs procedures, valuation, and requirements  ................................ ....................... 43 
3.1.2    Rules of origin  ................................ ................................ ................................ ......... 47 
3.1.3    Tariffs  ................................ ................................ ................................ .................... 47 
 Applied tariffs  ................................ ................................ ................................ .......47 
 Bound tariffs  ................................ ................................ ................................ ........ 49 
 Tariff rate quota (TRQ)  ................................ ................................ .......................... 49 
 Tariff concessions  ................................ ................................ ................................ .50 
 Tariff preferences  ................................ ................................ ................................ ..51 WT/TPR/S/ 403/Rev.1  • India  
 
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  3.1.4    Other charges affecting imports  ................................ ................................ ................. 52 
3.1.5    Import prohibitions, restrictions, and licensing  ................................ ............................ 55 
3.1.5.1    Import prohibitions  ................................ ................................ ............................... 55 
 Import licensing and restrictions  ................................ ................................ ............. 59 
3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 61 
 Anti-dumping measures  ................................ ................................ ......................... 61 
 Countervailing measures  ................................ ................................ ........................ 66 
 Safeguard measures  ................................ ................................ ............................. 68 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 70 
3.2.1    Customs procedures and requirements  ................................ ................................ .......70 
3.2.2    Taxes, charges, and levies  ................................ ................................ ........................ 71 
3.2.3    Minimum export prices  ................................ ................................ ............................. 72 
3.2.4    Export prohibitions, restrictions, and licensing  ................................ ............................. 72 
3.2.5    Export support and promotion  ................................ ................................ ................... 73 
3.2.5.1    Export from India Scheme (EIS)  ................................ ................................ ............. 73 
 Duty exemption/remission schemes  ................................ ................................ ........ 75 
 Export zones and other schemes  ................................ ................................ ............. 78 
 Transport and marketing assistance  ................................ ................................ ........ 78 
3.2.6    Export finance, insurance, and guarantees  ................................ ................................ ..79 
3.3   Measures Affecting Production and Trade  ................................ ................................ .......81 
3.3.1    Incentives  ................................ ................................ ................................ ............... 81 
3.3.2    Standa rds and other technical requirements  ................................ ............................... 83 
3.3.3    Sanitary and phytosanitary requirements  ................................ ................................ ....86 
3.3.4    Competition policy and price controls  ................................ ................................ ......... 91 
 Competition policy  ................................ ................................ ................................ 91 
 Price control  ................................ ................................ ................................ ......... 95 
3.3.5    State trading, state -owned enterprises, and privatization  ................................ ............. 97 
 State trading  ................................ ................................ ................................ ........ 97 
 SOEs and privatization  ................................ ................................ ........................... 99 
3.3.6    Government procurement  ................................ ................................ .......................  100 
3.3.7    Intellectual property rights  ................................ ................................ ......................  105 
 National IPR Policy 2016  ................................ ................................ ......................  105 
 Changes to the IPR institutional and legal frameworks  ................................ .............  106 
 Main features of the IPR regime over the review period  ................................ ...........  108 
 Trends in IPRs  ................................ ................................ ................................ .... 110 
 IPR enforcement  ................................ ................................ ................................ . 111 
4   TRADE POLICIES BY SECTOR  ................................ ................................ ...................  114  
4.1   Agriculture  ................................ ................................ ................................ ...............  114 
4.1.1    Measures affecting imports  ................................ ................................ .....................  116 
4.1.2    Measures affecting exports  ................................ ................................ .....................  117 WT/TPR/S/ 403/Rev.1  • India  
 
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  4.1.3    Measures affecting production  ................................ ................................ .................  118 
4.1.3.1    Input support  ................................ ................................ ................................ ..... 118 
 Support prices  ................................ ................................ ................................ .... 119 
 Procurement and public distribution  ................................ ................................ ...... 123 
4.1.4    Other measures  ................................ ................................ ................................ ..... 125 
4.2   Energy ................................ ................................ ................................ ....................  129 
4.3   Manufacturing  ................................ ................................ ................................ ..........  134 
4.4   Services  ................................ ................................ ................................ ..................  136 
4.4.1    Financial services  ................................ ................................ ................................ ... 136 
 Banking  ................................ ................................ ................................ .............  136 
 Insurance  ................................ ................................ ................................ ..........  141 
4.4.2    Telecommunications  ................................ ................................ ...............................  142 
4.4.3    Transport  ................................ ................................ ................................ ..............  148 
4.4.3.1    Air transport  ................................ ................................ ................................ ....... 150 
 Maritime transport  ................................ ................................ ..............................  153 
4.4.4    Tourism  ................................ ................................ ................................ ................  156 
5   APPENDIX TAB LES ................................ ................................ ................................ .. 159  
 
CHARTS  
 
Chart 1.1 Product composition of merchandise trade, by main HS section, 2014/15  
and 2019/20  ................................ ................................ ................................ ..................... 27 
Chart 1.2 Direction of merchandise trade, 2014/15 and 2019/20  ................................ ............. 28 
Chart 3.1 Distribution of MFN tariff rates  ................................ ................................ ............... 49 
Chart 3.2 Anti -dumping measures, 2015 -19 ................................ ................................ .......... 66 
Chart 3.3 EXIM Bank: loans by sector, 2014 -15 and 2018 -19, as at end -March  ......................... 80 
Chart 3.4 Procedure for the formulation of sta ndards, 2019  ................................ .................... 84 
Chart 3.5 Development of technical regulations by the DPIIT ................................ ................... 85 
Chart 4.1 Installed capacity, by energy source, 31 December 2015 and 30 June 2020  ..............  134 
Chart 4.2 Shares in the telecom market, March 2015 and August 2019  ................................ .. 146 
 
TABLES  
 
Table 1.1 Selected macroeconomic indicators, 2014 -20 ................................ .......................... 15 
Table 1.2 Basic economic indicators, 2014 -20 ................................ ................................ ........ 19 
Table 1.3 Central government tax revenue, 2014 -21 ................................ .............................. 22 
Table 1.4 Balance of payments 2014 -20 ................................ ................................ ............... 25 
Table 1.5 Trade in services 2014 -20 ................................ ................................ ..................... 29 
Table 1.6 FDI inflows/outflows, by main sector, 2014 -20 ................................ ........................ 30 
Table 1.7 FDI inflows/outflows, by main origin, 2014 -20 ................................ ......................... 30 
Table 2.1 Principal tr ade-related laws, 2020  ................................ ................................ .......... 33 WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 2.2 Notifications to the WTO, 1 January 2015 –30 June 2020  ................................ ........... 35 
Table 2.3 WTO dispute settlement cases involving India as respondent and complainant,  
January 2015 -August 2020  ................................ ................................ ................................ .36 
Table 2.4 Industries for which industrial licences are compulsory, 2020  ................................ ....39 
Table 2.5 Industries reserved for the public sector, 2020  ................................ ........................ 40 
Table 2.6 Sectors in which FDI is prohibited, 2020  ................................ ................................ .40 
Table 3.1 Goods subject to preshipment inspection  ................................ ................................ 45 
Table 3.2 Goods subject to tariff values, 2020  ................................ ................................ .......46 
Table 3.3 Tariff structure, 2014/15, 2019/20, 2020/21  ................................ ........................... 47 
Table 3.4 Products subject to tariff rate quotas, 2018-20 ................................ ........................ 50 
Table 3.5 Summary analysis of preferential tariffs, 2019/20  ................................ .................... 51 
Table 3.6 Taxes replaced by the GST  ................................ ................................ .................... 53 
Table 3.7 GST rate, 2020  ................................ ................................ ................................ ....54 
Table 3.8 Import prohibitions  ................................ ................................ .............................. 56 
Table 3.9 Imports subject to minimum import prices (MIPs), as at end -December 2019  ............. 57 
Table 3.10 Import quotas  ................................ ................................ ................................ ....60 
Table 3.11 Sunset reviews (SSRs), 2015 -20 ................................ ................................ .......... 64 
Table 3.12 Countervailing measures, January 2020  ................................ ................................ 68 
Table 3.13 Safeguard duties, 2015 -19 ................................ ................................ .................. 69 
Table 3.14 Export authorization  ................................ ................................ ........................... 70 
Table 3.15 Thresholds to obtain status holder  ................................ ................................ ........ 71 
Table 3.16 Export taxes, 2019 -20 (February 2020)  ................................ ................................ 71 
Table 3.17 Export Cess, 2020  ................................ ................................ .............................. 71 
Table 3.18 Minimum export prices (MEPs), 2015 -20 ................................ ............................... 72 
Table 3.19 Export restrictions by HS section, 2019 -20 ................................ ............................ 72 
Table 3.20 Items for which MEIS duty credit scrips cannot be  used ................................ .......... 74 
Table 3.21 Services eligible under the SEIS  ................................ ................................ ........... 75 
Table 3.22 Duty exemption/remission schemes, 2020  ................................ ............................ 76 
Table 3.23 Export Promotion Capital Goods (EPCG) Scheme, 2020  ................................ ........... 77 
Table 3.24 Products not eligible under the TMA Schem e, 2019  ................................ ................. 79 
Table 3.25 Explicit subsidies, 2015 -21 ................................ ................................ .................. 81 
Table 3.26 Scheme for Development of Pharmaceuticals Industry  ................................ ............ 83 
Table 3.27 Institutions in charge of SPS, 2019  ................................ ................................ .......87 
Table 3.28 Main legislation related to SPS matters  ................................ ................................ .87 
Table 3.29 Competent authorities  ................................ ................................ ........................ 91 
Table 3.30 Sector -specific exemptions to the Competition Act  ................................ ................. 92 
Table 3.31 Thresholds for the notification of combinations, 2016 -19 ................................ ......... 93 
Table 3.32 Main changes regarding filing a combination notice, 2015 -19................................ ...94 
Table 3.33 Competition data, 2014/15 -2018/19 ................................ ................................ .....95 
Table 3.34 Crops subject to minimum support prices, 2019/20  ................................ ................ 95 
Table 3.35 Changes to the Price Support Scheme (PSS) over the review period  ......................... 96 WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.36 Imports subject to state trading, 2015 –20 ................................ ............................ 98 
Table 3.37 Exports subject to stat e trading, 2015/16 –19/20  ................................ ................... 99 
Table 3.38 Provisions related to government procurement at the central level, 2015 -20 ...........  101 
Table 3.39 Methods for the procurement of goods, 2019  ................................ .......................  102 
Table 3.40 Methods for the procurement of services, 2019  ................................ ....................  103 
Table 3.41 Procure ment of commonly used goods/services on e -GeM, 2019  ............................  103 
Table 3.42 Implementation of the NIPR Policy, 2016 -20 ................................ ........................  105 
Table 3.43 Changes to the IPR institutional framework, 2015 -19 ................................ ...........  106 
Table 3.44 Changes to the IPR legislation, 2015 -19 (November 2019)  ................................ .... 106 
Table 3.45 Accession to WIPO treaties, 2015 -19 ................................ ................................ .. 108 
Table 3.46 Highlights of the Patents (Amendment)  Rules, 2016, and the Trade Marks  
Rules, 2017  ................................ ................................ ................................ .....................  108 
Table 4.1 Agriculture, selected indicators, 2013 -19 ................................ ..............................  114 
Table 4.2 Bodies responsible for formulating and implementing agricultural policy  ...................  115 
Table 4.3 Minimum support prices, 2014 –20 ................................ ................................ ....... 120 
Table 4.4 Credit -related subsidies/other assistance schemes, 2019 -20 ................................ ... 126 
Table 4.5 Measures to increase fish production and exports ................................ ...................  128 
Table 4.6 Consumption of electricity, 2014/15 -2018/19  ................................ ........................  129 
Table 4.7 Composition of the electricity sector, 2019  ................................ ............................  130 
Table 4.8 Se lected Central Government incentive schemes to distribution companies  ...............  132 
Table 4.9 Financing of electricity projects by non-banking financial companies .........................  133 
Table 4.10 Selected incentive schemes provided by the Ministry of Natural and  
Renewable Energies  ................................ ................................ ................................ .........  134 
Table 4.11 Trends in the banking sector's gross loans and deposits, and prudential  
indicators, 2015 -20 (as at 31 March)  ................................ ................................ ..................  136 
Table 4.12 Priority sector lending requirement  ................................ ................................ ..... 138 
Table 4.13 Insurance and reinsurance market, October 2019  ................................ ................  141 
Table 4.14 Selected telecom indicators, 2015 -19 ................................ ................................ . 143 
Table 4.15 Services covered by the unified licence  (per service area)  ................................ ..... 145 
Table 4.16 Selected mergers and acquisitions in the telecom sector, 2015 -19 .........................  147 
Table 4.17 Support for cost of transportation of goods, 2015 -19 ................................ ............  149 
Table 4.18 Changes to FDI policy in air transport services, 2015 and 2020 ..............................  151 
Table 4.19 Selected international air traffic indicators, 2014/15 -2019/20  ................................  152 
Table 4.20 Cabotage relaxation  ................................ ................................ .........................  154 
Table 4.21 Central Government financial assistance under  the SagarMala Programme  ..............  155 
Table 4.22 Selected indicators of ports, 2014/15 -2018/19  ................................ ....................  156 
Table 4.23 Selected tourism indicators, 2015 -19 ................................ ................................ .. 157 
Table 4.24 Selected Central Government incentive schemes in tourism, 2019  ..........................  158 
 WT/TPR/S/ 403/Rev.1  • India  
 
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  BOXES  
 
Box 1.1 The Atmanirbhar Bharat Abhiyan  programme  ................................ ............................ 17 
Box 1.2 FRBM Review Committee Report: key recommendations  ................................ ............. 21 
Box 3.1 Stages of the investigation process, 2020 ................................ ................................ ..62 
Box 3.2 Procedures to award contracts under the Public Procurement  
(Preference to Make in India) Order, 2017  ................................ ................................ ..........  105 
Box 4.1 Support programmes for sugar  ................................ ................................ ..............  122 
Box 4.2 Policy objectives in the electricity sector  ................................ ................................ .. 130 
Box 4.3 National Digital Communications Policy (NDCP 2018)  ................................ ................  144 
 
APPENDIX TABLES  
 
Table A1.1 Merchandise exports, by HS sections and major HS chapters/subheadings,  
2014-20 ................................ ................................ ................................ .........................  159 
Table A1.2 Merchandise imports by HS s ection and major HS chapter/subheading,  
2014-20 ................................ ................................ ................................ .........................  160 
Table A1.3 Merchandise exports by destination, 2014 -20 ................................ ......................  161 
Table A1.4 Merchandise imports, by origin, 2014 -20 ................................ ............................  162 
 
 
Table A2.1 Sectors in which FDI is restricted, April 2020  ................................ .......................  163 
 
 
Table A3.1 Tariff summary, 2019/20  ................................ ................................ ..................  167 
Table A3.2 India's tariff summary, 2020/21 ................................ ................................ .........  168 
Table A3.3 Subsidies notified to the WTO, 2015 –19 ................................ ..............................  169 
Table A3.4 Selected disinvestment, 2014/15 -2019/20  ................................ ..........................  173 
Table A3.5 Overview of the IPR regime, 2019  ................................ ................................ ...... 175 
 
  WT/TPR/S/ 403/Rev.1  • India  
 
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  SUMMARY  
1. India's economic growth continued to be strong for most of the period under review, averaging 
7.4% until 2018/19. A number of reforms were implemented, including the introduction  of the Goods 
and Services Tax (GST) to harmonize the indirect tax system; the Insolvency and Bankruptcy Code 
to address the problem of debt in the corporate sector; banking reforms to improve supervision of 
banks and non -banking financial companies; and, most recently, legislation to improve marketing 
and reduce regulation of agricultural products. Trade policy remained broadly unchanged during the 
period under review.  
2. Since the first half of 2019, growth has been weaker, mainly due to lower consumption an d 
investment, particularly private investment, with gross fixed capital formation growing by only 1% 
in fiscal year 2019/20. Recent cuts in the base corporate rate of tax, from 36% to 22%, and in 
personal income tax, were announced to boost investment and consumer spending. The authorities 
estimated that real GDP grew at around 5.1% during April -December 2019 but more recent 
estimates point to lower growth. The Government responded to the COVID -19 pandemic by 
announcing a number of short - and longer -term me asures targeting certain sectors of the economy, 
as well as the rural and urban poor. With lower inflationary pressure due to lower international 
commodity prices and the impact of the pandemic, monetary policy was also accommodative during 
the period.  
3. Strong economic growth also led to an improvement in socio -economic indicators, such as 
per-capita income and life expectancy. Economic inclusion policies were also enacted to ensure less 
rural distress, including through an increase in minimum support prices  for agricultural products and 
the direct transfer of subsidies to farmers. The National Food Security Act aims furthermore to 
provide subsidized food to a large percentage of the rural and urban population. However, given 
India's continued need for better  infrastructure, subsidies will need to be reduced and better 
targeted, to free up resources for investment.  
4. Services remained the most robust sector during the period, growing at over 8% between 
2014/15 and 2018/19. Agriculture, which is largely dependent  on rainfall, also performed relatively 
well. However, manufacturing growth, except for certain industries, remained weak. Unemployment 
increased from an estimated 3.7% in 2015/16 to 6.1% in 2016/17, the latest year for which 
estimates are available, with urban unemployment higher than rural unemployment.  
5. India's fiscal policy is framed within the Fiscal Responsibility and Management Act, 2003, which 
requires the budget deficit to be reduced to 3% of GDP by 31 March 2021, and general government 
debt to 60% of GDP by 2024/25. Although the fiscal deficit declined between 2014/15 and 2018/19, 
it overshot the target in 2019/20, mainly due to weaker -than-expected tax revenues. The 
introduction of the GST is expected to broaden the tax base, improve revenue collec tion, and reduce 
tax evasion. The deficits of state governments are also likely to be helped by rising state GST 
revenue, although there are downside risks, with almost half of the states budgeting above the 
required 3% threshold for 2019/20.  
6. The current a ccount deficit narrowed for much of the period under review. The services 
balance remained in surplus, while the deficit in merchandise trade narrowed, especially in 2019/20 
as imports declined more rapidly than exports. The current account deficit continu es to be financed 
by both foreign direct and portfolio investment which grew during the period under review, although 
portfolio investment has been volatile. The EU -28 and the United States remain India's main export 
markets, while most imports originate i n China. Major exports and imports remain largely 
unchanged.  
7. India is an original Member of the WTO and provides MFN treatment to all but one Member. 
India also ratified the Trade Facilitation Agreement (TFA) on 22 April 2016. It is a party to the WTO 
Information Technology Agreement (ITA), but not the expanded ITA. India is an observer to the 
WTO Agreement on Government Procurement (GPA). During the review period, India made a 
number of notifications to the WTO.  
8. There have been no major changes regarding/t o the formulation and implementation of trade 
policies since the last Review. Trade policy objectives are set out in the Foreign Trade Policy (FTP), 
which is issued every five years and is revised from time to time. The FTP aims to increase India's WT/TPR/S/ 403/Rev.1  • India  
 
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  share o f global exports from 2.5% in 2015 to 3.5% in 2020. The export target is to be achieved 
through a number of incentives, such as the Merchandise Export from India and the Services Export 
from India Schemes. India also continues to make frequent changes to i ts trade policies and 
measures, through circulars and notifications, to address domestic concerns. India continued to 
liberalize its policies on FDI, further permitting FDI up to 100% without the need for prior 
government approval in an expanded list of ag ricultural activities; defence; broadcasting carriage 
services; telecommunications services and business -to-business electronic commerce; insurance 
intermediaries; and airports, other air services and non -scheduled air transport services.  
9. During the period  under review, India implemented several measures to facilitate trade, such 
as a reduction in the number of documents required, and the automation of the customs clearance 
system for imports and exports. Other trade -facilitation initiatives introduced sinc e 2015 include: 
the electronic interface, the Indian Customs Electronic Gateway (ICEGATE); the Single Window 
Interface for Facilitation of Trade (SWIFT); the new authorised economic operators (AEO) 
programme; the Direct Port Delivery and the Direct Port En try (DPE) facilities; and the increased 
use of the Risk Management System (RMS).  
10. Trade policy remained largely unchanged since the previous Review. India continues to rely 
on trade policy instruments such as the tariff, export taxes, minimum import prices,  import and 
export restrictions, and licensing. These are used to, inter alia, manage domestic demand and supply 
requirements, protect the economy from wide domestic price fluctuations, and ensure conservation 
and proper utilization of natural resources. A s a result, frequent changes are made to tariff rates 
and other trade policy instruments, which creates uncertainty for traders.  
11. The basic tariff structure remains unchanged since 2015. However, following the adoption of 
the GST in 2017, the additional du ties and special additional duties previously added to the basic 
tariff were removed. The introduction of the GST has been a major change regarding other duties 
and charges affecting imports. The GST, which replaced several taxes, applies to both domestic and 
imported goods. The 10% social welfare charge, which applies only to imports, remains in place.  
12. India uses both ad valorem  and non -ad valorem  tariff rates; in 2020/21, 93.9% of all tariff 
lines are subject to ad valorem  rates. There are 725 tariff lin es (6.1% of the total) subject to non -
ad valorem rates; of these, 4 are subject to specific rates, and 721 (697 in 2015) have mixed duties 
(ad valorem  and/or a specific duty component). Mixed duties continue to apply to textiles and 
clothing (714 tariff li nes) and natural rubber products (7 lines).  
13. The simple average applied MFN tariff increased from 13% in 2014/15 to 14.3% in 2020/21, 
and to 15.4% if ad valorem  equivalents (AVEs) are considered. The increase in the average tariff 
reflects the changes in t he distribution of tariff rates since the last Review in 2015, with a decrease 
in the percentage of lower -rate tariffs. As a result, while tariff rates continue to range from zero to 
150% (considering only the ad valorem  rates), the percentage of tariff li nes with rates between 0% 
and 10% declined from 79.1% in 2015 to 67.8% in 2020/21. However, the percentage of tariff lines 
that bear rates higher than 10% and up to 30% increased from 12.1% (2014/15) to 21.3% 
(2019/20) to 22.1% in 2020/21, and those with r ates above 30% rose from 2.8% (2014/15) to 4% 
in 2020/21. The most common tariff rates continue to be 10% (31.7% of all tariff lines) and 7.5% 
(24.4%). The highest rates, above 60%, apply to products such as alcoholic beverages (150%), 
followed by animals and their products; fruit, vegetables and plants; coffee and tea; and certain 
motor vehicles, all with tariffs of 100%.  
14. India bound 75.3% of its Tariff Schedule. It bound 100% of the tariff lines related to 
agricultural products, at rates ranging from 10% to 300%, and 71.7% of the tariffs related to non -
agricultural products, in general at lower tariff rates, ranging from 0% to 150%. The highest bound 
rates apply to oil seeds, fats, oils and their products.  
15. The tariff treatment that India accords to certain  goods in the information and communications 
technology sector is currently the subject of a dispute at the WTO.  
16. India has MFN tariff rate quotas (TRQs) for skimmed milk and some types of cream, maize, 
and some oils. TRQs were also negotiated under the pre ferential agreements with Nepal and Sri 
Lanka. In general, there are no imports under TRQs.  WT/TPR/S/ 403/Rev.1  • India  
 
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  17. India maintains import and export prohibitions and restrictions. Restrictions are imposed to: 
(i) protect human, animal and plant life or health; public morality; historical heritage; the 
environment; and intellectual property rights (IPRs); (ii) prevent the use of deceptive practices and 
the illegal trade of arms and ammunition; and (iii) comply with UN resolutions. In addition, India 
continues to use designated st ate trading enterprises (STEs) to import some agricultural products, 
fertilizers, and oil products, with the stated purpose of ensuring a fair return to farmers; safeguarding 
food security; managing the procurement of fertilizer for farmers; and implementi ng the domestic 
support price system for oil products. Since the last Review, some products, such as onions and 
sugar (under TRQ since 2019) have been removed from the list of exports subject to state trading 
and may currently be exported by any eligible e xporter.  
18. India continues to be an active user of anti -dumping measures; it is currently the main user 
of anti -dumping measures in the WTO. During 2015 -19 (as at December 2019), India initiated 
233 investigations, a sharp increase since 2011 -14 (June) when the number of initiations stood at 
82. Most of the investigations initiated during the review period relate to products originating in 
China, followed by those originating in the Republic of Korea and the EU -28. At end -2019, India had 
imposed 254 anti -dump ing duties. These measures affected mainly chemicals and products thereof 
(40.6% of all measures). The average length of anti -dumping measures in force as at December 
2019 was 5.9 years; however, 58 measures, which applied mainly to imports originating in China 
(45%), have been in place for more than 10 years. During 2015 -20 (January), India initiated 
20 countervailing investigations, and there were 11 measures in place. As in the case of 
anti-dumping duties, most of the measures applied to imports originat ing in China. India is also an 
active user of safeguard measures; as at June 2019, India had initiated 46 investigations (12% of 
all the safeguards investigations initiated by WTO Members). There is one safeguard measure in 
force.  
19. To support both domestic production and exports, India continues to provide a number of 
incentives, in the form of direct subsidies and price support schemes, tariff concessions or 
exemptions, or preferential rates of interest. In addition, up to 40% of all bank lending must be 
allocated to "priority sectors", including agriculture, small and medium -sized enterprises, education, 
housing, social infrastructure, renewable energy, and exports. Preferences under government 
procurement are also provided to domestic companies.  
20. In general , the programmes maintained to promote exports apply to all sectors. However, 
some are sector -specific, for instance those pertaining to agriculture. Most of these programmes did 
not undergo substantial changes since 2015; they provide for fiscal and finan cial incentives and 
marketing assistance. However, in 2015, the Export from India Scheme (EIS) was introduced. The 
EIS encompasses two schemes: the Merchandise Exports from India Scheme (MEIS), which replaced 
five schemes; and the Services Exports from Ind ia Scheme (SEIS). The number of products covered 
by the MEIS, and the budget allocated to it, increased during the review period. The MEIS is 
scheduled to end on 1 January 2021; it will be replaced by a new scheme to reimburse exporters for 
taxes, duties a nd levies which are not exempt or refunded under any other existing scheme.  
21. Over the review period, India revised its standardization legislation; the Bureau of Indian 
Standards (BIS) Act, 1986 was replaced by the BIS Act, 2016. Under the new Act, standar dization 
covers goods and was introduced for services, systems, and processes; and several new provisions 
were adopted, such as new types of conformity assessment schemes. The BIS is India's national 
standards body, which formulates standards in all sector s, except those stipulated in the Agricultural 
Produce (Grading and Marking) Act, 1937 and the Drugs and Cosmetics Act, 1940. Procedures to 
formulate and implement standards and technical regulations did not change significantly over the 
review period. Sin ce 2015, some of India's technical regulations have been subject to specific trade 
concerns in the WTO Committee on Technical Barriers to Trade. Some products are subject to 
mandatory product certification. Product certification applies to both locally pro duced and imported 
goods. Regarding SPS, according to the notifications submitted to the WTO, SPS measures comply 
with, or are based on, relevant international standards, and they mostly apply to all Members. India 
took one emergency measure that applies t o all trading partners. During the review period, Members 
raised seven concerns, of which two were resolved.  
22. Government procurement in India remains decentralized, and is subject to multiple 
regulations, including sector -specific provisions and procurement provisions enacted by the states. 
The General Financial Rules (GFRs) that apply to all sectors is the main p iece of legislation regulating 
government procurement. Over the review period, the GFRs were amended several times, inter alia, WT/TPR/S/ 403/Rev.1  • India  
 
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  to introduce new procurement methods and enforce the use of electronic procurement. During the 
2015-20 period, India maintained sector -specific reservations and preferences in public 
procurement, and others that apply specifically to micro and small enterprises. In 2017, additional 
preferences for locally -produced goods were introduced under the Make in India initiative. India 
remains an Observer to the WTO Government Procurement Agreement.  
23. Competition is regulated by the Competition Act, 2002 that, with some exceptions, applies to 
all economic operators and sectors; there are also sector -specific provisions. Some changes adopted 
over the review period include: the adoption of leniency provisions regarding cartels; the 
simplification of the procedure to file a combination (mergers); the suspension of the deadline to 
notify a combination (in 2017); and the introduction of automatic ap proval for combinations that do 
not require an exhaustive assessment (in 2019). India continues to apply exceptions to the 
requirement to notify certain combinations.  
24. India continues to maintain price controls, especially for agricultural products under va rious 
mechanisms. Retail prices of other products, such as LPG cylinders, natural gas, fertilizer, and drugs, 
are also controlled. Price controls are in place mainly to support the agricultural sector, ensure food 
security, and reduce poverty.  
25. In 2016, Ind ia issued its first National Intellectual Property Rights (NIPR) Policy. It is aimed 
at creating national awareness of the importance of IPR protection through training and outreach 
and offers financial support and fiscal incentives to encourage IPR genera tion and commercialization, 
including a fee rebate of up to 80% on patent fees for start -ups. There have also been changes to 
the institutional framework regarding intellectual property. Since 2016, all IPRs, except for the 
protection of plant varieties, f all under the Department for Promotion of Industry and Internal Trade; 
this has become the single nodal agency for IPR. Plant variety protection continues to be 
administered by the Department of Agriculture, Cooperation and Farmers' Welfare. Since 2015, In dia 
has implemented various IPR enforcement measures, such as the establishment of commercial 
courts to expedite IPR -related court proceedings. However, since 2018, Customs is no longer allowed 
to seize infringing imports suo motu; therefore, at present, a  court injunction is required to protect 
patent rights against infringement at the border.  
26. While agriculture accounts for 16% of GDP, its share of total employment is over 40%. India 
continues to regulate imports and exports, as well as domestic prices, to  meet its food security goals. 
Import and export restrictions, TRQs, state trading, and minimum import prices are used at the 
border. The Government provides support, both direct and indirect, to farmers, including for inputs 
such as water, electricity, se eds and fertilizers; minimum support prices; and marketing and 
transport. Under the National Food Security Act (NFSA), food grains are provided at subsidized prices 
to households identified by the states as having priority; under the Act, subsidized food i s to be 
provided to 75% of the rural population and 50% of the urban population. The Government's subsidy 
for food accounts for almost half of its explicit subsidies, and the subsidy for fertilizers accounts for 
another third.  
27. During the period under revie w, various reforms took place. Under the Agricultural Export 
Policy, processed and organic agricultural products are not subject to export restrictions, and imports 
of agricultural products that are used for such exports were to be liberalized. The Governm ent has 
also gradually been increasing direct payments to farmers, as is the case under the Price Deficiency 
Payment Scheme, which benefits oilseed producers. Under this Scheme, if prices fall below the 
minimum support price, the difference between the mar ket price and the minimum support price is 
paid directly to registered farmers. Cash transfers for purchasing food provided under the NFSA are 
also being provided on a trial basis in some union territories. In 2020, the Essential Commodities 
Act was amende d to ensure that the supply of certain agricultural products may only be regulated 
in exceptional circumstances. Efforts have also been made to improve the marketing of agricultural 
products, including through the introduction of an electronic National Agr icultural Market (e -NAM) in 
2016, which aims to unify the markets across the states. In 2020, further marketing reforms took 
place to guarantee freedom to farmers to conduct intra - or inter -state trade, and to encourage 
contract farming between farmers and  agri-business.  
28. Over the review period, India's policies regarding the electricity sector were aimed at ensuring 
access to reliable and affordable services and at diversifying energy sources. To this end, various 
incentives were granted to expand the distr ibution network and to promote the use of renewables. 
As a result, the share of renewable energy sources (mainly solar and wind) to generate electricity WT/TPR/S/ 403/Rev.1  • India  
 
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  increased from 14.6% in 2015 to 23.7% in 2020. However, coal is still India's main source of power 
generation. India continues to provide cross -subsidies regarding retail tariffs; tariffs for consumers 
below the poverty line and small households are subsidized; and electricity for the agricultural sector 
is free/unmetered. The distribution companies, which are mainly owned by the states, continued to 
face severe financial difficulties, due to the under -pricing of electricity which, in turn, hampers their 
ability to offer a reliable power supply. In 2015, a voluntary scheme was put in place to address the 
companies' poor financial condition, with the states taking over a percentage of the companies' debt. 
As a result of the COVID -19 pandemic, consumers were allowed to defer payment of their electricity 
bills. 
29. The share of the manufacturing sector in India's GD P decreased from 16.3% in 2014/2015 to 
15.1% in 2019/2020. Sectors that play an important role in merchandise trade include textiles and 
clothing, which accounts for 2% of GDP, and 11.4% of merchandise exports, and employs around 
45 million people; and aut omobiles, with around 7% of GDP, and 8.0% of merchandise exports. 
India has run a deficit in its balance of trade in manufactured goods during the review period, with 
growth in imports outstripping that of exports. India continues to implement the National  
Manufacturing Policy (NMP) aimed at increasing the share of manufacturing in GDP to 25% by 2022. 
Provisions under the NMP include programmes to develop skills, facilitate financing for SMEs, 
increase demand for manufacturing and infrastructure through gov ernment procurement. The Make 
in India programme was launched in 2014, to attract investment to achieve the 25% -of-GDP target 
by 2022.  
30. Services accounted for around 54% of India's GDP in 2018/19 an increase since 2014/15 when 
their share stood at some 52%.  The sector contributes almost 70% to India's GDP growth. The 
services sector is the largest recipient of FDI. India ran a surplus in its services trade of around 3% 
of GDP, for most of the period under review.  
31. Following consolidation, the number of public  sector banks (PSBs) fell to 12 in 2020; however, 
with around 70% of total assets, they continue to dominate the sector. The remaining assets are 
distributed between 22 private banks, 46 foreign banks, a large number of rural, urban and 
cooperative banks, and non -banking financial companies (NBFCs). The sector continues to be 
regulated by the Reserve Bank of India (RBI), using a risk -based framework. During the period 
under review, commercial banks remained well -capitalized, although for several years 
non-performing assets (NPAs) remained high, rising to over 11% of gross advances in 2018 before 
falling to 9% by 2020. NPAs also increased in NBFCs, and the RBI issued new guidelines in 2019 to 
improve supervision of the latter. The RBI Act, 1934 was also amend ed in 2019, to address 
governance issues. The Government's Indradhanush Plan funding, to support PSBs, also aims to 
address governance issues.  
32. To encourage financial inclusion, the Pradhan Mantri Jan Dhan Yojana (PMJDY) Scheme was 
launched in August 2014, to enable the unbanked to open bank accounts, to directly receive salaries, 
subsidies, remittances and other payments. In addition, all banks are required to provide 40% of 
their lending to priority sectors; this target was extended to all foreign banks wi th 20 or more 
branches by March 2018 and those with less than 20 branches by March 2020. In light of the 
deteriorating economic environment due to the COVID -19 pandemic, a number of steps were taken 
in 2020 to provide temporary relief to borrowers and enha nce liquidity support for financial markets 
and other stakeholders. They include: a special refinance facility of INR 650 billion for the National 
Bank for Agriculture and Rural Development (NABARD), the Small Industries Development Bank of 
India (SIDBI), the National Housing Bank (NHB), and the EXIM Bank, to enable them to continue 
funding activities as required.  
33. There were no significant changes in the insurance sector, which continues to be dominated 
by public -sector companies, especially for life insura nce. Insurance penetration continues to be low, 
and a number of schemes were launched to bring insurance to a greater share of the population. 
There were a few changes in FDI policy in this sector. FDI of up to 49% (up from 26%) is permitted 
automatically in insurance companies, and up to 100% in insurance intermediation services. In 
addition, foreign re -insurers may open branches in India up to the 49% FDI limit. As for banking, 
since 2015, insurance providers are required to write a certain amount of thei r insurance in specific 
sectors.  
34. The telecommunication market remains highly concentrated. The state -owned companies 
(Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL)) remain the main WT/TPR/S/ 403/Rev.1  • India  
 
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  providers of fixed telecom services and, even though a new private supplier entered the mobile 
telecommunications market in 2016, the merger of two private operators was approved in 2017 to 
create India's biggest telecom company. Tariffs are regulated for fixed services in rural areas and 
national roa ming services. Over the 2015 -20 period, to increase teledensity, India adopted various 
regulatory measures in the sector, to expand the mobile telecom network throughout its territory, 
such as easing procedures to obtain right -of-way permits, allowing comp anies to share their active 
infrastructure, and introducing new provisions to improve interconnection. In 2018, India approved 
net-neutrality rules. Several connectivity projects are also in place, including India's largest rural 
broadband connectivity pro ject. Initiatives to enhance digital literacy were also introduced, such as 
the 2015 Digital India Initiative to introduce the Government's digital platform. During the COVID -19 
lockdown, telecom services were included in the list of essential services tha t had to remain 
operational. As a result, technical and commercial measures were taken by the operators to ensure 
unbroken network connectivity and uninterrupted services as the use of mobile services increased 
massively. For instance, the validity period for prepaid cards was extended; and download speed 
and Internet quality were reduced to prevent network congestion.  
35. Since 2015, air transport services have been further opened to FDI, but cabotage is still 
reserved for national air carriers. During the rev iew period, several initiatives were implemented to 
improve air connectivity, and to relax certain conditions imposed on Indian air carriers regarding 
operating international routes. Measures were also put in place to promote the maintenance, repair, 
and o verhaul of aircraft in India. Regarding maritime transport, over 2015 -18, India relaxed 
cabotage for specialized vessels, container traffic, and certain commodities, to encourage a shift 
from road/rail to coastal shipping. Incentives were introduced to pro mote ship -building in India. 
Since 2016, port infrastructure has been extended and upgraded, with a view to facilitating trade. 
As a result of COVID -19, major ports deferred the payment of various port charges, and offered 
storage capacity free of charge t o help operators. Private port operators were also offered deferred 
payments of charges and royalties.  
36. During 2015 -20, initiatives to further expand tourism included the diversification of tourism 
related products and markets, enhanced facilities (e.g. e -visa), and better air connectivity. 
Foreigners may provide any type of tourism -related services in India, except tourist guide services. 
Financial support is granted by the Central Government to develop tourism -related infrastructure 
and products, and for m arketing.  
  WT/TPR/S/ 403/Rev.1  • India  
 
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  1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
1.1.  For most of the period under review (2015 -mid 2020), India's economy continued its strong 
growth. Economic reforms were continued and were focused on increasing efficiency and 
inclusiveness. Mea sures to improve efficiency included a number of steps on trade and investment 
facilitation. Structural reforms were also undertaken. They included: the Insolvency and Bankruptcy 
Code (IBC) in 2016, which has begun to address the problem of debt in the cor porate sector although 
it has been slower than envisaged, with cases taking twice the stipulated period to resolve1; the 
Goods and Services Tax (GST) in July 2017, which is expected to reduce complexity in the indirect 
tax system2; and a more rigorous su pervisory framework in the banking sector, although problems 
have also emerged in non -banking financial companies (Section 4.4..1). Investment to improve 
infrastructure has also been continued, notably to improve transportation and linkages between the 
interior of the country and ports and airports. To address economic exclusion, a number of 
government programmes were launched, including an increased number of schemes aimed at 
poverty alleviation.3 
1.2.  Economic growth has been weaker since early 2019. Both consumption and private investment, 
the drivers of the economy, weakened due to lower private demand and credit availability. Real GDP 
growth was estimated at 5.0% in fiscal year 2019/20, significantly lower than the 6.8% in the 
previous year; further prov isional estimates at the end of May 2020 put growth lower, at 4.2%, 
mainly due to the effects of the COVID -19 pandemic.4 Growth in services and manufacturing, the 
two largest sectors, was strong for much of the period but has been weaker since 2019. The 
supervision of banks was strengthened, to address the high level of non -performing assets. However, 
following recent defaults in the non -banking financial sector, several measures were taken to 
improve overall governance standards in the sector. Growth cont inues to be constrained by 
infrastructure bottlenecks, despite recent improvements.  
1.3.  During the review period, efforts towards fiscal consolidation continued, with both the states 
and the central Government reducing their fiscal deficits under the Fiscal Re sponsibility and Budget 
Management (FRBM) Act. While the central Government's deficit has declined, it has not kept pace 
with the requirements of the Act, with the Government making use of the "escape clause" provision 
which allows the deficit to exceed th e target by 0.5% under certain conditions. Expenditure on 
subsidies has also been increasingly shifted to off -budgetary resources. Meeting the requirements 
of the FRBM Act in the coming years will remain a challenge, especially given India's increasing 
expenditure on subsidies and infrastructural needs.  
1.4.  India's current account deficit improved until 2016/17, but rose to around 2.1% of GDP in 
2018/19 due to rising commodity prices. The deficit improved to 0.8% of GDP in 2019/20. Foreign 
direct investment (F DI) financed almost half of the current account deficit. Portfolio investment 
weakened, following demonetization at the end of 2016, but has since rebounded. India's foreign 
exchange reserves were estimated at USD 476 billion on 21 February 2020.5 
1.2  Recent Economic Developments  
1.5.  India's economic performance remained strong for most of the period under review, with 
annual real GDP growth averaging 7.4% between 2014/15 and 2018/19. Lower growth in 2017/18 
 
1 The IBC specifies that cases should be resolved within 270 days, but it has been known to take almost 
double  that amount. More than two years after the Reserve Bank of India (RBI) referred 12 large debtors to 
the IBC, only half of these cases have been resolved, mostly in the steel sector. Subramanian, A. and Felman,  
J. (2019), "India's Great Slowdown: What Happ ened? What is the Way Out?" Center for International 
Development at Harvard University, Working Paper No. 370, December.  
2 The GST, along with demonetization at the end of 2016, also aimed to formalize India's large informal 
sector. Various other programme s were also put into place, such as the AADHAR (the unique identity 
programme) and the PM Jan Dhan Yojana, which made bank accounts accessible to a larger percentage of the 
population.  
3 The RBI also issued the National Strategy for Financial Inclusion in January 2020.  
4 RBI, Annual Report 2019 -20. Viewed at 
https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/0RBIAR201920DA64F97C6E7B48848E6DEA 06D531BADF.P
DF. 
5 Information provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  was partly attributed to stress in the financial sector, which acted as a drag on the real estate sector; 
the temporary disruption caused by demonetization at the end of 2016; and structural reforms, such 
as the introduction of the GST in 2017.6 Since the first half of 2019, growth has been significantl y 
weaker, and was estimated to have slipped to 5% in 2019/20 (Table 1.1). The slowdown was 
particularly severe in manufacturing.7 Estimates by the RBI show that industrial g rowth  fell to 1.7% 
in the first quarter of 2019 /20 and to -0.5% in the second quar ter.8 The weakness was mainly due 
to lower consumption and investment, particularly private investment, with gross fixed capital 
formation growing by only 1% in 2019/20.9 Uncertainty in the financial services sector, particularly 
high non -performing asse ts, and recent defaults in the non -banking finance sector also contributed 
to reduced investor confidence. The 2019 Budget (July 2019) cut the base corporate rate of tax from 
36% to 22% to try to boost private investment. In February 2020, further personal  income tax cuts 
were announced in the Budget for 2020/21. The authorities estimate that real GDP grew at around 
5.1% during April -December 2019 but more recent estimates put growth at 4.2%, largely due to 
the economic impact of the COVID -19 pandemic.  
Table 1.1 Selected macroeconomic indicators, 2014 -20 
  2014 /15 2015 /16 2016 /17 2017 /18 2018 /19a 2019 /20a 
Real GDP at market price (INR billion, 
2011/12 prices)  105,276.8  113,694.9  122,983.3  131,798.6  140,775.9  147,788.8  
Real GDP at market price (USD billion, 
2011/12 prices)  1,721.8  1,736.6  1,833.6  2,044.7  2,013.3  .. 
Current GDP at market price (INR 
billion)  124,679.6  137,718.7  153,623.9  170,950.0  190,101.6  204,422.3  
Current GDP at market price (USD 
billion)  2,039.1  2,103.6  2,290.4  2,652.1  2,718.7  .. 
GDP per capita at current market price 
(USD)  1,609.4  1,639.6  1,763.2  2,015.3  2,041.1  .. 
National account (% change , unless 
otherwise indicated)        
Real GDP (2011/12 prices)  7.4 8.0 8.2 7.2 6.8 5.0 
Consumption  6.6 7.9 7.8 8.6 8.3 6.5 
  Private  6.4 7.9 8.2 7.4 8.1 5.8 
  Government  7.6 7.5 5.8 15.0 9.2 10.5 
Gross fixed capital formation  2.6 6.5 8.3 9.3 10.0 1.0 
Exports of goods and services  1.8 -5.6 5.1 4.7 12.5 -2.0 
Imports of goods and services  0.9 -5.9 4.4 17.6 15.4 -5.9 
   XGS/GDP (at current market price)  23.0 19.8 19.2 18.8 19.7 18.4 
   MGS/GDP (at current market price)  26.0 22.1 21.0 22.0 23.6 21.2 
Prices and interest rates        
Inflation (% change)        
  Consumer Price Index  5.3 4.8 3.9 4.3 2.9 .. 
    Rural 5.7 5.7 3.8 4.4 1.8 .. 
    Urban  4.7 3.9 4.0 4.1 4.1 .. 
  Wholesale Price Index 1.2 -3.7 1.7 3.0 4.3 .. 
Deposit rateb 7.25-8.75 7-7.5 6.5-7 6.25-6.75 6.25-7.5 .. 
Base ratec 10-10.25  9.3-9.7 9.25-9.6 8.65-9.45 8.95-9.4 .. 
Broad money (M3, % change)  10.9 10.1 6.9 9.2 10.5 .. 
 
6 On 9 November 2016 , the Government announced that all INR 500 and 1,000 notes would not be legal 
tender from midnight onwards. New INR 500 and 2,000 notes would be issued at a later date. The goal was to 
stop the hoarding of money, reduce the role of cash in the economy , and move consumers towards formal and 
digital transactions , including  for taxation purposes. It is estimated that around 87% of the currency in 
circulation was withdrawn as a result. On 30 August 2017, the RBI announced that around 99.3% of the 
withdrawn note s had been deposited in banks. In a preliminary assessment , the RBI concluded that 
demonetization had had a transient negative impact on the economy , with an important result being the 
increased use of digital transactions . RBI, 2017, Macroeconomic Impact of Demonetisation: A Preliminary 
Assessment , March. Viewed at: 
https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/MID10031760E85BDAFEFD49719399 5BB1B6DBE602.PDF ). 
7 Structural rigidities in labour, land and product markets have made the sector uncompetitive. RBI, 
2020, Annual Report 2019 -20. 
8 RBI, RBI Bulletin, December 2019 . Viewed at: 
https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/01T_11022020145BCB811C51401C881B18DC16170FBF.PDF . 
Growth had significantly deteriorated by the firs t quarter of 2020/21 due to the COVID -19 pandemic. RBI, RBI 
Bulletin, September 2020 . Viewed at: 
https://rbidocs.rbi.org.in/rdocs/Bulletin/PDFs/1T 11092020ED033472A5A045D5B31962B7ADF03310.PDF . 
9 The RBI estimates that, during the period 2014 -19, the contribution of gross fixed capital formation to 
GDP, which is the main constituent of investment in the economy, fell by 6 percentage points below its l evel in 
2011-14. RBI, 2020, Annual Report , 2019 -20. Viewed at: 
https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/0RBIAR201920DA64F97C6E7B48 848E6DEA06D531BADF.P
DF.  WT/TPR/S/ 403/Rev.1  • India  
 
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    2014 /15 2015 /16 2016 /17 2017 /18 2018 /19a 2019 /20a 
Exchange rates        
INR/USD (financial year average)  61.14  65.47  67.07  64.46  69.92  .. 
Real effective exchange ratesd (% 
change)  6.3 2.3 2.0 3.2 -5.8 .. 
Nominal effective exchange ratesd (% 
change)  1.2 -1.6 -1.0 1.6 -7.1 .. 
Central government balance (% of 
GDP)e       
Current balance  -2.9 -2.5 -2.1 -2.6 -2.4 -2.4 
Current revenue (revenue receipts)  8.8 8.7 8.9 8.4 8.2 9.1 
   Tax revenue, net  7.2 6.9 7.2 7.3 6.9 7.4 
Current expenditure  11.8 11.2 11.0 11.0 10.6 11.5 
Capital receipts  4.5 4.3 3.9 4.1 4.0 4.2 
Capital expenditures  1.6 1.8 1.9 1.5 1.6 1.7 
Gross fiscal balancef -4.1 -3.9 -3.5 -3.5 -3.4 -3.8 
Primary balanceg -0.9 -0.7 -0.4 -0.4 -0.4 -0.7 
Central government debt  .. .. .. .. .. .. 
  Domestic  .. .. .. .. .. .. 
  External  4.4 4.4 4.2 4.2 ..  
Savings and investment (% of GDP)        
Gross domestic savings  32.2 31.1 30.3 30.5 .. .. 
Gross domestic investment  33.5 32.1 30.9 32.3 .. .. 
External sector (% of GDP, unless 
otherwise indicated)        
Current account balance  -1.3 -1.1 -0.6 -1.8 -2.1 .. 
Merchandise trade balance  -7.1 -6.2 -4.9 -6.0 -6.6 .. 
  Exports  15.5 12.7 12.2 11.7 12.4 .. 
  Imports  22.6 18.8 17.1 17.7 19.0 .. 
Services balance  3.8 3.3 3.0 2.9 3.0 .. 
Financial account balance  1.4 1.1 0.6 1.8 2.1 .. 
  Direct investment  1.5 1.7 1.6 1.1 1.1 .. 
Terms of trade (1999/ 2000=100)  57.9 71.8 71.1 73.3 70.7 .. 
Merchandise exports (% change)h -0.6 -15.9 5.2 10.3 9.1 .. 
Merchandise imports (%  change)h -1.0 -14.1 -1.0 19.5 10.3 .. 
Service exports (% change)h 4.1 -2.4 6.4 18.8 6.6 .. 
Service imports (%  change)h 3.6 3.7 13.3 22.6 7.3 .. 
Foreign exchange reservesi (USD 
billion, end -period)  317.3  336.1  346.3  399.4  385.4  .. 
   in months of imports  8.9 10.9 11.3 10.9 .. .. 
Total external debt (USD billion, end -
period)  474.7  484.8  471.0  529.3  543.0  .. 
Debt service ratio  7.6 8.8 8.3 7.5 6.4 .. 
Memorandum:        
Unemployment rate  .. 3.7 .. 6.1 .. .. 
.. Not available.  
a Provisional.  
b Refers to the deposit rates of the five major banks , of maturit ies of one to three years.  
c Relates to either the Prime Lending Rate, or the Benchmark Prime Lending Rate, or the Base Rate, 
as the case  may be , for the relevant year, of the five major  banks.  
d Six-currency trade -based weight (including euro, Japanese yen, US dollar, British  pound, Chinese 
renminbi, and Hong Kong dollar).  
e Up to 2018 /19, actual figures; 2019 /20, figures are based on revised budget estimates.  
  Revenue receipts plus capital receipts (not including borrowing and other liabilities) minus total 
expenditure.  
g Fiscal balance minus interest payments . 
h Growth rates are based in US  dollars . 
i Excluding gold, special drawing rights, and the Reserve Tranche Position in the International 
Monetary Fund ( IMF). 
Source:  RBI; Ministry of Finance, Economic Survey 2019 -20; Union Budget 2020 -21; and data provided by 
the authorities.  
1.6.  To respond to the impact of the COVID -19 pandemic, in May 2020, the Government announced 
the Atmanirbhar Bharat Abhiyan (Self-reliant In dia) programme. It aims to provide a stimulus to 
various sectors and sections of society, to respond to the effects of the current health crisis. The 
package, which is estimated at INR 20 trillion, combines fiscal, financial and structural reform 
measures,  some of which are planned, notably legislative changes. Selected measures under the 
programme are presented in Box 1.1.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Box 1.1 The Atmanirbhar Bharat Abhiyan  programme  
Policies to improve the business environment , especially micro, small and medium -sized 
enterprises ( MSMEs ) 
Emergency loans of up to INR 30 million to all businesses; businesses with INR 1 billion turnover with up to 
INR 250 million outstanding can borrow up to 20% of their outstanding credit (as at 29 February 2020) until 
30 October 2020. Interest on loans is capped , with a 100% credit guarantee on principle and interest for 
banks and non -bank financial companies (NBFCs).  
The Government will facilitate the provision of INR 200 billion as subordinate debt for MSMEsa with 
non-performing assets , (NPAs) including b y providing INR 40 billion to the Credit Guarantee Fund Trust for 
Micro and Small Enterprises (CGFTMSE) to provide partial credit -guarantee support to banks that lend under 
the Trust. 
A Fund of Funds for MSMEs of INR 10 0 billion  to be set up to provide eq uity funding for MSMEs with growth 
potential and viability.  
Global tenders to be disallowed for government procurement of up to INR 2 billion.  
Under the PM Garib Kalyan Yojana (PMGKY) , 12% each  of the employer and employee contributions into the 
employee provident fund (EPF) for the period March -August 2020 were covered by the Government. For firms 
not eligible under the PMGKY , the required contribution will be reduced from 12% each to 10% (exce pt for 
central state-owned enterprises , which will maintain the 12% employer contribution).  
Poverty alleviation  
Under the PMGKY: free provision of 5 kg of wheat or rice per person and 1 kg of pulses per household; gas 
cylinders for provided free of charg e for three months to around 800 million families; INR 500 per month for 
three months provided to 200 million women with Jan Dhan Yojana bank accounts; and insurance coverage 
of INR 5 million per health worker.  
Measures for farmers , including a 3 -month lo an moratorium for 30 million farmers; the interest payment and 
prompt loan -repayment incentive on crop loans , due on 1 March 2020 , was  extended to 31 May 2020; 
2.5 million  new Kisan credit cards issued , with a loan limit of INR 25 0 billion ; support of INR 42 billion  provided 
to states under the Rural Infrastructure Development Fund for rural infrastructure; and emergency working 
capital of INR 300 billion for farmers , through additional refinance provided by the National Bank for 
Agriculture and Rural Development  (NABARD ) to rural cooperative banks and regional rural banks.  
For migrants and for urban areas, state governments are permitted to use the State Disaster Response Fund 
(SDRF) to create shelters and provide food and water , including three free meals a day for residents of the 
shelters; free provision of 5 kg of grain per person and 1 kg of cha nna (pulses)  per family per month for two 
months , expected to benefit around 80 million migrants and cost INR 35 billion; assistance to self -help groups 
in urban areas , including through the manufacture of face masks and sanitizer; employment for migrants 
returning to their states , through the Mahatma Gandhi National Rural Employment Guarantee Scheme 
(MGNREGS);b and assistance of up to INR 50 billion for aro und 500,000 street vendors.  
Sectoral polices  
Agriculture: transfers to farmers through purchases of agricultural products at the minimum support price  
(worth INR 743 billion), the PM Kisan Fund (INR 187 billion) and the PM Fasal Bima Yojana (INR 64 bill ion); 
additional procurement of milk from farmers , and interest subvention s of 2% per year to dairy cooperatives 
during 2020 /21; the creation of the INR 1 trillion Agri Infrastructure Fund for farm gate infrastructure; and 
the pilot scheme for subsidizing transportation and storage of fresh fruit and vegetables.  
Fisheries : INR 200 billion for the PM Matsya Sampada Yojana (INR 110 billion for marine, inland fisheries and 
acquaculture activities , and INR 90 billion for infrastructure) .  
Energy: INR 900 billion to be provided to  power distribution companies  (DISCOMs ) whose debt to 
power -generation and transmission companies is around INR 940 billion. Central public sector generation 
companies to provide a rebate to DISCOMs , which will be p assed on to industrial consumers. New tariff policy 
to be released , ensuring , inter alia , that DISCOMs provide adequate power and their inefficiency is not a 
burden on consumers; progressive reduction in cross subsidies; and power departments and utilities  in the 
union territories to be privatized  
Coal mining: commercial mining to be permitted; and investment in infrastructure  
Air transport: restrictions on Indian airspace to be eased; and development of new airports through public 
private partnerships  
Legislative and administrative reform  
Amendment to the Essential Commodities Act , 1955, to deregulate control of agricultural products . 
Legislation on agricultural produce price and quality  assurance; and agricultural marketing reform to reduce 
rigidities in markets.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Investment facilitation , including ranking of states by investment attractiveness and promotion of "new 
champion sectors"; and infrastructure upgradation .  
Amendment to Compan ies Act , 2013 plans to allow for decriminalization of certain offences (including minor 
technical errors and shortcomings in CSR reporting); the  National Company Law Tribunal  (NCLT) to be given 
power to create additional/specialized benches; and defaults b y smaller companies to be subject to lower 
penalties.  
Public -sector enterprises to be privatized .  
Financial and fiscal measures  
Reduction of cash reserve ratio (CRR) from 4% to 3% on 28 March 2020 for one year; reduction of policy 
repo rate from 5.15% to 4.4 0%; increased limit on banks for overnight borrowing under the marginal standing 
facility (MSF) from 2% of statutory liquidity ratio  to 3% up to 30 June 2020; and liquidity coverage ratio for 
banks reduced from 100% to 80% . 
Special liquidity scheme of INR 300 billion for NBFCs, housing finance companies  (HFCs),  and micro -finance 
institutions (MFIs) to be launched , to help them to raise debt. Partial credit -guarantee scheme , of 
INR 450 billion , to help NBFCs, HFCs and MFIs wit h low credit rating , with the central Government 
guaranteeing the first 20% of loss es. 
Limit on state government borrowing raised from 3% to 5% of gross state domestic product , part of which is 
linked to specific state reform.  
Relaxation in statutory and compliance requirements for filing income tax and GST  returns ; customs clearance 
24x7 until 30 June 2020; moratorium of three months for lending institutions for loans outstanding as at 
1 March 2020.  
a MSMEs are to be redefined as follows: m icro enterprises are those that have investment of less than 
INR 10 million and turnover of less than INR 50 million; small enterprises are those with an 
investment of less than INR 100 million and turnover of less than INR 500 million; and 
medium -sized en terprises are those with investment of less than INR 200 million and turnover of 
less than INR 1 billion.  
b The MGNREGS guarantees wage employment for 100 days per financial year to rural household s 
whose adult members volunteer to do unskilled manual work . MGNREGS , About MGNREGS . Viewed 
at: http://www.nrega.ap.gov.in/Nregs/ . 
Source:  Government of India, 2020 Building Atmanirbhar Bharat and Overcoming COVID -19. Viewed at: 
https://www.india.gov.in/spotlight/building -atmanirbhar -bharat -overcoming -covid-19 on 31 August 
2020. 
1.7.  In addition, immediate steps we re taken in several sectors to try and mitigate the effects of 
the COVID -19 pandemic: in the electricity sector, deferred payments were granted to help 
consumers pay their bills; in telecoms, which were included in the list of essential services that had 
to remain operational, technical and commercial measures were taken by operators to ensure 
unbroken network connectivity and uninterrupted services, as the use of mobile services increased 
massively10; and, in the transport sector,  major ports deferred the payment of various port charges 
and offered storage capacity free of charge to help operators, while private port operators were also 
offered deferred payments of charges and royalties.  
1.8.  With the decline in international commodity prices, especially petrole um, which forms around 
a third of India's imports, inflation, as measured by the consumer price index (CPI), has remained 
low since 2016; the RBI took an appropriately accommodative stance. Reflecting lower commodity 
prices, the current account deficit imp roved until 2016/17 before increasing to 2.1% in 2018/19, 
due to weaker international demand and rising petroleum prices; the deficit improved to 0.8% in 
2019/20. With the deteriorating international and domestic environment, the central Government 
took ce rtain steps to boost investment and consumption, notably a cut in the corporate tax rate in 
2019 and in personal income tax rates in 2020 (see below).  
1.9.  Services remains the most dynamic sector, with growth averaging over 8% annually between 
2014/15 and 2018 /19 (Table 1.2). Growth was led by trade and repair services, communications, 
hotels and tourism services, and transport services. The share of services in the economy grew from 
under 52% in 2014/15 to 55% in 2019/20. Notwithstanding the recent slowdown, m anufacturing 
also showed robust growth during 2014 -19, driven mainly by machinery and equipment, and food 
products; during 2019/20, however, manufacturing growth is estimated at below 1%. In the 
 
10 For instance, the validity period for prepaid cards was extended; and download speed and Internet 
quality were reduced to prevent network congestion.  WT/TPR/S/ 403/Rev.1  • India  
 
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  agricultural sector, production rose in 2016/17 and 2017/18, following bumper harvests; growth has 
moderated since then in the sector overall.  
Table 1.2 Basic economic indicators, 2014 -20 
 
2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20 
Percentage change in gross value -added , by economic activity (at constant (2011 /12) prices)  
Agriculture, forestry and fishing  -0.2 0.6 6.8 5.9 2.4 3.7 
Crops  -3.7 -2.9 5.3 4.4 -1.0 .. 
Livestock  7.4 7.5 10.0 7.4 8.1 .. 
Forestry and logging  1.9 1.7 5.5 6.2 0.4 .. 
Fishing and aquaculture  7.5 9.7 10.4 14.7 12.0 .. 
Mining and quarrying  9.7 10.1 9.8 4.9 -5.8 2.8 
Manufacturing  7.9 13.1 7.9 6.6 5.7 0.9 
Food products, beverages and 
tobacco  2.7 16.2 10.8 4.6 8.7 .. 
Textiles, clothing and leather 
products  0.0 19.6 0.8 5.1 4.5 .. 
Metal products  -5.8 -13.7 26.6 10.7 2.1 .. 
Machinery and equipment  9.9 20.3 10.4 11.8 7.2 .. 
Other manufactured goods  17.5 16.7 3.0 3.2 5.8 .. 
Electricity, gas, and water supply  7.2 4.7 10.0 11.2 8.2 4.6 
Construction  4.3 3.6 5.9 5.0 6.1 3.0 
Services  9.8 9.4 8.5 6.9 7.7 7.0 
Trade, and repair services  10.2 10.8 10.3 10.4 8.5 .. 
Hotels and restaurants  6.1 13.3 8.8 5.7 7.7 .. 
Transport, and storage  7.4 6.9 4.3 6.5 6.6 .. 
Railways  9.5 5.9 -3.9 7.0 5.0 .. 
Road transport  6.7 7.0 5.6 6.0 6.8 .. 
Water transport  8.3 1.8 5.9 6.5 5.8 .. 
Air transport  14.0 16.7 18.5 17.5 12.3 .. 
Services incidental to transport  7.7 7.4 7.0 7.3 7.3 .. 
Storage  6.1 13.0 -2.3 9.2 3.5 .. 
Communication and services 
related to broadcasting  12.8 14.3 1.3 -5.4 5.0 .. 
Financial services  8.5 7.3 3.4 4.8 4.7 .. 
Real estate, ownership of dwelling 
and professional services  12.2 12.1 10.8 4.6 7.6 .. 
Public administration and defence  6.6 3.9 8.7 10.0 9.2 .. 
Other services  9.7 8.0 9.8 9.8 9.5 .. 
Percentage share of gross value -added , by economic activity (at current basic prices)  
Agriculture, forestry and fishing  18.2 17.7 18.0 18.0 17.1 17.6 
Crops  11.2 10.6 10.6 10.4 9.4 .. 
Livestock  4.4 4.6 4.8 5.1 5.1 .. 
Forestry and logging  1.5 1.5 1.5 1.4 1.3 .. 
Fishing and aquaculture  1.0 1.1 1.1 1.2 1.2 .. 
Mining and quarrying  2.7 2.3 2.3 2.3 2.3 2.1 
Manufacturing  16.3 17.1 16.7 16.4 16.1 15.1 
Food products, beverages and 
tobacco  1.6 1.7 1.9 1.8 1.7 .. 
Textiles, clothing and leather 
products  2.2 2.4 2.2 2.1 2.0 .. 
Metal products  2.4 1.9 2.0 2.1 2.1 .. 
Machinery and equipment  3.4 3.9 3.9 3.8 3.7 .. 
Other manufactured goods  6.8 7.3 6.8 6.7 6.5 .. 
Electricity, gas, and water supply  2.5 2.7 2.5 2.7 2.7 2.6 
Construction  8.5 7.9 7.7 7.7 7.8 7.6 
Services  51.8 52.3 52.6 52.8 54.0 55.0 
Trade, and repair services  10.5 10.4 10.5 10.8 11.1 .. 
Hotels and restaurants  1.0 1.0 1.0 1.0 1.0 .. 
Transport, and storage  5.0 5.0 4.9 4.8 4.7 .. 
Railways  0.8 0.8 0.8 0.7 0.7 .. 
Road transport  3.2 3.2 3.1 3.1 3.1 .. 
Water transport  0.1 0.1 0.1 0.1 0.1 .. 
Air transport  0.1 0.2 0.2 0.1 0.1 .. 
Services incidental to transport  0.8 0.7 0.7 0.7 0.6 .. 
Storage  0.1 0.1 0.1 0.1 0.1 .. 
Communication and services 
related to broadcasting  1.8 1.9 1.8 1.6 1.6 .. 
Financial services  5.7 5.8 5.4 5.4 5.6 .. WT/TPR/S/ 403/Rev.1  • India  
 
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2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20 
Real estate, ownership of dwelling 
and professional services  14.8 15.1 15.5 15.2 15.6 .. 
Public administration and defence  5.9 5.8 5.9 6.1 6.2 .. 
Other services  7.1 7.4 7.7 7.9 8.3 .. 
.. Not available.  
Source:  Ministry of Statistics and Programme Implementation, First Revised Estimates of National Income, 
Consumption Expenditure, Saving and Capital Formation, 2018 -19. Viewed at: 
www.mospi.gov.in/sites/default/files/press_release/Press_Note_NAD_31012020.pdf . 
1.10.   India does not systematically collect data on employment. However, it would appear that the 
rate of unemployment grew from 3.7% in 2015/16 to 6.1% in 2017/18, with urban unemployment 
at 7.8% and rural unemployment at 5.3%.11 The largest share of the workforce is employed in 
agriculture: officially, 42.7% in 2017/18, although informal employment is higher.  
1.11.   Strong economic  growth has resulted in a steady improvement in India 's socio -economic 
indicators. Per capita income growth has been accompanied by an improvement in life expectancy 
to 69 years by 2017, compared to 63 in 2000, and a decline in mortality rates to 37 for every 
1,000  live births. According to the latest data a vailable (2015), however, the World Bank estimates 
that the level of poverty remains significant, at around 13.4% of the population.12 
1.12.   The priority of the central Government has therefore been to increase economic inclusion 
through schemes and subsidies ma inly targeting the rural sector. Minimum support prices of key 
agricultural crops were raised, while the PM Jan Dhan Yojana  enabled the direct transfer of a growing 
number of subsidies to a targeted population. The Government aims to double farmers' income s by 
2020. Central government expenditure on explicit subsidies was around 2.5% of GDP during the 
review period, although extra -budgetary expenditure on subsidies has increased significantly in 
recent years (Section 1.3).  
1.13.   Given India's continued need for better infrastructure, subsidies will need to be reduced and 
better targeted to free up resources for investment. In December 2019, India announced INR 
102,000 billion (around USD 1,400 billion) for a "national infrastructure pipeline".13 Almost 80% of 
its financing will be provided by the central and state governments (with equal shares), with the 
remainder to be provided by the private sector. P rojects worth INR 42.7 billion  (42%  of the total ) 
are already under implementation, projects worth INR 32.7 billion (32%) are in the conceptualization 
stage , and the rest are under development. It is expected other projects will be added.  
1.3  Fiscal Policy  
1.14.   India's fiscal policy is conducted in the framework of the Fiscal Responsibility and Management 
(FRBM)  Act, 2003, w hich called for the reduction and elimination of the revenue deficit by 31 March 
2009. The Act was amended several times, most recently in March 2018. The 2018 amendment 
followed recommendations by the FRBM Review Committee Report, issued in January 2017 
(Box 1.2). The amendment called for a reduction of the fiscal deficit to 3% of GDP by 31 March 2021 
(fiscal year 2020/21), and for the central Government to endeavour to contain general government 
debt to 60%  of GDP, of which the central government debt to 40%, by the end of financial year 
2024/25.14 The central Government must also try to ensure that these targets are not exceeded 
 
11 National Statistical Office, Periodic Labour Force Survey, (July 2017 -June 20 18). Viewed at: 
http://www.mospi.gov.in/sites/default/files/publication_reports/Annual%20Report%2C%20PLFS%202017 -
18_31052019.pdf . More recent non -government estimates based on labour market surveys put unemployment 
at 7.2% in January 2020. Centre for Monit oring the Indian Economy , No improvement in new investment 
proposals . Viewed at:  https://www.cmie.com/ . The estimate also shows that, while the rural unemployment 
rate has fallen sharply since December 2019 to 6%, urban unemployment rose to 9.7%.  
12 World Bank. Viewed at: https://databank.worldbank.org/data/download/poverty/33EF03BB -9722-
4AE2-ABC7 -AA2972D68AFE/Global_POVEQ_IND.pdf . 
13 Press Information Bureau (PIB), Finance Minister Smt  Nirmala Si tharaman releases Report of  the Task 
Force on National Infrastructure Pipeline for 2019 -2025. Viewed at:  
https://pib.gov.in/PressReleseDetail.aspx?PRID=1598055  
14 The FRBM (Amendment) Rules, 2018 clarify that "the Central Government shall reduce the fiscal 
deficit by an amount equivalent to 0.1 per cent or more of GDP at the end of each financial year beginning with 
the financial year 2018 -19, so that the fiscal de ficit is brought down to not more than 3% of the GDP by 
31 March 2021".  WT/TPR/S/ 403/Rev.1  • India  
 
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  after these dates. The "escape" and "buoyancy" clauses recommended by the Committee were 
maintained in the amendment and, where the fiscal deficit is allowed to vary from these targets, "a 
statement explaining the reasons thereof and the path of return to annual prescribed targets … shall 
be laid, as soon as may be, before both the Houses of Parliament". The Fiscal Council, also 
recommended by the Committee, has not yet been established.  
Box 1.2 FRBM Review Committee Report: key recommendations  
The Committee was set up on 17 May 2016. Its terms of reference included a review of the FRBM Act over 
the 12 years of its implementation , and suggest ing the way forward; examin ing the need and feasibility of a 
"fiscal deficit range" as a target; and the need and feasibility of aligning fiscal expansion (contraction) with 
credit expansion (contraction) in the economy.  
The Committee recommended the repeal of the FRBM Act , 2003 and t he FRBM Rules, 2004; enactment of a 
new Debt and Fiscal Responsibility Act and rules; adoption of a medium -term ceiling for general government 
debt of 60% of GDP (40% for the central Government and 20% for state governments); and adoption of the 
fiscal def icit as the key operational target for achieving the medium -term debt ceiling. Both the fiscal and 
revenue deficits were to drop as a percentage of GDP , as indicated below:  
 
Year Debt  Fiscal deficit  Revenue deficit  
2017/18 49.4 3.5 2.30 
2018/19 47.3 3.0 2.05 
2019/20 45.5 3.0 1.80 
2020/21 43.7 3.0 1.55 
2021/22 42.0 2.8 1.30 
2022/23 40.3 2.6 1.05 
2023/24 38.7 2.5 0.80 
 
The Committee also suggested that there could be a deviation from the fiscal deficit target of 0.5 percentage 
points ("escape clause") in the case of national emergencies or national security needs, far -reaching structural 
reforms in the economy with unant icipated fiscal implications, or a sharp decline in real output growth of at 
least 3 percentage points below the average in the previous four quarters. If there is a sharp increase in real 
output growth of at least 3 percentage points above the average of the previous four quarters, the fiscal deficit 
must fall by at least 0.5 percentage points below the target ("buoyancy clause").  
To determine whether these conditions are met, the Committee recommended the appointment of a Fiscal 
Council whose functions w ould include : multi-year forecasts for the Government; debt and fiscal sustainability 
analys es with projections for key fiscal indicators; independent assessment of central government fiscal 
performance and compliance with targets established by the Act , and recommend ation of changes to the fiscal 
strategy to ensure compliance; prepar ation of  a Macroeconomic Framework Statement; provision of advice to 
the central Government on whether conditions permit the invocation of the escape or buoyancy clause s; and 
recommendations to return to the original fiscal targets.  
Source : FRBM, FRBM Review Committee Report, Volume I: Responsible Growth, A Debt and Fiscal 
Framework for 21st Century India, January 2017 . Viewed at: 
https://dea.gov.in/sites/default/files/Volume%201%20FRBM%20Review%20Committee%20Report.
pdf. 
1.15.   The central government budget is announced in February ever y year. India's fiscal year runs 
from April to March. The Railway Budget, which was previously separate from the central 
government Budget, was incorporated into the latter in 2017.  
1.16.   During the period under review, the central Government's fiscal deficit fe ll from 4.1% of GDP 
in 2014 /15 to 3.4% in 2018 /19 (compared to a target of 3.3%). The estimate for 2019 /20 was 
raised from 3.4% to 3.8% in the 2020 /21 Budget (instead of the 3 .0% required in the FRBM Act).15 
The overshoot in 2019 /20 was mainly due to weake r-than-expected tax revenue from the newly 
implemented GST and related compensation to the states, as well as a  reduction  in the corporate 
income tax rate. According to the Medium -Term Fiscal Cum Fiscal Policy Strategy Statement , issued 
with the Budget, the central Government projects a decline in the fiscal deficit to 3.5% for 2020 /21 
and to 3.3% and 3.1% , respectively , in 2021 /22 and 2022 /23.16 Central government debt , which 
 
15 The Budget speech indicated that the deviation of 0.5% is consistent with the trigger mechanism 
under the FRBM Act, which permits such a deviation on account of structural reforms in  the economy with 
unanticipated fiscal implications. Union Budget 2020 -21, Budget Speech . Viewed at: 
https://www.indiabudget.gov.in/budgetspeech.php . 
16 The Medium -Term Fiscal Cum Fiscal Policy  Strategy Statement is required under the FRBM Act. It sets 
out a three -year rolling target for fiscal indicators, and an explanation of the factors underlying these 
estimates. It also indicates the fiscal policies and fiscal priorities for the ensuing fin ancial year, and an WT/TPR/S/ 403/Rev.1  • India  
 
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  was expected to decline to 48% of GDP in 2019 /20, has been revised up wards  to 50.3%, higher 
than the FRBM requireme nt of 43.7%.  The Statement notes that the progressive reduction in the 
debt-to-GDP ratio of the Government will ease the interest burden and allow more space to the 
Government to spend on other s ocially productive sectors without recourse to additional borrowing . 
1.17.   Tax revenue (net of the share of the states) remained at around 7% of GDP during the review 
period. Indirect taxes accounted for under half of the central government tax revenue. In 2017,  the 
GST, a tax on value added, was introduced. The GST replaced various taxes at the central and state 
levels (Section 3.1.4) and is expected to broaden the tax base, improve collection, and reduce tax 
evasion. Its share in total tax revenue rose from 23%  when it was introduced, to around 28% in 
2018/19 and 2019/20. The share of customs revenue declined significantly from 15% in 2014/15 to 
under 6% since 2018/19, mainly due to lower commodity prices during the period. However, the 
authorities pointed out t hat the total incidence of duties (including internal taxes such as the GST 
and other taxes before the GST came into force) on imports did not decline (Table 1.3). Direct tax 
collection was considerably lower than budgeted for in 2019/20, mainly due to a c ut in the corporate 
tax rate. The cut in personal income tax rates in 2020 is also likely to have implications for tax 
revenue in 2020/21. Nevertheless, the authorities believe that better compliance, combined with 
measures taken to broaden the tax base, l ed to a rise in the tax -to-GDP ratio in the medium to long 
term. The Budget for 2020/21 projects that income tax revenue will rise despite the cut in personal 
income tax rates.  
Table 1.3 Central government tax  revenue, 2014 -21 
(INR billion)   
2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20 2020/21  
Total tax revenue  12,448.8  14,556.5  17,158.2  19,190.1  20,804.7  21,634.2  24,230.2  
Tax revenue, net of states' 
share  9,036.2 9,437.7 11,013.7 12,424.9 13,172.1  15,045.9 15,045.9  
 
(% of total tax revenue)  
Direct taxes  56.1 51.2 49.8 52.5 54.6 54.1 54.4 
 Corporation taxes  34.5 31.1 28.3 29.8 31.9 28.2 28.1 
 Income taxes  21.7 20.1 21.5 22.7 22.7 25.9 26.3 
Indirect taxes  43.9 48.8 50.2 47.5 45.4 45.9 45.6 
 Customs  15.1 14.4 13.1 6.7 5.7 5.8 5.7 
 Excise duties  15.2 19.8 22.2 13.5 11.2 11.5 11.0 
 Service tax  13.5 14.5 14.8 4.2 0.3 0.1 0.0 
 GST n.a. n.a. n.a. 23.1 28.0 28.3 28.5 
Other taxes and duties on 
commodities and services  0.1 0.0 0.0 0.0 0.3 0.3 0.3 
Memorandum:        
 
Central government balance (% of GDP)  
Gross fiscal balancea -4.1 -3.9 -3.5 -3.5 -3.4 -3.8 -3.5 
n.a. Not applicable.  
a Revenue receipts plus capital receipts (not including borrowing and other liabilities) minus total 
expenditure.  
Note:  Up to 2018/19 actual figures; 2019/20 figures are based on revised budget  estimates, and 2020/21 
figures are budgeted.  
Source:  Union Budget (various years ). 
1.18.   With regard to expenditure, the Government expects a reduction in spending on th e food 
subsidy, mainly due to the use of loans from the National Small Savings Fund (NSSF) to cover around 
half of the subsidy provided to the Food Corporation of India (FCI) for procurement.17 As a result, 
expenditure on subsidies is expected to decline t o around 1.1% of GDP in 2019/20 (instead of 1.4% 
as budgeted) and to 1.0% in 2020/21. During the period under review, the NSSF and other special 
banking arrangements were increasingly used to cover various public -sector expenditures. Thus, 
 
assessment of whether the policies will ensure compliance with the targets set out under the Act and the 
medium -term fiscal strategy.  
17 The NSSF is a small savings fund for the public sector, including provident fund deposits and saving s 
certificates. NSSF loans have been increasingly used since 2016 -17 by public -sector companies, including the 
FCI, the National Highways Authority of India, Air India, the National Rail Finance Corporation, and the Power 
Finance Corporation. The NSSF is u sed by both the central and state governments to supplement their 
spending requirements but state governments have reduced their reliance on it, borrowing instead on the 
market. Ministry of Consumer Affairs, Food & Public Distribution, Payment to FCI to ru n Procurement, Storage 
and Distribution Network. Viewed at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1580397 . WT/TPR/S/ 403/Rev.1  • India  
 
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  while budgetary expenditure decreased, off -budget expenditures rose.18 The Comptroller General's 
report to Parliament notes that such off -budget expenditures defer payment in the relevant financial 
year, and result in additional cost by way of interest payments.19  
1.19.   After a period of consolidation, the deficits of the state governments  rose to 3.0% and 3.5% 
of GDP in 2015/16 and 2016/17, respectively. The rise was mainly due  to increased expenditure by 
the states under the UJWAL Discom Assurance Yojana  (UDAY) , which envisag ed them assuming 
75% of the debt of the state electricity distribution companies over these two years (Section 4.2).20 
After falling to 2.4% in 2017/18, state deficits  rose to 2.9% in 2018/19 (instead of the budgeted 
2.6%), mainly  as a result of increased expenditure for agriculture (such as loan waivers) and lower -
than-expected revenue. It is expected that, with rising state GST revenue, the states will consolidate 
their fiscal position in 2019/20, although there are downside risks, with almost half of the  states 
(12) budgeting above the required 3% threshold for 2019/20.21 The RBI also noted that much of the 
improvement in state budgets is due to a reduction in expenditures, notably capital expenditures, 
"which has negative output effects in the medium ter m".22 
1.4  Monetary and exchange rate policy  
1.20.   The RBI is responsible for India's monetary and exchange rate policy. The Reserve Bank Act, 
1934 was amended in 2016 to give the RBI a statutory basis for flexible inflation targeting23 based 
on the Monetary Policy Framework Agreement (MPFA), signed between the Government of India and 
the RBI on 20 February 2015. The MPFA requires the RBI to bring inflation (measured by the year -
on-year change in the monthly CPI) down to 6% by January 20 16 and 4% for subsequent years, 
within a band of plus or minus 2%. If the RBI fails to meet the target, it is required to explain to the 
Government the reasons for the failure, and provide an estimated period within which it could meet 
the target.24 The po licy interest rate required to achieve the inflation target is determined by the 
Monetary Policy Committee (MPC), established in September 2016 and mandated to meet at least 
four times a year.  
1.21.   Monetary policy is implemented through the use of a combination  of direct and indirect 
instruments, principally the cash reserve ratio, the statutory liquidity ratio, and refinance facilities. 
The main indirect instrument is the liquidity adjustment facility (LAF), whereby the RBI uses repo 
and reverse repo rates to a djust short -term liquidity. The only varying policy rate remains the repo 
rate or the rate at which the RBI lends to commercial banks. Recently, the RBI also introduced 
longer -term repo operations to improve monetary transmission. The RBI's operating targe t is the 
 
18 It is estimated that extra -budgetary spending increased f rom around 1.4% of GDP in 2015 to 2.9% 
by 2018 (Subramanian, A. and Felman, J., 2019, "India's Great Slowdown: What Happened? What's the Way 
Out?" Center for International Development at Harvard University, Working Paper No. 370, December).  
19 The report also suggests that such off -budget financial arrangements understates annual 
expenditures on subsidies, and prevents the transparent depiction of fiscal indicators for the relevant year, and 
that an appropriate disclosure framework may be required f or off -budget financing.  Report of the Comptroller 
and Auditor General of India on Compliance of the Fiscal Responsibility and Budget Management Act, 2003, for 
the Year 2016 -17. Viewed at: 
https://cag.gov.in/sites/default/files/audit_report_files/Report_No _20_of_2018_Compliance_of_the_Fiscal_Res
ponsibility_and_Budget_Management_Act_2003_Department_of_Economic_Affairs_Minis.  
20 The RBI estimates the impact of the UDAY on state government budgets at around 0.7% of GDP . RBI, 
State Finances: A Study of Budgets of 2019 -20. Viewed at:  
https://www.rbi.org.in/Scripts/AnnualPublications.aspx?head=State%20Finances%20:%20A%20Study%20of
%20Budgets .  
21 According to the Annual Report of the RBI for 2018/19, the increased expenditure was mainly due to 
farm loan waivers, income support schemes, and an increase in the minimum support prices for certain crops 
in certain states. RBI, Annual Report 2019. Viewed at:  
https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/2ECONOMICREVIEW80E1FDD5A97642ADA02908CBC64739
B9.PDF . 
22 RBI, State Finances: A Study of Budgets of 2019 -20. Viewed at:  
https://www.rbi.org.in/Scripts/AnnualPublications.aspx?head=State%20Finances%20:%20A%20Study%20of
%20Budgets . 
23 Previously, the RBI's approach to monetary policy was based on multiple indicators, including price 
stabilit y, financial stability, and economic growth. Monetary Policy Framework in India — Experience with 
Multiple Indicators Approach; Speech by Mr Deepak Mohanty. Viewed at:  
https://r bidocs.rbi.org.in/rdocs/Speeches/PDFs/DMBEM020310.pdf . 
24 RBI, Viewed at : https://rbidocs.rbi.org.in/rdocs/content/pdfs/MPFA28022015.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
- 24 - 
 
  weighted average call rate (WACR), which it aims to align with the policy repo rate through liquidity 
management.  
1.22.   During the period under review, with the target for CPI inflation by the end of 2016/17 at 
below 6%, and a focus on an inflation targ et of 4%, monetary policy maintained an accommodative 
stance, especially to encourage investment and support growth. As CPI inflation fell to below its 
mandated target to 5.6% by the end of 2015 and 5.7% by January 2016, the policy rate was reduced 
to 6.5%  in April 2016. Following the central Government's decision to demonetize in November 
2016, the RBI used a number of instruments, including reverse repo rate auctions, to absorb surplus 
liquidity in the banks; this was followed by time -limited use of an in cremental cash reserve ratio 
(ICCR) of 100% on net demand and time liabilities of banks, and open -market sales of securities. 
The RBI reverted to the use of reverse repo auctions (its traditional instrument to absorb surplus 
liquidity) on 14 January 2017, following the decline in surplus liquidity. The demonetization 
dampened inflation further, and the policy rate was reduced to 6% in August 2017, where it 
remained until June 2018 when monetary policy was tightened by 25 basis points to 6.5% to respond 
to growing inflationary pressures from rising input prices of crude oil and other commodities. The 
MPC switched to a calibrated tightening stance in October 2018 but, by early 2019, inflationary risks 
had eased, and inflation was expected to remain within the 4% target. With economic growth 
weakening and inflation predicted to remain below the RBI's target, the MPC cut the repo rate by 
25 basis points in February, April and June 2019 to 5.75%. The rate was further reduced to 5.40% 
in August 2019 and to 5.15% in  October 2019. To address the challenges created by the current 
global COVID -19 pandemic, the rate was reduced substantially at the end of March 2020 to 4.4%, 
and then further in May to 4.0%.  
1.23.   Despite a decline in the repo rate, there has been concern that monetary transmission by 
banks has been staggered and incomplete.25 Following the introduction of an external benchmark 
system for all new floating rate personal loans and loans to micro and small enterprises (MSEs) by 
the RBI in October 2019, most banks l inked their lending rates for such loans to the RBI's repo 
rate.26 There are early indications of an improvement in transmission to new rupee loans to the 
housing, automotive and MSE sectors. The authorities noted that weighted average lending rates on 
existing and new loans declined. In February 2020, loans to medium -sized enterprises were also 
linked to the external benchmark.  
1.24.   India's exchange rate policy is based on a managed float (since 1993) , with the RBI 
intervening from time to time to prevent excessive volatility and in line with the objectives of 
monetary policy . The nominal effective exchange rate (NEER) depreciated during 2015 /16 and 
2016/17, before appreciating slightly in 2017 /18. Following an increase in oil prices , a widening 
current account deficit , and the strengthening of the US dollar, the NEER showed s harper 
depreciation in 2018 /19. The real effective exchange rate (REER) showed appreciation for much of 
this period but depreciated in 2018 /19.27 During the first half of 2019, there was modest appreciation 
of the Indian rupee , followed by depreciation by mid-2019, and volatility thereafter . 
1.5  Balance of payments  
1.25.   After gradually improving between 2014/15 and 2016/17, India's current account deficit 
widened to 2.1% of GDP in 2018/19. In 2019/20, the deficit fell to 0.8%, due to a narrowing 
merchandise trade de ficit, as the decline in imports outstripped that of exports during this period. 
The services balance continues to be positive, as it was throughout the review period. The current 
account deficit reflects the difference between gross domestic savings and i nvestment in the country. 
While savings continued to grow since the last Review, they did not keep pace with investment. The 
current account deficit was financed through capital inflows, primarily in the form of foreign direct 
and portfolio investment. Whi le gross FDI to India increased gradually since 2014/15, higher 
repatriation by foreign investors led to a decline in net FDI between 2015/16 and 2017/18; net FDI 
inflows improved during 2018/19 and 2019/20. Portfolio investment, which remains volatile and  
 
25 RBI, Fourth Bi -monthly Monetary Policy Statement, 2019 -20, Resolution of the Monetary Policy 
Committee . Viewed at: 
https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR86 5A67C25ACCD20475696264BABF2DFA063.PDF . 
26 RBI, Fifth Bi -monthly Policy Statement, 2019 -20, Resolution of the Monetary Policy Committee . 
Viewed at: 
https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR135049CE0509E92A44F4B7EA2FDC4A9C3340.PDF . 
27 The NEER and REER are based on a basket of six currencies: euro, Japanese yen, US dollar, British 
pound,  Chinese renminbi, and Hong Kong dollar.  WT/TPR/S/ 403/Rev.1  • India  
 
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  susceptible to global developments, has increased since 2016 -17. Recent reductions in foreign 
investment restrictions, and the reduction in corporate rate of tax in 2019, may help to attract more 
FDI.28 
Table 1.4 Balance of payments 2014 -20 
(USD million)  
  2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20 
Current account  -26,789.0  -22,087.8  -14,350.0  -48,661.1  -57,180.4  -24,550.1  
Goods and services balance  -68,411.0  -60,402.2  -44,097.9  -82,474.0  -98,341.7  -72,583.8  
Goods balance  -144,940.0  -130,078.7  -112,442.5  -160,035.9  -180,282.6  -157,505.9  
Exports  316,545.0  266,365.3  280,138.0  308,970.4  337,236.6  320,430.9  
Imports  461,484.0  396,444.1  392,580.5  469,006.3  517,519.2  477,936.8  
Services balance  76,529.0  69,676.5  68,344.6  77,561.9  81,940.9  84,922.1  
Receipts  158,107.0  154,311.1  164,196.6  195,088.9  208,000.4  213,191.0  
Payments  81,578.0  84,634.7  95,852.0  117,527.0  126,059.5  128,268.9  
Primary income  -24,140.0  -24,375.3  -26,301.9  -28,680.9  -28,861.1  -27,280.6  
Credit  13,397.0  14,703.0  16,290.8  18,861.6  21,839.3  25,165.5  
Debit 37,537.0  39,078.3  42,592.7  47,542.5  50,700.4  52,446.1  
Secondary income  65,761.0  62,689.7  56,049.8  62,493.8  70,022.4  75,314.4  
Credit  70,123.0  66,001.6  61,550.0  69,433.4  76,633.9  83,350.6  
Personal transfers 
(current transfers 
between resident and 
non-resident 
households)  67,331.0  63,420.8  59,084.1  66,852.5  73,918.0  80,758.7  
Debit 4,362.0  3,311.9  5,500.2  6,939.6  6,611.5  8,036.2  
Capital account  85.0 40.7 149.8  -29.1 -163.5  -1,091.7  
Gross acquisitions/disposals of 
non-produced non -financial 
assets  110.0  13.4 39.5 42.2 -68.0 -1,017.9  
Capital transfers  -25.0 27.3 110.3  -71.2 -95.5 -73.8 
Financial account  27,725.0  23,120.2  14,680.2  47,788.4  57,829.6  24,667.6  
Direct investment  31,251.0  36,021.0  35,612.2  30,286.1  30,712.0  43,013.2  
FDI in India  35,283.0  44,906.5  42,214.9  39,430.5  43,302.3  56,006.2  
India's direct investment 
abroad  -4,031.0  -8,885.6  -6,602.7  -9,144.5  -12,590.3  -12,993.0  
Portfolio investment  40,934.0  -4,503.1  7,611.6  22,114.9  -2,438.0  1,403.4  
Portfolio investment in 
India 40,923.0  -4,016.0  7,765.6  22,164.7  -2,224.6  552.1  
Portfolio investment by 
India 11.0 -487.2  -154.0  -49.8 -213.3  851.3  
Financial derivatives (other 
than reserves) and employee 
stock options  -1,563.0  631.0  9,821.8  -2,870.0  1,032.1  4,098.9  
Other investment  18,509.0  8,876.0  -16,814.9  41,831.7  25,184.2  35,650.2  
Other equity  1,271.0  373.4  0.0 0.0 1,820.0  0.0 
Currency and deposits  15,789.0  15,808.2  -12,080.9  9,675.1  10,693.1  7,964.3  
Loans  -876.0  -8,203.1  -8,623.2  9,275.6  10,569.2  13,431.7  
Insurance, pension, and 
standardized guarantee 
schemes  76.0 -787.0  -293.6  -1,682.7  -1,161.8  -624.6  
Trade credit and advances  -111.0  -1,609.9  6,467.3  13,899.9  2,020.7  -1,025.6  
Other  2,361.0  3,294.5  -2,284.5  10,663.9  1,243.0  15,904.3  
Reserve assets  -61,406.0  -17,904.7  -21,550.3  -43,574.4  3,339.4  -59,498.1  
Errors and omission  -1,021.0  -1,073.1  -480.0  901.8  -485.8  974.2  
Note:  2019/20 figures are provisional.  
Source:  RBI, Handbook of Statistics on Indian Economy . Viewed at: 
https://www.rbi.org.in/S cripts/AnnualPublications.aspx?head=Handbook%20of%20Statistics%20on
%20Indian%20Economy ; and Developments in India's Balance of Payments during the Fourth 
Quarter (January -March) of 2019 -20. Viewed at: 
https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=50020 . 
 
28 According to  the Department for Promotion of Industry and Internal Trade (DPIIT), around 90% of 
total FDI inflows are through the automatic route. DPIIT, Industrial Policy 2017 - A Discussion Paper. Viewed 
at: https://dipp.gov.in/sites/default/files/Industrial_policy_2017_DP.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  1.6  Developments in Trade and Investment  
1.6.1   Trends and patterns in merchandise and services trade  
Merchandise trade  
1.26.   India's merchandise trade as a share of GDP i s around 30%. Growth in both exports and 
imports fell sharply in 2015/16, due to lower petroleum prices and weak global demand. Since then, 
growth in exports has averaged around 8% annually, and imports almost 11%.  
1.27.   Exports increased from USD 310 billion i n 2014/15 to USD 313 billion in 2019/20. Imports 
grew from USD 448 billion to USD 474 billion during the same period. The product composition of 
exports remained largely unchanged. Petroleum and mineral products, precious stones and metals, 
chemicals, and textiles are the largest components thereof. The share of machinery and electrical 
equipment increased during this period, reflecting, in part, a move towards medium technology 
exports with greater value added (Chart 1.1 and Table  A1.1). Imports continue t o be dominated by 
petroleum and mineral products which account for around a third of imports. The share of machinery 
and electrical equipment imports (especially machinery and mechanical appliances and parts, and 
electrical machinery and parts) also increa sed during this period, perhaps as a result of trade policies 
to encourage imports of components and export of value -added products (Chart 1.1 and 
Table  A1.2).29 Other imports that increased include chemicals and transport equipment.  
1.28.   In terms of the direct ion of trade, the EU -28 remains the main destination for exports, 
followed by the United States (Chart 1.2 and Table A1.3). Around a third of exports are destined for 
other countries in Asia, where the principal markets remain China; Hong Kong, China; and 
Singapore. The share of its exports destined for the Middle East and Africa has, however, been 
declining.  
1.29.   Almost 40% of India's imports in 2019/20 originated in Asia (Chart 1.2 and Table A1.4). The 
largest source of imports from the region is China, whose share remained relatively stable during 
this period. Imports from the United States increased quite significantly, while decreasing slightly 
from Europe (EU -28 and Switzerland) during this period. Around a quarter of imports originated in 
the Middle East, a share that remained relatively unchanged.  
 
29 Tariffs on imports of intermediate goods have been falling as part of various policies to promote the 
production and export of value -added products.  WT/TPR/S/ 403/Rev.1  • India  
 
- 27 - 
 
  Chart 1.1 Product composition of merchandise trade, by main HS section, 2014/15 and 
2019/20  
 
Source:  WTO calculations, based on data from the Ministry of Commerce and Industry, Department of 
Commerce. Viewed at: https://commerce -app.gov.in/eidb/default.asp .  
Chart 1.1  Product composition of merchandise trade by main HS section, 2014/15 and 2019/20
2014/15 2019/20
Total:   USD 310.3 billion Total:  USD 313.2 billion  
Base metals & 
articles thereof
6.3%
Chemicals 
8.6%Precious stones
& metals  
13.4%Machinery;
electrical equipment
11.5%
Base metals &
articles thereof
6.3% 
Total:   USD 448.0 billion Total:   USD 474.0 billion Transport 
equipment
7.3%
Textiles &
textile articles
10.9%Other
9.0%
Source:  WTO calculations, based on data from the Ministry of Commerce & Industry, Department of Commerce.  
Viewed at: https://commerce -app.gov.in/eidb/default.asp.Other 
8.8%Base metals &
articles thereof
8.3%
Other
7.4%Vegetables &
cereals  6.4%
Transport
equipment
4.4%Transport 
equipment
8.4%  Other
7.9%
Chemicals 
9.6%Transport
equipment
3.3%Petroleum  & 
mineral products
19.5%Textiles & 
textile articles
12.1% Base metals &
articles thereof
7.9%Machinery; 
electrical equipment
7.3%
Plastics & rubber
3.2%Petroleum & 
mineral products
15.3%
Machinery;
electrical equipment
14.5% Machinery; 
electrical equipment
19.5% 
Plastics & rubber 
3.7% Plastics & rubber
3.3% Plastics & rubber
2.5%
Precious stones
& metals  
11.5% Precious stones
& metals 
13.9%
Petroleum & 
mineral products
37.2%Petroleum & 
mineral products
33.5%Precious stones
& metals
11.5%
Chemicals 
15.1% Chemicals 
10.8%Live animals & 
products thereof  3.4%Live animals & 
products thereof
3.2%
Vegetables & 
cereals 5.0%Exports 
Imports 
Fats & oils
2.1%Animal/vegetable 
fats & oils  2.4%Precision 
instruments
1.7%Precision
instruments
2.0%WT/TPR/S/ 403/Rev.1  • India  
 
- 28 - 
 
  Chart 1.2 Direction of merchandise trade, 2014/15 a nd 2019/20  
 
Source:  WTO calculations, based on data from the Ministry of Commerce and Industry, Department of 
Commerce. Viewed at: https://commerce -app.gov.in/eidb/default.asp . 
Services trade  
1.30.   India has a net surplus in its services trade. After falling in  2015/16, services exports 
recovered and have grown from USD 164.2 billion in 2016/17 to USD 213.2 billion in 2019/20 
(Table  1.5). The main services exports are computer, information and telecommunications services, 
whose share increased from 47.6% to 49.6 % of exports between 2014/15 and 2015/16 before 
declining to 45.1% in 2019/20. Other key services exports include travel services and transportation 
services, at 14.1% and 9.8%, respectively, in 2019/20. Imports of services grew from 
Chart 1.2  Direction of merchandise trade, 2014/15 and 2019/20
2014/15 2019/20
Asia
30.1%Exports 
Total:   USD 310.3 billion Total:  USD 313.2 billion
EU-28
11.0%
China
13.5%United States
4.9% Other
11.6%
EU-28
10.8%Other
8.5%United States
7.5%
Total:   USD 448.0 billion Total:   USD 474.0 billionUnited Arab 
Emirates
10.6%
China
13.8%
Other
Middle East  
5.8%Saudi Arabia  
6.3%United States
13.7% United States
17.0%
Singapore
2.8
Hong Kong, China
3.6%United Arab 
Emirates
5.8%Other Asia
18.7%
EU-28
17.4%
Singapore
3.2%Other
9.5%
Other 
Middle East
9.6%Other Asia
11.9%
Switzerland
4.9%EU-28
16.2%
China
3.8%Hong Kong, China
4.4%
United Arab 
Emirates
9.2%Africa
10.6%
Other
Middle East
7.1%
Indonesia
3.2%Other Asia
18.8%
Saudi Arabia
5.7%Other Asia   
14.2%Africa
9.3%Other
10.0%
Hong Kong, China
3.5%
Asia
38.8%Asia
34.0%Asia
30.5%
United Arab 
Emirates
6.4%China
5.3%
Iraq
5.0%Other 
Middle East
8.8%
Africa
8.7%Singapore
3.1%Africa
8.0%Switzerland
3.6%Imports 
Source:  WTO calculations, based on data from the Ministry of Commerce & Industry, Department of Commerce.  
Viewed at: https://commerce -app.gov.in/eidb/default.asp.Korea, Rep. of
3.0%
Iraq
3.2%Indonesia
3.3% Korea, Rep. of
3.3%WT/TPR/S/ 403/Rev.1  • India  
 
- 29 - 
 
  USD 81.6 billion in 20 14/15 to USD 128.3 billion in 2019/20. Other business services account for 
around one third of imports, followed by transportation and travel services.  
Table 1.5 Trade in services 2014 -20 
(USD billion)  
  2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20 
Total credit  158.1  154.3  164.2  195.1  208.0  213.2    
(% of total credit )  
Manufacturing services on 
physical inputs owned by others  0.1 0.1 0.1 0.1 0.1 0.1 
 
Maintenance and repair services 
n.i.e. 0.1 0.1 0.1 0.1 0.1 0.1 
 
Transportation  11.1 9.1 9.7 8.9 9.4 9.8  
Travel  12.9 13.8 14.2 14.5 13.7 14.1  
Construction  1.0 1.0 1.3 1.2 1.6 1.5  
Insurance and pension  1.4 1.3 1.3 1.3 1.3 1.1  
Financial  3.6 3.2 3.1 2.6 2.3 2.2  
Charges for use of intellectual 
property  0.3 0.3 0.3 0.4 0.3 0.4 
 
Computer, information, and 
telecommunication  47.6 49.6 46.9 40.9 41.5 45.1 
 
Other business  18.0 18.8 20.1 19.1 18.8 21.4  
Personal, cultural, and 
recreational  0.8 0.9 0.8 0.8 0.9 1.0 
 
Government goods and services, 
n.e.s.  0.3 0.4 0.4 0.3 0.3 0.3 
 
Other  2.9 1.5 1.7 9.6 9.7 2.8 
Total debit  81.6 84.6 95.9 117.5  126.1  128.3    
(% of total debit )  
Manufacturing services on 
physical inputs owned by others  0.04 0.05 0.04 0.04 0.03 0.05 
 
Maintenance and repair services 
n.i.e. 0.3 0.4 0.4 0.5 1.0 0.9 
 
Transportation  19.8 17.8 14.7 15.0 16.3 18.9  
Travel  18.8 17.5 17.2 16.6 17.2 17.2  
Construction  1.4 1.1 0.9 1.3 2.0 2.1  
Insurance and pension  1.4 1.4 1.6 1.4 1.4 1.4  
Financial  4.4 3.7 6.1 4.7 2.8 2.3  
Charges for use of intellectual 
property  5.9 5.8 6.0 5.9 6.4 6.0 
 
Computer, information, and 
telecommunication  5.0 4.8 5.0 5.5 5.9 8.0 
 
Other business  33.9 36.7 33.7 31.2 32.1 36.5  
Personal, cultural, and 
recreational  1.8 1.4 2.3 2.0 2.0 2.4 
 
Government goods and services, 
n.e.s.  1.2 1.0 0.6 0.7 0.9 0.9 
 
Other  6.2 8.3 11.5 15.2 12.1 3.3 
Source:  RBI, Handbook of Statistics on Indian Economy . Viewed at: 
https://www.rbi.org.in/Scripts/AnnualPublications.aspx?head=Handbook%20of%20Statistics%20on
%20Indian%20Economy ; and Developments in  India's Balance of Payments during the Fourth 
Quarter (January -March) of 2019 -20. Viewed at: 
https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=50020 . 
1.6.2   Trend s and patterns in FDI  
1.31.   India is a net recipient of FDI. FDI inflows grew from USD 29.7 billion in 2014/15 to 
USD 36.8 billion in 2019/20. Services account for the sector receiving most FDI; its share increased 
from 11.0% in 2014/15 to 17.7% in 2019/20. The share of FDI in computer software and hardware 
has also increased rapidly, from 7.7% in 2014/15 to 17.0% in 2019/20. Inflows in 
telecommunications were also strong during 2016/17 and 2017/18, and FDI in trading was also 
considerable. The automobile industr y continues to attract FDI, in part due to the large domestic 
market and relatively high tariffs (Section 4.3). FDI outflows increased from USD 4.0 billion in 
2014/15 to almost USD  12.6 billion in 2018/19.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 1.6 FDI inflows/outflows, by main sector, 2014 -20 
(USD  million)  
  2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20a 
FDI equity inflows  29,737  40,001  43,478  44,857  44,366  36,769  
 (% of FDI equity inflows)  
Servicesb 10.9 17.2 20.0 15.0 20.6 17.7 
Computer software and 
hardware  7.7 14.8 8.4 13.7 14.5 17.3 
Trading  9.2 9.6 5.4 9.7 10.1 9.6 
Telecommunication  9.7 3.3 12.8 13.9 6.0 11.7 
Automobile industry  9.2 6.3 3.7 4.7 5.9 6.8 
Constructionc 5.5 11.6 4.6 7.3 5.6 4.6 
Chemicals (other than 
fertilizers)  2.6 3.7 3.2 2.9 4.5 2.3 
Power  2.4 2.2 2.6 3.6 2.5 0.9 
Drugs and pharmaceuticals  5.0 1.9 2.0 2.3 0.6 1.1 
Total outflows  4,031  8,886  6,603  9,144  12,590  .. 
.. Not available.  
a Up to Dec ember  2019. 
b Including financial, banking, insurance, business, outsourcing, research and development , courier, 
technical testing , and analysis.  
c Includes construction ( infrastructure) activities , and construction development: townships, housing, 
built-up infrastructu re and construction -development projects.  
Note:  Percentages are based on FDI equity inflows only, taken from the DPIIT.  
Source:  RBI, Handbook of Statistics on Indian Economy . Viewed at: 
https://www.rbi.org.in/Scripts/AnnualPublications.aspx?head=Handbook%20of%20Statistics%20on
%20Indian%20Economy ; and DPIIT, FDI Statistics . Viewed at: https://dipp.gov.in/publications/fdi -
statistics . 
1.32.   As in previous years, Mauritius remains one of the largest investors in India, although it was 
overtaken by Singapore in recent years. FDI from M auritius grew to 36% of total FDI in 2016/17; 
however, it has since decreased. This may partly be explained by a revision to the India -Mauritius 
tax treaty in 2016, which removed the exemption on capital gains tax for FDI from Mauritius. 
Following a revise d double taxation avoidance agreement with Singapore, which entered into force 
in April 2017, and a new regulation discouraging foreign companies from setting up overseas entities 
to avoid Indian taxes by denying them local tax benefits, investment increas ed from Singapore and 
decreased from Mauritius. Other important sources of FDI include the Netherlands, Japan and the 
United States.  
Table 1.7 FDI inflows/outflows, by main origin, 2014 -20 
(USD million)  
  2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20a 
FDI equity inflows  29,737  40,001  43,478  44,857  44,366  36,769  
 (% of FDI equity inflows)  
Singapore  22.7 34.2 20.0 27.2 36.6 31.7 
Mauritius  26.4 20.9 36.2 35.5 18.2 20.3 
United Kingdom  4.9 2.3 3.4 1.9 3.0 3.1 
Netherlands  11.6 6.6 7.7 6.2 8.7 9.6 
Japan  7.0 6.5 10.8 3.6 6.7 7.6 
Germany  3.8 2.5 2.5 2.5 2.0 1.0 
United States  6.1 10.5 5.5 4.7 7.1 7.6 
Cyprus  2.0 1.3 1.4 0.9 0.7 0.7 
France  2.1 1.5 1.4 1.1 0.9 1.3 
Total outflows  4,031  8,886  6,603  9,144  12,590  .. 
.. Not available.  
a Up to Dec ember  2019. 
Note:  Percentages are based on FDI equity inflows only, taken from the DPIIT . 
Source:  RBI, Handbook of Statistics on Indian Economy . Viewed at: 
https://www.rbi.org.in/Scripts/AnnualPublications.aspx?head=Handbook%20of%20Statistics%20on
%20Indian%20Economy ; and DPIIT, FDI Stat istics. Viewed at: https://dipp.gov.in/publications/fdi -
statistics . WT/TPR/S/ 403/Rev.1  • India  
 
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  2  TRADE AND INVESTMENT REGIMES  
2.1  General Framework  
2.1.  India is a union of its states and union territories. Under the Constitution, which entered into 
force on 26 January 1950, India has an independent executive, legislature, and judiciary.  
2.2.  Executive power is vested in the President, who is the Head of State and is elected for five 
years by the members of an electoral college comprising members of both houses of Parliament and 
the state legislative assemblies. The President is assisted by the Council of Ministers, headed by the 
Prime Minister. The President appoints the Prime Ministe r and, on the advice of the Prime Minister, 
the other members of the Council of Ministers, all of whom must also be members of Parliament.  
2.3.  India has a parliamentary system, with a bicameral Parliament consisting of a Lower House 
(Lok Sabha , or House of th e People) and an Upper House ( Rajya Sabha , or Council of States). The 
Lok Sabha is subject to election every five years through universal suffrage. The Rajya Sabha is a 
permanent body, most of whose members are elected by the members of state legislative 
assemblies1; the term of each member is six years, with one third of Rajya Sabha members retiring 
every two years. Each state has an elected state legislature, and representatives in the Rajya 
Sabha.2 Executive authority in the states and union territorie s is held by the Governor who is 
appointed by the President of India. The Governor of a state is assisted by the Council of Ministers, 
headed by the Chief Minister. The Governor appoints the Chief Minister and, on the advice of the 
Chief Minister, the othe r members of the Council of Ministers, all of whom must also be members of 
the state Legislature.   
2.4.  The legal system is based on common law and statutory legislation. The primary source of law 
is the legislation enacted by Parliament. All bills must be intr oduced in Parliament before being 
enacted into law. All bills, except money bills, may be introduced in either House of Parliament. They 
must be passed by a simple majority in each House and, once passed in one House, are sent onto 
the other House for adop tion. Once adopted by both Houses, the bill must be approved by the 
President before it can become law. If Parliament cannot agree on the bill within six months, the 
President may summon a joint session of both Houses to discuss and vote on it. If the Bill  is passed 
in the Joint Session, it is deemed to have been passed by Parliament.   
2.5.  Money bills, as defined by Article 110 of the Constitution, may only be introduced in the Lok 
Sabha. After passage in the Lok Sabha, the bill is transmitted to the Rajya Sabh a, which, in turn, 
returns it within 14 days with its recommendations. The Lok Sabha may either accept or reject the 
recommendations, following which the bill is deemed to have been passed by both Houses of 
Parliament. If the bill is not sent back to the L ok Sabha within 14 days, it is also deemed to have 
been passed by both Houses.3 The President must sign the bill, once passed by Parliament, in order 
for it to become law. Except for money bills, the President may amend the bill and return it to either 
House for consideration. The President may not withhold assent if the bill is returned without taking 
into account the recommendations made. Acts become law once published in the Gazette of India 
on the date of assent by the President or the date of entry in to force indicated in the law.  
2.6.  In periods when Parliament is in recess, Article 123 of the Constitution gives the President 
power to promulgate ordinances, if immediate action is required. An ordinance has the same force 
and effect as an act of Parliament  but it ceases to exist at the expiration of six weeks from Parliament 
reconvening, or before if both Houses disapprove it. An ordinance may be withdrawn at any time by 
the President.  
2.7.  Enabling legislation takes the form of regulations and rules which are u sually drawn up by the 
implementing ministries or statutory bodies. In addition, government departments may issue 
circulars or notifications from time to time to amend regulations.  
 
1 12 members of the Rajya Sabha are nominated by the President. The Vice -President, who is elected by 
an electoral college of both Houses of Parliament and the state assemblies, is the ex officio  Chair of the Rajya 
Sabha.  
2 There are 28 states and nine union territories. All the states, and the union territories of Delhi, Jammu 
and Kashmir and Puducherry, have  their own legislative assemblies and representatives in the Rajya Sabha.  
3 Constitution, Article 109.  WT/TPR/S/ 403/Rev.1  • India  
 
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  2.8.  The Constitution determines the distribution of responsibilities of the st ate and central 
governments. The subjects of legislation are distributed between the central and state governments  
under Article 246 of the Constitution (read with the Seventh Schedule of the Constitution).4 The 
Seventh Schedule of the Constitution lists certain areas, such as foreign affairs; treaties and 
agreements with foreign countries and their implementation; and trade and commerce, as the 
responsibility of the central Government (Schedule I - the Union List). In addition, while certain 
sectoral resp onsibilities also fall under the Union List (e.g. banking, insurance, and industries in the 
public interest), others, such as agriculture, protection against pests, and prevention of plant and 
animal diseases, fisheries, public health, and sanitation, are the responsibility of state governments 
(Schedule II - State List). Both the central and state governments have joint responsibility for other 
activities, such as bankruptcy and insolvency, commercial and industrial monopolies, and legal, 
medical and other  professions (Schedule III - Concurrent List).  
2.9.  Under Chapter IV of the Constitution, the judiciary is headed by the Supreme Court, consisting 
of a Chief Justice and 30 other judges.5 The judges are appointed by the President, after consultation 
with the C hief Justice and other judges as deemed necessary. The Supreme Court takes up appeals 
on any judgements made by the High Courts, which are the highest courts in the states and union 
territories. The High Courts are the appellate courts for decisions taken by district and subordinate 
civil and criminal courts. There are 25 High Courts, each having jurisdiction over one state and one 
or more union territories.  
2.10.   The Supreme Court's decisions are binding on all other courts in India. It also has sole 
jurisdiction over any disputes between the states and the central and state governments. In addition, 
special tribunals are established for resolving specific issues, including the Income Tax Appellate 
Tribunal, the Central Administrative Tribunal, the Intellectual Property Appellate Tribunal, and the 
Debt Recovery Tribunal.  
2.11.   Under Chapter V of the Constitution (Article 148), the Comptroller and Auditor General (CAG) 
is appointed by the President to audit, on an annual basis, the accounts of the central and state 
governments and any other authority or body as prescribed by any law passed by Parliament.6 
2.2  Trade Policy Formulation and Objectives  
2.2.1   Trade policy formulation  
2.12.   There have been no changes in the structure of trade policy formulation and implementation 
since the last Review. Responsibility for trade policy formulation and implementation lies with the 
Department of Commerce in the Ministry of Commerce and Industry, wi th the assistance of other 
ministries and agencies, such as the Ministry of Finance, the Reserve Bank of India, and sectoral 
ministries.7 
2.13.   The policy framework is provided by the Foreign Trade Policy (FTP), which is drawn up under 
the Foreign Trade (Develo pment and Regulation) Act, 1992, and formulated and implemented by 
the Department of Commerce. Other key trade -related legislation includes the Customs Act, 1962, 
and the Customs Tariff Act, 1975 (Table 2.1). The current FTP covers the period 2015 -21, and is 
amended periodically to take into account changing domestic and international economic 
considerations.  
 
4 List I is known as the Union List, and includes 100 subjects over which the Union has exclusive power 
of legislation; List II  is known as the State Lis t, and comprises 61 items or entries over which the state 
legislature has exclusive power of legislation; and List III,  known as the Concurrent List, comprises over 52 
items over which both the central and state governments have concurrent powers to legisl ate. 
5 Article 124(1) as amended by the Supreme Court (Number of Judges) Amendment Act, 2008.  
6 Such bodies can include public sector enterprises. The CAG also audits the performance of 
programmes administered by the central and state governments.  
7 Accord ing to the Annual Report of the Department, other functions include: multilateral and bilateral 
commercial relations, special economic zones (SEZs), state trading, export promotion and trade facilitation, 
and development and regulation of certain export -oriented industries and commodities. Department of 
Commerce, Annual Report 2017 -18. WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 2.1 Principal trade -related laws, 2020  
Area Law 
Foreign trade  Foreign Trade (Development and Regulation) Act, 1992  
Foreign Trade (Development and Regulation) Amendment Act, 2010  
Export (Quality Control and Inspection) Act, 1963  
SEZ Act, 2005  
Customs  Customs Act, 1962  
Customs Tariff Act, 1975  
Investment  Companies Act, 2013;  
Industries (Development and Regulation) Act, 1951  
Indian Contract Act, 1872  
Industrial Disputes Act, 1947  
Anti-dumping/countervailing 
measures and safeguards  Customs Tariff Act, 1975  
Taxation  Income Tax Act, 1961  
Central Excise Act,  1944 
Goods and Services Tax Act , 2017 
State VAT Acts  
Standards/ TBT and labelling  Bureau of Indian Standards Act, 1986  
Food Safety and Standards Act, 2006  
Drugs and Cosmetics Act, 1940  
Insecticides Act, 1968  
Legal Metrology Act, 2009  
SPS Livestock Importation Act, 1898  
Destructive Insects and Pests Act, 1914  
Food Safety and Standards Act, 2006  
Plant Quarantine Order, 2003 , under Destructive Insects and Pests Act, 1914 
Export (Quality Control and Inspection) Act , 1963  
Agricultural and Processed Food Products Export Development Authority  Act, 
1985 
Competition  Competition Act, 2002  
Intellectual property rights Copyright Act, 1957  
Patents Act, 1970  
Trade Marks Act, 1999  
Designs Act, 2000  
Geographical Indications of Goods (Registration and Protection) Act, 1999  
Protection of Plant Varieties and Farmers' Rights Act, 2001  
Seeds Act, 1966  
Biological Diversity Act, 2002  
Agriculture  National Food Security Act, 2013  
Agricultural Produce Marketing Committee A ct  
Energy  Petroleum Act, 1934  
Oil Field (Regulation and Development) Act, 1948  
Petroleum and Natural Gas Board Act, 2006  
Electricity Act, 2003  
Banking  Reserve Bank of India Act, 1934  
Banking Regulation Act, 1949  
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980  
Securitization and Reconstruction of Financial Assets and Enforcement of 
Security Interest Act, 2002  
Recovery of Debts due to Banks and Financial Institutions Act, 1993  
Foreign Exchange Management Act, 1 999 
Insurance  Insurance Act, 1938  
Insurance Regulatory and Development Authority Act, 1999  
Life Insurance Corporation Act, 1956  
General Insurance Business Act, 1972  
Motor Vehicles Act, 1988  
Securities  Securities and Exchange Board of India Act, 1992  
Securities Contract (Regulations) Act, 1956  
Depositories Act, 1996  
Telecommunications  Indian Telegraph Act, 1885  
Indian Wireless Telegraphy Act, 1933  
Telecom Regulatory Authority of India Act, 1997  
Maritime transport  Merchant Shipping Act, 1958  
Indian Ports Act, 1908  
Major Port Trust Act, 1963  
Air transport  Aircraft Act, 1934  
Airports Economic Regulatory Authority of India Act, 2008  WT/TPR/S/ 403/Rev.1  • India  
 
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  Area Law 
Rail transport  Railways Act, 1989  
Road transport  National Highways Act, 1956  
Control of National Highways (Land and Traffic) Act, 2002  
National Highways Authority of India Act, 1988  
Carriage by Road Act, 2007  
Source:  Information provided by the authorities.  
2.14.   Expert groups and advisory bodies are also constituted from time to time to provide advice 
on trade policy and meeting trade policy objectives. Policy advice may also be provided by other 
institutions within the Central Government, such as the Director General of Foreign Trade (DGFT), 
the Tariff Commission, and the National Institution for Transforming India (NITI Aayog), established 
on 1 January 20158; and non -governmental bodies, such as the Indian Institute of Foreign Trade, 
and chambers of commerce, such as the Federation of Indian Chambers of Commerce and Industry 
and the Confederation of Indian Industries.  
2.2.2   Trade policy objectives  
2.15.   According to the FTP, India's trade policy objective is to increase its share in global exports. 
The current FTP (2015 -21) aims to increase  India's share of global exports  from 2% in 2015 to 3.5% 
by 2020. The FTP Statement, which was released in 2015, aimed to achieve this by providing a 
stable and sustainable policy environment for foreign trade in merchandise and services; link rules, 
procedures and incentives for exports and imports with other central government schemes, such as 
"Make in India"; promote diversification of Indian exports; improve integration with major regions 
of the world; and provide a mechanism for regular appraisal to rationalize imports and reduce the 
trade imbalance.9 To find a balance between meeting the needs  of the growing economy and the 
promotion of domestic industry, a  mechanism was put in place by the Department of Commerce for 
quarterly appraisal of imports. According to the authorities, t he 21 stakeholder 
ministries/ departments which were identified were advised to probe the need for importing various 
commodities and the feasibility of producing them in a cost -effective way. The objective is to develop 
an ecosystem conducive to formulating coordinated and rational import policies in various sectors.   
2.16.   To achieve these export targets, India uses incentives such as the Merchandise Export from 
India Scheme (MEIS), the Services Export from India Scheme (SEIS), and credit facilitation, to 
encourage exports. The o bjectives of the MEIS and the SEIS under the FTP is to offset infrastructural 
inefficiencies and associated costs of  exporters  (Section 3.2.5.) .10 On 1 September 2020, the 
Government announced that it would withdraw the MEIS from 1 January 2021.11 The latest 
amendment to the FTP in 2017 incorporated chan ges resulting from India's ratification of the WTO 
Agreement on Trade Facilitation (TFA), including a reduction in the number of documents required 
for export and import, the single window interface for facilitating trade (SWIFT), and the 
establishment of the National Committee on Trade Facilitation.   
2.17.   While the overall goal remains to increase exports, since policymaking in India is largely 
focused on domestic issues, frequent use of trade policy is made to encourage domestic production 
and meet domestic inflation and supply objectives. Thus, changes ar e made as required to import 
and export restrictions and the tariff to ensure stable domestic supplies of key products. This was 
noted most recently in the report of the High Level Advisory Group in September 2019, which stated 
 
8 The NITI Aayog , which replaced the Planning Commission, was reconstituted on 7 June 2018 to include 
ex officio  members , including the Ministers of Finance and Commerce. Its key objectives include "to evolve a 
shared vision of national development priorities and strategie s with the active involvement of states in the light 
of national objectives". N ITI Aayog,  Objectives and Features.  Viewed at  
https://niti.gov.in/index.php/objectives -and-features  on 22 May 2019.  
9 FTP Statement 2015 -20. Viewed at: http://www.eximkey.com/Upload/Spotlight/FTP2015 -
2020/FTPstatement2015.pdf  on 22 May 2019.  
10 The MEIS replaces export incentives provided under the Focus Product Scheme, the Market Linked 
Focus Product Scheme, the Focus Market Scheme, the Agricultur e Infrastructure Incentive Scrip, and the 
Vishesh Krishi Grameen Upaj Yojana. At present, the MEIS is available for more than  7,500 tariff lines/HSN 
Codes  (for some codes under the apparel and made -up sectors of textiles, the MEIS was withdrawn with effect  
from 7  March 2019, through  Public Notice 58 dated 29  January 2020, bringing the lines covered to around 
7,500 from  more than 8 ,000 tariff line s). Viewed at:  https://content.dgft.gov.in/Website/PN58E_2020.pdf .  
11 DGFT Notification No. 30/2015 -2020. Viewed at: 
https://content.dgft.gov.in/Website/dgftprod/4a37d60a -f0bf-4783-bc67-a17131168d46/N30E.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  that "international trade re ceives inadequate attention both in the Government and outside in India, 
with the inward focus being visible across most institutions both in the public and private sectors".12 
Frequent changes in import and export policy create uncertainty for economic ac tors. The report 
calls for a reduction and rationalization of the tariff, in order to make it simple and more predictable13 
and, with regard to agriculture, recommends that "there must not be a 'stop and start' policy on 
exports and imports of agricultural  products because that prevents farmers from taking objective 
decisions on sowing different crops".14 
2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.18.   As a founding Member of the WTO, India provides most -favoured nation (MFN) treatment to 
all WTO Members (and other trading partners that are not WTO Members), except Pakistan, for 
which it withdrew MFN treatment on 15 February 2019.15 Under the notification issued by the 
Ministry of Finance, imports of all products from Pakistan are subject to duties of 200% sinc e 
16 February 2019.16 India accepted the Fourth and Fifth WTO Services Protocols. It is a Party to the 
WTO Information Technology Agreement (ITA) but has not joined the expanded ITA. India is also 
an observer to the WTO Agreement on Government Procurement (GPA) since February 2010. India's 
trade policies have been reviewed six times, most recently in June 2015.  
2.19.   India ratified the WTO TFA on 22 April 2016. According to its notifications to the WTO, around 
72% of its commitments are in category A (implemented  by 22 February 2017), and 23% in category 
B (which are to be implemented by 22 February 2022). It notified its contact points in April 2019.17 
2.20.   India's most recent notifications to the WTO are shown in Table 2.2.  
Table 2.2 Notifications to the WTO, 1 January 2015 –30 June 2020  
WTO agreement  Description  Document symbol  (most 
recent notification)  Date 
Agreement on Agriculture  
Article 18.2 (DS:1)  Domestic support  G/AG/N/IND/18  31/03/2020  
Article 18.2 (MA:1)  Tariff and other quota commitments  G/AG/N/IND/6  07/03/2011  
Article 18.2 (MA:2)  Tariff quotas  G/AG/N/IND/1 7 22/08/2019  
Article 18.2 (ES:1)  Export subsidies  G/AG/N/IND/9  30/07/2012  
Enabling Clause  
Paragraph 2  Preferential tariff treatment for least 
developed countries ( LDCs) G/C/W/651/Add.1 and 
WT/COMTD/N/38/Add.1  18/11/2015  
Paragraph 2c  Regional trade agreement (India and 
Thailand)  WT/COMTD/N/54  22/06/2017  
GATT 1994  
Article XXVIII:5  Invocation of paragraph 5  G/MA/307  01/12/2014  
Agreement on the Implementation of Article VI of the GATT 1994 (Anti -dumping)  
Article 16.4 – ad 
hoc Semi-annual report  G/ADP/N/335/IND  18/05/2020  
Article 18.5  Notification of laws and regulations  G/ADP/N1/IND/2/Suppl.8  21/04/2017  
Agreement on the Implementation of Article VI I of the GATT 1994 ( Customs valuation ) 
Article 22 National legislation  
Checklist of issues  
Notification under Decision A.3  
Notification under Decision A.4  G/VAL/N/1/IND/4  
G/VAL/N/2/IND/2  
G/VAL/N/3/IND/1  
G/VAL/N/3/IND/2  21/02/2019  
21/02/2019  
21/02/2019  
21/02/2019  
Article XVII and Understanding on the Interpretation of Article XVII (State trading)  
Article XVII:4(a)  New and full notification on state 
trading enterprises  G/STR/N/16/IND;  
G/STR/N/17 /IND 03/10/2019  
 
12 Department of Commerce, Report of the High -Level Advisory Group , pg. 66 . Viewed at 
https://commerce.gov.in/writereaddata/uploadedfile/MOC_637084 606089692212_HLAG%20Report%20.pdf . 
13 Report of the High -Level Advisory Group , p. 130.  
14 Report of the High -Level Advisory Group , p. 186.  
15 Pakistan does not provide MFN treatment to India.  
16 Department of Revenue, Ministry of Finance, Notification No. 5/2019 -Customs, 16 February 2019 . 
Viewed at: http://www.cbic.gov.in/resources//htdocs -cbec/customs/cs -act/notifications/notfns -2019/cs -
tarr2019/cs05 -2019.pdf;jsessionid=5518F5844624F9CF43B5814A980DD355 . 
17 WTO document G/TFA/N/I ND/2, 11 April 2019.  WT/TPR/S/ 403/Rev.1  • India  
 
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  WTO agreement  Description  Document symbol  (most 
recent notification)  Date 
Agreement on Import Licensing  
Article 7.3  Replies to questionnaire on import 
licensing procedures  G/LIC/N/3/IND/19  04/11/2019  
Decision on Notification Procedures for Quantitative Restrictions  
G/L/59/Rev.1  Notification of quantitative restrictions 
in force  G/MA/QR/N/IND/2  and 
G/MA/QR/N/IND/2/Add.1  21/06/2018  
24/04/2019  
Agreement on Subsidies and Countervailing Measures  
Article 25.11  Semi-annual report  G/SCM/N/356/IND  06/05/2020  
Article 25  New and full notification of subsidy 
programmes  G/SCM/N/343/IND/Suppl.1; 
G/SCM/N/315/IND/Suppl.3; 
G/SCM/N/284/IND/Suppl.5; 
G/SCM/N/253/IND/Suppl.4  18/10/2019  
Article 32  Notification of law and regulations on 
subsidies and countervailing measures  G/SCM/N/1/IND/2/Suppl.9  21/11/2019  
Agreement on Safeguards  
Article 12.1(a)  Notification of initiation of an 
investigation  G/SG/IND46  20/09/2019  
Article 12.1(b)  Finding of serious injury and proposal to 
impose a measure  G/SG/N/8/IND/31/Suppl.2; 
G/SG/N/10/IND/22/Suppl.1; 
G/SG/N/11/IND/17/Suppl.2  06/08/2018  
Article 12.4  Notification before taking a provisional 
measure  G/SG/N/7/IND/10/Suppl.1  30/09/2015  
Article 12.4  Notification of termination  with no 
measure imposed  G/SG/N/9/IND/1 7 22/04/20 20 
Article 12.5  Notification of proposed suspension of 
concessions and other obligations  G/SG/N/12/IND/1/Rev.1  14/06/2018  
Agreement on Technical Barriers to Trade  
Article s 2.9 and 
5.6.2 Proposed technical regulation and 
procedures for assessment of 
conformity  G/TBT/N/IND/ 148 27/05/2020 
Agreement on Sanitary and Phytosanitary Measures  
Article 7 , Annex B  Sanitary and phytosanitary  regulations  G/SPS/N/IND/2 50 29/04/2020 
Agreement on Trade Facilitation  
WT/L/931  Notification of category commitments  G/TFA/N/IND/1  14/03/2018  
Articles 1.4, 
10.4.3, 10.6.2 and 
12.2.2  Notification on publication of 
information  G/TFA/N/IND/2  11/04/2019  
Agreement on Trade -Related Aspects of Intellectual Property Rights  
Article 69  Notification of Contact Points  IP/N/3/ IND/1  17/01/2020 
General Agreement on Trade in Services  
Article III:3  Regulatory changes  S/C/N/1013  10/06/2020  
Article V  Notification of economic integration 
agreement  S/C/N/ 954 17/06/2019 
Article VII:4  Existing recognition measures  S/C/N/929  06/03/2019  
Source:  WTO Secretariat . 
2.21.   India was involved in 24 disputes as complainant and 32 as respondent in the WTO. The 
status of disputes involving India since the last Review is shown in Table 2.3. India was also a third 
party in 165 disputes.  
Table 2.3 WTO dispute settlement cases involving India as respondent and complainant, 
January 2015 -August 2020  
Subject  Complaina nt/ 
respondent  Status  WTO document 
series  
India as respondent  
Anti-dumping duties 
on USB flash drives  Chinese Ta ipei Consultations requested on 25 September 
2015; no dispute panel established  DS498  
Certain measures on 
imports of iron and 
steel products  Japan  Decision by India to appeal the panel ruling 
on 14 December 2018; and by Japan to 
cross-appeal on 21 December 2018  DS518  
Export related 
measures  United States  Decision by India to appeal the pan el ruling 
on 19 November 2019  DS541  
Measures concerning 
sugar and sugarcane  Brazil  
Australia  
Guatemala  Panel established on 15 August 2019 and 
composed on 28 October 2019  DS579  
DS580  
DS581  WT/TPR/S/ 403/Rev.1  • India  
 
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  Subject  Complaina nt/ 
respondent  Status  WTO document 
series  
Tariff treatment on 
certain goods in the 
information and 
communications 
technology sector European Union  
Chinese Taipei  The European Union requested consultations 
on 2 April 2019 ; the United States, Chinese 
Taipei, Singapore, China, Japan, Canada 
and Thail and requested to join 
consultations. Panel composed on 31 August 
2020 DS582  
DS588  
Tariff treatment on 
certain goods  Japan  Japan requested consultations on 10 May 
2019; the United States, Singapore, 
Canada, Chinese Taipei, Thailand, China and 
the European Union requested to join 
consultations; panel established on 29 July 
2020 DS584  
Additional duties on 
certain products from 
the United States  United States  Panel constituted on 28 October 2019; 
composed on 7 January 2020  DS585  
India as complainant  
Countervailing 
measures on certain 
hot-rolled carbon 
steel flat products  United States  Decision by the United States to appeal the 
panel ruling on 18 December 2019; joint 
communication from India and the United 
States on 14 January 2020, indic ating that 
an appeal is to be filed at a later date  DS436  
Certain measures on 
steel and aluminium 
products  United States  Panel composed on 25 January 2019  DS547  
Certain measures 
relating to the 
renewable energy 
sector  United States  Panel report circulated on 27 June 2019; the 
panel report was appealed by the United 
States on 15 August 2019  and by India on 
20 August 2019  DS510  
Measures concerning 
non-immigrant visas  United States  Consultations requested on 3 March 2016  
and 18 March 2016 ; El Salvador requested 
to join consultations. N o dispute panel was 
established.  DS503  
Source:  WTO Secretariat.  
2.3.2   Regional and preferential agreements  
Regional trade agreements  
2.22.   Since January 2015, India has notified entry into force for on e regional trade agreement (RTA) 
with Thailand, and the accession by Afghanistan to the South Asian Free Trade Agreement (SAFTA), 
bringing its network of RTAs to 16, as notified to the WTO.18 In addition, services and investment 
commitments were notified f or its agreements with ASEAN and for the Asia -Pacific Trade Agreement 
(APTA) during the period under review.  
2.23.   Most of India's RTAs are with its neighbouring countries, although a few were negotiated with 
countries further afield, notably in Latin America an d Africa. During the period under review, trade 
in services and investment provisions entered into force under India's agreement with ASEAN and 
under the APTA. With regard to its specific commitments in the India -ASEAN agreement, India made 
improvements ov er its GATS commitments for some professional services, computer and related 
services, some telecommunications services, some health services, and some tourism services, 
although not for all ASEAN members.  
2.24.   With regard to the APTA, the parties agreed a fra mework  agreement on the promotion, 
protection and liberalization of investment, and a framework agreement on the promotion and 
liberalization of trade in services. Under the framework agreement on services, the parties agreed 
to cooperate to improve effici ency and competitiveness, and to negotiate specific commitments to 
liberalize services in due course. Under the framework agreement on investment, the parties agreed 
to initiate negotiations to develop and implement programmes for cooperation and facilitat ion, 
promotion and awareness, liberalization, and protection. The parties also agreed a framework 
agreement on trade facilitation, under which they agreed to improve transparency by making their 
policies and procedures available to the public, and consolid ate, rationalize and minimize the number 
 
18 WTO RTA Database. Viewed at:  http://rtais.wto.org . WT/TPR/S/ 403/Rev.1  • India  
 
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  and diversity of fees and charges imposed on exports and imports. The agreement also established 
a Working Group on Trade Facilitation to review its implementation.  
2.25.   The parties to the SAFTA completed negotiations on a new protocol on services (the SAFTA 
trade in services — SATIS —Agreement), which entered into force following ratification by all parties 
on 29 November 2012, but this has not been notified to the WTO.19 In November 2019, India 
declared th at it would not sign the Regional and Comprehensive Economic Partnership (RCEP) 
Agreement, which now involves the ASEAN members and five other countries in the region 
(Australia, China, Japan, Republic of Korea, and New Zealand).20 Negotiations with a numb er of 
other trading partners continue, including Australia, Bangladesh, Canada, the European Union, the 
European Free Trade Area (EFTA), the Gulf Cooperation Council, Indonesia, Iran, Israel, Mauritius, 
New Zealand, Peru and the Southern African Customs Un ion (SACU), as well as the Bay of Bengal 
Initiative on Multi -Sectoral Technical and Economic Cooperation (BIMSTEC).21 
Preferential trade agreements  
2.26.   India receives preferences under the Generalized System of Preferences (GSP) programmes 
of Australia, Canada , the European Union, Japan, Kazakhstan, New Zealand, Norway, Switzerland, 
the Russian Federation, Turkey, and the Eurasian Economic Union. Following a review launched on 
12 April 2018, the United States announced on 4 March 2019, that it would be terminat ing GSP 
preferences for India.22 United States GSP preferences were terminated on 5 June 2019.  
2.27.   India also provides duty -free and quota -free treatment to LDCs, following the WTO Hong Kong 
Ministerial Declaration in December 2005. The scheme is open to all L DCs who register for it. Since 
the last Review, when 31 LDCs had declared their interest and had received preferences under the 
scheme, another 5 have been added, while the Maldives and Samoa graduated from the UN LDC 
list; therefore, the total number of L DCs that are provided preferences under this scheme is 34.23 
Data provided by the authorities indicates that the scheme now provides duty -free market access 
for around 94.2% of India's tariff (Section 3.1.3.5).  
2.3.3   Other agreements and arrangements  
2.28.   Bilateral i nvestment promotion and protection agreements are currently in force with 10 
countries and regions (72 at the time of the last Review). India also signed bilateral investment 
treaties with 3 countries (at the time of the last Review, 14 had been signed but  were not in force).24 
2.4  Investment Regime  
2.4.1   Legal framework  
2.29.   Establishment of companies in India is regulated by the Companies Act, 2013, as amended in 
2017 and 2019, which applies to both domestic and foreign firms. The Act regulates the 
establishment, the fu nctions and responsibilities of senior management, and the auditing and 
accounting requirements. The Act is administered by the Ministry of Corporate Affairs, which also 
 
19 The authorities indicated that SATIS is yet to be implemented, as specific schedules of commitments 
have not been finalized. All parties except Pakistan have confirmed that they are ready with t heir final offers on 
services.  
20 Business Line, India refuses to sign up for RCEP; says its core concerns remain unresolved. Viewed 
at: https://www.thehindubusinessline.com/economy/india -says-no-to-rcep-as-its-concerns -remain -
unaddressed/article29880428.ec e on 22 May 2019  
21 Early announcements under the WTO's Transparency Mechanism for RTAs were made for negotiations 
with the EFTA, the European Union, the SACU and the BIMSTEC.  
22 The press release states " India has implemented a wide array of trade barriers that create serious 
negative effects on United States commerce.  Despite intensive engagement, India has failed to take the 
necessary steps to meet the GSP criterion."  Office of the United States Trade Representative, United States 
Will Terminate G SP Designation of India and Turkey. Viewed at: https://ustr.gov/about -us/policy -offices/press -
office/press -releases/2019/march/ united -states -will-terminate -gsp. 
23 These additional five are the Republic of Togo, the Republic of Chad, the Republic of Guinea -Bissau, 
the Republic of Niger, and the Republic of Guinea (Central Board of Indirect Taxes & Customs Notifications 
34/2016, dat ed 19 May 2016; 39/2016, dated 21 June 2016; 46/2016, dated 23 August 2016; and 68/2017, 
dated 27 July 2017).  
24 Belarus, Brazil and Kazakhstan.  WT/TPR/S/ 403/Rev.1  • India  
 
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  administers related legislation, such as the Limited Liability Partnership Act, 2008, and the 
Competition Act, 2002. Other key laws relating to investment include the Industries (Development 
and Regulation) Act, 1951, the Indian Contracts Act, 1872, the Industrial Disputes Act, 1947, and 
the Insolvency and Bankruptcy Code, 2016. In addition , the Securities and Exchange Board of India 
(SEBI) Act, 1992, mandates the SEBI to regulate matters relating to capital, transfer of securities, 
and other related matters, and the manner in which they are disclosed by companies.  
2.30.   A company may be establis hed in India as a limited liability company, a branch or project 
office, a joint venture with a foreign investor, or a wholly foreign -owned company (subject to sectoral 
restrictions on foreign investment, as in Section 2.4.2.1). To establish, the investor is required to 
register with the Ministry of Corporate Affairs. Since 2016, this registration can be done 
electronically. The Simplified Pro -forma for Incorporating a Company Electronically combines five 
procedures previously covered by different agencies,  thereby reducing the number of steps required 
for incorporation to five.25 The requirement to obtain a certificate before commencing operations 
was removed in 2015; the Ministry of Corporate Affairs re -introduced the requirement for filing a 
declaration f or commencing a business through the Companies (Incorporation) Fourth Amendment 
Rules, 2018 (Section 10A).  
2.4.1.1   Compulsory industrial licensing  
2.31.   Under the Industries (Development and Regulation) Act, 1951, the Central Government may 
"direct investment into desi red channels of industrial activity, inter alia , through the mechanism of 
licensing, keeping with national development objectives and goals".26 Over the years, the number 
of industries that were subject to compulsory industrial licensing declined, with fou r industries 
remaining on the list at present (Table 2.4). The distillation and brewing of alcoholic drinks was 
removed from the list of industries requiring industrial licences, by an amendment to the Industries 
(Development and Regulation) Act, in 2016.  
Table 2.4 Industries for which industrial licences are compulsory, 2020  
Industry  
Electronic airspace and defence equipment  
Industrial explosives , including detonating fuses, safety fuses, gunpowder, nitrocellulose and matches  
Specified hazardous chemicals: (i) hydrocyanic acid and its derivatives ; (ii) phosgene and its derivatives ; 
and (iii) isocyanates and diisocyanates of hydrocarbon not elsewhe re specified  
Cigars and cigarettes of tobacco and manufactured tobacco substances  
Source:  Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry , 
Industrial Policy . Viewed at : https://dipp.gov.in/policies -rules-and-acts/policies/industrial -policy . 
2.32.   In addition, two industries continue to be reserved for the public sector (Table 2.5). Licences 
for investment by non -small and medium -scale enterprises to manufacture items reserved for the 
small and medium -sized enterprise sector (SMEs) were required at the time of the last Review; with 
the removal of the 20 products reserved for the SME sector in April 2015, no licences are required 
for su ch investment.27 
 
25 The procedures combined were incorporation of the company, obtaining a director identification 
number, reserva tion of company name, application for permanent account number, and application for tax 
deduction and collection account number. Department for Promotion of Industry and Internal Trade, Reform 
Update – Starting a Business – India. Viewed at: 
https://dipp.gov.in/sites/default/files/Starting_Business_Reform_07052018.pdf . 
26 Department for Promotion of Industry and Internal Trade, Industrial Policy.  Viewed at: 
https://dipp.gov.in/policies -rules-and-acts/policies/industrial -policy . 
27 DPIIT  Notice, Gazette of India. Viewed at : 
http://www.dcmsme.gov.in/publications/circulars/Gazette_india -15.pdf . Investors in all other sectors and 
industries do not require approval from the Government but must file  an Industrial Entrepreneurs 
Memorandum (IEM) with the DPIIT. Licensing and IEM procedures were simplified , and applications can be 
made online in a newly developed online portal, since 16  October 2018. According to the authorities, the IEM is 
responsible  principally for data collection on investment and certain types of industrial activity. The p eriod of 
validity of industrial licence s in general was extended from two years to three. However, the initial validity of 
industrial licence s for the defence sector was increased in phases from 2 years to 15 years, further extendable 
up to 18 years, under the Industries (Development & Regulation) Act, 1951. If the licensee commences 
production during this period, the licence continues to be valid . WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 2.5 Industries reserved for the public sector, 2020  
Industry  
Atomic energy  
Railway operations other than:  
(i) suburban corridor projects through public -private partnerships;  
(ii) high -speed train projects ; 
(iii) dedicated freight lines : 
(iv) rolling stock , including train sets and locomotives or coach manufacturing and maintenance facilities ; 
(v) railway electrification ; 
(vi) signalling systems ; 
(vii) freig ht terminals ; 
(viii) passenger terminals ; 
(ix) infrastructure in industrial parks pertaining to railway line s or sidings , including electrified railway lines ; 
and  
(x) mass rapid transport systems  
Source:  Department for Promotion of Industry and Internal Trade, Industrial Policy. Viewed at: 
https://dipp.gov.in/policies -rules-and-acts/policies/industrial -policy . 
2.4.2   Foreign in vestment  
Policy framework  
2.33.   India's foreign direct investment (FDI) regime is implemented by the Department of 
Promotion of Industry and Internal Trade (DPIIT), formerly the Department of Industrial Policy and 
Promotion, in the Ministry of Commerce and Indus try, and issued through a Circular on Consolidated 
FDI Policy which is updated periodically. The latest update was up to 28 August 2017. Changes to 
the Policy are made through DPIIT Press Notes, the most recent of which was issued in April 2020 
(Press Note  3).  
2.34.   India has continued to gradually open up sectors to FDI; sectors in which FDI is prohibited 
are listed in Table 2.6. Other sectors were opened up, with varying limits of foreign equity. Currently, 
government approval is required for investment in 11 sectors: mining, defence (for FDI in small 
arms manufacture), broadcasting and print media, civil aviation, satellites, telecommunications, 
private security agencies, trading (multi -brand and food), financial services not regulated or 
regulated by more tha n one regulator, and pharmaceuticals (Table A2.1).  
Table 2.6 Sectors in which FDI is prohibited, 2020  
Sector  
Agriculture not included in Table A2.1  
Lottery business, including government/private and online lotteries, etc.  
Gambling and betting, including casinos , etc. 
Chit funds  
Nidhi compan ies 
Trading in transferable development rights  
Real-estate business or construction of farmhouses  
Manufacturing of cigars, cheroots, ci garillos and cigarettes, of tobacco or of tobacco substitutes  
Activities/sectors not open to private sector investment: atomic energy and railway operations (other than 
permitted activities in railway infrastructure ( Table A2.1)  
Source:  DPIIT.  
2.35.   Key changes since the previous Review include permitting up to 100% foreign -equity 
ownership in a larger number of agricultural activities through the automatic route; automatic FDI 
of up to 100% in the defence industry, broadcasting carriage services, and tel ecommunications 
services and in business -to-business electronic commerce activities; up to 100% FDI through the 
automatic route for insurance intermediaries and up to 49% in insurance companies28; and FDI of 
up to 100% through the automatic route for airpo rts, other air services, and non -scheduled air 
transport services, and up to 49% in scheduled air transport services.29 With regard to single brand 
 
28 DPIIT, FDI Policy Section, Press Note No. 1 (2020 Series) . Viewed at: 
https://dipp.gov.in/sites/default/files/pn1_2020.pdf . 
29 DPIIT, FDI Policy Section, Press Note No. 2 (2020 Series) . Viewed  at: 
https://dipp.gov.in/sites/default/files/pn2_2020.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  retail, the requirement for 30% of inputs to be sourced locally by retailers whose foreign -equity 
ownership was 51% and over was eased.30 
2.36.   There were no changes with regard to investment by nationals of Bangladesh and Pakistan, 
which must receive prior approval from the Central Government, even in sectors where FDI is 
normally automatic. The policy was revised in  2020 to add that an entity of a country which shares 
a land border with India, or where the beneficial owner of an investment into India is situated in or 
is a citizen of any such country, can invest only under the government route.31 
2.37.   Until June 2017, the  main agency charged with examining and approving investment in 
sectors in which investment approval is required, was the Foreign Investment Promotion Board, 
based in the Ministry of Finance. Since 5 June 2017, examination and approval of such proposals is  
the responsibility of the relevant ministry or department in the sector in which the FDI is to take 
place. Under the Standard Operating Procedures, issued on 29 June 2017, investors must file their 
proposals on the Foreign Investment Facilitation Portal, maintained by the DPIIT. The proposal is 
transferred to the concerned administrative ministry or department which, in turn, examines the 
proposal within a week of receiving it. Following any additional documentation requests or questions 
to the applicant, the decision to grant approval is made within six weeks of receipt of the proposal. 
In cases where the investment proposed exceeds INR 5 billion (around USD 775 million), the 
proposal must also be examined by the Cabinet Committee on Economic Affairs, whic h takes a 
decision within one week of receiving the proposal.32 
2.38.   Invest India is the official investment promotion agency. It assists investors, inter alia,  in 
identifying locations, market strategy, expediting regulatory approvals, and facilitating meeting s 
with relevant government officials.  
2.4.3   Investment incentives  
2.39.   To encourage FDI, the central and state governments provide several incentives. In addition 
to SEZs and export -oriented units (EOUs), which continue to operate, India introduced the Make in 
India scheme in September 2014, which targets investment in 25 sectors of the economy. The 
National Investment and Manufacturing Zones (NIMZs), as part of the National Manufacturing Policy, 
provide incentives for infrastructure development on a public private pa rtnership (PPP) basis 
(Section  4).  
2.40.   Companies investing in infrastructure development in NIMZs and SEZs up to 31 March 2017 
were provided a tax exemption on 100% of their profits for any 10 consecutive years in the first 
15 years of operation. Tax incentiv es are also available for exports by companies based in SEZs and 
EOUs, including a 100% tax exemption on export profits for the first five years from when 
manufacturing commences, followed by a 50% tax exemption for the next five years, and a 50% 
tax exemp tion for the final five years if export profits are reinvested in the company.33 
2.41.   The Central Government also established public sector financial companies to finance 
infrastructure projects. The India Infrastructure Finance Company Limited's (IIFCL) Scheme  for 
Financing Viable Infrastructure Projects (SIFTI) provides financing to eligible sectors as notified by 
the Government from time to time. The following sectors are currently eligible: transport and 
logistics, energy, water and sanitation, communication , and social and commercial infrastructure. 
 
30 The new policy continues the local procurement requirement but does not make a distinction between 
goods destined for the local market or for export.  
31 DPIIT, FDI Policy Section, Press Note No. 3 (2020 Series) . Viewed at: 
https://dipp.gov.in/sites/default/files/pn3_2020.pdf . 
32 DPIIT, Standard Operating Procedure (SOP) for Processing FDI Proposals, No. 1/8/2016 -FC-1, 
29 June 2017 . Viewed at : 
https://dipp.gov.in/sites/default/files/Standard%20Operation%20Procedure%20%28SOP%29%20for%20Proce
ssing%20FDI%20Proposals%20%281%29.pdf . 
33 The benefits under Section 10AA are available for companies that started operations before 
31 March  2020. The 100% deduction on taxes available for SEZs notified on or after 1 April 2005 under the 
SEZ Act 2005 (under Section 80IAB) was available for SEZs developed before 31 March 2017.  WT/TPR/S/ 403/Rev.1  • India  
 
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  The IIFCL may lend up to a maximum of 20% of the total project cost (and an additional 10% for 
takeout financing) at a rate of interest that is based on the average cost of funds.34 
2.42.   Under the Startup India progra mme, launched in 2016, any start -up established after 1 April 
2016 (and before 1 April 2021) can get a tax exemption under Section 80IAC of the Income Tax Act 
on 100% of profits for any three -year period within seven years.35 The period was increased to 3  out 
of 10 years, and the turnover limit for benefiting from exemption was raised from INR 250 million 
to INR 1 billion in the 2020 -21 Budget.36 
2.43.   Assistance is also provided in the form of lending targets for all banks, of 40% of adjusted 
net bank credit per  year to priority sectors, including agriculture, SMEs, export, education, housing, 
renewable energy and social infrastructure (Section 4.4.1.1). Furthermore, in the Budget for 
2020-21, a 100% tax exemption was provided on interest, dividend and capital ga ins income of 
foreign sovereign wealth funds that invest in the priority sectors of infrastructure and other notified 
sectors before 31 March 2024 with a minimum lock -in period of three years.37 
2.44.   Other selected schemes, including those in India's most recen t notification to the WTO, are in 
Table A3.4.  
 
34 IIFCL, SIFTI.  Viewed at:  https://www.iifcl.org/sifti . The interest rate consists of the IIFCL base rate 
and a spread above the base rate. The base rate  depends, inter alia , on the weighted average cost of capital 
for the I IFCL (including cost of borrowings and cost of equity), and provisioning and administrative costs. The 
spread above the base rate is based on factors like the risk profile of the borrower and market conditions.  
35 Startup India. Viewed at : https://www.startupindia.gov.in/ . According to a notification by the DPIIT 
issued on 19 February 2019, an entity shall be considered a startup if : (i) it is registered as a private limited 
company, a partnership firm, or a l imited liability partnership in India up to a period of 10 years; (ii) it has a 
turnover in any financial year of less than 1  billion ; and (iii) works towards innovation, development or 
improvement of products , processes or services , or if it is a scalable  business model with a high potential of 
employment generation or wealth creation . DPIIT Notification (GSR 127(E)), 19 February 2019. Viewed at: 
https://ww w.startupindia.gov.in/content/dam/invest -india/Templates/public/198117.pdf . 
36 Under Section 54GB of the Income Tax Act, capital gains from the transfer of residential property is 
exempted from taxation (for transfers up to 31 March 2021) if it is invested in the capital of eligible start -ups, 
subject to certain conditions. The cond itions include that: the net consideration received by the assessee is 
used for subscription in the equity shares of an eligible start -up before the date for providing income tax 
returns under Sub -section (1) of Section 139 of the Act; the eligible start -up, within one year from the date of 
the subscription in equity shares, uses this amount for the purchase of new assets; and, after the subscription 
in shares, the assessee has more than 25% share capital or more than 25% of voting shares in the eligible 
start-up. 
37 Budget Speech 2020 -21. Viewed at : https://www.indiabudget.gov.in/doc/Budget_Speech.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  3  TRADE POLICIES AND PRACTICES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuation, and requirements  
Customs Procedures  
3.1.  In India, the import (and export) of goods is governed by the Customs Act, 1962, the  Customs 
Tariff Act, 1975, the Foreign Trade (Development and Regulation (D&R)) Act, 1992, and the Foreign 
Trade Policy (FTP) issued by the Directorate General of Foreign Trade (DGFT). The DGFT also issues  
Public Notic es to implement  the provisions of the Foreign Trade (D&R) Act, the Rules and Orders , 
and the provisions of the FTP. 
3.2.  Importers (and exporters) are required to register with the DGFT to obtain an 
Importer -Exporter Code (IEC).1 No import (export) can take pl ace without this Code, unless 
specifically exempted. Exempted categories include imports (exports) by central or state 
governments; import s (export s) for personal use; and imports (exports) from (to) Nepal, Bhutan, 
Myanmar (through the Indo -Myanmar border areas) and China (through the Gunji, Namgaya, 
Shipkila and Nathula ports), if consignments are of a specific value.2  
3.3.  Importer s (exporter s) may clear goods themselves , without an agent, or authorize licence 
agents, known as c ustoms brokers, to do so. Agen ts must be Indian nationals holding a valid licen ce 
issued by the Commissioner of Customs.  
3.4.  After obtaining an IEC, the importer (exporter) must present the mandatory documents to 
Customs, which is mostly done electronically. Prior to 2015, the documents re quired to import were: 
bill of entry; commercial invoice; packing list; bill of lading; Foreign Exchange Control Form 
(Form  A-1); terminal handling receipt; and certified engineer's report.3 In 2015, the number of 
supporting documents required to import was reduced to three. These are: the bill of lading/airway  
bill, the commercial invoice cum packing list, and the bill of entry.4 Additional documents  maybe 
required for imports (exports) subject to restrictions, to policy conditions, or to a No -Objection 
Certificate, or that need to comply  with a specific requirement under a statute.5 
3.5.  There are three types of bills of entry: for home consumption; for warehousing, and for ex -bond 
clearance. To facilitate customs procedures, bills of entry can be fi led prior to the act ual shipment , 
7 days beforehand for air shipments and Inland Container Depot s (ICD), and 14 days for shipments 
by sea.  
3.6.  In 2016, India introduced the Single Window Interface for Facilitating Trade (SWIFT). The m ain 
features of SWIFT are : (i) integrated risk assessment ; (ii) automated routing ; (iii) nine separate 
documents replaced by the Integrated Declaration ; and (iv) online clearances . At present, some 50 
government agencies are part of SWIFT; agencies are integrated gradually via circulars issued by 
the Central Board of Indirect Taxes and Customs ( CBIC).6 
3.7.  During  the period under review, India introduced the Indian Customs Electronic Gateway 
(ICEGATE) as the national portal of the Indian Customs of the CBIC to provide e -filing serv ices for 
importers (and exporters). Through this facility , Customs offers services including electronic filing of 
the bill of entry (import goods declaration), shipping bills (export goods declaration), e -payment of 
customs duties, the possibility  to sign all customs documents electronically, and a facility to file 
online supporting documents. ICEGATE is linked with multiple partner agencies , including  the 
Reserve Bank of India ( RBI), banks, the DGFT, the Ministry of Steel, the Directorate of Valuation , 
 
1 In the case of 100% export operating units /export processing zone s, the IEC number is allocated by 
the concerned Development Commissioner of the export processing zone. 
2 FTP (2015 -21) (as at 31 March 2019) . Viewed at:  https://dgft.gov.in/foreigns -trade-policy -2015-20-. 
3 Circular No. 01/15 -Customs of 12 January 2015 and DGFT  Notification No. 114 of 12 March 2015 . 
4 Chapter 2 of the FTP  (2015 -21) (as at 31 March 2019) . Viewed at: 
https://dgft.gov.in/sites/default/files/FTP%20Chapter%202%20as%20on%20March%2031%202019.pdf .  
5 FTP (2015 -21) (as at 31 March 2019) . Viewed at: https://dgft.gov.in/foreigns -trade-policy -2015-20-. 
6 Circular s No. 44/2018 -Cus of 13 November 2018; No. 13/2019 -Cus of 03 June 2019; No. 19/2019 -Cus 
of 16 July 2019 ; and No. 03/2020 -Cus of 15 January 2020.  WT/TPR/S/ 403/Rev.1  • India  
 
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  and other government agencies involved in import (export) procedures , to facilitate customs 
clearance.7 All electronic documents/messages handled by ICEGATE are processed at Custom s by 
the Indian Customs EDI System (ICES) . As at January 2020, the ICES  was operational at 245 major 
customs locations , handling nearly 98% of import s (and export s). At that point in time,  the EDI 
system was not available in 25 customs locations,  mostly Land Customs Stations in remote areas . 
3.8.  A Risk Management System (RMS) was introduced in all Customs locations where the ICES  is 
operational.  Bills of entry are cleared through the RMS.  The verification and/or examination of the 
imported goods is done selectively , based on  the RMS. In general, onl y high-risk consignments are 
subject to  detailed verification before  clearance.  As at February 2020, (latest available data) 66% 
of all bills of entry were cleared through the green chan nel (neither physical nor document 
examination); and 12% underwent a document check.  The verification of the b ill of entry depends 
upon the classification, value, rate of duty , and any other  information that may have a bearing on 
the assessment of the duty levied . Bills not requiring verification are  cleared immediately up on 
payment of duty  and other charges , if any.  
3.9.  As a result of India's ratification of the WTO TFA in April 2016, the National Committee on 
Trade Facilitation (NCTF) was constituted. This inter -ministerial body facilitate s the domestic 
coordination and impleme ntation of the TFA provisions. It , inter alia , developed the Pan -India 
roadmap for trade facilitation , coordinating the various trade facilitation initiatives, and implemented 
outreach programmes informing all stakeholders about TFA  projects . The NCTF introduced the 
National Trade Facilitation Action Plan , under which various measures to ensure the i mplementation 
of the TFA were  taken.8 
3.10.   In 2016, India merged two facilitation schemes  - the Accredited Client Programme and the 
authorized economic  operator (AEO) programme  - into a combined three -tier AEO programme for 
importers , exporters , and logistics operators , such as terminal operators, customs brokers, 
warehouse operators, and freight forwarders , to enhance the scope of these schemes  and to provide 
further benefits to the entities who demonstrate strong internal control system s and compliance with 
the laws administered by the CB IC. In 2018, Customs further simplified the AEO accreditation 
process to follow global best practices.  The new  AEO programme introduced extensive benefits, 
including greater trade facilitation and self -certification .9 An entity with AEO status is considered a 
"secure " trader and a reliable trading partner. As at February 2020 , there were 4,175  AEO status 
holders.10 
3.11.   India also i ntroduc ed direct port delivery (DPD) and direct port entry (DPE) for import s 
(export s), to reduce release times and costs . Under the DPD, imports by pre -registered clients, with 
containers that do not require examination, are cleared directly at the port instead of being diverted 
to a container freight station located outside the port. Under the DPE, used by exporters, containers 
packed at factories may enter directly into the port terminal prior to registration. This system was 
previo usly only available for refrigerated containers, over -dimensional cargo, motor vehicles, and 
perishable non -refrigerated cargo, and only for specific AEOs. Now, this facility is extended to all 
exports packed in containers in any manufacturing entity.  
3.12.   In 2016, to further facilitate trade, India introduced deferred payment of customs dut ies.11 
This is a mechanism for delinking duty payment and customs clearance . Duties and taxes can be 
payed after the arrival of the merchandise,  to facilitate transit from do cks to warehouses . Importers 
certified under the AEO programme  may benefit from this mechanism. However, a n eligible importer 
who fails to pay duty in full by the due date more than once in a period of three consecutive months 
is no longer  be allowed to ma ke deferred payment s. 
 
7 ICEGATE , About ICEGATE . Viewed at: https://www.icegate.gov.in/about_icegate.html . 
8 CBIC, India – National Trade Facilitation Action Plan 2017 -20. Viewed at: 
https://www.cbic.gov.in/resources//htdocs -cbec/implmntin -trade -facilitation/national -trade -
facilitation.pdf;jsessionid=1D4236D6DDE5247C6A2C7033CC8E9224 . 
9 For detailed information, refer to Circular No. 33/2016 -Customs  of 22 July 2016 and Circular 
No. 3/2018-Customs  of 17 January 2018. 
10 Custom s, Indian Customs AEO. Viewed  at: http://www.cbic.gov.in/resources//htdocs -cbec/AEO -fact-
sheet-2.pdf;jsessionid=1B49197827B0F80B6F1A4C1748878B4F . 
11 Deferred Payment of Import Duty Rules, Notification No. 134/2016 -Customs  of 2 November 2016. WT/TPR/S/ 403/Rev.1  • India  
 
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  3.13.   According to the authorities, the various trade facilitation initiatives implemented during the 
period under review resulted in a remarkable improvement in the time and cost related to the 
clearance of imports (exports).12 
3.14.   As any othe r taxation statute, the Customs Act contains deta iled provisions for judicial review 
and for the resolution of disputes through appeals . 
3.15.   During the review period, c hanges were made relating to contraventions regarding the 
intentional evasion of payment of duties and the improper importation (exportation) of goods  (e.g. 
goods that are loaded or unloaded in a place other than a customs port, or prohibited 
imports/exports) .13 Penalties may be based on the value of the goods, or as a percentage of the 
duty levi ed. Regarding  fraud or wilful mis -statement, the amount of the penalty was reduced from 
25% to 15% of the duty. The penalty for the improper importation (or exportation) of goods should 
not exceed 10% of the duty sought to be evaded or INR 5,000, whichever is greater (Section s 112 
and 114).14 
3.16.   Preshipment inspection is mandatory  for imports of un -shredded and shredded metallic waste 
and scrap ; paper, paperboard and paperboard waste ; and second -hand and defective steel products  
(Table 3.1). However, since 2018, all metal scrap originating in Australia, Canada, New Zealand,  the 
United Kingdom, and t he United States , enter ing through the p orts of Chennai, Tuticorin, Kandla, 
Jawaharlal Nehru Port Trust (JNPT) (Mumbai), and Krishnapatnam, are exempted from this 
requirement .15 Imports of shredded metallic waste and scraps are allowed through all ports of India, 
while those of un -shredded metall ic waste and scrap are permitted only through designated ports.  
Preshipment i nspections ensure that consignments do not contain hazardous  materials , toxic waste, 
radioactive waste/scrap, any type of arms, ammunition, mines, shells, live or used cartridge s, or 
any other explosive material in any form.  Preshipment inspection certificates are issued by 
accredited certifying agencies , located within  and outside India.16 Certificate s attest  that the 
consignment s have been  checked for radiation level s. 
Table 3.1 Goods subject to preshipment inspection  
HS code Item description  
7204.10.00 Waste and scrap of cast iron  
7204.21.90 Waste and scrap of alloy steel, stainless, other than empty or discharged cartridges of 
all bores and sizes   
7204.29.20 Waste and scrap  of high-speed steel  
7204.29.90 Waste and scrap of alloy steel, other than stainless, of high -speed steel ; and empty 
or discharged cartridges of all bores and sizes  
7204.30.00 Waste and scrap of tinned iron or steel 
7204.41.00 Turnings, shavings, chips, milling waste, sawdust, filings, trimmings and stampings, 
whether or not in bundles  
7204.49.00 Other ferr ous waste and scrap  
7204.50.00 Re-melted scrap ingots  of iron or steel  
7404.00.12 Copper scrap  
7404.00.22 Brass scrap  
7503.00.10 Nickel scrap  
7602.00.10  Aluminium scrap  
7902.00.10  Zinc scrap  
8002.00.10  Tin scrap  
8104.20.10  Magnesium scrap  
4802 Paper and paperboard  
4805.24 ; 4805.25  Paperboard waste  
Source : Handbook of Procedures , para. 2.54; and information provided by the authorities.  
 
12 CBIC, Time Release Study 2019 . 
13 Sections 111 -114 of the Customs Act, 1962.  
14 Information provided by t he authorities.  
15 Institute of Scrap Recycling Industries, Inc., India Eliminates Pre -Shipment Inspection Certification 
(PSIC) for Metal Scrap . Viewed  at: https://www.isri.org/news -publications/news -details/2018/06/05/india -
eliminates -pre-shipment -inspection -certification -(psic) -for-metal -scrap . 
16 DGFT, Pre-shipment Inspection Policy (PSIA) . Viewed at: https://dgft.gov.in/policies/pre -shipment -
inspection -policypsia . WT/TPR/S/ 403/Rev.1  • India  
 
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  Customs valuation17 
3.17.   Customs valuation continues to be regulated by the Customs Act, 1962 (as amended); and 
the Customs Valuation Rules (Determination of Price of Imported Goods) Rules, 2007 (as amended), 
which regulate the application of the WTO Agreement on Customs Valuation. In general, India uses 
the transaction value, adjusted for costs incurr ed by the buyer that are not included in the price of 
the imported good, as the customs value for imported goods.18 These costs are added to the price 
actually paid for the imported good. The Central Government can, however, adopt other rules to 
determine the transaction value of the imported goods.19 In addition, under t he Customs Act, the 
CBIC may fix reference prices ("tariff values") for certain imported (exported) goods, based on their 
international prices and trends; these values are revised periodica lly. The tariff value is used to 
calculate customs duty ( Table 3.2) . 
Table 3.2 Goods subject to tariff values, 2020  
HS  Description of goods  Tariff value  
0802.80  Areca nuts  USD 3,798/MT  
1511.10.00  Crude palm oil  USD 838/MT  
1511.90.10  Refined, bleached and deodorized 
(RBD) palm oil  USD 865/MT  
1511.90.90  Others – palm oil  USD 852/MT  
1511.10.00  Crude palmolein  USD 869/MT  
1511.90.20  RBD palmolein  USD 872/MT  
1511.90.90  Others – palmolein  USD 871/MT  
1507.10.00  Crude soya bean oil  USD 898/MT  
7404.00.22  Brass scrap (all grades)  USD 3,589/MT  
1207.91.00  Poppy seeds  USD 3,395/MT  
71 or 98  Gold in any form  USD 497/10 gr  
71 or 98  Silver in any forma USD 573/kg  
a Silver in any form shall not include foreign currency coins, or jewellery or articles made of silver.  
Source:  Notification No. 4/2020 -Customs, 15 January 2020.  
3.18.   The importer or his agent must furnish a declaration disclosing full and accurate details 
relating to the value of the import ed goods; and any other statement, information or document, 
including an invoice from the manufacturer or producer of the goods, to determine their value.  
3.19.   Self-assessment of customs duty by importers (or exporters) was introduced in 2011 (Finance 
Act, 2011 ). This system is based on trust. The objective is to expedite the release of imported 
(exported) goods. Importers pay duty/tax/cess on the date of presentation of the self-assessed bill 
of entry. The declared value may be rejected if there is reason to do ubt its accuracy. In this case, 
the importer may need to furnish further information.  At the request of the importer, Customs should 
inform him/her, in writing, of the grounds for doubting the accuracy of the declared value. 
Thereafter, the importer is giv en a reasonable opportunity to be heard, before a final decision is 
taken.20 The importer and/or his agent can appeal a decision regarding valuation to the 
Commissioner (Appeal) in the first instance. A second course of appeal lies with the Customs Excise 
and Service Tax Appellate Tribunal. An appeal against a decision made by the Tribunal can only be 
made to the Supreme Court (Customs Act, 1962). Importers are informed of their right to appeal 
by the adjudicating and appellate authorities, in writing.  
3.20.   Goods may be released from Customs, pending the final determination of the value, upon the 
provision of a guarantee.21 Customs may resort to a provisional assessment of the value of the goods 
to assess the duty if an importer (exporter ) is unable to furnish th e necessary documents or 
information to assess the duty, or if the importer (exporter ) produced all the documents and 
furnished full information but the customs  officer deem s it necessary to make further enquir ies to 
 
17 This Section is based on WTO documents G/VAL/N/1/IND/4 of 21 February 2019 and 
G/VAL/N/2/IND/2 of 21 February 2019.  
18 All the costs and services are listed in Article 10 of the Customs Valuation (Determination of Value of 
Imported Goods) Rules, 2007 . 
19 Section 156(2)(a) of the Customs Act, 1962 . 
20 Rule 12 of the Customs Valuation Rules (Determination of Price of Imported Goods), 2007.  
21 Section 18 of the Customs Act, 1962 , read w ith the Customs (Provisional Duty Assessment) 
Regulations, 2011 , and the Customs (Finalisation of Provisional Assessment) Regulations, 2018 . WT/TPR/S/ 403/Rev.1  • India  
 
- 47 - 
 
  assess the duty (Section 18 of the Customs Act).  In these instances, the importer (exporter) is 
required to execute a bond for the difference between the provisional duty assessed and the duty 
most likely to be assessed at the final assessment stage, and to provide a bank guarantee or cash 
deposit, as deemed appropriate by the importer.  If the duty provisionally collected is higher than 
the final duty, the importer/exporter will be refunded.  
3.21.   India applies the Decision on the Treatment of Interest Charges22; and the provisions 
regarding the V aluation of Carrier Media Bearing Software for Data Processing Equipment (VAL/8).  
3.1.2   Rules of origin  
3.22.   India does not use non -preferential rules of origin.  
3.23.   Preferential rules of origin are used in accordance with India's trade agreements. Some of the 
key criteria used in the determination of the rules of origin are: (i) wholly obtained; (ii) change in 
tariff classification; (iii) value addition; (iv) non -minimal operations; and (v) specific rules of origin.  
3.24.   Since its last Review , India notified the modific ations , made in 2015, to the preferential rules 
of origin for LDCs, used under the Duty -Free Tariff Preference (DFTP) Scheme for LDCs. For goods 
to benefit from this  Scheme , they must either be wholly produced in the territory of the exporting 
beneficiary,  or they must fulfil local value -added content requirements based on either the ex-works 
price of the goods or the f.o.b. value (the 2008 rules of origin only had the f.o.b. value option), 
which are determined by a formula , and a change in the tariff class ification at the six -digit level . 23 
There is no product -specific rule under the DFTP Scheme. Cumulation is allowed.24 During the review 
period, India notified the entry into force of one RTA , with Thailand. Rules of origin in the case of 
this RTA also fol low the general rules of origin negotiated under other agreements.  
3.1.3   Tariffs  
Applied tariffs  
3.25.   In 20 20/21 , the applied MFN tariff consisted of 11,900 lines at t he eight -digit level in the HS 
2017 nomenclature.25 India uses both ad valorem  and non-ad valorem  tariff rates; however, most 
tariffs lines ( 93.9%) are subject to ad valorem  rates. There are 725 tariff lines (6.1% of the total) 
subject to non-ad valorem  rates; of these, 3 are subject to specific rates (almonds in shell and 
shelled (2 lines), an d crude petroleum),  and 721 (compared to 697 at the time of the previous 
Review) carry mixed duty with an ad valorem  and/or specific duty component. The mixed duties 
continue to apply to textiles and clothing ( 714 tariff lines ) and to natural rubber produc ts (7 tariff 
lines) . To calculate the tariff indicators , the Secretariat used , for the  non-ad valorem  tariffs , 
ad valorem  equivalents (AVEs), which were calculated us ing the unit value method, where trade 
data was available. AVEs were calculated for the 3 tariff lines with specific rates and for 557 of the 
lines with mixed duty . For the rest of the tariff lines with mixed duty , the Secretariat used only the 
ad valorem  part of the rate for the calculations , as trade data was not available  (Table 3 .3). 
Table 3.3 Tariff structure, 2014/15, 2019/20, 2020/21  
 
MFN applied rate  
2014 /15 (HS12)  2019 /20 (HS17)  2020 /21 (HS17)  
Simple average rate (%)  13.0 13.9 (14.9)  14.3 (15.4)  
   WTO agricultural products  36.4 34.8 36.5 
   WTO non -agricultural products  9.5 10.8 (12.0)  11.1 (12.3)  
Duty-free (% of all tariff lines)  2.7 3.0 2.7 
Simple average rate of dutiable lines only (%)  13.4 14.3 (15.3)  14.7 (15.8)  
Non-ad valorem tariffs (% of all tariff lines)  6.1 6.0 6.1 
Tariff quotas (% of all tariff lines)  0.0 0.0 0.0 
Domestic tariff peaks (% of all tariff lines)a 2.7 2.5 (3.5)  3.1 (3.7)  
 
22 Circular No. 38/2016 of 22 August 2016.  
23 Customs non-tariff notification N o. 29/2015 -Customs (N.T.) of 10 March 2015. 
24 Notification No. 100/2008 – Customs (N.T.) of 13 August 2008 (Customs Tariff (Determination of 
Origin of Products under the Duty -Free Tariff Preference Scheme for Least Developed Countries) Rules, 2008).  
25 The tariff, as provided by the authorities , is effective since February 2020. It does not include any 
changes made during the fiscal year.  WT/TPR/S/ 403/Rev.1  • India  
 
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MFN applied rate  
2014 /15 (HS12)  2019 /20 (HS17)  2020 /21 (HS17)  
International tariff peaks (% of all tariff lines)b 13.6 24.0 (24.7)  25.4 (26.1)  
Overall standard deviation  16.5 14.5 (18.8)  15.1 (19.2)  
Nuisance applied rates (% of all tariff lines)c 0.02 0.01 (0.02)  0.19 (0.2)  
Bound tariff lines (% of all tariff lines)d 74.9 75.3 75.2 
Total number of tariff lines  11,481  11,755  11,900  
  Duty-free rates  305 351 322 
  Ad valorem  rates (>0%)  10,476  10,693  10,853  
  Non-ad valorem  rates 700 711 725 
    Specific rates  3 3 4 
    Mixed duties  697 708 721 
a Domestic tariff peaks are defined as those exceeding three times the overall average applied rate.  
b International tariff peaks are defined as those exceeding 15%.  
c Nuisance rates are those greater than zero, but less than or equal to 2%.  
d Includes tariff lines that are "partially" bound.  
Note: Calculations for averages are based on national tariff line level s (8-digit).  
Figures in brackets include AVEs, as available. For mixed duties , where  AVEs were not available , only the 
ad valorem  part of the rate was used.  
FY2019 -20: out of 711 non -ad valorem  rates, 547 AVEs were calculated using the unit value method.  
FY2020 -21: out of 725 non -ad valorem  rates, 56 0 AVES were calculated.  
To calculate the unit value, 2018 -19 import values and quantities were used.  
Source:  WTO Secretariat calculations, based on data provided by the authorities  
Calculations of AVEs: based on trade data from the Ministry of Commerce and Industry, Department of 
Commerce.  Viewed at: https://commerce -app.gov.in/eidb/default.asp . 
3.26.   The simple average applied MFN tariff increased from 13.0% in 2014/15 to 14.3% in 2020/21, 
and to 15.4% if AVEs are considered (Table 3.3). At the time of the last Review, the average tariff 
had also increased from 12% in 2010/11 to 13% in 2014 -15, due mainly to an increase in the tariffs 
affecting agricultural products (WTO definition) (36.4% in 2014/15). However, in 2019/20, the 
increase in average tariff was due t o an increase in the average tariff of non -agricultural goods, 
which rose from 9.5% to 10.8%, or to 12.0% if AVES are considered (Table 3.3). The average MFN 
tariff for non -agricultural products rose, due to a general increase in all tariff rates, except f or tariffs 
on transport equipment, which decreased from 32.1% to 23.0%. The most important increase 
affected clothing, with the average tariffs rising from 10.0% to 19.6%. Despite the increase in tariffs 
regarding non -agricultural products, protection for agricultural products (WTO definition), albeit 
declining from 36.4% in 2014/15 to 34.8% in 2019/20, remains considerably higher than the 
average protection for non -agricultural products. The decline in the average tariff for agriculture is 
mainly due to a decline in tariffs for cereals and preparations thereof (from 40.9% in 2014/15 to 
32.7% in 2019/20), and of oil seeds and fats (from 33.2% in 2014 -15 to 26.7% in 2019/20). Most 
agricultural products continue to benefit from above -average tariff protection,  especially beverages, 
spirits and tobacco (81.1%), and coffee and tea (74.8%) (Table A3.1).  
3.27.   In 2020/21 the average protection for both agricultural and non -agricultural products (WTO 
definition) increased. Average applied tariff for agricultural goods inc reased from 34.8% to 36.5%, 
mainly due to the increase in the tariffs on oil seeds, fats, oil and their products which increased 
from to 26.7% to 35.1%, and that accorded to sugars and confectionary that increased from 35.4% 
to 47.0%. In the case of non -agricultural products, the average tariff increased slightly from 10.8% 
to 11.1%, mainly as a result of an increase of duties levied on leather, rubber, footwear and travel 
goods from 12.8% to 15.4% (Table A3.2).  
3.28.   The distribution of tariff rates underwent s ome changes since the last Review. Tariff rates 
continue to range from zero to 150% (considering only the ad valorem  rates). However, at the time 
of the previous Review, 79.1% of all tariff lines had tariff rates between 0% and 10%; this 
percentage has sin ce declined to some 69.6% in 2019/20 and to 67.8% in 2020/21; the percentage 
of tariff lines that bear rates higher than 10% and up to 30% increased from 12.1% to 21.3% in 
2019/20 to 22.1% in 2020/21. The percentage of tariff lines with rates above 30% als o increased 
from 2.8% at the time of the last Review to 4.0%. The most common tariff rates continue to be 10% 
(31.7%) and 7.5% (24.4%). The highest rates, above 60%, apply to products such as alcoholic 
beverages (150%), followed by animals and their produc ts; fruit, vegetables and plants; coffee and 
tea; and certain motor vehicles, with tariffs of 100% (Chart 3.1 and Table A3.2).  WT/TPR/S/ 403/Rev.1  • India  
 
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  Chart 3.1 Distribution of MFN tariff rates  
 
Note:  Figures above the bars refer to  the percentage of total lines. Totals do not add up to 100% due to 
the exclusion of non -ad valorem  rates.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
 Bound tariffs  
3.29.   In the Uruguay Round, India bound 75.3% of its Tariff  Schedule. It did not bind products such 
as: fish and crustacea (HS03), minerals (HS25 –HS27), pharmaceutical products (HS30), fertilizers 
(HS31), some plastics and rubber (HS39 –HS40), some textiles (HS50 –HS 55 and HS56 -HS63), 
footwear and other articles (HS64 -HS67), ba se metals (HS72 –HS79), photographic material and 
instruments (HS90 –HS92), arms (HS93) , and other manufactured articles (HS94 –HS96). As with 
the applied MFN rates, most bound rates are ad valorem  (92%) ; only textiles and clothing are bound 
at mixed duties,  and two lines (almonds) are bound at specific rates. India bound 100% of the tariff 
lines related to agricultural products, at rates ranging from 10%  to 300%, and 71.7% of the tariffs 
applied to non -agricultural products. The lat ter were bound at lower tar iff rates , ranging from zero 
to 150%. The highest bound rates apply to oils seeds, fats, oils and their products (HS15).  
3.30.   The tariff treatment that India accords to certain goods in the information and 
communications technology sector is the subject o f a current dispute (DS582).26 
3.31.   In 2014, India reserved the right to modify its Schedule XII under Article XXVIII:5 of the 
GATT 1994 for the three -year period commencing 1 January 2015.27 
Tariff rate quota  (TRQ)  
3.32.   India continues to maintain MFN TRQs for skimmed milk and some types of cream (HS0402.10 
and HS0402.21), maize (HS1005.90), crude sunflower or safflower seed oil (HS1512.11),  and rape, 
colza or mustard oil (HS1514.19 and HS1514.99). India also negotiated T RQs under its bilateral 
agreements with Sri Lanka and Nepal (Table 3 .4). Since 2017, India has also implemented a TRQ of 
300,000  metric tonnes  for raw sugar (HS1701) , at an in -quota rate of 25% , as a unilateral market 
access trade facilitation measure .28 
 
26 WTO document WT/DS582/1 -G/L/1303 , 9 April 2019 . 
27 WTO document G/MA/307, 1 December 2014.  
28 Customs - Notification No. 74/2017, 7 September 2017.  
2.710.726.439.3
2.29.8
0.52.33.0 9.024.932.7
10.311.0
1.71.42.79.324.431.5
11.310.8
2.41.6
04008001,2001,6002,0002,4002,8003,2003,6004,0004,4004,800
Duty free >0%-5% 7.5% 10.0% >10%-20% >20%-30% >30%-60% >60%-150%Number of tariff linesChart 3.[IND]  Distribution of MFN tariff rates
MFN 2019 -20
Total number of lines: 11,755
MFN 2020 -21
Total number of lines: 11,900
n.a.     Not applicable.
Note:  Figures above the bars refer to the percentage of total lines.  Totals do not add up to 100% due to the exclusion of n on-ad
valorem rates.
Source:  WTO Secretariat calculations, based on data provided by the authorities.MFN 2014 -15
Total number of lines: 11,481WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.4 Products subject to tariff rate quotas, 2018 -20 
Description  HS code  In-quota 
rate 
2019 -20 Out-of-
quota 
rate 
2019 -20 Tariff quota 
quantity 
(metric 
tonnes)a In-quota 
quantity 
(metric 
tonnes)a 
2018 -19 Fill 
rate 
MFN TRQs        
Skimmed milk and cream , 
in powder or granule or 
other solid forms  0402.10;  
0402.21  15% 60% 10,000  .. .. 
Maize (corn), other than 
seed quality  1005.90  0% 50% 500,000  .. .. 
Crude sunflower or 
safflower seed oil  1512.11  50% 35% 150,000  436 0.3%  
Rape, colza or mustard oil 
and fractions thereof  1514.19; 
1514.99  35% 35% 150,000  2,580,488  100%  
Preferential TRQs        
India -Sri Lanka        
Textiles and clothing  61, 62  0% 20%b 8 million pieces  .. .. 
Tea 0902 7.5%  100% 15 million kg  .. .. 
Desiccated coconut  0801.11  30% 70% 500 .. .. 
Pepper  0904 0% 30%, 70%  2,500 .. .. 
Vanaspati, bakery 
shortening and margarine  1516; 1517; 
1518 0% 30%, 35%, 
80% 50,000  .. .. 
India -Nepal        
Vegetable fats  1516 0% 30%, 35%, 
80% 100,000  .. .. 
Zinc oxide  2817 0% 7.5%  2,500  .. .. 
Acrylic yarn  5509 0% 5%, 7.5%  10,000  .. .. 
Copper products  74, 8544  0% 5%, 7.5%, 
10% 10,000  .. .. 
.. Not available.  
a Unless otherwise indicated.  
b 20%, or 20% and a specific part  of the tariff rate , whichever is higher.  
Source:  WTO documents G/AG/N/IND/14  of 11 February 2019;  G/AG/N/IND/16 and 17  of 22 August 2019 ; 
and data provided by the authorities.  
3.33.   Procedure s for import s under the MFN TRQ Scheme are established by the DGFT .29 Only public 
entities, including some state trading agencies such as the State Trading Corporation, may import 
under this Scheme. All eligible entities intending to import under the Scheme must apply to the 
DGFT before 1 March of the financial year preceding the year when the transaction is to take place. 
The DGFT evaluates the applications and allocates the quotas by 31 March. Imports must be 
completed (i.e. consignments must be cleared by the customs  authorities) before 31 March of the 
financial year when the transaction takes place.  
3.34.   In general, there are no imports under TRQs; fill ratios are very low. According to the 
authorities , in certain instances, this is because the out -of-quota rate (i.e. the  MFN tariff rate) is 
lower than the in -quota rate ; hence , there is no need to use the quota. As result, in 2018 -19, imports 
of rape, colza and mustard oil exceeded the TRQ  quantities . 
Tariff concessions  
3.35.   India continues to maintain a number  of tariff concessions or exemptions that are granted on 
the grounds of public interest , to, inter alia , reduce the cost of essential imports , and promote 
domestic value addition.30 These concessions are granted by issui ng gazette notifications under 
Section 25(1) of the Customs Act. For instance, because of  COVID -19, items such as artificial 
respiration or other therapeutic respiration apparatus (ventilators), face masks and surgical masks, 
personal protection equipment , and COVID -19 testing kits were exempted from import duties until 
 
29 Handbook of Procedures (2015 -20) (as at 31 March 2019). Viewed  at: 
https://dgft.gov.in/sites/default/files/HBP%20Chapter%202%20as%20on%20Mar%2031%202019_0.pdf . 
30 Customs Notification No. 50/2017. Viewed  at: http://www.cbic.gov.in/resources/htdocs -
cbec/customs/cs -act/notifications/notfns -2017/cs -tarr2017/cs50 -2017.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
- 51 - 
 
  30 September 2020.31 Tariff concessions are also granted under different schemes implemented to 
promote exports , such as the Export from India Scheme (EIS), the Duty Exemption/Remission 
Schemes, export oriented units (EOUs), electronics hardware technology parks (EHTPs), software 
technology parks (STPs) , and bio-technology parks (BTPs) (Section 3.2.4).  
3.36.   Concessions may be granted based on end -user conditions. Since 2017, in order to promote 
employment, products used in certain initiatives in the handloom, handicraft, leather, marine, sports 
goods and toy sectors may be imported duty -free, up to a specific value, which is contingent on the 
value of the exports of the previous year.32 Equipment used for research and development (R&D) in 
the pharmaceuticals and bio -technology, and agro -chemicals sector s may be imported duty -free.33 
In addition, to facilitate assessment and clearance, India implements the Project Import Scheme, a 
simplified process  of classification and valuation ; goods imported under this Scheme to set 
up/expand industrial projects are all classified under HS98.01 , and are subject to  a concessional rate 
of 5%.  
3.37.   Temporary import of goods into India for display or use at specified eve nts are exempt from 
customs duties, subject to a declaration by the importer indicating the nature of the exhibition, 
except in the case of imports of precious  or semi-precious stones or jewellery . In this case,  the 
importer must submit a certificate from the Gems and Jewellery Export Promotion Council.34 
Tariff preferences  
3.38.   India grants preferential treatment on imports originating in regions with which it has 
negotiated preferential agreements, provided they comply with the established preferential rules of 
origin. The average preferential tariff that India has negotiated in  the various agreements varies 
considerably, as does the coverage of the preferences. The average tariff applied for some trade 
partners is relatively low, at 0.8%, as i n the case of the agreement with  the SAFTA LDC s; under this 
agreement, the number of du ty-free lines exceeds 99%. However , in the case of the agreement with 
MERCOSUR, the coverage is low (3.1%), the number of duty -free lines is 3% , and the preferential 
tariff (1 4.8%) is slightly lower than the average MFN tariff. In all instances, the number  of 
agricultural products that enjoy preferential treatment is smaller than the number of non -agricultural 
products (Table 3. 5). 
Table 3.5 Summary analysis of preferential tariffs, 2019/20  
  Preferential 
linesa  
(% of all 
tariff lines)  Total  WTO agriculture  WTO non -
agriculture  
Average 
(%) Duty 
free 
(%) Average 
(%) Duty 
free 
(%) Average 
(%) Duty 
free 
(%) 
MFN  
14.9 3.0 34.8 4.9 12.0 2.7 
APTA 27.2 13.5 4.9 32.4 4.9 10.7 4.9 
Bangladesh  27.4 13.5 5.0 32.4 4.9 10.7 5.0 
Lao, People's Dem. Rep.  0.8 14.8 3.1 34.8 4.9 11.9 2.9 
ASEAN  84.0 5.0 73.7 21.4 51.1 2.6 77.0 
Philippines  83.9 5.4 64.7 22.2 41.1 2.9 68.1 
MERCOSUR  3.1 14.8 3.0 34.8 4.9 11.9 2.7 
SAFTA non -LDCs 75.8 7.1 3.0 14.8 4.9 6.0 2.7 
SAFTA LDCs 96.2 0.8 99.2 6.1 93.5 0.0 100.0  
Afghanistan  0.3 14.8 3.1 34.4 5.3 12.0 2.7 
Chile 9.2 14.1 3.0 33.2 5.3 11.3 2.7 
Japan  81.0 5.4 22.9 21.8 6.9 3.0 25.2 
Korea, Rep. of  76.7 6.0 66.9 24.6 6.3 3.2 75.8 
Malaysia  84.3 4.9 73.8 21.2 51.3 2.6 77.1 
Nepal  93.7 1.1 96.7 7.4 87.9 0.2 98.0 
Singapore  45.5 10.7 27.7 32.6 13.0 7.5 29.9 
Sri Lanka  87.8 4.2 79.4 8.6 89.6 3.5 77.9 
Thailand  1.9 14.7 4.9 34.6 5.5 11.8 4.8 
LDCs 94.3 1.9 94.2 13.2 76.6 0.3 96.7 
 
31 Customs Notification No. 20/2020 of 9 April 2020 . 
32 FTP (2015 -20) (as at 31 March 2019). Viewed  at: 
https://dgft.gov.in/sites/default/files/FTP%20Chapter%201%20as%20on%20March%2031%202019_1.pdf . 
33 Handbook of Procedures (2015 -20) (as at 31 March 2019). Viewed  at: 
https://dgft.gov.in/sites/default/files/HBP%20Chapter% 202%20as%20on%20Mar%2031%202019_0.pdf . 
34 Notification No. 8/2016 -Customs  of 5 February 2016. WT/TPR/S/ 403/Rev.1  • India  
 
- 52 - 
 
    Preferential 
linesa  
(% of all 
tariff lines)  Total  WTO agriculture  WTO non -
agriculture  
Average 
(%) Duty 
free 
(%) Average 
(%) Duty 
free 
(%) Average 
(%) Duty 
free 
(%) 
Memorandum:         
Afghanistanb 96.2 0.8 99.2 6.1 93.5 0.0 100.0  
Bangladeshc 96.2 0.8 99.2 6.1 93.5 0.0 100.0  
Korea, Rep. ofd 78.6 5.8 68.8 24.3 6.3 3.1 77.9 
Malaysiae 84.5 4.9 73.9 21.2 51.5 2.5 77.2 
Nepalb 96.2 0.8 99.2 6.1 93.5 0.0 100.0  
Singaporee 86.5 4.4 77.6 21.4 53.5 2.0 81.1 
Sri Lankaf 91.2 2.4 79.5 5.7 89.6 1.9 78.0 
Thailande 84.1 4.9 74.1 21.2 51.6 2.6 77.4 
a The percentage of preferential lines includes only lines for which the preferential rates are lower than 
the corresponding MFN applied rate.  
b Based on the lowest rate applied from  either  the country's bilateral agreement or the SAFTA.  
c Based on the lowest r ate applied from either the APTA or the  SAFTA.  
d Based on the lowest rate applied from either the country's bilateral agreement or the  APTA.  
e Based on the lowest rate applied from either the country's bilateral agreement or the  ASEAN.  
f Based on the lowest rate applied from either the country's bilateral agreement, the APTA or the  
SAFTA.  
Note:  Only preferential tariff rates that apply to the whole line at the 8 -digit level were used in this 
analysis.  
 APTA = China; Korea, Rep. of; and Sri Lanka.  
 ASEA N = Brunei  Darussalam , Malaysia, Singapore, Thailand, Viet Nam, Myanmar, Indonesia, and 
Lao People's Dem. Rep.  
 SAFTA non -LDCs = Pakistan, and Sri Lanka.  
 SAFTA LDCs = Bangladesh, Bhutan, Maldives, Nepal, and Afghanistan.  
Source:  WTO calculations, based on  data received by the authorities, and CBIC notifications. Viewed at: 
http://cbic.gov.in/Customs -Notifications . 
3.39.   India grants duty -free quota -free access to LDCs as per Paragraph 47 of the Hong Kong 
Ministerial Declaration of December 2005. It extended this preference to LDCs through its DFTP 
Scheme for LDCs, which came into effect in 2008 with tariff reductions spread over five years. The 
Scheme provided preferential market access on tariff lines that  comprise 92.5% of the global exports 
of all LDCs. Subsequently, in 2014, the Scheme was modified to increase the coverage and to 
simplify the rules of origin procedures. Under the new expanded DFTP Scheme, India grants 
duty-free access on 94.2% of all tar iff lines35; around 2.6% (309 lines) of the tariff is excluded from 
the Scheme, while reduced rates (with a margin of preference ranging from between 10% and 60% 
of the MFN rate) of preferential duties are offered for 3.2% (374 lines) of the tariff.  
3.1.4   Other  charges affecting imports  
3.40.   Since the last Review, one of the major changes regarding other duties and charges affecting 
imports was the replacement (in most cases) of the additional (or countervailing) duty (AD), applied 
in place of excise duties (the Cent ral Value Added Tax (CENVAT)) on imports, and the special 
additional duty (SAD), to offset state and local taxes, by the Goods and Services Tax (GST), 
introduced in 2017.  
3.41.   The GST aims at integrating the economy, by amalgamating a large number of central an d 
state taxes into a single tax. As a result, the GST replaced various indirect taxes at the central and 
state levels (Table 3.6).  
 
35 Customs Notification No.  8/2014 , 1 April 2014 . Viewed  at: 
http://commerce.gov.in/trade/international _tpp _DFTP.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.6 Taxes replaced by the GST  
Central level taxes  
Central Excise Duty 
Excise Duties (Medicinal and Toilet Preparations)  
Additional Duties of Excise (Goods of Special Importance)  
Additional Duties of Excise (Textiles and Textile Products)  
Additional Duties of Customs , with some exceptions  
Special Additional Duty of Customs , with some exceptions  
Service Tax  
Central Surcharges and Cesses , insofar as they relate to supply of goods and services:  Cess on Rubber, 
Cess on Automobiles, Cess on Tea, Cess on Coal, Cess on Bidis, Cess on Sugar, Cess on Jute Goods, Cess on 
Water Consumed by Certain Industries, Clean Energy Cess, Swachh Bharat Cess, Infrastructure Cess , and 
Krishi Kalyan Cess  
State taxes  
State VAT /Sales Tax  
Central Sales Tax on certain goods (e.g. crude petroleum, high -speed diesel, motor spirit, natural gas, 
aviation turbine fuel , and alcoholic beverages)  
Octroi and Luxury Tax  
Entry Tax (all forms)  
Entertainment and Amusement Tax (except when levied by local bodies)  
Taxes on advertisements  
Purchase Tax  
Taxes on lotteries, betting and gamblin g 
State Surcharges and Cesses , insofar as they relate to the supply of goods and services  
Source:  PIB, An overview of GST.  Viewed at: https://pib.gov.in/newsite/printrelease.aspx?relid=161273 ; 
and information provided by the authorities.  
3.42.   The introduction of the GST is expected to widen the tax base and reduce tax eva sion. The 
tax base is to widen , as the GST affects most goods and services. The GST is expected to reduce 
tax evasion , as the taxes are collected at each stage of the supply chain. The GST taxes only the 
value addition.36 Thus, taxpayers may get a credit f or taxes paid on inputs (input tax credit) at the 
previous stage of production. Credits may be taken on taxes paid on all goods and services, other 
than a few items included in the negative list.37 Credits may be used to pay output tax. Unutilized 
tax cred its can be carried forward. In addition, as the GST replaced several taxes , taxpayers are not 
required to maintain records or show compliance with a myriad of indirect tax laws.38 
3.43.   The GST rates are fixed based on the recommendations of the GST Council. Uniform GST 
rates and exemptions apply across India , to ensure harmonization among the central level and the 
states, and between the states. As a result, India became  more integrated. The previous tax regime , 
with a multiplicity of taxes and their  cascading effects,  fragmented the country , as each state had 
to maintain border checkpoints. This adversely affected the free flow of goods within the country , 
resulting in additional logistics costs and increasing the overall cost of production.39 
3.44.   The GS T is a destination -based consumption tax . The revenue derived from it accrues to the 
state or the union territory (UT) where the consumption takes place. The GST is simultaneously 
levied by the Centr al Government and the states /UTs at a common rate (Table 3.7). Intra-state 
supply of goods and/or services is subject to the Central GST (CGST) , collected by the Centr al 
Government ; and to  the state GST (SGST) or the u nion territories GST ( UTGST ), collected by the 
states/UTs accordingly . The integrated GST (IGST ), equivalent to the CGST plus the SGST/UTGST, 
is levied and collected by the Centr al Government  on all inter -state supply of goods and /or services, 
and on imports. There is a mechanism for settling transactions between states. Accounts are settled 
periodically between the Centr al Government  and the states and the UTs, to ensure that the 
SGST/UTGST portion of the IGST is transferred to the s tate/UT where the goods or services are 
 
36 PIB, An overview of GST, 25 April 2017 . Viewed at: 
https://pib.gov.in/newsite/printrelease.aspx?relid=161273 . 
37 For more details, refer to Section 17(5)  of the CGST Act, 2017 . Viewed at: 
http://gstcouncil.gov.in/sites/de fault/files/CGST.pdf . 
38 Sebastian, J. (2018), India's Goods and Services Tax: Salient Features and Post –Implementation 
Issues , International VAT Monitor, March/April. Viewed at: 
https://www.ibfd.org/sites/ibfd.org/files/content/pdf/ivm_2018_02_in_1.pdf . 
39 Government of India (2015), Report on the Revenue Neutral Rate and Structure of Rates for the 
Goods and Services Tax (GST) . WT/TPR/S/ 403/Rev.1  • India  
 
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  consumed.  The share of states in the CGST and IGST for the 2015 -20 period was 42%, and during 
2020-21 it will decrease to 41% due to revenue to be provided to the new UTs created in 2019.40 
Table 3.7 GST rate, 2020  
GST/IGST  CGST  SGST/UTGST  
0% 0% 0% 
5% 2.5%  2.5%  
12% 6% 6% 
18% 9% 9% 
28% 14% 14% 
Source:  WTO Secretariat.  
3.45.   Imported  goods and services are subject to the IGST. The IGST on imported goods is levied 
based on the transaction value of the imported product plus the customs duty imposed on the 
product.41 Imported services are valued per the same rules used to value services for domestic 
taxes.42 In general, the i nvoice value is the taxable value.43 
3.46.   The list of exempted goods and services is the same  at the central and state level s. The GST 
applies to all goods other than alcoholic beverages and five petroleum products (i.e. crude 
petroleum, motor spirit (petrol), high-speed diesel, natural gas , and aviation turbine fuel). The GST 
Council will recommend the date when these goods will be subject to the GST. Goods that fall outside 
the purview of the GST, when imported , are still subject to the AD and the SAD.44 Tobacco and 
tobacco products are subject to GST and, in addition, the Central Government may levy a Central 
Excise Duty. At present, the Central Excise Duty on tobacco is 0%. Some services are exempted 
from the GST.45 
3.47.   There are also exemptions on the appl ication of the GST , based on the threshold of aggregate 
turnover in a financial year. Exemptions apply to: t axpayers (goods  only) with an aggregate turnover 
of up to INR 4 million; and taxpayers (goods and services , or services  only) with an aggregate 
turnover of up to INR 2 million.46 In addition, small taxpayers with an aggregate turnover of up to 
INR 5 million (services) or INR 15 million (goods or restaurants) may opt to use the composition 
levy. Under this scheme, the taxpayer is taxed a fixed GST rate  on turnover: 1% (goods); 5% 
(restaurants) ; or 6% (all other services).  
3.48.   The GST on exports and on supplies to SEZ s is zero-rated.  
3.49.   As per the Goods and Services Tax (Compensation to States) Act, 2017, a GST Compensation 
Cess is levied on the supply of domes tic and imported goods and services, as recommended by the 
GST Council . The Cess is used to finance the compensation to the states for the loss of revenue 
arising on account of the implementation of the GST. Compensation will be provided to a state for a 
period of five years from the date on which the state brings its SGST Act into force. In general, the 
Cess is ad valorem  (15%), with some exceptions for tobacco products (HS24) and coal (HS2701, 
2702 and 2703) for which it is specific.47 
3.50.   Other changes regar ding the charges on imports were the elimination of : the Clean Energy 
Cess on coal, lignite and peat, in 2017 ; and the Education Cess and Secondary and Higher Education 
 
40 PRS Legislative Research, Report of the  15th Finance Commission for FY 2020 -21. Viewed at: 
https://www.prsindia.org/report -summaries/report -15th-finance -commission -fy-2020-21. 
41 The Customs Law is applicable for the valuation of imported goods (Sec tion 5(1) of the IGST Act) . 
42 The base for levying the tax is the transaction value (i.e. price actually paid or payable, provided the 
supplier and the recipient are not related) ( Section 15 of the CGST Act and Chapter IV of the CGST Rules, 
2017). 
43 Information provided by the authori ties. 
44 These are products that fall under Chapter s 24 and 27, as listed in the Fourth Schedule to the Central 
Excise Act, 1944.  
45 These include agricultural services, some transportation services, services provided by government 
and diplomatic agencies, j udicial services, educational services, medical services, transmission or distribution 
of electricity , and services related to renting property.  
46 These thresholds apply to all of India, except for 11 Special Category States (North -East and the hilly 
states); in these cases, the threshold is INR 10 lakhs.  
47 Schedule of the Goods and Services Tax (Compensation to States) Act, 2017.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Cess, in 2018.48 Instead, a Social Welfare Surcharge (SWS) of 10% on the basic customs duty was 
put in place in 2018 , to finance education and other social welfare schemes.49 The SWS is only levied 
on imported goods , not on domestic goods. Customs duty plus the SWS  are levied on a ll imports, 
unless exempt.50 
3.51.   In 2020, India imposed a Health Cess, at a rate of 5%, on imported medical devices falling 
under HS headings 9018 -9022, to finance the health infrastructure and services.51 The Cess is levied 
in addition to any other customs duties; however, it does not apply to medical devices th at are 
exempt from customs duty and inputs/parts used in the manufacturing of medical devices.52 
3.52.   The National Calamity Contingency Duty was removed in 2017 for all goods, except for some 
tobacco products ( ad valorem  duties, which increased from 10% -45% in 2019-20 to 25% -60% in 
2020-2153 and non-ad valorem  duties54, which also increased); and crude petroleum 
(HS 2709.00.00) (INR 50 per tonne).55 
3.1.5   Import prohibitions, restrictions, and licensing  
3.53.   India continues to impose import prohibitions and restrictions. T he DGFT may, through a 
notification, impose restrictions on imports (and exports) to: (i) protect human, animal or plant life 
or health; public morality; historical heritage; the environment; and intellectual property rights 
(IPRs); (ii) prevent the use of  deceptive practices; the use of prison labour; and the traffic of arms, 
ammunition and implements of war; (iii) and to comply with United Nations Security Council 
resolutions. In addition, some products may only be imported through designated state tradin g 
enterprises (STEs). These imports (canalized items) can only be imported via specified 
transportation channels and methods. These include petroleum products, bulk agricultural products 
such as grains and vegetable oils, and some pharmaceutical products. All restricted items and items 
permitted to be imported by STEs, except live animals required for R&D, may be imported without 
an authorization by government -recognized R&D units.  
3.1.5.1   Import prohibitions  
3.54.   India applies import prohibitions, mainly on health and safety grounds, and these continue to 
apply to products such as meat and offal from wild animals, tallow fat, animal rennet, and 
unprocessed ivory (Table 3.8).56 Since the last Review, India has also applied import prohibitions to 
shark fins, le ather from reptiles, and fur skin. Most of these restrictions apply to goods no matter 
their origin; however, some import prohibitions are country -specific. Imports of milk and milk 
products from China have been prohibited, since 2015, on health grounds.57 
 
48 Taxation Law (Amendment) Act, 2017, and the Union Budget 2018 -19. 
49 Finance Act, 2018.  
50 For the whole list of goods exempted from the SWS, refer to: Notification No.  11/2018 -Customs, 
2 February 2018.  
51 The Finance Bill, Bill No. 26 of 2020. Viewed at: https://www.indiabudget.gov.in/doc/Finance_Bill.pdf . 
52 Notification No. 08/2020 -Customs , 2 February  of 2020. 
53 HS2403.11.10, HS24 03.19.90, HS2403.91.00, HS2403.99.10, HS2403.99.20, HS2403.99.30, 
HS2403.99.40, HS2403.99.50, HS2403.99.60 and HS2403.99.90 (25%), and HS2403.19.10 (60%)  (WTO 
Secretariat, based on the  2020-21 Tariff Schedule provided by the authorities ). 
54 HS2402.20.10 (INR 200 per thousand) , HS2402.20.20 (INR 250 per thousand) , HS2402.20.30 (INR 
440 per thousand), HS2402.20.40 (INR 440 per thousand), HS2402.20.50 (INR 545 per thousand), 
HS2402.20.90 (INR 735 per thousand), HS24  02.90.10 (INR 600 per thousan d), HS2403.19.21 (INR 1 per 
thousand) and HS2403.19.29 (INR 2 per thousand)  (WTO Secretariat, based on the  2020-21 Tariff Schedule 
provided by the authorities ). 
55 National Calamity Contingent Duty , Annexure 7  of Taxation Laws (Amendment) Act, 2017.  
56 WTO d ocument G/MA/QR/N/IND/2 of 21 June 2018 ; and information provided by the authorities.  
57 Notification No.1/2015 -2020, 23 April 2019.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.8 Import prohibitions  
HS code  Description  
0207.43.00  Fatty livers, fresh or chilled  
0208.90.10  Other meat and edible meat offal, fresh, chilled or frozen of wild animals  
0209.10.00  Pig fat  
0209.90.00  Poultry fat  
0305.71.00  Shark fins  
0410.00.10  Edible products of animal origin, n.e.s., of wild animals  
0504.00.31  Guts of other animals for natural food casings of wild animals  
0504.00.41  Guts other than for natural food casings of wild animals  
0504.00.51  Bladders and stomachs of wild animals  
0505.10.10  Feathers of a kind used for stuffing; down of wild birds  
0505.90.21  Other feather s (excluding for stuffing purpose s) of wild birds  
0505.90.31  Powder and waste of feathers or parts of f eathers of wild birds  
0505.90.91  Skins and other parts of wild birds  
0506.10.11  Bones, including horn-cores,  crushed , of wild animals  
0506.10.21  Bone grist of wild animals  
0506.10.31  Ossein of wild animals  
0506.10.41  Bones, horn cones  and parts thereof, not crushed , of wild animals  
0506.90.11  Bone meal of wild animals  
0506.90.91  Other of wild animals  
0507.10.10  Ivory 
0507.10.20  Ivory powder and waste  
0510.00.91  Ambergris, castoreum, civet and musk; cantharides; bile; glands of wild animals  
0511.91.10  Fish nails  
0511.91.20  Fish tails  
0511.91.30  Other fish waste  
0511.99.21  Sinews and tendons of wildlife  
0511.99.92  Bovine embryo s of wildlife  
1501.10.10  Lard 
1501.20.00  Other pig fat  
1501.90.00  Poultry fat  
1502.10.10  Mutton tallow  
1502.10.90  Other tallow  
1502.90.10  Unrendered fats  
1502.90.20  Rendered fats or solvent extraction fats  
1502.90.90  Other fats  
1503.00.00  Lard stearin, lard oil, oleostearin, oleo -oil and tallow oil, not emulsified or mixed or otherwise 
prepared  
1504.10.99  Other fats and oils and their fractions, of fish or marine mammals, whether or not refined, 
but not chemically modified  
1504.20.30  Sperm oil  
1504.20.90  Other fats and oils and their fractions , of fish, other than liver oils  
1504.30.00  Fats and oils and their fractions , of marine mammals  
1506.00.10  Neat foot oil and fats from bone or waste  
1506.00.90  Other animal fats and oils and their fractions, not chemically modified  
1516.10.00  Animal fats and oils and their fractions  
1517.10.10  Margarine of animal origin  
1517.90.30  Imitation lard of animal origin  
1518.00.40  Animal or vegetable fats and oils and their fractions, boiled, oxidized, dehydrated, 
sulphurized, blown, polymerized by heat in a vacuum or in inert gas or otherwise chemically 
modified, excluding those of Heading 1516: inedible mixtures or preparations of  animal or 
vegetable fats or oils of Chapter  15, n.e.s.  
1522.00.10  Degrasa 
1522.00.20  Soap stocks  
1522.00.90  Other animal or vegetable waxes  
3507.10.11  Microbial rennet: animal rennet  
3507.10.19  Other enzymes; prepared enzymes not elsewhere specified or included  
3507.10.91  Animal rennet  
3507.10.99  Other animal rennet  
4113.30.00  Leather of reptiles  
4301.10.00  Furskins of mink  
4301.60.00  Furskins of fox  
4301.80.00  Other furskins (e.g. chinchilla)  
4302.11.00  Tanned or dressed furskins  of mink  
4302.19.40  Tanned or dressed furskins of Tiger -cat  
4303.10.10  Articles of apparel and clothing accessories of wild animals covered under the Wildlife 
Protection Act, 1972  WT/TPR/S/ 403/Rev.1  • India  
 
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  HS code  Description  
4303.90.10  Other articles of furskin of wild animals covered under the Wildlife Protection Act, 1972  
4403.99.18  Red sanders ( Pterocarpus Santalinus ) 
8517 Telephone sets, including telephones for cellular networks or for other wireless networks; 
other apparatus for the transmission or reception of voice, images or other data, including 
apparatus for communication in a wired or wireless network (such as a local or wide area 
network), other than transmission or reception apparatus of Heading 8443, 8525, 8527 or 
8528 
9601.10.00  Worked ivory and articles of ivory  
Country -specific prohibition s 
China:   
0401 Milk and cream, not concentrated or containing added sugar or other sweetening matter  
0402 Milk and cream, concentrated or containing added sugar or other sweetening matter  
0403 Buttermilk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and 
cream, whether or not concentrated or containing added sugar or other sweetening matter , 
or flavoured or containing added fruit, nuts or cocoa  
0405 Butter and other fats and oils derived from milk; dairy spreads  
0406 Cheese and curd  
1704 Sugar confectionery (including white chocolate), not containing cocoa  
1901 Malt extract; food preparations of flour, g roats, meal, starch or malt extract, not c ontaining 
cocoa or containing less than 40% by weight of cocoa calculated on a totally defatted basis, 
not elsewhere specified or included; food preparations of goods of Headings 0401 to 0404, 
not containing cocoa or containing less than 5% by weight of co coa calculated on a totally 
defatted basis n.e.s.  
1905 Bread, pastr ies, cakes, biscuits and other bakers' wares, whether or not containing cocoa; 
communion wafers, empty cachets of a kind suitable for pharmaceutical use, sealing wafers, 
rice paper , and si milar products  
a Residues resulting from the treatment of fatty substances or animal or vegetable waxes.  
Note:  Tariff lines affected are based on the HS12 nomenclature.  
Source:  WTO document G/MA/QR/N/IND/2, 21 June 2018.  
3.55.   Imports of certain goods (48 tariff lines at the HS eight -digit level) are subject to import 
prohibitions depending upon their import price ( Table 3.9 ). These imports are prohibited or restricted 
when the c.i.f. price is lower than the minimum import price (MIP) . According to the authorities, 
MIPs are imposed to protect the domestic growers/farmers and their livelihood. Line ministries 
decide which products should be subject to MIPs.  
Table 3.9 Imports subject t o minimum import prices (MIPs), as at end -December 2019  
HS code  Description  MIP Import policy  
0801.32.10  Cashew kernel s, broken  INR 680/kg  Prohibited  
0801.32.20  Cashew kernel s, whole  INR 720/kg  Prohibited  
0802.80.10  Areca/betel nuts, whole  INR 251/kg  Prohibited  
0802.80.20  Areca/betel nuts, split  INR 251/kg  Prohibited  
0802.80.30  Areca/betel nuts, ground  INR 251/kg  Prohibited  
0802.80.90  Areca/betel nuts, other  INR 251/kg  Prohibited  
0904.11.20  Light black pepper, neither crushed nor 
ground  INR 500/kg  Prohibited  
0904.11.30  Black pepper, garbled, neither crushed 
nor ground  INR 500/kg  Prohibited  
0904.11.40  Black pepper, ungarbled, neither 
crushed nor ground  INR 500/kg  Prohibited  
0904.11.50  Green pepper, dehydrated, neither 
crushed nor ground  INR 500/kg  Prohibited  
0904.11.60  Pepper pinheads, neither crushed nor 
ground  INR 500/kg  Prohibited  
0904.11.70  Green pepper, frozen or dried, neither 
crushed nor ground  INR 500/kg  Prohibited  
0904.11.80  Pepper other than green, frozen, 
neither crushed nor ground  INR 500/kg  Prohibited  
0904.11.90  Other, neither crushed nor ground  INR 500/kg  Prohibited  WT/TPR/S/ 403/Rev.1  • India  
 
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  HS code  Description  MIP Import policy  
0904.12.00  Pepper, crushed or ground  INR 500/kg  Prohibited  
0908.31.10  Cardamoms, large ( amomum ), neither 
crushed nor ground  INR 500/kg  Free 
0908.31.20  Cardamoms, small ( ellettaria ), 
Alleppey green, neither crushed nor 
ground  INR 500/kg  Free 
0908.31.30  Cardamoms, small, Coorg green, 
neither crushed nor ground  INR 500/kg  Free 
0908.31.40  Cardamoms, small, bleached, half -
bleached or bleachable, neither 
crushed nor ground  INR 500/kg  Free 
0908.31.50  Cardamoms, small mixed, neither 
crushed nor ground  INR 500/kg  Free 
0908.31.90  Cardamoms, other, neither crushed 
nor ground  INR 500/kg  Free 
2515.11.00  Marble and travertine, crude or roughly 
trimmed  USD 200/MT  Restricted  
2515.12.10  Merely cut, by sawing or otherwise, 
into blocks or slabs of a rectangular 
shape: blocks  USD 200/MT  Restricted  
2515.12.20  Merely cut, by sawing or otherwise, 
into blocks or slabs of a r ectangular 
shape: slabs  USD 200/MT  Restricted  
2515.12.90  Merely cut, by sawing or otherwise, 
into blocks or slabs of a rectangular 
shape: other  USD 200/MT  Restricted  
4012.11.00  Retrea ded tyres , of a kind used on 
motor cars (including station wagons 
and racing cars)  USD 25 per tyre  Restricted  
4012.12.00  Retrea ded tyres , of a kind used on 
buses or lorries  USD 175 per tyre  Restricted  
4012.13.00  Retrea ded tyres , of a kind used on 
aircraft  USD 175 per tyre  Restricted  
4012.19.10  Retrea ded tyres for two wheelers  USD 25 or 175 per tyrea Restricted  
4012.19.90  Other retrea ded tyres  USD 25 or 175 per tyrea Restricted  
4012.20.10  Used pneumatic tyres for buses, lorries 
and earth -moving equipment , including 
light commercial vehicles  USD 175 per tyre  Restricted  
4012.20.20  Used pneumatic tyres for passenger 
automobile vehicles, including two -
wheelers, three -wheelers and personal 
type vehicles  USD 25 per tyre  Restricted  
6802.10.00  Tiles, cubes  and similar articles  USD 40 per m2 b Free 
6802.21.10  Marble blocks or tiles  USD 40 per m2 b Free 
6802.21.20  Marble monumental stone  USD 40 per m2 b Free 
6802.21.90  Other marble, travertine and alabaster  USD 40 per m2 b Free 
6802.23.10  Granite blocks or tiles  USD 50 per m2 b Free 
6802.23.90  Other granite  USD 50 per m2 b Free 
6802.29.00  Other stone  USD 50 per m2 b Free 
6802.91.00  Marble, travertine and alabaster  USD 40 per m2 b Free 
6802.92.00  Other calcareous stone  USD 40 per m2 b Free 
6802.93.00  Granite  USD 50 per m2 b Free 
6810.11.10  Cement bricks  USD 50 per m2 Free 
6810.11.90  Other building blocks and bricks  USD 50 per m2 Free 
6810.19.10  Cement tiles for mosaic  USD 50 per m2 Free 
6810.19.90  Other tiles  USD 50 per m2 Free WT/TPR/S/ 403/Rev.1  • India  
 
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  HS code  Description  MIP Import policy  
6810.91.00  Articles of cement: prefabricated 
structural components for building or 
civil engineering  USD 50 per m2 Free 
6810.99.10  Concrete boulder s USD 50 per m2 Free 
6810.99.90  Other articles of cement  USD 50 per m2 Free 
a Import of retreaded  tyres for buses, lorries and earth -moving equipment , including bigger size 
vehicles and light commercial vehicles , is permitted freely if the per tyre c.i.f. value is USD 175 or 
above. Import of retreaded tyres for passenger automobile vehicles , including  two-wheelers, 
three -wheelers and personal type vehicles , is permitted freely if the per tyre c.i.f. value is USD 25 or 
above.  
b For maximum thickness of slab of 20  mm. 
Note:  The MIP  for pepper under HS subheading 0904 is subject to certain conditions. See DGFT 
Notifications No. 50/2015 -2020 (5 February 2018), No. 53/2015 -2020 (21 March 2018), and 
No. 21/2015 -2020 (25 July 2018).  
 Items falling under HS Chapters 25 and 40 are restrict ed if not imported under the MIP. 
 Items falling under HS Chapters 08, 09, and 68 are prohibited if not imported under the MIP. 
Source:  DGFT  Notifications No. 36/2015 -2020 (17 January 2017), No. 42/2015 -2020 (6 December 2017); 
No. 33/2015 -2020 (17 Septembe r 2018); and No. 8/2015 -20 (12 June 2019). Viewed at: 
http://dgft.gov.in/policies/notifications . 
Import licensing and restrictions  
3.56.   To facilitate the importation of restricted items, an import licensing system is in place . In 
2019/20 there were 440 tariff l ines (3.7% of all tariff lines) subject to import licensing.58 All 
importers h olding a valid IEC  may apply for a licence . Import licences are issued, on an MFN basis, 
by the DGFT. The practice of routing import licensing applications through the sponsoring  authorities 
was stopped . Applications are considered by the Exim Facilitation Committee, a single administrative 
organ , constituted for this purpose.59 Import licences are valid for 18 months, renewable for 
6 months on merit. Fees are calculated based on the c.i.f. value of imports, one per thousand of the 
c.i.f. value, with a minimum of INR 500 and a maximum of INR 100,000.60 Import licences are issued 
for a specific port as specified by the applicant . If the import policy specifies a port of entry for a 
particular product, then the licence will indicate it.  
3.57.   The DGFT may refuse to grant an import licence, inter alia , if the applicant has contravened 
any law; if India decides to import through a STE; or if the applicant is not eligible in accordance 
with any provisions of the FTP. In addition, i mport licences of specified goods, services or technology 
may be suspended or cancelled without giving prior not ice to the licence holder. The importer 
(exporter) may contest the decision, through the DGFT's grievance redressal mechanism, within six 
months, when it would be reassessed.61  
3.58.   Some licences are subject to an actual -user condition, which means that the imported product 
cannot be sold in the domestic market , and it must be used for a specific reason . A list of items that 
are granted licences with actual -user conditions does not exist; these  conditions apply on a case-by-
case basis.  The Secretariat cannot provide more details regarding these changes because , as 
indicated by the authorities, for more details on the list of products, whose import conditions have 
changed, it is necessary to search by product, on the DGFT we bsite.  
3.59.   Most second -hand goods, except second -hand capital goods, require a licence to be 
imported.62 
3.60.   Import licences are also used to administer quotas. Quotas are distributed on an MFN basis, 
unless there is a memorandum of understanding (MoU) with a trad ing partner. For instance,  during 
fiscal year (FY) 2017-18, 125 ,000 MT of pulses were imported from Mozambique under an MoU; this 
was raised to 200,000 MT on 1 June 2020.  Under the FTP 2015 -21, quotas were established for 
 
58 WTO Secretariat calculations, based on online information taken from the DGFT. Viewed at: 
http://dgft.gov.in/basiccontent/itchs -schedule -1-import -policy -2017.  
59 WTO document G/LIC/N/3/IND/18, 17 January 2018 ; and information provided by the authorities.  
60 Appendix -2K of the FTP.  
61 The Foreign Trade ( Development and Regulation) Act, 1992 . 
62 FTP (2015 -20) (as at 31 March 2019) ; and information provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  several pulses (Table  3.10) .63 In 2018, India also imposed a quota of 100,000 MTof peas (including 
yellow, green, dun and kaspa peas) for a period of three months (1 April to 30 June 2018) , which 
was exten ded three times.64 New quotas were announced in April 2020 for FY 2020-21. On 
28 March  2020, quantitative restrictions on imports of peas were announced of up to 150,000  tonnes 
(for green peas and other peas) and 400,000 tonnes (for pigeon peas).  Quotas on  import s of certain 
varieties of pulses were imposed to protect small and marginal farmers , who were affected by an 
increase in imports,  to ensure their food and livelihood security.65 
Table 3.10 Import quotas  
Product  Quota volume/ FY 
(2019 -2020)  Purpose  
Marble and similar stones 
(HS.2515.11.00, HS 2515 .12.10, 
HS 2515.12.20 and HS 2515 .12.90) Eliminated on 
1 October 2016  .. 
Sandalwood (HS4403 .99.22) 4,795 MT  Protect plant life ; and conservation of 
exhaustible natural resources  
Toor dal (HS 0713.60.00) 4 lakh/MT Protect small and marginal farmers  
Moong dal  (HS 0713.31.00) 1.5 lakh/MT Protect small and marginal farmers  
Urad dal (HS 0713.31.00) 1.5 lakh/MT Protect small and marginal farmers  
Peas (HS 0713.10.00) 1.5 lakh/MT Protect small and marginal farmers  
.. Not available.  
Source:  WTO document s G/LIC/N/3/IND/15 , 9 March 2016 ; and G/LIC/N/3/IND/18 , 17 January 2018 ; and 
information provided by the authorities.  
3.61.   India may impose quantitative restrictions if the Central Government, after conducting an 
investigation, determines that goods are imported in such an increased quantity and under such 
conditions as to cause or threaten to cause serious injury to domestic industry. Quantitative 
restrictions may not be imposed on goods originating from a developing country, if the share of 
imports of such goods from that country does not exceed 3%; or, where such goods originate from 
more than one developing country, as long as  aggregate imports from all these countries do not 
exceed 9% of the total imports of the specific good into India. Th is type of quantitative restriction, 
unless revoked earlier, expires  four years from the date  of its imposition.66 
3.62.   Import s of metallic waste and scrap are allowed only if  they do  not contain hazardous, 
radioactive material, any type of arms, or any other explosive material. Import s of scrap can take 
place only throug h designated ports , without exception .67 
3.63.   Certain products may only be imported through specific ports. These are: natural rubber 
(HS4001) (Chennai and Nhava Sheva (Jawaharlal Nehru Port); palm oil (HS1511) (all ports, except 
ports in Kerala); new vehicles (16 entry points); and used/second -hand vehicles (Mumbai Port).  
3.64.   Imports of jewellery and coins (HS7113, HS7114, HS7115, and HS7118) from the Republic 
of Korea continue to be restricted .68 
3.65.   On 5 September 2019, the import policy of certain items in Chapters HS72, HS73 and HS86 
was revised from being free to subject to compulsory registration under the Steel Import Monitoring 
 
63 The decisions regarding the allocation of quotas are available online at: http://dgft.gov.in/other -
commetiee -decisions.  
64 DGTF Notification s No. 4/2015 -2020, 25 April 2018 ; No. 15/2015 -2020, 2 July 2018; 
No. 31/2015 -2020; 29 August 2018; No. 32/2015 -2020, 30 August 2018; and No. 37/2015 -2020, 28 
September 2018 .  
65 Information provided by the authorities.  
66 The Foreign Trade (Development and Regulation) Act, 19 92 (as amended) and the Foreign Trade 
(Development and Regulation) Amendment Act, 2010 N o. 25 of 19 August 2010.  
67 These ports are  Chennai, Cochin, Ennore, Nhava Sheva (Jawaharlal Nehru Port) , Kandla, Mormugao, 
Mumbai, New Mangalore, Paradip, Tuticorin, Vi shakhapatnam, Pipava , Mundra, Kolkata , and Krishnapatnam . 
For more details on the  type of metallic waste and scrap which can be imported freely, refer to the Procedures 
of Import in the Shredded Form; unshredded , compressed and loose form are laid down in Para 2.54 of the 
Handbook of Procedures.  DGFT, Handbook of Procedures (2015 -20) (as at 31 March 2019) . Viewed at: 
https://dgft.gov.in/sites/default/files/HBP%20Chapter%202%20as%20on%20Mar%2031%202019_0.pdf . 
68 DGFT Notification No. 25/2015 -2020, 25 August 2 017. WT/TPR/S/ 403/Rev.1  • India  
 
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  System , to allow the authorities to monitor the trade volumes.69 Currently, no other goods are 
monitored.70 
3.1.6   Anti-dumping, countervailing , and safeguard measures  
Anti-dumping measures  
3.66.   The main legislation regarding anti -dumping and countervailing  measures are Sections 9, 9A, 
9B and 9C of the Customs Tariff Act, 1975 (as amended ); and the Customs Tariff (Identification, 
Assessment and Collection of Anti -dumping Duty on Dumped Articles and for Determination of 
Injury) Rules, 1995  (as amended).  
3.67.   During the period under review, India made several notifications to the WTO regarding 
amendments to the legislation related to anti -dumping and co untervailing measures.71 All these 
amendments took place prior to the period under review, and some of them date back to 2002 and 
2003, namely those related to conditions to determine whether a Member has non -market economy 
status for the purpose of the an ti-dumping investigation.72 Other amendments related to, inter alia , 
the responsibilities of the designated authorities; the principles to determine injurious price; the 
review of an anti -dumping duty (sunset reviews)73; and circumvention measures.74 
3.68.   In Ma y 2018, the Directorate General of Trade Remedies (DGTR), under the Department of 
Commerce, replaced the Directorate General of Anti -dumping and Allied Duties (DGAD) as the sole 
agency dealing with all trade remedies in India. The DGTR deals with anti -dump ing, countervailing, 
and safeguard (both duty increases and quantitative restrictions) measures. Prior to the creation of 
the DGTR, the DGAD dealt with anti -dumping and countervailing cases; and the Directorate General 
of Safeguards (DGS) and the Directora te General of Foreign Trade (DGFT) both dealt with 
safeguards.75 The DGTR is in charge of conducting anti -dumping, countervailing and safeguard 
investigations, and for making recommendations to the Minister of Finance regarding the imposition 
of any such m easures.  
3.69.   An application to initiate an anti -dumping investigation can be made either by, or on behalf 
of, the concerned domestic industry to the DGTR. Applications are deemed valid if made by domestic 
producers who account for at least 25% of total domest ic production of the article in question. An 
application is also considered to be made on behalf of the domestic industry if it is supported by 
domestic producers whose collective output accounts for more than 50% of the total production of 
the like articl e. For an anti -dumping investigation to be initiated, the petitioner must furnish sufficient 
evidence regarding dumping of the goods in question; injury to the domestic industry; and a causal 
link between the dumped imports and alleged injury to the domest ic industry.  
3.70.   The Designated Authority may also initiate the proceedings ex officio/suo -motu, based on 
information received from the Collector of Customs. During 2015 –19, the DGTR did not initiate any 
 
69 DGFT  Notification N o. 17/2015 -2020, 5 September 2019. 
70 Information provided by the authorities.  
71 WTO documents G/ADP/N/1/IND/2/Suppl.5 - G/SCM/N/1/IND/2/Suppl.5 to Suppl. 8, 12 October 2015 
to 21 April 2017.  
72 Customs Tariff (Identification, Assessment and Collection of Anti -Dumping Duty on Dumped Articles 
and for Determination of Injury) Amendment R ules, 2002. Customs Notification No.1/2002 Customs (N.T.), 
4 January 2002; and Customs Tariff (Identification, Assessment and Collection of Anti -Dumping Duty on 
Dumped Articles and for Determination of Injury) Amendment Rules, 2003. (Notification No. 101/2 003 – 
Customs (N.T.)), 10 November 2003 (WTO documents G/ADP/N/1/IND/2/Suppl. 8 - G/SCM/N/1/IND/2/Suppl. 8, 
21 April 2017). 
73 The Customs Tariff (Identification, Assessment and Collection of Anti -Dumping Duty on Dumped 
Articles and for Determination of Injur y) Amendment Rules , 2011. Notification No. 15/2011 -Customs (N.T) , 
1 March 2011 (WTO document s G/ADP/N/1/IND/2/Suppl.5 - G/SCM/N/1/IND/2/Suppl.5 , 12 October 2015 ). 
74 The Refund of Anti -Dumping Duty (Paid in Excess of Actual Margin of Dumping) Rules, 2012. 
Notification No. 5/2012 -Customs (N.T.) , 19 January 2012  (WTO document s G/ADP/N/1/IND/2/Suppl.7 - 
G/SCM/N/1/IND/2/Suppl.7 , 9 October 2015).  
75 Amendment to the Government of India (Allocation of Business) Rules, 1961, 7 May 2018.  Press 
Information Bureau , Government of India, Ministry of Commerce and Industry . Viewed at: 
https://pib.gov.in/newsite/PrintRelease.aspx?relid=179195 . WT/TPR/S/ 403/Rev.1  • India  
 
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  investigations suo-motu. The procedure for suo-motu investigations is the same as those based on 
an industry petition, as per the Anti -Dumping Rules (Box 3.1).  
3.71.   The DGTR may suspend or terminate the investigation in the following cases: (i) if there is a 
request in writing from, or on behalf of, the domestic in dustry affected, at whose instance the 
investigation was initiated; (ii) if there is no sufficient evidence of dumping or injury to justify 
continuation of the investigation; (iii) if the margin of dumping is less than 2% of the export price; 
(iv) the volu me of dumped imports from a country is less than 3% of the total imports of the like 
product into India,  unless the volume of dumped imports collectively from all such countries is more 
than 7% of the total imports ; and (v) if injury is negligible. The Aut hority may also terminate or 
suspend an investigation after the preliminary findings if the exporter concerned is ready to agree 
upon a price undertaking.  
Box 3.1 Stages of the investigation process, 2020  
A. Preliminary screening:  
The application is checked to ensure that it is fully documented and provides sufficient evidence for initiating 
an investigation. If the evidence is not adequate, then a deficiency letter is issued. Unless the deficiencies are 
rectified, the submission made before the Authority cannot be construed as an application pending before  it. 
B. Initiation:  
The DGTR  determine s if the application is made by , or on behalf of , the domestic industry. It also examines 
the a ccuracy and adequacy of the evidence provided in the application. When there is sufficient evidence 
regarding dumping, injury , and causal link, a public notice is issued.  This notice is  issued  once the initiation is 
decided.  
C. Access to information:  
The Designated  Authority provides access to the non -confidential evidence presented by various interested 
parties to all interested parties , on request.  
D. Preliminary findings:  
The DGTR  starts conducting the investigation and, in appropriate cases, make s a preliminary finding containing 
detailed information on the main reasons behind the determination.  
The preliminary finding is normally made 60  days from the date of initiation  and, in most cases, between 90 
and 120 days of initiation . 
E. Provisional duty: 
A provisional duty not exceeding the margin of dumping may be imposed , based on the preliminary finding.  
The provisional duty may be imposed only after the expiry of 60 days from the date of initiation of the 
investigation.  
The provisional duty remain s in force for up to  6 months. It may be extended to 9 months under certain 
circumstances.  
F. Oral evidence and p ublic hearing:  
The Designated Authority may allow the oral presentation of relevant information. However, o ral submissions 
are considered  only if they are  subsequently provided in writing.  
G. Disclosure of information:  
The DGTR  inform s all interested parties of the essential facts, which form the basis for its decision , before the 
final finding is made.  
H. Final determination:  
Within one year of the date of in itiation of the investigation, the Designated Authority determine s if the ar ticle 
under investigation is being dumped  and submit s its final findings to the Central Government.  
I. Time -limit for an investigation process : 
The n ormal time allowed by the statute for the conclusion of an investigation and the submission of final 
findings is one year from the date of initiation of the investigation. Th is period may be extended by 6 months.  
Source:  WTO Secretariat.  
3.72.   A provisional  anti-dumping duty may be recommended by the Designated Authority in its 
preliminary findings. Statutorily, the provisional anti -dumping duty cannot be levied earlier than 
60 days from the date of initiation of proceedings. The DGTR usually recommends the imposition of WT/TPR/S/ 403/Rev.1  • India  
 
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  provisional duties after the expiry of the mandatory period of 60 days, and levies them for a period 
of about three months, although they may levied for  a period not exceeding six months , which  may 
be extended to nine months under certain circumstances . 
3.73.   The DGTR recommends the imposition of a final anti -dumping duty that removes the injury 
to the domestic industry.76 India follows the lesser duty rule ; it applies the amount of anti -dumping 
duty equal to or lower than the margin of dumping that would remove the injury to the domestic 
industry .77 
3.74.   Anti-dumping duties may not be levied on goods imported under the Advance License Scheme 
(Advance Authorization Scheme) or on imports by EOUs/export processing zones (EPZs) units, even 
if such imports are from trading partners that are dumping or are under investigation. The final 
anti-dumping du ty paid on imported goods used to manufacture exports may be refunded under the 
Duty Drawback Scheme.  
3.75.   An anti -dumping duty may be levied retrospective ly under certain circumstances.78 However, 
it cannot be levied retrospectively beyond 90 days from the dat e of issuance of the notification 
imposing duty. So far, the DGTR has not imposed any duty retroactively.  
3.76.   If the final anti -dumping duty is higher than the provisional duty already imposed and 
collected, the difference is not collected from the importer. H owever, if the final anti -dumping duty 
is lower than the provisional duty already collected, the difference is refunded to the importer. 
Moreover, if the provisional duty is withdrawn as a result of a negative final finding, the provisional 
duty already co llected is refunded to the importer.  
3.77.   An anti -dumping duty remains in force for a period of five years from the date the duty is 
imposed, which is the date that the Department of Revenue issues the notification imposing the 
duty. However, the duty may be re viewed at any time prior to the expiration of the period. Before 
the expiration of a measure, the Designated Authority may initiate a sunset review , on its own 
initiative or  as a result of a request from an interested party. The  anti-dumping duty may conti nue 
to remain in force pending the outcome of such a review for a further period not exceeding one 
year.79 However, if the Central Government, in a review, is of the opinion that the cessation of the 
duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, 
extend the period of such imposition for a further period of five years  starting  from the date of order 
of the extension.  
3.78.   The domestic industry must file a petition to seek extension for an anti -dumping measu re, at 
least 270 days prior to the date of its expiry (or 240 days prior to the date of expiry of the measure, 
with justification for the delay). An order of initiation or rejection is generally issued within 45 days 
of the date of receipt of the petition.80 Sunset reviews may be initiated suo muto ; however, according 
to the authorities, this has not been done.  
3.79.   Sunset review s must be concluded within 12 months of their date of initiation.81 The Central 
Government may, under special circumstances , extend th is period by six months.82 While the sunset 
review is being conducted, the anti-dumping duty  may be extended for one year , pending 
investigation.  In a sunset review, the DGTR  examines the likelihood of either the continuation or 
recurrence of dum ping and injury. In accordance with the result of the investigation, the review may 
result in the renewal of the duty, its withdrawal, or the variation of the level of the duty. A review 
 
76 DGTR, FAQ. Viewed at: http://www.dgtr.gov.in/faq . 
77 Customs Tariff (Identification, Assessment and Collection of Anti -dumping Duty on Dumped Articles 
and for Determination of Injury) Rules, 1995 (Notification No. 2/95 – Customs (N.T.), 1 January 1995 (as 
amended)).  
78 Namely if:  (i) there is a history of dumping which caused injury or that the importer was, or should 
have been , aware that the exporter practiced dumping and that such dumping would cause injury; and (ii) the 
injury caused by massive dumping of an article imported i n a relatively short period of time is likely to 
seriously undermine the remedial effect of the anti -dumping duty liable to be levied.  
79 Rule 23 (1) of the Customs Tariff (Identification, Assessment and Collection of Anti -Dumping Duty on 
Dumped Articles an d for Determination of Injury) Amendment Rules , 2011 (Notification No. 15/2011 -Customs 
(N.T.), 1 March 2011 ). 
80 DGTR Trade Notice No. 02/2017, 12 December 2017 (Annex D).  
81 Sub-rule (1) of Rule 23 of the Anti -dumping Rules . 
82 Rule 17(i)(a) of the  Anti-dump ing Rules . WT/TPR/S/ 403/Rev.1  • India  
 
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  should follow the same procedure as prescribed for investigation of a  fresh case , to the extent 
possible .83 However, t he methodology to be adopted for such an examination has not been 
prescribed. Hence, t he DGTR may examine whichever parameters it deems relevant for a likelihood 
analysis, if it can justify its determination s. However, according to the authorities, the parameters 
for likelihood analysis used by the DGTR are in accordance with Annexure II of the Anti-dumping 
Rules, 1995  (i.e. those used in a normal investigation).  Regarding sunset reviews, the o nus is on 
the domestic industry to prima facie  establish the likelihood of continuation or recurrence of dumping 
and injury.  The DGTR may reject a request for initiation if it is not substantiated and if there is no 
prima facie  evidence of likelihood.84 
3.80.   Duties are collec ted during the sunset review investigation. In the case of no dumping/injury, 
the duty charged during that period is not refunded.85 
3.81.   During the period under review, most  measures were subject to sunset reviews . The duties 
were extended in most of the cases, except in the investigations initiated in 2017, when most duties 
were withdrawn. In those instances, when the measure was extended, the duties were not changed 
(Table 3. 11). 
Table 3.11 Sunset reviews (S SRs), 2015-20  
  2015 2016 2017 2018 2019  2020  
SSRs duea 18 13 21 11 23 38 
SSR petitions not received  5 4 2 2 8 9 
SSRs initiatedb 13 9 15 7 9 12 
Ongoing investigations  0 0 0 0 0 0 
Same duty continued  10 8 1 3 6 0 
Duty changed  0 0 0 0 0 0 
Duty withdrawn  3 1 9 4 3 0 
SSRs terminated  0 0 5 0 0 0 
SSR petitions found deficient  0 0 4 2 6 0 
SSR petitions under scrutiny  0 0 0 0 0 2 
a The total number of SSRs due in a year is the total number of anti-dumping measures expiring in  
that year.  
b Investigations are initiated up to 6 months prior to the expiry of the anti -dumping duty.  
Source:  Information provided by the authorities . 
3.82.   The order determining the existence of dumping may be appealed  before the Customs, Excise 
and Service Tax Appellate T ribunal (CESTAT). However, only the final findings/order of the 
Designated Authority  can be appealed before the Customs, Excise Service Tax Appellate Tribunal  
(CESTAT ) (previously CEGAT). Appeals should be filed within 90 days of the date the determination  
order is issued. During 2015 -19, some 200 decisions made by the Designated Authority were 
appealed before the CESTAT.86 
3.83.   India's legislation has provisions to address circumvention  of anti -dumping measures; these 
were included in 2012 in the Customs Tariff  Act, 1975 (i.e. Section 9A (1A) ). The provision s refer t o 
three types of circumvention : (i) a lteration of  the description , name o r composition of the subjected 
article (minor alteration) ; (ii) importing the article in an unassembled fo rm (assembly operations) ; 
or (iii) by changing its country of export or origin (transhipment). Section 9A (1A) also states that if 
the Designated Authority deems  that circumvention of anti -dumping duty has taken place,  the 
anti-dumping duty may be extended. T he Anti -Dumping Rules, 1995 (as amended) lay down the 
definition of circumvention (Rule 25), the process to initiate an investigation to determine 
circumvention (Rule 26), the process to determine the existence of circumvention (Rule 27), and 
 
83 Rule 23 (1) of the Customs Tariff (Identification, Assessment and Collection of Anti -Dumping Duty on 
Dumped Articles and for Determination of Injury) Amendment Rules , 2011 (Notification No. 15/2011 -Customs 
(N.T,), 1 March 2011 ). 
84 Section 9A(5 ) of the Customs Tariff Act, 1975, and Rule 23 (3) of the Anti -dumping Rules  made 
thereunder, lay down the provisions for conducting a sunset review.  
85 Information provided by the authorities.  
86 Information provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  the review of  circumvention (Rule 28).87 In 2020, the Rules were again amended to further clarify 
the definition of circumvention.88 
3.84.   The DGTR  may initiate circumvention investigation s upon receipt of a written complaint by 
the domestic industry, provided that the appli cation contains sufficient evidence for initiation. I ndia's 
legislation  also allows for suo motu  initiation , where any information of such evidence is received 
from the Commissioner of Customs or any other source. The circumvention investigation must be 
completed within 12 months and must not exceed 18 months from the date of initiation ; if this 
happens,  reasons must be recorded in writing by the Designated Authority . Once the existence of 
circumvention is determined, the DGTR  may recommend the imposition o f an anti-dumping duty  on 
imports that have been found to be circumventing an existing anti -dumping duty.  Such duty may 
also be imposed retrospectively from the date of initiation  of the investigation . A public notice 
recording the findings is issued . Generally, the existing anti -dumping duty is extended to the 
circumventing product.89 The anti -dumping duty on the circumventing product is co -terminus with 
the tenure of the anti -dumping duty imposed on the circumvented product.  
3.85.   During the period under review , India imposed five circumvention remedies , for di clofenac 
sodium (China); cold -rolled stainless steel (China, the EU, Republic of Korea,  South Africa, Chinese 
Taipei, Thailand,  and the United States) ; jute sacking bags (Bangladesh) ; glass fibre (China) ; and 
O-Acid (China).90  
3.86.   India continues to be an active user of anti -dumping measures; it is currently the main user 
of antidumping measures in the WTO. During 2015 -19 (December 2019), India initiated 
233 investigations , a sharp increa se since 2011 -14 (June), when the number of initiations stood at 
82. Most of the investigations initiated during the review period are related to products originating 
in China, followed by those originating in the Republic of Korea and the EU -28. At end -2019, India 
had imposed 254 anti -dumping duties. These measures affected mainly chemicals and products 
thereof, accounting for 40.6% of all measures (Chart 3.2). The average length of an anti -dumping 
measure in force as at December 2019 was 5.9 years; howeve r, 58 measures have been in place 
for more than 10 years .91 These measures apply mainly ( 45%) to China.  
 
87 The Custom Tariff (Identification Assessment and Collection of Anti -Dumping Duty on Dumped Articles 
and for Determination of Injury) Amendment Rules, 2012 ; Customs Notification N °6/2012 , 19 January 2012  
(WTO document s G/ADP/N/1/IND/2/Suppl.7 - G/SCM/N/1/IND/2/Suppl.7 , 9 October 2015 ). 
88 Customs Notification No. 09/2020, 2 February 2020.  
89 Information provided by the authorities.  
90 Information provided by the authorities.  
91 WTO document G/ADP/N/328/IND, 28 Octo ber 2019 ; and WTO Secretariat.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Chart 3.2 Anti-dumping measures, 2015 -19 
 
Source:  WTO, Integrated Trade Intelligence Portal (I -TIP).  
Countervailing measures  
3.87.   The main pieces of legislation regarding countervailing measures are Sections 9, 9B and 9C 
of the Customs Tariff Act, 1975 (as amended) , and the Customs Tariff (Identification, Assessment 
050100150200250300
2015 2016 2017 2018 2019
OtherUnited Arab EmiratesSaudi Arabia, Kingdom ofBrazilBangladeshIranSouth AfricaSingaporeJapanViet NamUnited StatesRussian FederationMalaysiaIndonesiaChinese TaipeiEU-28ThailandKorea, Republic ofChina
0102030405060708090100
Source: WTO, Integrated Trade Intelligence Portal (I -TIP).Base metals & 
products thereof
12.6%Chemicals & 
products thereof
40.6%
Other
5.5%
Machinery & electrical 
equipment 
5.9%Chart 3.[]   Anti -dumping measures
Number of investigations initiated and measures in force:
Plastics, rubber & 
articles thereof  
12.6%
Textiles & articles 
thereof  9.1%
Articles of stones,
ceramic, glassware
5.9%Cases initiated 
Measures in force 
(as at end -period)
Precision instruments 2.0%
Transport equip. 2.0%Wood & articles 
thereof  3.9%Total measures in force by product and partner, as at end -December 2019:Investigations initiated by product and partner, 2015 to 2019:
Chemicals & 
products thereof
28.8%Plastics, rubber & 
articles thereof  
16.7%
Base metals & 
products thereof
18.0%Textiles & articles 
thereof 15.0%Machinery & electrical 
equipment 3.0%
Articles of stones,
ceramic, glassware
4.3%Wood & articles
thereof  2.6%
Other 6.0%Paper & 
paperboard 
2.6%Mineral products
3.0%
0 10 20 30 40 50 60OtherUnited Arab EmiratesUrkaineBrazilBangladeshSingaporeSouth AfricaUnited StatesSaudi Arabia, Kingdom ofIranRussian FederationViet NamJapanMalaysiaChinese TaipeiThailandIndonesiaEU-28Korea, Republic ofChinaWT/TPR/S/ 403/Rev.1  • India  
 
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  and Collection of Countervailing Duty on Subsidised Articles and for Determination of Injury) Rules, 
1995, (as amended).  
3.88.   The DGTR, which is responsible for anti –dumping, is also the Authority in charge of 
administering countervailing measures. It initiates investigations to determine the existenc e, degree 
and effect of any alleged subsidy in relation to imports, upon receipt of a properly documented 
application by, or on behalf of, the domestic industry. The DGTR may also initiate investigations on 
its own behalf  (Rule 6(4) of Countervailing ( CVD) Rules, 1995 ). The application furnished by the 
industry should  include, inter alia , evidence of subsidy on imports; if possible, its amount; injury; 
and causal link.   
3.89.   The Central Government imposes a countervailing measure only after determining that inju ry 
to a domestic industry, which  is difficult  to repair,  was caused  by massive  imports  in a relatively  
short period,  of an article  that is subsidized. The Designated Authority has one year from the date 
of initiation of an investigation to determine  if the  article under investigation is being subsidized , 
and submit s to the Central Government its recommendation as to the amount of duty which , if 
levied, would be adequate to remove the injury to the domestic industry. The Central Government 
may, in exceptional circumstances , extend the aforesaid period of one year by six months. Moreover, 
in cases in which the Designated Authority has suspended  the investigation on acceptance of a price 
undertaking, and subsequently resume d the same investigation because of a violation of th is price 
undertaking, the period during which the price undertaking was in force is not tak en into account to 
calculate the  period of one year.  The countervailing duty imposed, by notification  in the Official 
Gazette , on the subsidized exports from a trading partner cannot exceed the amount of the 
subsidy/ies. The countervailing duty is in addition to any other duty imposed under the Customs 
Tariff Act, 1975  or other laws.  
3.90.   The Central Government may impose a provisional countervailing duty based on the 
preliminary findings recorded by the Designated Authority. A provisional duty may not be imposed 
prior to 60 days from the dat e of issue of the public notice indicating the decision to initiate the 
investigation. The duty remain s in force for a period not exceeding four months.  If the final 
countervailing dut y is lower than the provisional duty  imposed and collected, the differen tial is 
refund ed to the importer.  
3.91.   Unless revoked earlier,  the countervailing duty remains in effect for five years  from the date 
imposition . However, if the Central Government, in a review , determines that the termination of the 
duty is likely to lead  to the continuation or recurrence of subsidization and injury,  it may, from time 
to time, extend  the period  of the measure for a further five years . If a review is initiated prior to the 
conclusion  of the original measure, the countervailing duty remain s in force , pending the conclusion 
of the  review , for a period not exceeding one year . 
3.92.   In 2020, the Rules, 1995,  to provide for investigation into cases of circumvention of 
countervailing duty. 92 As a result of the amendment, if it is considered that exports are 
circumvent ing a countervailing duty in force , the Designated A uthority may initiate an investigation 
on its own initiative or at the request of the interested party, to determine the exist ence and effect 
of any alleged circumvention of the countervailing duty . The government of the exporting trading 
partner is notified prior to the initiation of the investigation. These investigations should take 
12 months; they should not exceed 18 months.  Circumventing duties may be imposed retroactively 
to the date when the investigation was initiated. The circumvention measures remain in place for 
the duration of the countervailing measure . The imposition of a circumventing measure may be 
reviewed. As at  July 2020, n o case s of circumvention in countervailing duty measure s had been 
initiated in India.  
3.93.   During 2015 -20 (January), India initiated 20 countervailing investigations, and 11 measures 
were in place. As in the case of anti -dumping duties, most of the  measures applied to imports 
originating in China (Table 3.12).  
 
92 Notification No. 10/2020 Customs (N.T.), 2 February 2020.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.12 Countervailing measures, January 2020  
HS Product  Date of 
initiation  Duties in 
force  Termination  Member  
8503 Castings for wind-
operated electricity 
generators  29.05.2014  19.01.2016   China  
7219; 7220  Certain hot -rolled and 
cold-rolled stainless 
steel flat products  12.04.2016  07.09.2017   China  
4011.20  New pneumatic tyres 
for buses and lorries  27.03.2018  24.06.2019   China  
7306.40.00; 7306.61.10; 
7306.11.00; 7306.21.00  Stainless steel welded 
pipes  09.08.2018  17.09.2019   China,  
Viet Nam  
2925.11.00  Saccharin  10.08.2018  30.08.2019   China  
3904.69.90  Fluoroelastomers  14.08.2018   05.02.2019  China  
3808.91.99; 3808.93.90; 
3808.99.90  Atrazine  27.08.2018  17.09.2019   China  
7407.10.10; 7407.10.20; 
7408.11.90; 7408.19.20; 
7408.19.90; 7409.11; 
7409.19  Continuous cast 
copper wire rods  10.09.2018  08.01.2020a  Indonesia,  
Malaysia,  
Thailand,  
Viet Nam  
7007.19.00; 7003.19.90; 
7005.10.10; 7005.10.90; 
7005.21.90; 7005.29.90; 
7005.30.90; 7007.19.00  Textured and 
tempered glass, 
whether coated or 
uncoated  12.09.2019    Malaysia  
7005.10.90  Clear float glass  01.10.2019    Malaysia  
7219; 7220  Products of stainless 
steel  18.10.2019    Indonesia  
4002.19  Styrene butadiene 
rubber  29.10.2019    Korea, Rep. 
of 
4411.12; 4411.13; 
4411.93; 4411.14; 
4411.92  Fibreboards  05.11.2019    Indonesia, 
Malaysia,  
Sri Lanka, 
Thailand, 
Viet Nam  
a CBIC, Ministry of Finance Notification No. 1/2020 -Customs (CVD). Viewed  at: 
https://www.cbic.gov.in/resources//htdocs -cbec/customs/cs -act/notifications/notfns -2020/cs -
others2020/csot01 -2020.pdf .  
Source: WTO Secretariat , Subsidies and Countervailing Measures . Viewed at: 
https://www.wto.org/english/tratop_e/scm_e/scm_e.htm . 
Safeguard  measures  
3.94.   Until May 2018, s afeguard  measures were adm inistered by the Directorate General of 
Safeguards (DGS) (duties), and the Directorate General of Foreign Trade (DGFT) for safeguards that 
took the form of quantitative restrictions. Currently, t he DGTR is the sole agency dealing with 
safeguard (both duty increases and quantitative restrictions) measures . The Standing Board of 
Safeguards (chaired by the Commerce Secretary) considers the recommendations of the Designated 
Authority, and decides whether to recommend the imposition of a safeguard measure to the  Ministry 
of Finance, which levies the duty.  
3.95.   Safeguards continue to be regulated by: Sections 8B, and 8C of the Customs Tariff Act, 1975 
(as amended); the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997; 
the Customs Tariff (Tr ansitional Product Specific Safeguard Duty) Rules, 2002; and the Safeguard 
Measures (Quantitative Restriction) Rules, 2012.  
3.96.   Applications to initiate an investigation to impose a safeguard measure must be made on 
behalf of the domestic industry. O n receipt of a written application, the Director General initiate s an 
investigation to determine the existence of "serious injury " or "threat of serious injury " to the 
domestic industry, caused by the import of an article in such increased quantities . A public notic e is 
issued to the interested parties for them to file responses. The non -confidential versions of the 
application/responses are kept open for inspection for the interested parties. The DGTR may impose 
a provisional duty based on preliminary findings, if  a delay in imposing an early remedy may further 
deteriorate the condition of an ailing industry .93 The provisional duty remains in force for maximum 
 
93 Information provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  of 200 days from the date of imposition. For the final determination, the DGTR examines all the 
submissions made by the parties during the course of the investigation. After the final determination 
is made and the final findings are issued, the matter is t hen referred to the Board of Safeguards, 
which, in turn, decides whether the imposition of a measure is needed. If, in accordance with the 
final determination, there is no need to impose a definitive measure, and if a preliminary duty was 
imposed, the duty  collected is refunded.  
3.97.   Safeguard investigations take eight months from the date of initiation until their conclusion; 
however, this period might be extended.  
3.98.   Safeguard duties may remain in force for a maximum of four years from the date of 
imposition, unl ess it is determined that the threat of injury for the industry still exists; under these 
circumstances, the safeguard measure may be extended. In these cases, there would be a review 
investigation . However, a safeguard duty can, under no circumstances, co ntinue to be imposed 
beyond a period of 10 years from the date on which the duty was first imposed.  
3.99.   Safeguard duties may be levied in addition to anti -dumping and countervailing duties or in 
addition to any other duties imposed under any other laws. Safegu ard duties are not levied on 
articles imported by export -oriented undertakings (EOUs, foreign trade zones (FTZs) or SEZs.  
3.100.   During the period under review, India initiated seven safeguard investigations, three  of 
which resulted in the implementation of a mea sure; one investigation was dismissed; and three  are 
ongoing (Table 3.13). Regarding the ongoing investigation related to imports of single-mode optical 
fibre, the DGTR  recommended the impos ition of a provisional safeguard duty of 25% f or imports 
originati ng in all countries , with the exception of developing countries other than China.94 India 
imposed an ad valorem  safeguard duty in all instances that a final safeguard measure was imposed, 
except in the case of hot -rolled flat products of steel, which are s ubject to a specific duty.95 During 
the period 2015 -19, India withdrew six safeguard measures, all within the maximum four -year 
period for which a safeguard may be imposed. As in the case of anti -dumping, India is a major use 
of safeguard measures. As at J une 2019, India had initiated 46 safeguard measures (12% of all the 
safeguards investigations initiated at the WTO), there is one safeguard measure in force.  
Table 3.13 Safeguard duties, 2015 -19 
HS code  Descri ption  Initiation  In force  Withdrawn  
1108,1903, 283410, 3505  Sodium nitrite  17.04.13 26.02.14 25.05.15 
7304.19, 7304.23, 7304.29, 
7304.31, 7304.39, 7304.51, 
7304.59, 7304.90  Seamless pipes, tubes  and 
hollow profiles of iron or non -
alloy steel  22.04.13 13.08.14 12.02.17 
2905.17, 3823.70  Saturated fatty alcohols  13.02.14 28.08.14 27.02.17 
2918.15  Sodium citrate  04.03.14 01.10.14 31.12.17 
3907.20  Flexible slabstock polyol , of 
molecular weight 3,000 to 
4,000  22.05.14  
22.01.15 
2841.30  Sodium di -chromate  26.05.14  
22.01.15 
7219.31, 7219.32, 
77219.33, 7219.34, 
7219.35, 7220.20, 7220.90  Cold-rolled flat products of 
stainless steel , of chromium 
type, 400 series  19.09.14  
01.04.15 
7208, 7219.31, 7219.32, 
7219.33, 7219.34, 7219.35, 
7220.20, 7220.90, 7225.30  Hot-rolled flat products of non -
alloy and other alloy steel , in 
coils of a width of 600 mm or 
more 07.09.15 29.03.16 31.12.17 
7208, 7225  Hot-rolled flat sheets and plates 
of alloy or non -alloy steel  07.12.15 23.11.16 31.12.18 
7601 Unwrought aluminium 
(aluminium , not alloyed , and 
aluminium alloys)  19.04.16  
07.11.16 
 
94 WTO documents  G/SG/N/8/IND/32 ; G/SG/N/10/IND/23 ; and G/SG/N/11/IND/18 , 
21 November  2019. 
95 For hot -rolled flat sheets a nd plates (excluding hot -rolled flat products in coil form) of alloy or non -
alloy steel having nominal thickness less than or equal to 150 mm and nominal width of greater than or equal 
to 600 mm under HS headings 7208 and 7225 (72254013, 72254019, 72254020 , 7225030 and 73359900). 
(WTO documents  G/SG/N/8/IND/30; G/SG/N/10/IND/21; and G/SG/N/11/IND/16, 15 August 2016).  WT/TPR/S/ 403/Rev.1  • India  
 
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  HS code  Descri ption  Initiation  In force  Withdrawn  
8541.40.11  Solar cells , whether or not  
assembled in modules or panels  19.12.17 30.07.18  
2907.11.10  Phenol  23.08.19   
9001.10.00  Single -mode optical fibre  23.09.19   
2905.12.20  Isopropyl alcohol  04.11.19   
Source:  WTO, I-TIP database . 
3.2  Measures Directly Affecting Exports  
3.2.1   Customs procedures and requirements  
3.101.   Exporters or their agents must obtain an Importer -Export Code (IEC) from the DGFT prior 
to filing the shipping bill and the other required documents electronically. Manual filing is allowed 
only where it is not feasible to make an electronic submission.  
3.102.   Since the previous Review, in order to facilitate trade, the number of mandatory documents 
required for exports was reduced from seven to three.96 At present, the mandatory documents 
required for exports are the bill of lading, the commercial invoice cum packing list and the shipping 
bill (or bill of export).97 However, exports subject to restrictions may require additional documents, 
such as export  licences. Likewise, exporters benefiting from the different export promotion schemes 
might require further registrations and documents (Table 3.14).  
Table 3.14 Export authorization  
Authorization  Validity period 
Export authorization for special chemicals, organisms, 
materials, equipment and technologies (SCOMET)  24 months  
Export authorization for other restricted goods  24 months  
Export Promotion Capital Goods (EPCG) authorization  24 months  
Advance authorization for deemed exports  12 months or length of the project , whichever is 
longer  
Advance authorization for other exports  12 months  
Source : WTO Secretariat.  
3.103.   As in the case of imports, exports are cleared through a risk management system; hence 
consignments are examined, assessed or cleared based on their associated risk. As a result, any 
export consignment can be examined by Customs (even up to 100%), if there  is any specific 
intelligence in respect of the said consignment. There is no routine examination of perishables. 
Examination of such cargo takes place only if there is some risk, and with the prior permission of 
the concerned officials. The examined peris hable cargo should be cleared from Customs within 
24 hours, unless there is contravention of any law. In addition, Customs should not seize any cargo 
with the aim of disrupting the manufacture and/or scheduled delivery of the exports. In exceptional 
cases,  Customs may seize a consignment if there is evidence of serious irregularity. In these cases, 
goods should be released within seven days, unless the irregularities are substantiated.  
3.104.   India issues preferential and non -preferential certificates of origin (C oOs), if required by the 
importing country. The non -preferential CoOs provide evidence of the origin of goods but do not 
bestow any right to preferential tariffs. The fee to issue this type of CoOs may not exceed INR 100 
per certificate. In 2019, an o nline platform to issue CoOs was launched .98 
3.105.   India implements the Export and Trade Houses Scheme, whose objective is to recognize 
established exporters by granting them a specific status, e.g. one -star to five -star export houses. 
Exporters of goods, services an d technology are all eligible. Status recognition depend s on export 
performance , based on export value during the current and previous three financial years  (two 
 
96 Before  2015, the required documents were: shipping bill, commercial invoice, packing list, bill of 
lading, foreign exchange control form, te rminal handling receipt, and technical certificate.  
97 Circulars No. 01/2015 - Customs , 12 January 2015 ; and No. 15/2015 - Customs , 18 May 2015 ; and 
DGFT  Notification No. 114 , 12 March 2015 . 
98 Common Digital Platform for Issuance of Certificates of Origin, Overview . Viewed at: 
http://coo.dgft.gov.in . WT/TPR/S/ 403/Rev.1  • India  
 
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  financial years  for gems and j ewellery ) (Table 3.15).  For MSMEs, manufacturing units with 
International Organization for Standardization (ISO)/Bureau of Indian Standards (BIS) certification, 
and units located in the North -Eastern states or in the agri-export zones, export earnings are doubled 
when calculating export performance. Benefits depend upon the level granted to the exporter, but 
all relate to trade facilitation, for instance: self -declaration at customs and self -certification of origin.  
Table 3.15 Thresholds to obtain status holder  
Status category  Export performance (USD million)  
One-star export house 3 
Two-star export house 25 
Three -star export house 100 
Four-star export house 500 
Five-star export house 2,000 
Source:  FTP 201520.  
3.2.2   Taxes, charges, and levies  
3.106.   The Second Schedule of India's Customs Tariff Act lists all goods that are subject to export 
taxes. The Schedule lists some  50 products at the HS four -, six-, or eight -digit level, including  
basmati rice, coffee , tea, sugar, specified ores, raw wool  and cotton , and i ron-related products. 
However, at present, most of these products bear a duty of 0%; export taxes apply solely to some 
minerals and hides, skins and leather ( Table 3. 16). However, in 2016 -17 and 2017 -18, due to a 
drop in the production of sugar and hence a  shortage of sugar to meet domestic supply, an export 
tax of 20% was imposed on sugar.99 This tax was removed in 2018 to encourage the sugar industry 
to export. In general, India uses this policy as required, to, inter alia , ensure domestic supply of raw 
materials for higher value -added industries, promote further processing of natural resources , or 
ensure an "adequate" domestic price . Hence, the constant changes regarding export taxes.  
Table 3.16 Export taxes, 2019 -20 (February 2020)  
HS code  Product  Rate 
(% of the f.o.b. value)  
2606.00.10  Bauxite, not calcined  15% 
2606.00.20  Bauxite, calcined  15% 
2614.00.10  Ilmenite, unprocessed  10% 
2614.00.20  Ilmenite, upgraded  2.5%  
2606.00.90  Other aluminium ores , including laterite  15% 
41 Hides, skins and leather, tanned and untanned, all sorts  40%a 
7204 Ferrous waste and scrap, re -melted scrap ingots of iron or steel  15% 
a As per Customs Notification No. 27/2019, July 2019.  
Source:  CBIC. 
3.107.   India continues to apply a cess on certain exports, to finance the develop ment of specific 
industr ies. The products and the cess rates have not changed since the previous Review in 2015 
(Table 3.17).  
Table 3.17 Export Cess, 2020  
Product  Cess rate  
Shellac and lac -based products  INR 2.30 per quintal  
Certain spices  0.5% on the f.o.b. value  
Tobacco  0.5% on the f.o.b. value  
Manganese ore  INR 4 per tonne  
Chrome ore  INR 6 per tonne  
Mica products  3.5% of the f.o.b. value  
Iron ore  INR 1 per tonne  
Note:  The cess on manganese ore, chrome ore, and iron ore is levied under the Iron Ore Mines, 
Manganese Ore Mines, and Chrome Ore Mines Labour We lfare Cess Act , 1976.  
Source:  CBIC.  
 
99 Department of Food and Public Distribution, Exports.  Viewed at: https://dfpd.gov.in/exp.htm . WT/TPR/S/ 403/Rev.1  • India  
 
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  3.2.3   Minimum export prices  
3.108.   India continues to maintain minimum export prices (MEPs), to ensure domestic supply, at 
reasonable prices, of goods deemed important for domestic consumption. MEPs are imposed on a 
specific item, from time to time, generally on essential items, in consultation with the concerned 
administrative department in the Central Government, after taking into account, inter alia, domestic 
availability/production, domestic prices, and quantity exported; thus, there is no specific list of items 
that may be subject to MEPs. During the period under review, the products that were subject to 
MEPs were mustard oil in packs of up to 5 kg (unchanged since the last Review), potatoes, and 
onions (Table 3.18).  
Table  3.18 Minimum export prices (MEPs), 2015 -20 
Product  DGFT Notification No. (date)  MEP and /or comments  
Potatoes  15 (26.07.2016)  USD 360 /MT 
32 (27.12.2016)  MEP removed  
Edible oil in 
branded 
consumer 
packs up to 
5 Kg 17 (06.08.2015)  USD 900 /MT  
08 (18.05.2016)  USD 900 /MT. MEP does not apply to rice bran oil  
43 (27.03.2017)  USD 900 /MT. MEP does not apply to groundnut oil, 
sesame oil, soya  bean oil and maize (corn) oil  
01 (06.04.2018)  MEP removed , except  for mustard oil (USD 900/MT) 
Onions  19/2015 -20 (13.09.2019 ) USD 850 /MT 
49/2015 -20 (02.03.2020 ) MEP removed  
Source:  WTO Secretariat.  
3.2.4   Export prohibitions, restrictions, and licensing  
3.109.   India's Export Policy lists the export requirement for each export product. Products are 
classified as free, restricted, prohibited, or traded exclusively by STEs. Exports deemed "free" are 
allowed without a licence issued by the DGFT. However, some of these items must comply with 
conditions st ipulated in other laws, such as rules of origin; technical specifications; environmental, 
sanitary and health norms; and quality requirements ( Table 3 .19). Products that are restricted are 
usually subject to export licences, issued by the DGFT but, in cert ain instances, in addition to the 
licence, other requirements may apply.100 Regarding the prohibited items, some of them are 
prohibited with exceptions. In these cases, for the same tariff line, there could be two or three 
different policies: prohibited and free; prohibited and restricted; or prohibited, restricted and free. 
This type of policy applies to four tariff lines at the HS eight -digit level, related to live animals and 
products.101 
Table 3.19 Export restrictions by HS section, 2019 -20 
(No. of tariff lines)  
HS Section  Free with 
conditions  Restricted  Restricted 
with 
conditions  Prohibited  Prohibited 
with 
exceptions  
01 Live animals and products  331 12  
27 12 
02 Vegetable products  270 8 2  
7 
03 Fats and oils  93   
12 2 
04 Prepared food, beverages and tobacco  16 4 5   
05 Mineral products  3 6 1   
06 Chemicals and products thereof  267 5 2 1 3 
07 Plastics, rubber, and articles thereof  17     
08 Raw hides and skins, leather, and its 
products  19     
09 Wood and articles of wood    
1 4 15 
10 Pulp of wood, paper  and paperboard  12   
3  
11 Textiles and textile articles  19 1    
16 Machinery, electrical equipment, etc.  38 5    
17 Transport equipment  9 28    
18 Precision equipment  55 10    
19 Arms and ammunition  6     
 
100 The proced ures for obtaining export licence s for restricted items is detailed in Trade Notice 
No. 50/2018 -19, 18 March 2019 . 
101 The specific lines that are subject to this type of policy are: HS0106.32.00, HS0106.3 3.00, 
HS0106.39.00  and HS0511.99.99 (Export Policy, 2 018, as amended).  WT/TPR/S/ 403/Rev.1  • India  
 
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  HS Section  Free with 
conditions  Restricted  Restricted 
with 
conditions  Prohibited  Prohibited 
with 
exceptions  
20 Miscellaneous manufactured articles  1 1    
21 Works of art, etc.  2     
Total  1,158  80 11 47 39 
Source:  DGFT . Viewed at : https://dgft.gov.in/CP/ . 
3.110.   Export restrictions and prohibitions are notified on an annual basis; they are usually in place 
for a specific period . However , as with other trade policy instruments, during this period, the DGFT, 
through a notification, may change  the policy to meet specific policy objectives (e.g. self -sufficiency 
or containment of domestic prices) . India co ntinues to use trade policy to meet non -trade policy 
objectives, changing policies constantly, thus diminishing the predictability of the trade policy 
regime. In addition, the use of export restrictions and prohibitions seems to be in contradiction with 
India's main trade policy goal , which is  to increase its share of global exports from 2 .0% in 2015 to 
3.5% by 2020 (Section 2 .2.2). 
3.111.   In addition, export licences for specific goods, services or technology  may be suspended or 
cancelled without giving the holde r of the licence previous notice. The importer (exporter) may 
contest the decision within six months of the order; it would then be reassessed.102 According to the 
authorities, this applies only to items specified in the Special Chemicals, Organisms, Materi als, 
Equipment and Technologies (SCOMET) list, exports of which are regulated.103 
3.112.   During the review period,  the DGFT , on the recommendation of the Ministry of Environment, 
Forest and Climate Change (M oEF&CC ), imposed a yearly export quota of 310 MT on red s anders 
wood exclusively sourced from private land (including Pattaland) .104 
3.2.5   Export support and promotion  
3.113.   India continues to implement a series of programmes to promote exports , which apply to all 
sectors ; however,  some are sector -specific, e.g. those that apply to agriculture ( Section 4 .1). Most 
of these programmes grant fiscal and financial incentives, while other s provide marketing assistance.  
3.114.   During the period under review, India did not provide a notification regarding export 
subsidies for a griculture goods.  
3.2.5.1   Export from India Scheme (EIS)  
3.115.   In 2015, India introduced the Export from India Scheme (EIS) through the FTP 2015 -21. 
The EIS was implemented to offset inefficiencies regarding infrastructure and associated costs. 
Under it, there are two s chemes : one for merchandise, the Merchandise Exports from India Scheme 
(MEIS) ; and the other for services, the Services Exports from India Scheme (SEIS).  
3.116.   The MEIS replaced five schemes, i.e. the Focus Product Scheme, the Market Linked Focus 
Product Scheme,  the Focus Market Scheme, the Agri. Infrastructure Incentive Scrip, and the Village 
Industry Scheme (Vishesh Krishi and Gram Udyog Yojana Scheme s (VKGUY)).105 
3.117.   Under the MEIS, exporters receive a "duty credit scrip" when exporting eligible goods , some 
7,500 tariff lines at the eight -digit level in 2020, listed in the MEIS Schedule Appendix 3B of the 
Handbook of Procedures,  to specific markets, which are classified into three categories.106 The 
amount of the "scrip, which is equivalent to 2%, 3% or 5% of the f. o.b. value of the export, varies 
 
102 The Foreign Trade ( Development and Regulation) Act, 1992 . 
103 DGFT, Appendix 3 List of SCOMET Items . Viewed at:  
http://dgftcom.nic.in/exim/2000/itchs2017/export/append3.pdf . 
104 Public Notice. No. 74/2015 -20, 18 February 2019. Viewed at: 
http://164.100.59.247/sites/default/files/PN%2074%20dated%2018.02.2019%20Eng_0.pdf . 
105 Press Information Bureau, Merchandise Export from India Scheme . Viewed  at: 
http://pi b.nic.in/newsite/PrintRelease.aspx?relid=148539 . 
106 Category A (the traditional markets) includes: Canada, the European Union, and the United States; 
Category B (emerging and focus markets): Africa, Latin America and Mexico, CIS countries, Turkey, West Asia n 
countries, ASEAN countries, Japan, the Republic of Korea, China, and Chinese Taipei; and Category C: other 
markets.  WT/TPR/S/ 403/Rev.1  • India  
 
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  according to the exported good .107 In general, export items with high domestic content and value 
addition are accorded higher level of "scrip rates.108 Higher rates are granted to: agricultural and 
village industry products, presently covered under Special Agriculture and Village Industry Scheme 
(Vishesh Krishi and Gram Udyog Yojana); value -added and packaged products; eco ‐friendly and 
green products produced with waste from agricultural products; labour -intensive products; go ods 
produced by a large number of producers and/or exporters; industrial products from "potential 
winning" sectors; and hi ‐tech products with high export earning potential.  
3.118.   Until 2018, t he "duty credit scrip " could be used to pay duties levied on imported inputs or 
final goods, with some exceptions, including some agricultural and capital goods; and central excise 
duties on inputs or goods procured on the internal market.  In 2018, the MEIS scope was w idened , 
and now  "scrips " are allowed for debit for  the import of items which were earlier not permitted  
(Table  3.20).109 The "scrips ", and the goods imported or domestically procured against them, can 
be transferred.  
Table 3.20 Items for which MEIS duty credit scrips cannot be used  
Garlic, peas, and all other vegetables (HS Chapter 7) with a duty higher than 30%  
Tea, coffee and pepper (HS Chapter 9)  
All oil seeds (HS Chapter 12)  
Natural rubber (HS Chapter 40)  
Capital goods:  
• general -purpose agricultural tractors >25 horsepower (hp) and ≤75 hp;  
• stationary diesel engines;  
• irrigation pumps;  
• threshers for cereals;  
• combine harvesters suitable only for wheat and paddy crops; and  
• animal -driven implements  
Source:  Appendix 3A of the FTP 2015 -20. 
3.119.   In 2015, the MEIS covered 4,914 tariff lines at the eight -digit level and had a budget of 
INR 180 billion . Since then, the coverage and the budget allocated to it have increased. In 2020, 
some 7,500 tariff lines at the eight -digit level were included in the Scheme, and the budget 
amounted to INR 390.6  billion .110 
3.120.   Handicrafts, handloom products, books/periodicals, leather footwear, toys , and customized 
fashion garments111 sold through e -commerce platforms or exported through courier or foreign post 
offices, of a f.o.b. value of up to INR 500,000 per consignment, may benefit from the MEIS.  
3.121.   Goods manufactured and exported from a SEZ/ EOU are eligible for the MEIS. However, 
goods exported from units located in Electronic Hardware Technology Parks (EHTPs)  and Free Trade 
and Warehousing Zones (FTWZs) are not eligible, nor are SEZ/EOU/EHTP/Bio -technology Park 
(BTP)/FTWZ products exported through domestic tariff area (DTA) units, or goods imported to be 
exported in the same condition, or goods that are trans -shipped through India. Deemed exports112 
and exports subject to minimum export prices or export duties are not eligible either .113 
3.122.   On 1 September 2020, India announced that the Scheme would end on 1 January 2021. In 
addition, a limit of INR 20 million was placed on the value of exports that can benefit from the MEIS 
 
107 The duty credit scrip is a pass  issued to exporters, which allows the m to import commodities with a 
duty deduction (non-payment of taxes ) of the amount specifi ed in the scrip . 
108 Ministry of Commerce and Industry, Starred Question No. 113 to be Answered on 7th December, 
2015. Viewed  at: 
https://commerce.gov.in/writereaddata/UploadedFile/MOC_635975493407970101_LS20151207.pdf . 
109 Public Notice  No. 24/2015 -2020, 26 July 2018.  
110 Information provided by the authorities.  
111 Customized fashion garments are made on the specific request/order of a customer and, accordingly, 
are tailored/manufactured.  
112 Deemed exports are goods produced in India that do not leave Indian territory but are still 
considered as exports under some provisions of the FTP . 
113 Press Information Bureau, Merchandise Export from India Scheme . Viewed  at: 
http://pib.nic.in/newsite/PrintRelease.aspx?relid=148539 . WT/TPR/S/ 403/Rev.1  • India  
 
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  between 1 September 2020 and 31 December 2020.114 The MEIS will be rep laced by the Remission 
of Duties or Taxes on Export Products (RoDTEP), a scheme for exporters to get a reimbursement on 
taxes, duties and levies which are not exempted or refunded under any other existing mechanism.115 
3.123.   The SEIS, in operation since 2015, rep laced the Served from India Scheme (SFIS). The SEIS 
is available only to notified services (Table 3 .21). It applies to service providers incorporated in 
India, while the SFIS only applied to services provided by Indian nationals with foreign exchange 
earnings of at least INR 1 million . Thus, the SEIS provides rewards to all service providers of notified 
services located in India (national or foreign -owned), providing services from India, regardless of 
the constitution or profile of the service provider.  
Table 3.21 Services eligible under the SEIS  
Business services  Construction and engineering services  
Tourism and travel services  Educational services  
Recreational, cultural and sporting services  Environmental se rvices  
Transport services  Health and social services  
Communication services   
Source:  Department of Commerce and Industry, Public Notice No. 45/2015 -2020, 5 December 2017.  
3.124.   The rate of the duty credit scrip under the SEIS is based on net foreign exchange earned. 
The rate of the reward is 7% of total foreign exchange earned. The reward issued as scrip may be 
used to purchase all types of goods and services, and to pay tax. It is fully transferable. Incentives 
under the SEIS are also available to un its located in SEZs.   
Duty exemption/remission schemes116 
3.125.   Duty exemption/remission schemes enable exporters to import inputs duty -free, including 
replenishment of inputs or duty remission. During the period 2015 -20, the DGFT implemented 
schemes such as: the  Advance Authorisation (AA) Scheme; the Duty -Free Import Authorisation 
(DFIA) Scheme; and the Duty Drawback (DBK) Scheme  (a duty remission scheme ). 
3.126.   Under the AA Scheme, inputs to be incorporated in to exports may be imported free of 
customs duties and other  charges affecting imports  (Table 3.22 ). There is also a Special Advance 
Authorisation Scheme specifically for exports of apparel and clothing accessories (HS 61 –HS 62) , 
under which fabric, but not other inputs, may be imported duty -free.117 
3.127.   The DFIA Scheme also allows for inputs to be imported duty -free to produce exports  subject 
to minimum value -addition ( Table 3.22 ). The DGFT, by means of a Public Notice, may exclude any 
product(s) from the purview of the DFIA Scheme.  For example, various d rugs procured from 
unregistered sources are excluded from the Scheme.118 
 
114 DGFT Notification No. 30/2015 -2020, 1 September 2020. Viewed at: 
https://content.dgft.gov.in/Website/dgftprod/4a37d60a -f0bf-4783-bc67-a17131168d46/N30E.pdf . 
115 Press Information Bureau, Cabinet approves scheme for "Remission of Duties and Taxes on Exported 
Products (RoDTEP)" to boost exports Scheme for enhancing Exports t o International Markets . Viewed at: 
https://pib.gov.in/PressReleseDetail.aspx?PRID=1606281 ; and CBIC, RoDTEP Committee . Viewed at: 
https://www.cbic.gov.in/htdocs -cbec/home_links/RoDTEP -Committee.  
116 Based on the FTP 2015 -21. 
117 For more information on this specific Scheme, refer to Paragraph 4.04 of the FTP.  
118 Information provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.22 Duty exemption/remission schemes , 2020  
 AA Scheme  DFIA Scheme  
Inputs that may 
be imported 
duty-free Inputs to be incorporated in export s The DGFT may exclude any product(s) from 
the purview of the Duty-Free Import 
Authorisation  (DFIA) Scheme.  
There are no general criteria; exclusion is 
on a case -by-case basis, depending on the 
sensitivity of the export product and the 
inputs used to manufacture it.  Fuel, oil, and catalysts  
Spices (HS Chapter 9), only if used in 
crushing, grinding, and sterilizing or 
manufacturing of oils or oleoresins (not for 
cleaning, grading, or re -packing)  
Spare parts, up to 10% of c.i.f. value of 
total imports  
Minimum value 
addition  15%, except:  20% 
Copper products and petroleum: 8%  
(Appendix 4D of the FTP)  
Tea: 50%  
Gems and jewellery: according to the type 
of jewellery (see paragraph 4.61 of 
Handbook of Procedures)  
Validity  12 months  12 months. Not renewable  
Export 
fulfilment  18 months ; it m ay be modified if pre -
import conditions apply  12 months from the date of issue of the 
DFIA 
Other 
provisions  The period to import is as prescribed in the 
FTP Handbook of Procedures  Exports must take place through specific 
ports; to use other ports, an application is 
required  
Pre-import conditions may be imposed. 
According to the authorities, this means 
that the exporter must import the duty -
free inputs prior to starting to export  For inputs considered sensitive, the 
exporter must provide a declaration 
regarding the technical characteristics, 
qualities and specifications , in the shipping 
bill 
Restricted imports are allowed without the 
required licence/permit ; restricted exports 
must obtain export authorization or 
permission   Restricted imports may be imported ; 
restricted exports must obtain the required 
export authorization  
Imports reserved for STEs cannot be 
importe d; items reserved for export by 
STEs can be exported  Imports res erved for STEs cannot be 
imported ; items reserved for export by 
STEs can be exported  
AAs are not transferable  DFIAs are transferable  
Inputs may also be purchased from 
national 
suppliers/STEs/EOUs/EHTPs/BTPs/Software 
Technology Parks (STPs)  n.a. 
n.a. Not applicable.  
Source:  FTP 2015 -21. 
3.128.   The Duty Drawback Scheme , which is still regulated by the Customs Act, 1962 and the 
Customs and Central Excise Duties Drawback Rules, 2017 (earlier rules of 1995 amended  and 
superseded ), is still in force . The Scheme seeks to reimburse duties and taxes levied on any 
imported/ domestically procured inputs used to manufacture export s. Prior to the implementation of 
the GST in 2017 , the duties and taxes reimbursed under the Scheme were: (i) customs duty ; 
(ii) central excise duty ; and (iii) service tax . Since the implementation of the GST, in 2017, the 
duties reimbursed are restricted to the customs and central excise duties.  There are two types of 
duty drawback: (i) the "all industry rate"  (AIR) ; and (ii) the b rand rate.  
3.129.   The AIR  of the duty drawback is essentially an average rate based on the average value of 
inputs and the duties (both customs and excise)  levied on inputs used to produce a particular class 
of goods .119 The AIR is  reviewed annually, based on, inter alia , the average prices of inputs, their 
import -indigenous ratio, duty rates , and the average f.o.b.  value of the export s; thereafter, it is 
notified in the annual Drawback Schedule. The AIR or the amount refunded is either ad valorem , 
calculated as a percentage of the f.o.b. value of exports, or a specific per -unit value. A cap or 
maximum amount that can be refunded applies to certain products.  
 
119 For more on the full list of factors used to determin e the amount or rate of drawback , refer to 
Rule 3(2) of the Customs and Central Excise Duties Drawback Rules, 2017 . WT/TPR/S/ 403/Rev.1  • India  
 
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  3.130.   The brand rate of duty drawback is used when there is no AIR for a specific export product , 
or when the existing AIR neutralizes less than 80% of the duties paid on materials used to 
manufacture the export. To benefit from the brand rate, exporters must apply to the jurisdictional 
Principal Commissioner of Customs/Commissioner of Customs (previous ly the Central Excise 
Commissionerate ) so that a rate for the good to be exported is determined ; the Commissioner takes 
the final decision.120 
3.131.   If the export value of the goods produced is less than the value of the imported inputs, the 
drawback cannot be us ed. In addition, the amount of the drawback may not exceed one  third of the 
market price of the export.121 
3.132.   India continues to implement other schemes to promote exports of gems and jewellery. 
These are: (i) Advance Procurement/Replenishment of Precious Meta ls from Nominated Agencies; 
(ii) Replenishment Authorisation for Gems; (iii) Replenishment Authorisation for Consumables; and 
(iv) Advance Authorisation for Precious Metals. Under these schemes, exporters can import inputs , 
to manufacture exports , duty-free. These schemes cannot be used in addition to other 
export -promotion schemes , such as the AA Scheme and the DFIA Scheme. Under these schemes, 
only nominated agencies may import gold, silver, platinum, and diamonds.122 
3.133.   The Export Promotion Capital Goods (EP CG) Scheme , which has been in place since 1991, 
provides tax concessions only for imports of capital goods . As under other export schemes, g oods 
may be imported  under  the EPCG Scheme subject to export obligation s (Table 3.23 ). 
Table 3.23 Export Promotion Capital Goods (EPCG) Scheme , 2020  
Inputs that may be 
imported duty -free Capital goods  
Exemptions of other 
charges affecting imports  Capital goods imported for exports are also exempt from IGST and 
Compensation Cess until 31.3.20 21 (Chapter 5.01(a) of the FTP ( 2015-21)) 
Validity of the 
authorization   24 months from the date of issue. Cannot be renewed  
Export fulfilment  6 years from the date that the authorization is issued (Chapter 5.01 (c) of th e 
FTP (2015-21)) 
Export obligation  Equivalent to six times the duties, taxes and cess saved on capital goods 
(Chapter 5.01 (c) of the FTP ( 2015-21)). The export obligation for green 
technology products is 75% of the original , and there are also reduced ex port 
obligations ( 25%) for exporters based in the North -East region , and Jammu and 
Kashmir. If capital goods are sourced in India, the export obligation is reduced 
by 25% from the original  
Time frame to fulfil the 
export obligation  In the first four years of operation, exporters must fulfil at least 50% of the 
export obligation, and the rest in the last two years. With a view to promoting 
exports, if the export obligation is fulfilled earli er, part of the export obligation is 
waived. Where the exporter fulfils between 75% and 100% of the export 
obligation in half or less than half of the original specified export obligation 
period, the remaining export obligation is waived.  
Other provisions  Restricted imports are permitted only if approved by the Exim Facilitation 
Committee (EFC). An authorization , issued by the EFC , is also required if the 
exports proposed to benefit from the EPCG Scheme are restricted goods  
"Deemed exports" may also be counted towards the fulfilment of the export 
obligation, along with usual benefits available for "deemed exports"a 
Shipments under the AA Scheme, the DFIA Scheme, the Drawback Scheme, or 
other reward schemes also count toward s the fulfilment of the export obligation 
under the EPCG Scheme  
Capital goods may be procured from domestic manufacturers or EOUs.  
a "Deemed exports " are goods manufactured in India under different export promotion schemes , such 
as: AA, Advance Authoris ation for Annual Requirement , and DFIA; EOU, STP, EHTP and BTP; and 
goods under the EPCG that have not been exported but sold in the Indian territory. Deemed exports 
are, in general, eligible for benefits according to the scheme under which they were produced.  
Source:  FTP 2015 -21. 
 
120 Until 2017, the brand rate of duty drawback was granted under Rules 6 and 7 of the D rawback Rules, 
1995, and, thereafter, under Rules 6 and 7 of the Customs and Central Excise Duties Drawback Rules, 2017 . 
121 Rule 9 of the Customs and Central Excise Duties Drawback Rules, 2017 . 
122 FTP, paras. 4.31-4.53. WT/TPR/S/ 403/Rev.1  • India  
 
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Export zones and other schemes  
3.134.   India continues to implement the Export Oriented Units (EOU) Scheme, the Export 
Processing Zones (EPZ)/Special Economic Zones (SEZs ) Scheme, the Electronics Hardware 
Technology Parks (EHTP) Scheme, the Software Technology Parks (STP) Scheme and the 
(Bio-Technology Parks ) BTP Scheme , to promote exports, generate employment and attract 
investment. An EOU/EHTP/STP/BTP unit may import and/o r procure from the domestic tariff area 
(DTA) or bonded warehouses in the DTA or international exhibition s held in India , without payment 
of duty , all types of goods, including capital goods, provided that these are not prohibited. Goods 
imported or procur ed from bonded warehouses in DTA s are not subject to customs duties. They are 
subject to GST, which is refunded.  
3.135.   Enterprises established in EOU s/EPZs/SEZs/EHTP s/STPs/BTPs must have positive net foreign 
exchange (NFE) earnings, and specific sectors may need  to comply with other 
provisions/conditions.123 NFE earnings are calculated cumulatively in five -year periods, starting from 
the first year of production. If a unit is unable to fulfil the NFE earning requirement, the five -year 
period for the calculation may be extended.124 
3.136.   In general, under these Schemes, the entire production should be exported. However, 
producers, with some exceptions  (i.e. pepper and pepper products, and marble ), may  sell finished 
goods in the domestic tariff area (DTA, if they fulfil the positive net foreign exchange  (NFE)  
requirement upon payment of customs duty and GST. Producers of gems and jewellery may sell up 
to 10% of the f.o.b. value of exports of the precedi ng year in the DTA. Sales of services, including 
software, are allowed in the DTA up to 50% of the f.o.b. value of exports and/or up to 50% of foreign 
exchange earned.   
3.137.   State trading does not apply to EOUs, except with respect to exports of chrome ore/chro me 
concentrate.125 
Transport and marketing assistance  
3.138.   In 2019, India introduced the Transport and Marketing Assistance (TMA) Scheme. The 
Scheme was initially in effect from 1  March 2019 to 31  March 2020, but it was extended.  Under this 
Scheme, financial ass istance is provided to transport and commercialize agriculture products in 
specific exports markets. Under the TMA Scheme, a certain portion of freight charges are reimbursed 
to exporters.126 The amount reimbursed depends upon the export destination; it var ies from INR  700 
to INR 3,500 per tonne (subject to periodic adjustments).  
3.139.   Exporters must be registered to participate in the Scheme. All agricultural products 
(HS Chapters 1 to 24), with some exceptions, are covered under the Scheme (Table 3. 24). Exports 
must take place through ports that use the Electronic Data Exchange system. Benefits granted under 
the TMA Scheme cannot apply to: g oods produced under the EOU/EPZ/SEZ/EHTP/STP/BTP Schemes; 
exports of imported goods that have not undergone any transformati on; goods that are 
trans-shipped through India; products subject to MEPs or export duty; and/or goods exported 
through courier or foreign post offices using e -commerce platforms.  
 
123 DGFT,  FTP, Appendix 6B, Sector Speci fic Requirements for EOUs . Viewed at: 
https://dgft.gov.in/sites/default/files/6B.pdf . 
124 The detailed method of calculation of NFE earnings is given in Para 6.10 of the Handbook of 
Procedures 2015 -20. 
125 Other regimes (EHTP/STP/BTP) do not deal with ores. 
126 DGFT, Public Notice No. 82/2015 -20, dated 29 March 2019  – Procedure and ANF for availing 
Transport and Marketing Assistance (TMA) for Specified Agriculture Products – regd. Viewed  at: 
http://dgft.gov.in/sites/default/files/Eng.%20PN%2082%20dt%2029. 3.19_0.pdf ; and PIB, Transport and 
Marketing Assistance (TMA) for Specified Agriculture Products. Viewed at: 
http://pib.nic.in/newsite/PrintRelease.aspx?relid=189200 . WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.24 Products not eligib le under the TMA Scheme, 2019  
HS chapter  HS codes  Description  
1, 2 and 5  All HS 
codes  Live animals  
Meat and edible meat offal  
Products of animal origin, not elsewhere specified or included  
3 0306.17  Other shrimp and prawns  
4 0401 Milk and cream, not concentrated or containing added sugar or other 
sweetening matter  
0402 Milk and cream, concentrated or containing added sugar or other sweetening 
matter  
0403 Buttermilk, curdled milk and cream, yogurt, kephir , and other fermented or 
acidified milk and cream, whether or not concentrated or containing added 
sugar or other sweetening matter , or flavoured or containing added fruit, nuts 
or cocoa  
0404 Whey, whether or not concentrated or containing added sugar or other 
sweetening matter; products consisting of natural milk constituents, whether 
or not containing added sugar or other sweetening matter, not elsewhere 
specified or included  
0405 Butter and other fats and oils derived from milk; dairy spreads  
0406 Cheese and curd  
7 0703 Onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled  
10 1001,  
1006 Wheat and meslin  
Rice 
13 and 14  All HS 
codes  Lac; gums, resins and other vegetable saps and extracts, vegetable plaiting 
materials; vegetable products not elsewhere specified or included  
17 1701,  
1703 Cane or beet sugar and chemically pure sucrose, in solid form ; raw sugar not 
containing added flavouring or colouring matter; and molasses resulting from 
the extraction or refining of sugar  
22 and 24  All HS 
codes  Beverages, spirits  and vinegar; and tobacco and manufactured tobacco 
substitutes  
Source:  Public Notice No. 82/2015 -20, 29 March 2019.  
3.140.   The Market Access Initiatives (MAI) Scheme, an export promotion scheme in force until 
31 March 202 1127, provides financial assistance for export promotion initiatives. Under the Scheme, 
resources are mainly assigned to priority sectors (e.g. cottage and handicrafts industries, and 
leather). Preference is also given to support SMEs. Assistance for each acti vity is on a cost-sharing 
basis; 65% (90% in the priority sector) of the project is financed by public funds. Under the MAI 
Scheme , Towns of Export Excellence (TEE) are granted financial assistance to finance the marketing 
of exports, capacity -building, an d the development of technological services.128 The Marketing 
Development Assistance (MDA) Scheme is also intended to provide financial assistance, on an annual 
basis, for a range of export promotion activities (e.g. trade fairs in India or abroad, and expo rt 
promotion seminars).  
3.141.   In 2014, the DGFT implemented the Niryat Bandhu  Scheme for mentoring new and potential 
exporters through training and outreach programmes. The Scheme targets mainly MSME s based on 
their export potential.129 
3.2.6   Export finance, insurance,  and guarantees  
3.142.   The export sector is considered as one of the priority sector s in India (Section 4.4.1.1) . 
Export finance is , therefore,  provided by commercial banks (including foreign banks) and the Export -
Import Bank of India (Exim Bank).  The Exim Bank provides financing to exporters and buyers 
(including overseas governments and financial institutions) of Indian goods , services, and projects. 
 
127 Ministry of Fi nance (Department of Expenditure) OM No.  42(02)/PF -II/2014 , 10 January 2020. 
128 Under the FTP 2015-21, towns producing goods worth INR 750 crore or more have been notified as 
Towns of Export Excellence (TEE s), based on their potential to export. For TEEs in  the handloom, handicraft, 
agriculture and fisheries sectors, the threshold is INR 1 .5 billion . 
129 DGFT . Viewed  at: https://www.dgft.gov.in/sites/default/files/NiryatBandhu2014.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  It also offers various guarantees to exporters to secure " project exports " and export contracts.130 In 
addition to finance, the Exim Bank provides export intelligence services.131 
3.143.   In 2017/18, the Exim Bank approved loans amounting to INR 978.3 billion , up from 
INR 647.8  billion in 2016/17. Loans were extended mainly to the manufacturing and energy sectors 
(Chart 3.3).  
Chart 3.3 EXIM Bank: loans by sector, 2014 -15 and 2018 -19, as at end -March  
 
a Engineering procurement construction services.  
Note:  Loans to staff, banks, counter -guaranteed banks, and foreign governments are excluded.  
Source:  EXIM Bank.  
3.144.   Export credit insurance continues to be provided by the state -owned Export Credit Guarantee 
Corporation Limited (ECGC), which retains 90% of the market, as it protects short -, medium -, and 
long-term risks.132 The ECGC offers mainly  export credit insurance  to protect: (i)  Indian exporters 
against the risk of non –payment due to commercial and political risks; and (ii) banks and other 
financial institutions against losses incurred in extend ing credit facilities to exporters . Insurance 
cover for exporters guarantees the reimbursement of up to 80% -90% of the export value133; higher 
coverage (up to 95%) may be extended to small exporters.134 Other financial products to secure 
exports include an export factoring facility for MSMEs , and insurance to protect overseas investment s 
against political risks .135 MSMEs account for 85% of the ECGC's clients.136 
3.145.   The ECG C continues to administer the National Export Insurance Account (NEIA), in place 
since 2006, to provide credit insurance to " project exports " in sectors of strategic and national 
importance for India (i.e. electricity; railways; capital and engineering goo ds; housing, hospitals, 
and related civil infrastructure; and water supply ), which are not eligible to obtain insurance cover 
through the private sector or the ECGC. Since 2006, the  NEIA has supported 14 4 export projects in 
43 countries , to a total value of USD 6.6 billion .137 
 
130 Exim Bank of India, Financial Products . Viewed at: https://www.eximbankindia.in/project -exports . 
131 Exim Bank of India.  
132 Information provided by the authorities.  
133 Exim Mitra, About Us . Viewed at: https://eximmitra.in/en/about -exim-mitra . 
134 Information provided by the authorities.  
135 Department of Commerce and Industry, Export Credit Guarantee Corporation of India Limited . 
Viewed at: https://commerce.gov.in/InnerContent.aspx?Id=228 ; and ECGC. Viewed  at: 
https://www.ecgc.in/factoring -2/. 
136 Department of Commerce (2018), Annual Report 2017 -18. Viewed at: 
https://commerce.gov.in/writereaddata/uploadedfile/MOC_636626711232248483_Annual%20Report%20%20
2017-18%20English.pdf . 
137 Information provided by the authorities.  
Chart 4.[IND] EXIM Bank: outstanding loans by sector, as at end -March
Outstanding loans :
INR 704.92 billion
EPC services
12.4%
Construction
4.4%Other 
12.1%Other 
manufacturing
28.7%
Other services
10.2%Oil & gas 
10.1%2014-15 2018-19
Other 
8.2%
Oil & gas
6.1%
Other services
14.9%Other 
manufacturing
25.0%
Ferrous metal & 
metal processing
9.4%Outstanding loans :
INR 784.95 billion
EPC services
12.4%
Construction
6.1%Ferrous metal & 
metal processing    
7.8%Textiles & 
garments 7.5%Chemicals & dyes
6.6%
Textiles & garments
6.8%Petroleum products
6.1%
Note:  Loans to Staff, Banks, counter guaranteed by banks, and foreign governments, are excluded.
Source:  EXIM Bank.Petroleum products
5.2%
a    Engineering Procurement Construction services.WT/TPR/S/ 403/Rev.1  • India  
 
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  3.3  Measures Affecting Production and Trade  
3.3.1   Incentives  
3.146.   India's explicit subsidies continue to be targeted mainly at supporting the agricultur al sector, 
ensuring food security , and reducing poverty. As a result, food and fertilizer subsidie s accounted for 
most of the explicit subsidies in 2020 -21 (71%) (Table  3.25). Food subsidies include: (i) the subsidy 
granted to the Food Corporation of India (FCI) under the National Food Security Act (NFSA)138; 
(ii) the subsidy for decentralized procureme nt of food grains under NFSA139; and (iii) the sugar 
subsidy granted under the Public Distribution System.140 
Table 3.25 Explicit subsidies, 2015 -21 
 
2015 -16a 2016 -17a 2017 -18a 2018 -19a 2019 -20b 2020 -21b 
Total (INR billion)  2,641.1  2,348.1  2,244.3  2,992. 53 2,635.27  2,621.08   
(% of total)  
Food subsidies  52.8 46.9 44.7 45.0 41.0 44.0 
Fertilizer subsidies  27.4 28.2 29.6 32.0 30.0 27.0 
Imported (urea)  4.6 3.2 3.2 13.0 15.0 14.0 
Indigenous (urea)  14.5 17.0 16.5 8.0 5.0 5.0 
Nutrient -based  8.3 8.0 9.9 11.0 10.0 9.0 
Petroleum subsidies  11.4 11.7 10.9 11.0 15.0 16.0 
Interest subsidies  6.3 7.6 9.9 9.0 10.0 11.0 
Other subsidies  2.1 5.5 4.9 3.0 4.0 2.0 
a Actual expenditures.  
b Revised budget.  
Source:  Government online information ; Union Budget (various issues) ; and information provided by the 
authorities . 
3.147.   Indigenous urea is subsidized under the Fertilizer New Pricing Scheme (NPS) and the Uniform 
Freight Policy (UFP) ( a freight subsidy). These s chemes are intended to make fertilizers available to 
farmers at reasonable prices , and to grant producers a reasonable return . The maximum retail price 
(MRP) of urea is statutorily fixed. In 2019/20, the MRP of a 45 kg bag of urea was INR 242, and the 
MRP of a 50 kg bag was INR 268  (excluding taxes, levies and charges towards neem coating) . The 
difference between the cost of fertilizers at the farm gate and the MRP paid by the farmer is a subsidy 
given to the fertilizer manufacturer/importer. Under the UFP, a subsidy is granted to urea 
producers/importers to cover the freight costs from plant s/ports to the districts where it is to be 
used, to ensure that fertilizers are available across India.  
3.148.   As local production of urea is not enough to meet domestic demand, India also subsidizes 
imports. The price of imported fertilizer is controlled under t he Fertilizer Control Order and is thus 
statutorily regulated. The same price applies to locally produced and imported  fertilizer s. 
3.149.   The Nutrient Based Subsidy (NBS) Scheme , introduced in 2019 for decontrolled phosphatic 
and potassic  fertilizer, remains in place. Under this Scheme,  India subsidizes  the retail price of 
indigenous phosphatic and potassic fertilizers, to promote the balanced use of nitrogen, phosphorus, 
and potassium ( NPK) nutrients to protect soil health and enhance productivity. A fixed annua l 
subsidy, based on the nutrient content of each fertilizer , is transferred to the manufacturers.141 Even 
if prices of NPK fertilizers are decontrolled, these continue to be  monitored to ensure a reasonable 
price based on a formula .142 
 
138 A subsidy to cover the difference between the cost of production of food grains and the price at 
which they are sold under the different welfare schemes implemented in India and the cost of keep ing buffer 
stocks/strategic reserve . 
139 A subsidy to the state governments that procure food grains for central pool under  the Decentralized 
Procurement of Food Grains Scheme . 
140 A subsidy to provide sugar at a subsidized rate to families covered under Antyo day Ann Yojana . 
141 PIB Press Release, 19 July 2019. Viewed at: 
https://pib.gov.in/newsite/PrintRelease.aspx?relid=191930 ; and Department of Fertilizers, FAQ. Viewed at: 
http://fert.ni c.in/faq#n219 .  
142 For full details on the rate of the subsidy , refer to Department of Fertilizers, Citizen's Charter . Viewed 
at: http://fert.nic.in/page/phosphatic -and-potassic -pk-policy .  WT/TPR/S/ 403/Rev.1  • India  
 
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  3.150.   Subsidies for irrigati on and electricity for low -income or resource -poor producers are still 
provided  (Section 4.1) . 
3.151.   India continues to provide subsidies to petroleum products, such as liquefied petroleum gas 
(LPG) and kerosene. Under the Direct Benefit Transfer (DBT) Scheme , the Government  supports 
oil-marketing companies (OMCs) , which, in turn,  finance the purchase of LPG by households (with 
annual income of up to  INR 1 million), under the Direct Benefit Transfer (PAHAL) Schem e, launched 
in 2014.  Under the PAHAL Scheme, households may purchase a maximum of 12 cylinders per year 
of domestic LPG at market -determined prices , and subsequently receive a subsidy , a transfer into 
their bank accounts, for each cylinder acquired. The annual limit of 12 cylinders was set to  ensur e 
that the benefit reaches domestic customer s, and that subsidized LPG is not diverted for commercial 
purposes . In 2019 -20, the amount of the subsidy was INR 161.39 per LPG cylinder, down from 
INR 237.1 in 2018 -19.143 As at end -2019, 258.4 million LPG  consumers had joined the PAHAL 
Scheme , and INR 1,235.6 billion  had been transferred to them. An additional scheme, to provide 
clean fuel to households, the LPG Connection to Poor Households, was launched to motivate 
households below the poverty line to sh ift to cleaner fuel.144 
3.152.   Kerosene consumed by poor households is still  distributed and subsidized through the Public 
Distribution System (PDS) network (ration shops) of the state governments and UT s. 
3.153.   During the review period, India notified programmes established or maintained in the 
fisheries sector to the WTO Committee on Subsidies.145 India also notified programmes implemented 
to promote investment in the manufacturing  sector and in specific industri es/sectors , e.g. leather 
and textile s, hybrid and electric vehicle s, shipbuilding, forestry, mining , and information technology 
and telecommunications. The purpose of these programmes is to increase employment, upgrade 
technology, protect the environment , and facilitate industrialization in remote areas. Most of the 
assistance is via grants or fiscal incentives. According to India's  notification s, the trade effects that 
may result from these programmes cannot be estimated (Table A3. 3). 
3.154.   India also notified several programmes to support the agricultur al sector under the Green 
Box, in addition to the input s ubsidies generally available to low -income or resource -poor producers, 
which are considered development programmes , and the price support mechanism/administered 
prices. The subsidized inputs include irrigation, fertilizers , and electricity. Administered pr ices apply 
to, inter alia , coarse cereal, cotton, groundnut s, pulses, rapeseed/mustard, rice, sunflower s, yellow 
soya bean s, and wheat. India also provides a subsidy on premiums of agricultural insurance for 
production loss not exceeding 30% of the average  production.146 Additional programmes to support 
the sector are also implemented (Section 4.1.4).  
3.155.   In addition to the programmes notified to the WTO Committee on Subsidies, India continues 
to maintain a series of incentive programmes to encourage investment and production, some applied 
horizontally at national and regional level s and others at the sectoral level. Some of these 
programmes target small marginal farmers (SMFs) ; SMEs  or start -ups.147 
3.156.   India also implements a Scheme for Development of Pharmaceutical s Industry to ensure 
drug security by increasing the efficiency and competitiveness of  the domestic pharmaceutical 
industry  (Table 3.26) . Grants are provided under the  Scheme, which is divided into sub-schemes , 
each with different budgets. Hence, grants vary according to the sub -scheme. The objective of the 
Pharmaceuticals Technology Upgradation Assistance Scheme (PTUAS), one of the sub -schemes , is 
to assist SMEs to upgrade their plant s to adopt international standards so that they can enter the  
global market.  
 
143 Information provided by the a uthorities.  
144 PIB, Subsidy on Petroleum , 25 April 2016. Viewed at : 
https://pib.gov.in/newsite/PrintRelease.aspx?relid=141145 . 
145 WTO documents G/SCM/N/284/IND , 26 October 2016; G/SCM/N/284/IND/Suppl.1, 
5 September  2017; G/SCM/N/284/IND/Suppl. 2 and G/SCM/N/315/IND , 18 September  2018; and 
G/SCM/N/284/IND/Suppl.3 and G/SCM/N/315/IND/Suppl.1 , 7 March 2019 . 
146 WTO documents G/AG/N/IND/12, 1 May 2018; G/AG/N/IND/13, 2 0 July 2018; and G/AG/N/IND/15, 
29 March 2019.  
147 Startup India.  Viewed at : https://dipp.gov.in/programmes -and-schemes/industrial -
promotion/startup -india on 14 January 2020 . WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.26 Scheme for Development of Pharmaceuticals Industry  
Assistance to Bulk Drug Industry for Common Facility Centre  (CFC)  
Budget: INR 2  billion .  
Assistance: grant of a maximum of INR  1 billion  per CFC or 70% of the project cost of the CFC, whichever is 
less 
Assistance to Medical Device Industry for CFC 
Budget: INR 1  billion  
Assistance: grant of a maximum of INR  250 million  per CFC or 70 % of the project cost of the CFC, 
whichever is less  
Pharmaceuticals Technology Upgradation Assistance Scheme (PTUAS)  
Budget: INR 1.4 billion  
Assistance: subsidized interest on loans of a maximum provided by a scheduled commercial bank/financial 
institution  
The upper limit of the interest subsidy is 6% per annum for a period of three years.  
The maximum loan is INR 4 0 million  
Assistance for Cluster Development  
Budget: INR 30 0 million  
Assistance: grant of a maximum of INR 200 million  per cluster or 70% of the cost of the project , whichever 
is less  
Pharmaceutical Promotion Development Scheme (PPDS)  
Budget: INR 6 0 million  
Assistance: financial support for conducting export promotion activities  
Source:  Viewed at : http://pharmaceuticals.gov.in/schemes/scheme -development -pharmaceutical -industry . 
3.157.   In 2015, the Policy of Reservation for exclusive manufacture in the Small -Scale Indus tries 
(SSI) (now micro and small enterprises  (MSE)) sector was eliminated. As a result, the remaining 
20 items reserved for exclusive manufacture in the MSE sector  were de -reserved.148 Therefore, 
currently, there are no items reserved for exclusive manufacture in the MSE sector. However, India 
implements a number of schemes related to finance, infrastructure, technology upgrade and 
marketing, to promote the MSE sector.149 
3.3.2   Standards and o ther technical requirements  
3.158.   Over the review period, the legislation on standardization was substantially amended when 
the Bureau of Indian Standards (BIS) Act, 2016 , came into force in 2017, replacing the BIS Act, 
1986. As a result of the introduction of the new BIS Act: (i) multiple conformity assessment schemes, 
including self -declaration of conformity, became possible; (ii) any agency, in addition to the BIS, 
may b e appointed by the Central Government to assess conformity for mandatory certification; 
(iii) the Central Government may require any product to be brought under mandatory certification; 
(iv) mandatory hallmarking for gold and silver was introduced; (v) fur ther measures to protect 
consumers were introduced; (vi) measures  may be taken against retailers (not only manufacturers) 
and individuals (not only companies) for non -compliance with Indian standards; and (vii) more 
severe penal provisions were introduced.  The 2016 Act covers goods, services, systems, and 
processes; previously, only goods were  covered .150 
3.159.   The BIS, under the Department of Consumer Affairs, is responsible for standardization. It 
was officially established as India's national standards body und er the BIS Act, 2016.  
3.160.   The BIS formulates Indian standards in all sectors, except in those stipulated in the 
Agricultural Produce (Grading and Marking) Act, 1937 , and the Drugs and Cosmetics Act, 1940.151 
In this context , the Directorate of Marketing and Ins pection (DMI) under the Ministry of Agriculture 
and Farmers' Welfare, issues grading standards for 164 commodities; and the Central Drugs 
 
148 Notification No. 998(E) , 10 April 2015.  
149 For the full list of the Schemes , refer to Ministry of Micro, Small & Medium Enterprises, All Schemes . 
Viewed a t: https://msme.gov.in/all -schemes .  
150 BIS, Annual Report 2017 -18. Viewed at: https://bis.gov.in/?page_id=2367 ; Department of 
Consumer Affairs, Bureau of Indian Standards . Viewed at: https://consumeraffairs.nic.in/organisation -and-
units/division/bureau -indian -standards ; Press Information Bureau, Bureau of Indian Standards (BIS) Act 2016 
brought into force with effect from 12th October, 2017 . Viewed at: 
https://pi b.gov.in/newsite/PrintRelease.aspx?relid=171705 ; and information provided by the authorities.  
151 Section 41, BIS Act, 2016.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Standard Control Organization (CDSCO) issues standards for drugs and medical devices.152 The BIS 
may recognize other standards -developing organizations (SDOs) in India that develop sector -specific 
standards ; however, this has not yet been done .153 
3.161.   The procedure to adopt Indian standards has not been substantially revised since 2015  
(Chart  3.4). Indian standards are develope d by sectional (technical) committees, comprising public 
and private -sector representatives, and academics. Individuals, industries, and public agencies may 
submit proposals to formulate standards  to the c ommittees. It takes 9 to 24 months  to formulate a 
standard.154 The use of Indian standards is voluntary, but may become mandatory if it is stipulated 
in a contract or referred to in a piece of legislation or in a Quality Control Order issued by  the 
Department for Promotion of Industry and Internal Trade (DPIIT) .155 In this case, Indian standards  
would  become technical regulations. The relevant ministry is responsible for deciding which 
standards should become technical regulations. Standards are reviewed every five years (or 
earlier).156 In March 2018  (latest data available), there were 19,294 Indian standards, 27.3%  of 
which were harmonized with international standards.157 India has a free online catalogue, but 
standards are not free of charge.158 
Chart 3.4 Procedure for the formulation of standards, 2019  
 
a The BIS has 14 Division Councils.  
Source:  Section 22, BIS Rules, 2018; and BIS, Process of Standards Formulation . Viewed at: 
https://bis.gov.in/?page_id=1 88. 
 
152 Confederation of Indian Industry, National Conformity Assessment System . Viewed at: 
http://indiastandardsportal.org/Detail.aspx?MenuId=19 .  
153 Information provided by the authorities.  
154 Information provided by the authorities.  
155 Section 24, BIS Rules, 2018.  
156 Section 23, B IS Rules, 2018; and BIS, Process of Standards Formulation . Viewed at: 
https://bis.gov.in/?page_id=188 . 
157 BIS, Annual Report 2017 -18. Viewed at: https://bis.gov .in/?page_id=2367 . 
158 BIS, Sale of Standards . Viewed at: https://bis.gov.in/?page_id=116393 ; and information provided 
by the authorities.  
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  3.162.   Technical regulations are formulated in accordance with the Code of Good Practice of the 
WTO Agreement on Technical Barriers to Trade and by sectoral legal instruments. In India, the 
relevant sectoral entities are responsible for formulating and implementing technical regulations.159 
Technical regulations apply to both domestically  produced goods and imports.  
3.163.   The steps to develop technical regulations  are broadly common to all sectors, and  did not 
change substantially over the review period (Chart 3.5). In general, d raft technical regulations are 
subject to national and international public consultations . Comments by national stakeholders must 
be received within 60 days, and WTO Members have at least 60 days to provide comments. Finalizing 
draft technical regulations takes 6 to 12 months, including approval, vetting, and translation into 
Hindi. Once technical regulations are finalized as rules, regulations (or Quality Control Orders  for 
those issued by the DPIIT) , they are published in the Official Gazette and are simultaneously notified 
to the WTO. There is no minimum prescribed period of time for a technical regulation to enter  into 
force; a reasonable period of time is given . Technical regulations are amended on an ad hoc  basis.160 
India does not have a consolidated online catalogue of draft and approved  technical regulations.  
Chart 3.5 Development of technical regulations by the DPIIT  
 
Source:  DPIIT , Technical Regulations . Viewed at: https://dipp.gov.in/technical -regulations .  
3.164.   During 2015 -20 (end -June), India notified 102 new technical regulations to the WTO, 
regarding con sumer, health and environmental protection. Amendments to nine technical 
regulations, that had already been notified, were also submitted. During the same period, 24 specific 
trade concerns were raised in the WTO Committee on Technical Barriers to Trade. T he BIS is the 
national enquiry point for the WTO for all sectors other than telecom. The enquiry point for the 
telecom sector is the Telecom Engineering Centre (TEC).  
3.165.   Conformity assessment with Indian standards is regulated by the BIS (Conformity 
Assessmen t) Regulations, 2018, which provide for different types of conformity assessment 
schemes, including self -certification.161 Self-certification requires the manufacturer to register with 
the BIS, have samples tested by BIS -recognized laboratories, and complet e a self -declaration of 
conformity.162 
3.166.   Product certification is voluntary, for both domestic and imported products, except for 
products that must comply with Indian standards, even if these are not considered technical 
regulations, for public health and safety and for the protection of the environment. The relevant 
sectoral entities, in consultation with stakeholders, decide which products require mandatory 
certification. There are two mandatory certification schemes:  
• Scheme I (mandatory certification) in cludes 264 products (up from 92 in 2015) which 
require factory and market surveillance. These include certain types of cement, 
household electrical devices, food products (e.g. milk powder), and steel and steel 
products; and  
 
159 Information provided by the authorities.  
160 Information provided by  the authorities.  
161 Press Information Bureau, Bureau of Indian Standards (BIS) Act 2016 brought into force with effect 
from 12th October, 2017 . Viewed at: https://pib.gov.in/newsite/ PrintRelease.aspx?relid=171705 ; and BIS, 
Hallmarking overview . Viewed at: https://bis.gov.in/?page_id=247 .  
162 BIS (Conformity Assessment) Regulations, 2018  
Step 1: Data collection and analysis
The DPIIT identifies all the stakeholders, and gathers 
and analyses the required data (production, trade, 
infrastructure, and any implementing challenges) 
Step 2: Meetings with stakeholders
Positions of different stakeholders are consideredStep 3: Dissemination of Quality Control Order (QCO) 
Governmental agencies, quality institutions, conformity 
assessment bodies, industries and their associations are 
asked to promote awareness about the QCO 
Step 4: WTO notification
The QCO is notified to the WTO (60 days)
Step 5: Gazette notification
Gazette notification is released and reasonable time is 
given for implementation WT/TPR/S/ 403/Rev.1  • India  
 
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  • Scheme II (mandatory registrati on) includes 50 electronics and IT products, and solar 
photovoltaic products, which only require market surveillance.163  
3.167.   In addition to the two current schemes, the Central Government may introduce others.  
3.168.   Certified products may use the BIS Standard Mark ( ISI symbol). Licences to use this symbol 
are granted for up to two years and may be renewed for up to five years.164 Foreign manufacturers 
must have an authorized representative in India to obtain a licence to use the BIS Standard Mark 
(ISI symbol). The ter ms to grant a licence to a foreign manufacturer varies according to the product. 
The certification process for imports includes an on -site visit. The licence fee amounts to INR 
1,000.165 The BIS also manages the ECO Mark for environmentally friendly product s; its use is 
voluntary.  
3.169.   The BIS has eight laboratories to perform conformity assessment tests. It also recognizes 
other laboratories (OSLs) (some 243), which comply with the BIS Laboratory Recognition Scheme, 
2018; no overseas OSLs have been recognized.166 OSL services are used when testing is not viable 
for the BIS.167 The accreditation of laboratories is carried out by the National Accreditation Board for 
Testing and Calibration Laboratories (NABL) and the National Accreditation Board for Certification 
Bodies (NABCB).  
Labelling  
3.170.   Pre-packaged commodities for retail sale, including imports, must comply with the labelling 
requirements contained in the Legal Metrology (Packaged Commodities) Rules, 2011 (as 
amended).168 Labels should be in either English (preferred) or Hindi. Since 2017, imports must 
indicate the country of origin or the place of manufacture/assembly.169 These Rules do not apply to 
garments, which, since 2017, have been subject to specific labelling requirements.170 
3.171.   Labelling of pre -packaged /pre-packed food and wholesale food packages must also comply 
with the requirements contained in the Food Safety and Standards (FSS) (Packaging and Labelling) 
Regulations, 2011.171 No changes to the requirements (ingredients, nutritional information, etc.) 
were introduced over the review period. Imported food must also display the Food Safety and 
Standard Authority of India (FSSAI) logo, along with the FSSAI licence number. The FSSAI is in the 
process of reviewing the labelling regulation. In addition to the  labelling requirements stipulated in 
the Regulations, specific labelling requirements apply to alcoholic beverages, food additives, health 
supplements, and organic food.  
3.3.3   Sanitary and phytosanitary requirements  
3.172.   The entities involved in the development and adoption of sanitary and phytosanitary (SPS) 
measures are the Food Safety Standards Authority of India (FSSAI) for food safety and human 
health; the Directorate of Plant Protection, Quarantine and Storage,  for plant health; and the 
Department of Animal Hus bandry and Dairying, for animal health (Table  3.27). These agencies are 
also India's national enquiry points under the WTO SPS Agreement.  
 
163 Information provided by the authorities.  
164 BIS (Conformity Assessment) Regulations, 2018 .  
165 BIS, Foreign Manufacturers Certification Scheme . Viewed at: https://bis.gov.in/?page_id=2151 ; and 
information pr ovided by the authorities.  
166 Information provided by the authorities.  
167 BIS, Annual Report 2017 -18. Viewed at: https://bis.gov.in/?page_id=2367 ; BIS, Laboratory Services 
Overview . Viewed at: https://bis.gov.in/?page_id=1769 ; and BIS, Laboratory Recognition Scheme, 2018. 
Viewed at: https://bis.gov.in/PDF/lab/Final_LRS_2018_17082018.pdf . 
168 Legal Metrology (Packaged Commodities) Rules, 2011. Viewed at: 
http://megweights.gov.in/acts.html . 
169 Legal Metrology (Packaged Commodities) (Amendment) Rules, 2015, 2016 and 2017. Viewed at: 
https://consumeraffairs.nic.in/acts -and-rules/legal -metrology . 
170 Advisory for enforcement of provisions of Rules for Readymade Garments/Hosiery products, 16 
December 2016. Viewed at: https://consumeraffairs.nic.in/acts -and-rules/legal -metrology . 
171 FFSAI, Product Standards . Viewed at: https://fssai.gov.in/cms/product -standards.php . WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.27 Institutions in charge of SPS, 2019  
Agency  Functions  
Ministry of Agriculture and Farmers ' Welfare  
Directorate of Plant Protection, 
Quarantine and Storage  Plant and plant -related products  
Directorate of Marketing and 
Inspection  Raw and semi-processed agricultural commodities, and meat and 
meat products  
Central Insecticide Board and 
Registration Committee  Import, manufacture, sale, transport, distribution , and use of 
insecticides  
Ministry of Fisheries, Animal Husbandry and Dairyinga 
Department of Animal Husbandry 
and Dairying  (DAHD)  Responsible for policies relating to livestock production, preservation, 
protection from disease , and fisheries  
Ministry of Health and Family Welfare  
Food Safety and Standards 
Authority of India (FSSAI)  To establish standards for food , and regulate production , storage, 
distribution, sale and import to ensur e availability of safe and 
wholesome food for human consumption  
Ministry of Commerce and Industry  
Export Inspection Council  (EIC)  The EIC , through  export inspection agencies (EIAs) is responsible for 
quality control and inspection of notified commodities , and for 
ensur ing compliance with importing -country requirements  
a This Ministry was established in May 2019 to include departments previously under the Ministry of 
Agriculture and the Ministry of Food Processing Industries . 
Source:  Information provided by the authorities . 
3.173.   According to information provided by the authorities, India' s legislative framework for food 
safety, animal and plant health did not undergo  any major changes since 20 15. India does not have  
a single law governing the SPS system (Table 3. 28). Over the review period, several regulations to 
implement the Food Safety and Standards Act, 2006, were adopted; these are related to, inter alia , 
food or health supplements, the food -recall procedure, imports (e.g. licensing of food importe rs, 
clearance, and sampling and analysis)172, organic food, and packaging.  
Table 3.28 Main legislation related to SPS matters  
Food safety  
Food Safety and Standards Act, 2006 (as amended)  
Live animals and livestock products  
Livestock Importation Act , 1898 (as amended )  
Fish and fishery products; milk products; egg products; honey; poultry meat products; fresh meat 
(chilled/frozen); processed meat products; basmati rice; fruit and vegetable products; gelatin, ossein and 
crushed bones; animal casings; and feed additive and premixture  
Export (Quality Control and Inspection) Act, 1963 , and Export (Quality Control and Inspection) Rules, 1964, 
as amended  
Raw and semi -processed agricultural commodities, and meat and meat products  
Agricultural Produce (Grading and Marketing) Act , 1937 (as amended)  
Insecticide Act, 1968  
Plant and plant -related products  
Plant Quarantine Order  (Regulations of Import into India) , 2003  (as amended)  
Destructive Insects and Pests (Amendment and Validation) Act, 1992  
Insecticides Rules, 1971  
Insecticides Act, 1968  
Destructive Insects and Pests Act, 1914  
Source:  Information provided by the authorities . 
3.174.   The Plant Quarantine (Regulation of Import into India) Order, 2003 (PQ Order 2003) (as 
amended) and the Destructive Insects and Pests Act, 1914 , are the main pieces of legislation that 
regulate  India's National Plant Protection Organization (NPPO). The main objective of this legislation 
is to prevent the introduction of exotic pests posing a threat to agricultur e; thus, they are amended 
as required by the changing phyto sanitary conditions. To prevent the introduction and/or spread of 
quarantine pests and ensure their control, imports of plants/plant products (for consumption and 
 
172 Food Safety and Standards (Import) Regulation, 2017.  WT/TPR/S/ 403/Rev.1  • India  
 
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  propagation); germplasm/ genetically  modified organisms ( GMOs )/transgenic plant material for 
research purpose s; deleterious weed species; and live insects/fungi and other microbial 
cultures/bio -control agents may be prohibited, restricted or regulated.  
3.175.   Imports of primary agricultural product s require a sanitary -phytosanitary import permit,  
following the requirements established by PQ Order 2003. Under the Order , plants and plant 
materials may be imported after an Import (Pest) Risk Analysis (PRA) is conducted , based on 
scientific principles173; thereafter , products are categorized under Schedules IV (prohibited), 
V (imported on the recommendation of an identified institution with a phytosanitary certificate), 
VI (import permit and phytosanitary certificate are mandatory), VII (may be imported w ithout an 
import permit/less risk) and VIII (weeds that require quarantine).  
3.176.   To import plants and plant material s other than those listed in the Schedules, importers 
must file an application to conduct a PRA, to include the agricultural commodities in the relevant 
Schedule.  PRAs involve: an evaluation of the risk of introducing a pest, its establishment, and spread 
potential; an assessment of the economic and environmental impact of its introduction; and the 
need to adopt risk -mitigating measures. It may al so involve the visit of phytosanitary experts to the 
production site to carry out pre -shipment inspections and evaluate post –harvest treatment 
technologies and quarantine inspection, and certification facilities. The cost of such a visit is borne 
by the ex porting country. In the event of interception of a quarantine pest in imported consignments, 
further imports are suspended until the earlier PRA is reviewed and the risk -mitigating measures are 
evaluated.  
3.177.   Agricultural commodities are classified into two c ategories , namely : plants and plant 
material s for consumption , which may be imported through all the notified ports under PQ Order 
2003174; and seeds and propagative material s for sowing/ propagation, which  may be imported only 
through six major ports : Amritsar, Bengaluru, Chennai, Kolkata, Mumbai and New Delhi . 
Commodities meant for consumption may be imported through all the notified ports under PQ Order 
2003.  
3.178.   Imports of plants and seeds used for propagation  (e.g. cuttings, saplings or bud woods) , 
listed in Schedules V and VI of the PQ Order 2003, may be subject to post-entry quarantine 
inspection . These plants and seeds must be grown in post -entry quarantine facilities, established by, 
and at the cost to, the importer, and approved and certified by the inspection authority. The 
quarantine period is determined based on the type of plant materials and the time taken by them to 
grow to the stage where symptoms of disease appear.  
3.179.   Exports of agricultural commodities  are checked  as per the requirements of importing 
countries . Export inspections involve sampling and detailed laboratory tests in the case of seeds and 
planting material s for propagation , whereas visual examination with a hand lens , and washing tests 
are carried out for plant material s meant for consumption. The export inspections are conducted , in 
most cases, at the exporters ' premises.175 
3.180.   The Directorate of Marketing and Inspection  (DMI) develops quality standards ( AGMARK 
Standards ) for any article s scheduled  in the Agricultural Produce (Grading and Marketing) Act , 1937. 
These include fruit, vegetables, cereals, pulses, oilseeds, vegetable oils,  ghee, spices, honey, 
creamery butter, wholemeal wheat flour ( wheat atta), and chickpea flour (besan ).176 Standards are 
developed according to the Food Safety and Standards Act, 2006 , and are based on scientific data, 
Codex Alimentarius and the ISO. The DMI implement s a certification scheme for agricultural  
 
173 The risk analysis is based on, inter alia , the type of pest known to be associated with the particular 
product in the exporting country; the organisms that already exist in India; and the potential impact of such 
organisms on India's international trade . 
174 At present, there are 90 entry points, including 44 seaports, 23 airports and 23 land custom stations 
notified for the imports of plants and plant material. There are also 75 inland container depot/container freight 
stations . Eleven  foreign post offices have also been notified . Directorate of Plant Protection, Quarantine & 
Storage, Strengthening & Modernisation of Plant Quarantine Facilities in  India. Viewed  at: 
http://ppqs.gov.in/divisions/plant -quarantine/strengthening -modernisation -plant-quarantine -facilities -india. 
175 For m ore details,  refer to Plant Quarantine Information System, Exports . Viewed at : 
http://plantquarantineindia.nic.in/PQISPub /html/Export.htm . 
176 DMI, Agmark Certification Scheme . Viewed at: 
https://dmi.gov.in/Documents/Final%20Text%20Matter%20related%20to%20QC%20Section.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  commodities traded in the domestic and international markets . The scheme is voluntary , except for 
blended  edible vegetable oils and fat spread s.177 
3.181.   The Department of Animal Husbandry and Dairying (DAHD), previously under  the Ministry 
of Agriculture, currently under the Ministry of F isheries, Animal Husbandry and Dairying , continues 
to deal with sanitary issues , related to, inter alia , import s of livestock and livestock products . These 
imports  are also  regulated by the Livestock Importation Act , 1898 (as ame nded). 
3.182.   The DAHD is responsi ble for animal health and veterinary public health . It monitors and 
controls the production, processing and distribution of animal products, and takes measures to 
prevent, control and eradicate animal diseases and pests; it also exercises oversight of the safety of 
products, by -products and derivatives for human or animal consumption. It maintains border 
quarantine posts and internal control posts to ensure compliance with the sanitary requirements 
relating to the import or export of animals and animal prod ucts and by -products.  The DAHD develops 
and implements central government schemes  to prevent, control and contain  animal diseases ; and 
also issues guidelines to  the states and  UTs.178 
3.183.   Measures taken by the DAHD are based on risk assessment carried out by the Animal 
Quarantine and Certification (AQC) and Services  in the Central Government's official laborator ies. 
Testing of imported livestock/livestock products is done as per health protocol s issued by th e DAHD. 
On the basis of the risk assessment, the DAHD  classifies pests and diseases . The results of an 
analysis by official laborator ies are a prerequisite for granting or cancelling permits, authorizations 
or registrations . To prevent and control diseases , the DAH D may inspect and visit  premises,  and 
may require that health measures are applied if products pose a threat to veterinary public health 
or animal health.  India recognizes tests carried out by other national or foreign laboratories , 
authenticated by the of ficial authority of  the exporting nation , as a pre -import requirement into the 
country .179 
3.184.   With respect to imports, the DAHD carries out the necessary risk assessment to determine 
the health conditions that regulate the importation or transit of goods, or to demonstrate the safety 
of products and by -products entering , or marketed in , India. These products must be accompanied 
by sanitary import permits (SIPs) issued by the DAHD .180 Permits must be obtained prior to shipping 
from the country of origin.181 Permits are valid for 6 or 12 months , depending on the nature of the 
product , and may be used for multiple consignments. Imports o f animals and animal products are 
only allowed through designated ports , where animal quarantine and certification services are 
available (Amritsar, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, and Mumbai). Imports of fish 
products are allowed through th e seaport of Vishakhapatnam (Andhra Pradesh), the seaport and 
airport of Kochi, and the land customs station at Petrapole ( only for imports from Bangladesh).182 
3.185.   In the absence of the  required import permits , the DAHD may slaughter the animals, 
denature the products , or return them to their place of origin. If an animal product or by -product 
presents a serious threat to health , and/or the sanitary measures taken do not provide a satisfactory 
level of control, the DAHD may suspend the movement of the product , and apply health measures 
or establish special conditions for the product to be able to move within India or to be returned or 
re-exported.   
3.186.   Imports of poultry and poultry products originating from a region where there was avian 
influenza were prohibited u ntil 2017.183 Since 2019, imports are allowed only from areas free of 
highly pathogenic avian influenza, in accordance with the World Organisation for Animal Health (OIE) 
Terrestrial Animal Health Code.184 
 
177 The Food Safety and Standards Act and Regulations, 2006.  
178 Informatio n provided by the authorities.  
179 Information provided by the authorities.  
180 Section 3A , Livestock Importation Act, 1898, as incorporated by Live stock Importation (Amendment) 
Act, 2001 (Act No. 28 of 2001, 29 August 2001), (or as amended from time to time ). 
181 For information regarding procedure s to import specific animal products refer to DAHD, Trade. 
Viewed at: http://www.dahd.nic.in/trade . 
182 DAHD, Trade. Viewed at: http://www.dahd.nic.in/trade . 
183 Notification S.O. No. 2337(E) , 8 July 2016.  
184 Notification S.O. No. 4118 (E), 14 November 2019. WT/TPR/S/ 403/Rev.1  • India  
 
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  3.187.   The main institution involved in the development of SPS measures relating to food is the 
FSSAI, an autonomous body established under the Ministry of Health and Family Welfare . 
Enforcement primarily rests with the states and UTs. The FSSAI was established under the Food 
Safety and Standards Act, 2006 , which is a consolidating statute related to food safety regulation s  
3.188.   The FSSAI specifies the standards for ingredients, additives, contaminants, pesticide 
residues, and biological hazards. It  is responsible for setting standards for food manufactured in 
India, and it also regulates imports of food products and recalls foodstuffs that are not safe for 
human consumption. According to the authorities, t he standards developed by the FSSAI  are based 
on scientific evidence and on international standards (i.e. Co dex), and are duly notified to the WTO 
before finaliz ation for comments and suggestions , except in case of emergency.185 At present, there 
are 18 main regulations concerned with food standards and related regulatory procedures.186 
3.189.   To establish these standard s, the FSSAI establishes panels of independent scientific 
experts.187 The panels  review the draft standards , and provide their opinion s, which are then 
reviewed by a scientific committee , comprising the chairs of the scientific panels and other 
experts.188 Once the draft  standard is approved by the Minister of Health and Family Welfare, it is 
notified for comment to the general public , stakeholders and the WTO. Comments are considered 
by the scientific committees, and appropriate changes are made  to the draft  standard. The revised 
draft standard, validat ed by the scientific committee and a pprov ed by the FSSAI, is sent for legal 
vetting to the relevant  department , to seek consistency with existing legislation and constitutional 
requirements and , thereafter , it is approv ed by the  Minister of Health and Family Welfare , and 
published . 
3.190.   In order to ensure compliance with food safety standards, the FSSAI relies on the National 
Accreditation Board for Testing and Calibration Laboratories (NABL), and referral laboratories. The 
FSSAI also has mobile food -testing laboratories, known as Food Safety on Wheels (FSWs), to assess 
food safety in areas where there are no laboratorie s. 
3.191.   Imports of food are sampled and tested, based on risk profiles established on parameters 
set by the FSSAI.189 FSSAI officers are present at six entry points (Delhi, Mumbai, Kolkata, Chennai, 
Cochin and Tuticorin); in other locations, Customs officials ma y be authorized to act as FSSAI 
officers. The FSSAI has an online system, the Food Import Clearance System (FICS), to clear bills 
of entry selected through the risk management system (RMS), through the SWIFT.  
3.192.   The manufacture, import, research and release o f GMOs, and of GMO products , are regulated 
by the Rules for Manufacture, Use, Import, Export and Storage of Hazardous Micro -Organisms, 
Genetically Engineered Organisms or Cells , 1989 , under the Environment (Protection) Act , 1986. In 
order to implement the Rules, six competent authorities were created under the Ministry of 
Environment, Forest and Climate Change (MoEF&CC)  (Table 3.29).190 
3.193.   The Review Committee on Genetic Manipulation  (RCGM), in the MoEF&C C's Department of 
Biotechnology , developed the Guidelines and Standard Operating Procedures (SOPs) that regulate 
activities involving the use of GMOs in R&D and in industrial and environmental applications, to 
ensure human health and environmental safety. All  projects are reviewed by the RCGM to ensure  
compliance with the Guidelines and SOPs ; subsequently , the production, sale, importation and use 
of hazardous microorganisms, GMOs or cells  may be restrict ed or prohibit ed. 
 
185 Information provided by the authorities.  
186 The regulations and standards developed by the FSSAI are available on the FSSAI website . Viewed 
at: fssai.gov.in.  
187 Sections 13 , Food Safety and Standards Act, 2006 . 
188 Section 14 , Food Safety and Standards Act,  2006.  
189 Food Safety and Standards (Import) Regulations, 2017.  
190 MOEF&CC, What's New.  Viewed at:  http://envfor.nic.in ; and D epartment of Biotechnology, 
Committees. Viewed at: https://ibkp.dbtindia.gov.in/Content/Commitee?AspxAutoDetectCookieSupport=1 . WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.29 Competent authorities  
Authorities  Role 
Advisory   
Recombinant DNA Advisory 
Committee (RDAC)  Recommend s safety regulations related to recombinant research, use and 
applications  
Regulatory/ approval   
Genetic Engineering 
Appraisal Committee (GEAC)  Monitors the safety of research projects  involving hazardous 
microorganisms, GMOs , and products thereof  
Review Committee on 
Genetic Manipulation 
(RCGM)  Develops the G uidelines  and Standard Operating Procedures (SOPs)  to 
regulate  the use of GMOs in R&D and  in industrial and environmental 
applications  
Institutional Biosafety 
Committee (IBSC)  Implement s biosafety guideline s in institution s handling hazardous 
microorganisms and/or GMOs  
Monitoring   
State Biotechnology 
Coordination Committee 
(SBCC)  Inspect s, investigate s and take s punitive action in the case of violations of 
statutory provisions. Periodically review s the safety of measures applied at 
various institutions handling G MOs 
District Level Committee 
(DLC)  Monitor s the implementations of safety regulations in installations engaged 
in the use of GMOs /hazardous microorganisms , and their application in the 
environment  
Source:  MoEF&C C. 
3.194.   The RCGM issues the clearance letters/import  permits for GMOs; however, these  must be 
authorized by the Genetic Engineering Approval Committee (GEAC). The RCGM may also visit the 
sites where recombinant DNA projects are carried out,  to ensure compliance with the G uidelines and 
SOPs.  
3.195.   During 2015-20 (June) , India notified 15 5 new SPS measures to the Committee on SPS, 
most of which  were related to food safety. According to the notifications, the SPS measures comply 
with, or are based on , relevant international standards , and they mostly apply t o all Members. India 
took one emergency measure  that applies to all trading partners .191 During the review  period, 
Members raised seven concerns, of which two were resolved.  
3.3.4   Competition policy and price controls  
Competition policy  
3.196.   Competition is regulated by the Competition Act, 2002 , the Rules and Notifications issued 
by the Ministry of Corporate Affairs (MCA) , and the Regulations issued by the Competition 
Commission of India (CCI).192 In 2017, the Competition Act  was amended ; as a result, the 
Competition Appellate Tribunal (COMPAT) was replaced by the National Company Law Appellate 
Tribunal (NCLAT) . However, the procedures to appeal orders remain broadly unchanged.193 
3.197.   In 2018, the Competition Law Review Committee  was set up by the MCA, to review India's 
competition legislation and to consider international best practice .194 The Committee's 
recommendations were released in 2019. They included: (i) the adoption of provisions to identify 
hub-and-spoke agreements (anti -competitive practices);  (ii) the insert ion of an express provision to 
cover all kinds of anti -competitive agreements that may not be classified strictly as either horizontal 
or vertical arrangements ; (iii) the adoption of a mechanism to provide the possibility to opt for a 
settlemen t and/or commitment (anti -competitive practices)195; (iv) the creation of a green channel 
route to provide automatic approval for combinations (i.e. mergers, acquisitions, and 
amalgamations); and (v) the inclusion of thresholds  for combinations in the d igital sector. The 
Committee also made recommendations regarding governance in CCI and NCLAT investigation 
 
191WTO Document G/SPS/N/IND/249, 26 Fe bruary 2020.  
192 The legislation may be viewed at: https://www.cci.gov.in/ . 
193 Section 53A of the Competition Act, 2002, amended by the Finance Act, 2017.  
194 Press Information Bureau (PIB), Press Release, Government constitutes Competition Law Review 
Committee to review the Competition Act , 30 September 2018 . Viewed at: 
https://pib.gov.in/newsite/PrintRelease.aspx?relid=183835 . 
195 Settlements apply to cartels; they require an admission of guilt from the parties. Commitments apply  
to all cases other than cartels , and do not require any admission of guilt . WT/TPR/S/ 403/Rev.1  • India  
 
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  procedures, and fines.196 The Competition Act is being reviewed to implement these 
recommendations.  The green channel route for combinations has alrea dy been adopted.197 
3.198.   The CCI  is the competition regulatory authority; it is an autonomous entity accountable to 
the Central Government198, which finances it and appoints its members.199 
3.199.   In general, the Competition Act applies to all economic operators (public and private, Indian 
and foreign) and to all sectors. Exceptions continue to apply for public entities that operate in sectors 
related to atomic energy , defence and space, and minting currency .200 In addition, operators in the 
banking, maritime, and oil and gas sectors are still exempt from the application of certain provisions 
of the Act (Table 3 .30). Sector -specific provisions, such as the guidelines for mergers and 
acquisitions in the telecom sector, are also issued by the regulator. However, t he CCI may i ntervene 
in all sectors , even if there are specific regulations.201 
Table 3.30 Sector -specific exemptions to the Competition Act  
Operators  Sections of the Competition 
Act exempt of application  MCA 
notification 
number  Duration of the 
exemption 
(end -year)  
Banking compan ies in respect 
of which the Central 
Government issued a 
notification under Section 45 of 
the Banking Regulation Act, 
1949 Section 5 (combinations); Section 
6 (regulation of combinations)  S.O. (E), 
11.03.2020a 5 years (20 25) 
Nationalized banks  Section 5 (com binations); Section 
6 (regulation of combinations)  S.O. 2828(E), 
30.08.2017  10 years (2027)  
Regional rural banks  Section 5 (combinations) ; Section 
6 (regulation of combinations)  S.O. 2561(E), 
10.08.2017  5 years (2022)  
SOEs operating in the oil and 
gas sectors  Section 5 (combinations) ; Section 
6 (regulation of combinations)  S.O. 3714(E), 
22.11.2017  5 years (2022)  
Vessel -sharing agreements  Section 3 (anti -competitive 
agreements)b S.O. 3250(E),  
04.07.2018c 3 years  (2021 ) 
a The exemption was initially introduce d in 2013 ( S.O. 93 (E), 08  January 2013). 
b The exemption does not apply if the vessel -sharing agreements result in horizontal agreements 
aimed at price -fixing,  limiting capacity/sales  or allocating market s/customer s. 
c The exemption  was initially introduced in 2013 (MCA Notification S.O. 3641(E), 11 D ecember 2013).  
Source:  WTO Secretariat; information provided by the authorities; and CCI, Notification . Viewed at: 
https://www.cci.gov.in/notification/111 . 
3.200.   In general, agreements that cause, or may ca use, or are likely to cause an "appreciable 
adverse effect on competition" are prohibited. These include horizontal agreements (e.g. cartels) 
and vertical agreements. However, such prohibitions may not apply if: (i) they relate exclusively to 
exports; (ii)  they impose restrictions in order to protect IPRs; or (iii) they help increase efficiency.202 
3.201.   Investigations regarding anti -competitive behaviour are initiated by the CCI on its own 
behalf, or if relevant information is provided to the CCI, or if suggested  by the central or states' 
governments or by statutory authorities (e.g. sectoral regulators).203 Horizontal agreements are 
aimed at, inter alia , fixing prices, limiting sales, and allocating markets or customers. Various criteria 
 
196 PRS Legislative Research, Report of the Competition Law Review Committee.  Viewed at: 
https://www.prsindia. org/policy/report -summaries/report -competition -law-review -committee . 
197 Information provided by the authorities.  
198 OECD document DAF/COMP/GF/WD(2016)62, Independence of Competition Authorities – from 
Designs to Practices , Contribution from CUTS  to the Globa l Forum on Competition, 10 November 2016. Viewed 
at: https://one.oecd.org/document/DAF/COMP/GF/WD(2016)62/en/pdf . 
199 WTO document WT/TPR/S/313/Rev.1, 14 September 2015.  
200 Section 2( h), Competition Act, 2002.  
201 Information provided by the authorities.  
202 Section 3, Competition Act, 2002; and OECD document DAF/COMP/WD(2019)4, Licensing of IP rights 
and competition law - Note by India, 10 May 2019 . Viewed at: 
https://one.oecd.org/document/DAF/COMP/WD(2019)4/en/pdf . 
203 Section 19(1), Competition Act, 2002.  WT/TPR/S/ 403/Rev.1  • India  
 
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  are considered by the CCI to assess if there is a horizontal agreement and if it has an adverse effect 
on competition.204 
3.202.   Prior to 2017, only  enterprises that took part in a cartel could apply for leniency to seek a 
penalty reduction, in exchange for disclosing "full, true, and vita l" information to the CCI. In 2017, 
the scope of these benefits was enlarged to individuals that participate in a cartel on behalf of an 
enterprise. In addition, since 2017, the benefits may be granted to more than three applicants. A 
reduction of up to 10 0% in the amount of the fine may be granted to the first applicant that makes 
the "vital" disclosure to the CCI; 30% or 50% reductions  may be granted to the second and 
subsequent applicants, respectively .205 
3.203.   Vertical agreements seek to, inter alia , establis h exclusive supply and distribution 
arrangements. These are prohibited if they cause an adverse effect on competition in the market. 
In addition, certain conducts  (e.g. denial of market access, predatory pricing,  and imposition of 
unfair terms/conditions ) are prohibited when effected by an operator that holds a dominant position 
in a relevant market. The CCI analyses several variables to determine the abuse of dominant 
position, including market share; however, the Co mpetition Act does not specify any threshold to 
determine market share. There are thresholds only for the telecoms sector, and these are specified 
in the Guidelines. O nce dominance is established, the conduct is assessed to see if abuse of dominant 
positio n, within the meaning of the provisions of the Act , has been established . 
3.204.   India's legislation refers to three types of combinations: acquisitions, mergers, and 
amalgamations. Certain combinations are exempt from notification; others must be notified to, an d 
approved by, the CCI, if they exceed a certain threshold (Table  3.31). Thresholds should be revised 
to reflect fluctuations in the wholesale price index; they were last revised and increased in  2016.206 
Table 3.31 Thresholds for the notification of combinations, 2016 -19 
Criteria  Individual enterprises  Group s of enterprises  
In India  In India and abroad  In India  In India and abroad  
Value of 
assets  >INR 20 billion  >USD 1 billion, including at 
least INR 10 billion in India  >INR 80 billion  >USD 4 billion, including at 
least INR 10 billion in India  
 
OR 
 
Turnover  >INR 60 billion  >USD 3 billion, including at 
least INR 30 billion in India  >INR 240 billion  >USD 12 billion, including at 
least INR 30 billion in India  
Source:  MCA Notification S.O. 675 (E), 4 M arch 2016.  
3.205.   Since 2015,  India has also  maintained exemptions for small transactions (the de minimis  
exemption), which was initially introduced in 2011 for five years , and subsequently extended i n 2016 
for five further years.207 As a result , notifications are not required if the asset value does not exceed 
INR 3.5 billion or the turnover does not exceed INR 10 billion. Prior to 2017, the thresholds were 
INR 2.5 billion and INR 7.5 billion , respectively. The scope of the exemption was also enlarged to 
include mergers and amalgamations ; previously, only acquisitions were considered. In addition, 
groups that have less than 50% of the voting rights in other enterprises are also exempt from the  
notification requirement , as they are considered small transactions.208 
3.206.   In addition, currently,  10 categories of combinations  are "exempt" from the notification 
requirement, since they are not likely to cause an "appreciable adverse effect on competition".209 
 
204 Sections 3(3) and 19(3), Competition Act, 2002.  
205 Section 46, Competition Act, 2002; CCI (Lesser Penalty) Regulations, 2009, amended by the CCI 
(Lesser Penalty) Amendment Regulations, 2017; CCI, Cartel Enforcement and Competition , ICN Special 
Project . Viewed at: 
https://www.cci.gov.in/sites/default/files/whats_newdocument/ICN%20SPECIAL%20PROJECT%202018.pdf ; 
and CCI, Booklets . Viewed at:  https://www.cci.gov.in/advocacy -booklet/78 . 
206 MCA Notification S.O. 675 (E), 4 M arch 2016.  
207 MCA Notifications S.O. 482(E), 4 March  2011; and  S.O. 988(E), 2 9 March 2017.  
208 MCA Notifications S.O. 481(E), 4 M arch 2011; and S.O. 673(E), 4 March 2016.  
209 Schedule I of the CCI (Procedure in r egard to the Transaction of Business relating to Combinations) 
Regulations, 2011 lists the exemptions. The list was amended in 2012, 2013, 2014, 2015, and 2016.  WT/TPR/S/ 403/Rev.1  • India  
 
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  The exemptions, which were amended several times over the review period, refer mainly to the 
acquisition of shares and/or voti ng rights.  
3.207.   In 2015 –20, India introduced various changes regarding the procedure to file a combination. 
The requirement to notify a combination within 30 days of its signature was suspended in 2017, for 
five years, because it was considered too short to com pile the necessary information required, 
especially when combinations included international entities.210 Prior to the suspension of the 
deadline, parties were often fined for not complying with deadlines, which constituted a financial 
burden.211 Since 2017,  a combination may be notified to the CCI at any time, as long as the approval, 
if needed, is granted before the transaction is completed.212 
3.208.   In addition, filing requirements were simplified and clarified (Table  3.32). To this end, the 
green channel route w as adopted in 2019 as an automatic approval for combinations that do not 
require an exhaustive assessment. To use the automatic approval  process, parties request 
assistance from the CCI, to assess if they qualify . If the green channel is used, parties  self-assess  
the transaction , based on specif ic criteria .213 By February 2020,  nine combinations had been filed 
through the green channel . In all other cases, the CCI has 210 days from the date of filing to approve 
(or reject) a combination.214 
Table 3.32 Main changes regarding filing a combination notice, 2015 -19 
Amendment 
date Description  
CCI (Procedure in regard to Transaction of Business relating to Combinations) Regulations, 2011  
13.08.2019  The green channel route was introduced for certain types of combinations: ( i) those that do 
not produce/provide similar, identical or substitutable products or services; and ( ii) those 
that are not engaged in the production, supply, distribution, storage, sal e, service or trade 
in products/services which : are at different level s of the production /supply  chain or are 
complementary to each other  
09.10. 2018 Clarification was provided as to the procedures that were included in, or excluded from , the 
210-day dead line to complete an investigation  
Parties may suggest and adopt voluntary remedies  to take, in the case of infringement  
In the case of a significant lack of information, parties may withdraw and re -submit the 
notice, without facing an invalidation of the already -filed notice ; fees already  paid are 
adjusted if refiling is done within three months  from the date of withdrawal  
07.01. 2016 Parties are given the opportunity to  be heard , before the CCI invalidates a notice  
01.07. 2015 The requirements for filing a notice were simplified  
The timeline for reviewing notices was increased from 30 calendar days to 30  working days  
The parties are informed of invalidation  of a notice filed with the Commission within seven 
working days of the decision  
Combinations under review are posted on the CCI website  
Procedures to request confidentiality were introduced  
Source:  WTO Secretariat, based on CCI, Regulation as printed in Official Gazette . Viewed at: 
 https://www.cci.gov.in/regulations_as_printed_in_official_gazette ; and CCI (various year s), Annual 
 Report . Viewed at: https://www.cci.gov.in/annual -reports . 
3.209.   In 2014/15 –2018/19, the CCI initiated 209 investigations on alleged anti -competitive 
practices ; 93 were initiated by the CCI  itself. In 74 cases, the CCI found illegal  practices, including 
47 cartels  (Table 3.33) . Cartel ization was greatest in sectors such as health and p harmaceuticals ; 
information and broadcasting ; and chemicals and fertilizers. In ad dition, 27 operators were found 
guilty of abusing their position, in sectors such as coal and r eal estate. The CCI approved most of 
the combinations that were notified, which took place in sectors such as financ ial market s; 
pharmaceuticals and h ealthcare ; information technology ; the a utomotive industry;  power; and 
media and e ntertainment ; 39 combinations were rejected , as the notice was  incomplete . 
 
210 Information provided by the authorities.  
211 Sections 6(2) and 43A, Competition Act, 2002.  
212 Global Competition Review, India: Merger Control . Viewed at: 
https://globalcompetitionreview.com/insight/the -asia-pacific -antitrust -review -2019/1188995/india -merger -
control . 
213 CCI, Speeches - Speech by the CCI Chairperson, 16 September 2019. Viewed at: 
https://www.cci.gov.in/speeches ; and CCI (Procedure in regard to the Transaction of Business relating to 
Combinations) Amendment Regulations, 2019 , 13 August 2019).  
214 Section 31(11), Competition Act, 2002.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 3.33 Competition data, 2014/15 -2018/19  
 2014/15  2015/16  2016/17  2017/18  2018/19  
Anti-competitive practices       
Number of investigations initiated  41 23 100 23 22 
Number of investigations completed  34 32 23 36 51 
Number of anti -competitive practices 
deemed illegal  20 14 7 12 21 
Cartels  8 9 5 7 18 
Abuse of dominance  12 5 2 5 3 
Number of appeals  31 34 31 37 46 
Combinations       
Notified  98 125 113 64 94 
Approved  82 107 104 63 78 
Rejected  6 12 11 4 6 
Source:  Information provided by the authorities.  
Price control  
3.210.   India continues to control the price of some crops to ensure that farmers  can sell at a 
minimum support price (MSP) and to procure food for the public distribution  system (PDS) . In 2019, 
24 crops  were subject to M SPs (Table 3.34).  MSPs are established before the two planting/sowing 
seasons (i.e. kharif and rabi) by the Department of Agriculture Cooperation and Farmers' Welfare 
(DAC&FC), following recommendations made by the Commission for Agricultural Costs and Prices 
(CACP) . MSPs are set for the country as a whole; however, since the variables used to determine 
MSPs, specifically the production costs, may vary from state to state, the CACP uses an all -India 
weighted average cost of production when making its recommendations to establish the MSPs.215 An 
extra payment (bonus) above the MSPs, may also be given to encourage farming of certain crops in 
certain years (e.g. oilseeds and pulses 2016/17 216); in 2019/20, no bonuses were paid.217 
Table 3.34 Crops subject to minimum support prices, 2019/20  
Kharif crops  Arhar; bajra; cotton; groundnut s (in shell) ; jowar; maize; moong; niger  seed; paddy; 
ragi; sesam e; soyabean s (yellow); sunflower seed s; and urad  
Rabi crops  Barley; gram; masur (lentil s); rapeseed/mustard  seeds ; safflower  seeds ; toria; and 
wheat  
Other crops  Copra; de -husked coconut; and jute  
Source:  DAC&FC, Minimum Support Prices (MSP) for Kharif Crops of 2019 -20 Season . Viewed at: 
http://agricoop.nic.in/sites/default/files/MSP_2019 -20%20%28English%29.pdf . 
3.211.   Farmers may sell to central and state procurement  agencies  at MSPs218, or on the open 
market when market prices are higher. If market prices fall below the MSPs, the states/UTs may 
implement three schemes: (i) the Price Support Scheme (PSS); (ii) the Price Deficiency Payment 
System (PDPS); and (iii) the Pilot of Private Procurement and Stockist Scheme (PPPS).   
3.212.   The PSS applies to some crops  subject to MSPs, if they comply with "fair average quality" 
norms. This Scheme is in place to en sure that farmers may sell their produce at the MSPs . Under 
 
215 CACP, Determinants of MSP . Viewed at: http://cacp.dacnet.nic.in/content.aspx?pid=62 . 
216 Lok Sabha Unstarred Question No. 1589, 25 Jul y 2017 . Viewed at: 
http://www.indiaenvironmentportal.org.in/files/file/growth%20of%20farm%20income.pdf . 
217 MSPs are published online CACP, Determinants of MS P. Viewed at: 
http://cacp.dacnet.nic.in/content.aspx?pid=62 ; Farmers' Portal, Minimum Support Prices. Viewed at: 
https://farmer.gov.in/ms pstatements.aspx ; DAC&FW, Minimum Support Prices (MSPs) for Kharif Crops of 
2019-20 season. Viewed at: http://agricoop.nic.in/recentinitiatives/ minimum -support -pricesmsps -kharif -crops -
2019-20-season ; and DAC&FW, Minimum Support Prices of Rabi Crops of 2019 -20 season to be marketed in 
2019-20. Viewed at: http://www.agricoop.nic.in/recentinitiatives/minimum -support -price-rabi-crops -2018-19-
season -be-marketed -2019-20. 
218 Central procurement agencies are the Central Warehousing Corporation, the Cotton Corporation of 
India, the  Food Corporation of India, the Jute Corporation of India, the National Agricultural Cooperative 
Marketing Federation of India, the National Consumer Cooperative Federation of India, and the Small Farmers 
Agro Consortium.  WT/TPR/S/ 403/Rev.1  • India  
 
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  the PSS, procurement agencies purchase at the MSP.219 The Scheme is f ully financed by the Central 
Government.220 During the period under review, the list of crops covered by the PSS was revised, 
and the maximum statutory quantity that may be procured was increased (Table  3.35).  
Table 3.35 Changes to the Price Support Scheme (PSS) over the review period  
 2014  Guidelines  2018  Guidelines  
MSP c rops covered by the PSS  Cotton, oilseeds, and pulses  Copra , oilseeds, and pulses  
MSP c rops not covered by the 
PSS  Copra, coarse grains, d e-husked 
coconut , jute, paddy, and wheat  Cotton, coarse grains, de-husked 
coconut , jute, paddy, and wheat  
Duration of the PSS  Maximum 90 days (term may be 
extended)  Maximum 90 days; 6 months for 
copra  (terms may be extended)  
Daily procurement threshold  50 kg per day and per farmer  50 kg per day and per farmer  
Maximum procurement quantity  25% of the production  40% of the production  
Support granted to encourage 
procurement  Exemption of the states' mandi taxa 
and logistic arrangements  Exemption of all states' taxes 
and logistic arrangements  
a A fee on the sale and purchase of agricultur al produce.  
Source:  WTO Secretariat, based on Guidelines for Price Support Scheme (PSS) (Oilseeds, Pulses and Cotton), 
2014. Viewed at: http://agricoop.nic.in/sites/default/files/PSS%20GUIDELINES%20final.pdf ; and 
Amended Guidelines for Price Support Scheme (PSS) (Pulses, Oilseeds and Copra) under PM -AASHA, 
2018. Viewed at: http://fci.gov.in/app/webroot/upload/Procurement/PSS%20Guidelines.pdf . 
3.213.   The PDPS and the PPPS ar e two new schemes introduced in 2018/19. The PDPS is an 
alternative to the PSS. Under this System, the Government does not purchase; a cash transfer equal 
to the difference between the market price and the MSP is made to the farmers.221 Under the PPPS, 
an alternative to the PSS and the PDPS, private procurement agencies purchase, at the MSP price, 
directly from farmers.222 The private procurement agencies are compensated by a maximum of 15% 
of the MSP of its services; thus, the private agency bears some of th e losses associated with the 
Scheme.  
3.214.   The Market Intervention Scheme (MIS) is implemented on request by the states/UTs, when 
there is a decrease in prices caused by a bumper crop. The MIS applies to perishable crops for which 
there is no MSP. It is implemen ted if there is a 10% decrease in market price or a 10% increase in 
production over the previous year. Under the MIS, perishable crops are purchased by procurement 
agencies at a pre -determined market intervention price that covers production costs. The MIS  is 
implemented for a specific period or until the market prices stabilize (whichever is earlier).223 
3.215.   Sugarcane is subject to a fair and remunerative price (FRP), i.e. the minimum price that 
sugar mills must pay to farmers (INR 275/quintal in 2019/20). The FRP is fixed by the DAC&FC, 
following the CACP's recommendations. The FRP is linked to a basic recovery rate that was increased 
from 9.5% to 10% over the review period. A premium (of 1% of the FRP) for each 0.1% increase in 
the recovery rate may also be aw arded. A reduction (of 1% of the FRP) may also apply for each 
 
219 OECD/ICRIER (2018), Trends and Evaluation of Agricultural Policies in India, Agricultural Policies in 
India, OECD Publishing. Viewed at: https://www.oecd -ilibrary.org/agric ulture -and-food/agricultural -policies -in-
india_9789264302334 -en. 
220 Amended Guidelines for Price Support Scheme (PSS) (Pulses, Oilseeds and Copra) under PM -AASHA,  
2018. Viewed at: http://fci.gov.in/app/webroot/upload/Procurement/PSS%20Guidelines.pdf . 
221 Department of Agriculture and Farmer Welfare, Guideline for PDPS . Viewed at: 
http://agricoop. nic.in/sites/default/files/Guidelines%20PDPS.pdf ; and CACP (2018), Price Policy for Kharif 
Crops: The Marketing Season 2018 -19. Viewed at: 
http://cacp.dacnet.nic.in/View Reports.aspx?Input=2&PageId=39&KeyId=615 . 
222 CACP (2019), Price Policy for Kharif Crops: The Marketing Season 2019 -20. Viewed at: 
http://cacp.dacnet.nic.in/ViewReports.as px?Input=2&PageId=39&KeyId=669 .  
223 MIS. Viewed at: http://agricoop.nic.in/sites/default/files/MIS_0.pdf ; and Arthapedia, Market 
Intervention Scheme (MIS) . Viewed at: 
http://www.arthapedia.in/index.php?title=Market_Intervention_Scheme_(MIS) ). WT/TPR/S/ 403/Rev.1  • India  
 
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  0.1% decrease in the recovery rate.224 The price of white/refined sugar at the mill as well as the 
ex-mill price of ethanol are also controlled.225 
3.216.   India continues to implement the Public Distribu tion System (PDS) that facilitates the supply 
of food grains (rice, wheat, and coarse grains), sugar, and kerosene at subsidized prices. The System 
is implemented by the central and state governments. The central procurement agency, the Food 
Corporation of  India (FCI), is responsible for procurement, storage, transportation, and bulk 
allocation. The state governments are responsible for distributing the commodities through fair -price 
shops.226 
3.217.   The retail price of 14.2 kg LPG cylinders, sold by SOEs, for dome stic use continues to be 
controlled. The price is determined by the state -owned oil marketing companies (OMCs), i.e. Indian 
Oil Corporation (IOC) Ltd., Bharat Petroleum Corporation (BPC) Ltd., and Hindustan Petroleum 
Corporation (HPC) Ltd., in line with ch anges in international market prices and other market 
conditions. LPG prices are revised every month.  
3.218.   The price of natural gas extracted by state -owned oil companies (IOC and Oil and Natural 
Gas Corporation Limited (ONGC)) from existing fields227 is still subject to an administered pricing 
mechanism (APM). Power -generation plants, and industries such as: fertilizer, steel, refineries, 
petrochemicals, and LPG plants owned by the state -owned GAIL (Gas Authority of India Ltd.) and 
ONGC, are considere d priority sectors regarding the use of APM natural gas. Moreover, in the North -
Eastern region, the consumption of APM natural gas is subsidized.228 The price of natural gas in 
North -Eastern states is 60% of the price of gas in the rest of India; the balanc e (40%) is paid by 
the national oil companies (NOCs) as a subsidy financed by the Central Government.  
3.219.   The price of urea continues to be controlled (Section 3.3.1).  
3.220.   India continues to set ceiling prices at the retail level for scheduled formulations include d in 
the National List of Essential Medicines.229 The maximum retail price is set based on a market -based 
mechanism, that considers the simple average of the prices of those brands that have more than 
1% of the market share of the total turnover.230 The reta il price of non -scheduled formulations is 
monitored, to ensure that prices remain within 10% of the highest retail price during the preceding 
12 months.231 India also controls the retail price of new drugs.  
3.3.5   State trading, state -owned enterprises, and priva tization  
State trading232 
Imports  
3.221.   India's state -trading policy, regarding imports, did not change substantially since the 
previous Review in 2015. India continues to use state -trading for some agricultural products, 
fertilizer, and some oil products, to ens ure a fair return to farmers, to ensure food security (i.e. 
availability of adequate food for all sections of the society at affordable prices), to manage the 
procurement of fertilizer for farmers, and to implement the domestic support price system for oil  
products. Seven STEs are still in place. However, not all of them have a monopoly on trade; other 
 
224 Department of Food and Public Distribution , General Policy – Sugarcane Pricing Policy . Viewed at: 
https://dfpd.gov.in/gen_policy.htm . 
225 Sugar Price (Control) Order, 2018, and Department of Food and Public Distribution , General Policy – 
Sugarcane Pricing Policy . Viewed at: https://dfpd.gov.in/gen_policy.htm . 
226 Department of Food and Public Distribution . Viewed at: https://dfpd.gov.in/public -distribution.htm . 
227 Existing fields refer to fields awarded prior to the introduction of production -sharing contracts.  
228 Ministry of Petroleum and Natural Gas (2014), Report of the Committee on Gas Pricin g - 2014. 
Viewed at: http://petroleum.nic.in/sites/default/files/committee_report_on_gas_pricing_2014.pdf ; and  
Petroleum Planning and Analysis Cell, Subsid y. Viewed at: 
https://www.ppac.gov.in/content/150_1_Subsidy.aspx . 
229 The National List of Essential Medicines National is contained in the Schedule 1 of the Drugs (Price 
Control) Order, 2013 . National Pharmaceutical Pricing Authority. Viewed at: 
http://www.nppaindia.nic.in/en/utilities/list -of-notified -prices/dpco -2013/ . 
230 Section 4, Drugs (Price Contr ol) Order, 2013.  
231 Section 20, Drugs (Price Control) Order, 2013.  
232 Based on WTO Document G/STR/N/15/IND , 8 November 2018 . WT/TPR/S/ 403/Rev.1  • India  
 
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  companies may be authorized to import products under state trading when the STEs are not able to 
do so (Table 3.36). STEs may procure the products domestical ly and/or import them, depending on 
the domestic supply and demand. However, the Indian Oil Corporation (IOC) has a monopoly over 
imports of some oil products, and MMTC Ltd and Indian Potash on imports of urea.  
Table 3.36 Imports subject to state trading, 2015 –20 
State -trading 
enterprises  Product  HS code  Import value (USD million)  
2015 -16 2016 -17 2017 -18 2018 -19 2019 -20 
Food Corporation of 
India (FCI)  Wheat  1001.19.00  n.a. 0.00 n.a. n.a. n.a. 
1001.99.10  135.37  1,268.64  364.45  0.72 0.64 
Rice 1006.10.90  n.a. n.a. 0.01 0.02 0.01 
1006.20.00  n.a. n.a. n.a. 0.02 0.32 
1006.30.10  n.a. n.a. 0.19 0.27 7.74 
1006.30.20  n.a. n.a. n.a. n.a. n.a. 
1006.30.90  0.91 1.07 1.69 3.95 2.85 
1006.40.00  0.00 0.00 0.01 0.13 0.14 
State Trading 
Corporation (STC)  Copra  1203.00.00  0.32 n.a. 6.48 11.71  10.78  
Coconut (copra) 
oil and its f ractions  1513.11.00  2.86 n.a. n.a. 0.00 0.00 
1513.19.00  3.50 0.06 0.99 0.48 2.02 
STC, Indian Potash 
Ltd., Minerals and 
Metals Trading 
Corporation Ltd. 
(MMTC)  Urea 3102.10.00  2,393.68  1,154.40  1,452.72  1,887.82  2,886.30  
Indian Oil 
Corporation Ltd. 
(IOCL), Bharat 
Petroleum 
Corporation Ltd. 
(BPCL), Hindustan 
Petroleum 
Corporation Ltd. 
(HPCL)  Motor spirit  2710.12.11  0.06 0.00 n.a. 0.00 0.05 
2710.12.12  n.a n.a n.a n.a n.a 
2710.12.13  0.07 n.a. 0.04 0.08 n.a 
2710.12.19  644.16  297.00  70.24  467.29  1,041.34  
Natural gasoline 
liquid  2710.12.20  76.48  10.00  0.02 22.08  395.05  
2710.12.90  1,259.65  1,075.58  645.48  645.12  422.30  
Superior kerosene 
oil 2710.19.10  24.66  0.01 0.03 2.24 7.70 
Aviation turbine 
fuel 2710.19.20  137.33  164.92  180.85  198.47  45.03  
High-speed diesel  2710.19.30  70.62  422.39  463.44  386.61  1,673.36  
Light diesel oil  2710.19.40  0.25 0.14 1.51 4.41 7.19 
n.a. Not applicable . 
Note:  The figure 0.00 represents import  values lower than USD 5,000.  
Source:  WTO documents G/STR/N/15/IND, 8 November 2018; and G/STR/N/16/IND and G/STR/N/17/IND, 
3 October 2019; and DGFT.  
3.222.   The Government , through the Food Corporation of India (FCI) (set up in 1964), procures 
food grains and certain selected agricultural items from farmers at a minimum support price (MSP). 
These products are then distributed through the Public  Distribution System (PDS) at subsidized 
prices to consumers below the poverty line. The FCI also maintains buffer stocks of grains to ensure 
food security. The FCI was granted the right to import cereals, such as bajra, buckwheat, canary 
seed, jawar , millet oats, rice, rye, sorghum, wheat, ragi, and other cereals. However, most of these 
items, except for rice and wheat, were removed from the STE list in 2014.233 
3.223.   In the case of urea, state trading is necessary to implement and manage procurement for 
farmers. India maintains a system of support for both imported and indigenous urea. The quantity 
imported is established in consultation with the Department of Fertilizers and the Department of 
Agriculture and Co -operation.  
Exports  
3.224.   As with imports, India con tinues to grant special privileges to export certain products through 
STEs to, inter alia , allow small and tribal farmers to sell their products abroad, ensure the domestic 
supply of specific goods (i.e. kerosene and LPG), prevent wide domestic price fluct uations, and 
ensure conservation and proper utilization of natural resources (minerals).234 Since 2014/15, a major 
change related to exports under STEs was the removal of onions (since 2014/15) and sugar (under 
 
233 Notification No. 93 (RE -2013)/2009 -2014, 29 September 2014 
234 WTO document G/STR/N/15/IND, 8 November 2018.  WT/TPR/S/ 403/Rev.1  • India  
 
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  TRQ) (since 2019) from the list of exports sub ject to state trading; these products were liberalized, 
and may be exported by any eligible exporter (Table 3.37).  
Table 3.37 Exports subject to state trading, 2015 /16–19/20 
Enterprises  Products  HS code   
2015 /16 to 
2018 /19 HS code  
2019 /20 
2015 /16 
2016 /17 
2017 /18 
2018 /19 
2019 /20 
Indian Sugar 
Exim Corp. 
Ltd.a Sugar (preferential 
quota to the EU and 
the U nited States)  ex 
1701.00.00  n.a. .. .. .. .. .. 
Kudremukh 
Iron Ore Co. 
Ltd.  Iron ore concentrate s 
prepared by 
beneficiation and/or 
concentration of low -
grade ore containing 
40% or less of iron 
produced by the 
Kudremukh Iron Ore 
Company Ltd.  ex 
2601.11.50  ex 
2601.11.50  .. .. .. .. .. 
Iron ore pellets 
manufactured by  the 
Kudremukh Iron Ore 
Company Ltd.  ex 
2601.12.10  n.a. .. .. .. .. .. 
Manganese 
Ore India 
Ltd.b Manganese ores, excl. 
lumpy/blended 
manganese ore with 
>46% Mn  2602.00.00  n.a. 0.29 0.18 7.99 2.00 3.61 
Minerals and 
Metals 
Trading Corp. 
Ltd. 2602.00.00  2602.00.00  
Minerals and 
Metals 
Trading Corp. 
Ltd. Iron ore , other than 
that specified under 
the "free" category  ex 
2601.11.00  2601.11.00  134.38  849.70  586.71  275.68  1,302.74  
Beneficiated chrome 
ore fines/concentrates 
(maximum feed grade 
to be less than 42% 
Cr203)  ex 
2610.00.30  n.a. .. .. .. .. .. 
Chrome ore , friable , 
and concentrates fixes 
containing 47% C r203 
and above  2610.00.40  2610.00.40  19.44  38.41  12.21  16.78  10.43  
Chrome or lumps with 
Cr203 not exceeding 
40% ex 
2610.00.30  ex 
2610.00.30  .. .. .. .. .. 
Low silica, friable/fine 
ore with Cr203 not 
exceeding 52% and 
silica exceeding 4%  ex 
2610.00.90  ex 
2610.00.90  .. .. .. .. .. 
Low silica, friable/fine 
chromite ore with 
Cr203 in the range of 
52%-54% and silica 
exceeding 4%  ex 
2610.00.90  ex 
2610.00.90  .. .. .. .. .. 
Other chrome  n.a. 2610.00.00       
Indian Oil 
Corp. Ltd.  Crude oil  2709.00.00  2709.00.00  n.a. n.a. n.a. n.a. n.a. 
.. Not available  
n.a. Not applicable.  
a Not a STE as at 7 September 2015, through DGFT Notification No. 20/2015 -20, 7 September 2015.  
b Not a STE as at 2019/20.  
Source:  WTO documents G/STR/N/15/IND, 8 November 2018; and G/STR/N/16/IND; and G/STR/N/17/IND, 
3 Octob er 2019; DGFT, Export Import Data Bank ; and data provided by the authorities.  
SOEs and privatization  
3.225.   The participation of SOEs, also known as central public sector enterprises (CPSEs), remains 
important  in the economy ; however, it declined from 16% in 2014/15 to 13.4% in 2018/19 of India's WT/TPR/S/ 403/Rev.1  • India  
 
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  GDP (at current prices).235 Their contribution to employment is also significant, although the number 
of workers employed also declined over the review period, from  1.3 million in 2014/15 to 1  million 
in 201 8/19.236 The CPSEs generated foreign -exchange earnings of INR  1,433.8  billion in 201 8/19.237 
3.226.   The CPSEs operate in all sectors of the economy; they retain a dominant position in many 
markets, such as coal, electricity, mining, petroleum products, steel, and transpor t and logistics. In 
2017/18 (latest data), there were 257 operating CPSEs (235 in 2014/15).238 
3.227.   Disinvestment continued over the review period (Table A3. 4). One of the objectives of 
disinvesting in the CPSES is to comply with the minimum threshold of shares (25%) held by the 
public required for all public enterprises to be listed on India's stock exchanges.239 Disinvestment in 
the CPSEs operating in non -strategic sectors also continued during the period under review.240 The 
revenues from the sale of shares is deposited/invested in the National Investment Fund to, inter 
alia, recapitalize public banks and finance  core infrastructure projects.241 
3.3.6   Government procurement  
3.228.   Government procurement is estimated at 30% of GDP.242 India does not have consolidated 
data regarding government procurement, including the breakdown of the value of contracts by 
procurement method.243  
3.229.   Government procurement is decentralized; it may be carried out by public entities, including 
public enterprises, at central and state levels. However, the Central Government may designate 
procuring entities at the central level. India does not have a ny procuring agenc ies at the central 
level. Until 2017, the Directorate General of Supply and Disposals (DGS&D) was the procuring entity 
at the central level for commonly used goods and services; it was dissolved in 2017, when the 
government e -marketplace (e -GeM) was introduced.244 
3.230.   Government procurement is regulated by several pieces of legislation, in particular by the 
General Financial Rules (GFRs) (Table  3.38). The GFRs  are issued by the Ministry of Finance . They  
contain general provisions, such as the method s and thresholds of procurement , that  apply to all 
sectors. Generic guidelines to implement the GFRs are provided in procurement manuals, also issued 
by the Ministry of Finance; these were last revised in 2017 (goods and services) and 2019 (works).245 
In ad dition, the procuring entities, such as the Ministries of Defence and Railways, may issue their 
own internal procurement manuals which, according to the authorities, are consistent with the 
 
235 In 2015 /16, 13.3% ; in 2016 /17, 12.7%; and in 2017 /18, 12.6%. India Budget, Economic Survey  
2019-20 Statistical Appendix . Viewed at: https://www.indiabudget.gov.in/ec onomicsurvey/doc/Statistical -
Appendix -in-English.pdf ; and information provided by the authorities.  
236 Department of Public Enterprises (2018), Public Survey Enterprises 2017 -18, Volume I; and 
Department of Public Enterprises (2015), Public Survey Enterprises 20 14-15, Volume I. Viewed at: 
https://dpe.gov.in/publication/pe -survey/pe -survey -report  and informa tion provided by the authorities . 
237 Information provided by the authorities.  
238 Department of Public Enterprises (2018), Public Enterprises Survey 2017 -18, Volume I; and 
Department of Public Enterprises (2015), Public Enterprises Survey 20 14-15, Volume I. V iewed at: 
https://dpe.gov.in/publication/pe -survey/pe -survey -report . 
239 Rule 19A of the Securities Contracts (Re gulation) Rules, 1957, amended by the Securities Contracts 
(Regulation)  (Second Amendment) Rules, 2014, and the Securities Contracts (Regulation) (Third Amendment) 
Rules, 2017 . 
240 NITI Aayog (2018), Strategy for New India @75 . Viewed at: 
https:/ /niti.gov.in/writereaddata/files/Strategy_for_New_India.pdf ; and Department of Investment and Public 
Asset Management, Instructions on Strategic Disinvestment . Viewed at: https://dipam.gov.in/instructions -on-
strategic -disinvestment . 
241 Department of Investm ent and Public Asset Management, National Investment Fund . Viewed at: 
https://dipam.gov.in/national -investment -fund. 
242 CCI, Competition Act, 2002: Provisions Relating to Public Procurement , Advocacy Series 9. Viewed 
at: https://www.cci.gov.in/sites/default/files/advocacy_booklet_document/pp.pdf ; and OECD (2014), Smart 
Procurement – Going green: best practices for green procurement – India. Viewed at: 
https://www.oecd.org/governance/procurement/toolbox/search/india -best-practices -green -public -
procurement -gpp-market -capacity -cost-benefit -assessment.pdf . 
243 Information provided by the authorities.  
244 Information provided by the authorities.  
245 Department of Expenditure, Manual for Procurement of Goods, 2017 ; Manual for Procur ement of 
Consultancy and other Services, 2017 ; and Manual for the Procurement of Works, 2019 . Viewed at: 
https://doe.gov.in/procurement -policy -divisions . WT/TPR/S/ 403/Rev.1  • India  
 
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  GFRs.246 States have their own procurement provisions, which should be based on the GFRs; a few 
states also enacted their own procurement acts.  India is an observer to the WTO Government 
Procurement Agreement.  
Table 3.38 Provisions related to government procurement at the central level, 2015 -20 
Legislative provisions  Other provisions  
Contract Act, 1872  General Financial Rules, 2017 , and corresponding procurement 
manuals issued by the Ministry of Finance  
Sales of Goods Act, 1930  Delegation of Financial Powers Rules, 1978  
Prevention of Corruption Act, 1988  Public Procurement Policy for Micro and Small Enterprises  Order, 
2012  
Arbitration and Conciliation Act, 1996  Public Procurement (Preference to Make in India) Order, 2017  
Competition Act, 2002  Pharmaceutical Purchase Policy, 2013  
Central Vigilance Commission Act, 2003  National Digital Communications Policy, 2018  
Right to Information Act, 2005  Manual issued by the Directorate General of Supply and 
Disposals  (DGS&D ) 
Manuals issued by ministries/departments  
Source:  WTO Secretariat, based on the National Institute of Public Finance and Policy (2017), Public 
Procurement in India: Assessment of Institutional Mechanism, Challenges, and Reforms . Viewed at: 
https://www.nipfp.org.in/media/medialibrary/2017/07/WP_2017_204.pdf . 
3.231.   Over the review period, the GFRs were amended several times (including in 2017, 2019 and 
2020) . Some of these amendments include: (i) the use of the government e-marketplace (e -GeM) 
for commonly  used goods and services became mandatory; (ii) new methods (i.e. e-reverse auction 
and two-stage bidding ) were introduced; (i ii) e-procurement was made mandatory for all tenders; 
(iv) provisions to exclude participants we re introduced; (v) the evaluation criteria for the 
procurement of consultancy services were redefined; (vi) publication of tenders in newspapers 
became optional; (vii) fees to obtain tender documents were removed; ( viii) the participation of 
start-ups in p rocurement was facilitated, as requirements for prior turnover and prior experience 
were removed; ( ix) environmental considerations in procurement process were included; and (x)  the 
Code of Integrity was adopted.247 
3.232.   In 2020, on national defence and security  grounds, the 2017 GFRs, were amended to allow 
for the imposition of restrictions (e.g. prior registration and/or screening) on bidders with specific 
origin s.248 Therefore, since July 2020, bidders from trading partners that share land borders with 
India mu st register with the Registration Committee, set up by the Department for Promotion of 
Industry and Internal Trade (DPIIT). Registration is subject to prior clearance from the Ministries of 
External and Home Affairs. Registration is required each time that  bidders from such origin intend 
to participate in a public procurement process. However, up until December 2020, exemptions to 
the registration requirement are in place, for procurement related to COVID -19-required medical 
supplies .249 In addition, trading  partners that receive credit or development assistance from the 
Government are exempt from this registration requirement .250 
3.233.   According to the GFRs, government procurement must be transparent, competitive, and fair. 
Compliance with these principles is monitored by the Competition Commission of India (CCI), which 
carries out investigations on alleged collusive bidding; and the Cen tral Vigilance Commission (CVC) 
which is responsible for ensuring transparency and probity. In addition, the Comptroller and Auditor 
General must audit procurement at the central level; the  Comptroller's reports are presented to  
Parliament. Similar oversig ht is carried out at the state level . 
3.234.   In 2019, five methods were used to procure goods: (i) the advertised tender enquiry or open 
tender (the preferred procurement method); (ii) the limited tender enquiry; (iii) two -stage bidding; 
 
246 Rule 142 of the GFRs, 2017; and Depa rtment of Economic Affairs, Annual Report 2017 -18. Viewed 
at: https://dea.gov.in/sites/default/files/Final%20Annual%20Report%20English.pdf . 
247 Information provided by the authorities.  
248 Office Memorandum No. 6/18/2019/ -PDD, 23 July 2020. Viewed at: https://doe.gov.in/procurement -
policy -divisions ; and PIB, Restrictions on Public Procurement from certain c ountries, 23 July 2020 . Viewed at: 
https://pib.gov.in/PressReleasePage.aspx?PRID=1640778 . 
249 Other exemptions are: bona fide  small procurement, bona fide  procurement made thorugh e -GeM, 
and projects that receive international funding.  
250 Order (Public Procurement No.1), 23  July 2020. Viewed at: https://doe.gov.in/procurement -policy -
divisions . WT/TPR/S/ 403/Rev.1  • India  
 
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  (iv) the single tender en quiry; and (v) the e -reverse auction (Table  3.39). The e -reverse auction 
was introduced in 2017 to increase transparency, facilitate procedures, and promote competition.251 
For instance, since 2018, the Indian Railway e -Procurement Systems (IPEPS) has used the e-reverse 
auction for all high -value procurement, i.e. procurement of goods above INR 100 million and of 
works and services above INR 500 million.252 The use of the procurement method depends on the 
threshold or other factors, such as  a single source of  supply or the complexity and high -value nature 
of the object to be procure d. Up to May 2020, overseas bidders could participate in an a dvertised 
tender enquiry, if goods were not available in India and the contract was above INR 2.5 million. In 
these case s, a global tender enquiry (GTE) was issued. Since  May 2020, in order to promote self -
reliance, Make in India , and MSMEs, global tender enquiries cannot be issued for tenders of up to 
INR 2 billion , or such limit as may be prescribed by the Department of E xpenditure from time to 
time.253 
Table 3.39 Methods for the procurement of goods, 2019  
Method  Description  Threshold  
Advertised 
tender enquiry  All national bidders may participate.  
Overseas bidders may participate in tenders above INR 2 billion if 
goods are not available in India, in which case a global tender 
enquiry is issued.  >INR 2.5 million  
Limited tender 
enquiry  The procuring agency preselects at least three bidders  ≤INR 2.5 million  
Special limited 
tender enquiry  This method may be used for procurement above INR 2.5 million 
instead of the advertised tender enquiry, under certain 
circumstances, such as: (i) emergency -related procurement; 
(ii) public interest; (iii) suppliers are known to the procuring agency; 
and (iv)  the nature of the goods . >INR 2.5 million  
Two-stage 
bidding  This method is used for the procurement of high -value, complex, 
and technical goods. It consists of simultaneously receiving separate 
technical and financial bids. The technical bids are evaluated first; 
only the financial bids of the technically acceptable offers are 
evaluated .  n.a. 
Single tender 
enquiry  Procurement from single suppliers under certain circumstances:  
• suppliers are the original manufacturers or the authorized 
dealers;  
• in case of emergency -related procurement; and  
• standardization of the machinery or spare parts . n.a. 
E-reverse 
auction  Bidders may participate but may be shortlisted , based on 
technical/commercial requirements . Suppliers bid online in an 
interactive process, wherein the lowest bidder may be displaced by 
an even lower bid at any time during the duration of the auction.  
Bids are automatically evaluated by the system.  
This method  may be used, if, inter alia : 
(i) there are enough bidders in the market ; and  
(ii) the criteria to determine the successful bid are quantifiable.  
E-reverse auctions cannot be used for procuring items that are 
strategic or critical . n.a. 
n.a. Not applicable.  
Source:  Rules 158 and 161 -167 of the 2017  GFRs; and Chapter 4 (Modes of Procurement and Bidding 
Systems) of the Manual for Procurement of Goods, 2017.  
3.235.   Small -value  goods may be purchased directly, i.e. no tender is needed.254 The threshold to 
define small -value goods was increased from a maximum value of INR 15,000 to INR 25,000 in 
2017.  
 
251 PIB, Indian Railways to Implement Electronic Reverse Auction for All High Value Procurements of 
Goods, Services and Works, 16 March 2018 . Viewed at: 
https://pib.gov.in/newsite/Print Release.aspx?relid=177570 . 
252 PIB, Indian Railways to Implement Electronic Reverse Auction for All High Value Procurements of 
Goods, Services and Works, 16 March 2018 . Viewed at: 
https://pib.gov.in/newsite/PrintRelease.aspx?relid=177570 .  
253 Ministry of Finance No. F. 12/17/2019 -PPD of 15 May 2020.  
254 Rule 154 of the 2017 GFRs; and Rule 145 of the 2005 GFRs.  WT/TPR/S/ 403/Rev.1  • India  
 
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  3.236.   Documents for tenders and the details of the bid awards must be published on the Central 
Public Procurement Portal (CPPP); publication in newspapers is optional (since 2017).255 Bidders are 
also required to submit their proposals through the CPPP. Exemptions to online publishing and 
submissions may apply for confidentiality or security  reasons.  
3.237.   The method used for the procurement of services depends on the type of service and the 
threshold (Table  3.40). The criteria to evaluate proposals for the supply of consultancy services were 
revised in 2017 to consider both the cost and the qualit y of consultancy; previously, a cost -based 
selection applied.256 The thresholds for the procurement of services remained unchanged over the 
review period.  
Table 3.40 Methods for the procurement of services, 201 9 
Method  Consultancy  
services  Non-consultancy 
services  
A list of potential suppliers is prepared by the procuring 
entity, based on enquiries to other procuring entities  ≤INR 2.5 million  ≤INR 1 million  
An enquiry (expression of interest) is published on the 
Central Public Procurement Portal  (CPPP) >INR 2.5 million  >INR 1 million  
Source:  Rules 183 and 201 of the 2017  GFRs.  
3.238.   Commonly  used goods and services that are listed in the government e -marketplace (e-GeM) 
must be procured from suppliers registered therein (Table 3. 41). E-GeM was launched in 2016; the 
rules to use it were laid down in the 2017  GFRs. The selection of e -GeM suppliers depends on 
thresholds ; these  were modified in 2019. Until 2017, commonly  used goods and services were 
procured through rate contracts concluded by the Directorate General of Supply and Disposals  
(DGS&D ) with one or more bidders for a specified time -period (usually one year), subject to 
predetermined prices, terms and conditions.257 Commonly  used goods and services not yet listed on 
e-GeM must be procured by local purchase committees through open bidding .258 
Table 3.41 Procurement of commonl y used goods/services on e -GeM, 2019  
2017  GFRs  2017  GFRs as amended in 2019  Selection of suppliers  
≤INR 50,000  ≤INR 25,000  The procuring entity may select any of the 
registered suppliers that meet the requirements  
>INR 50,000  
≤INR 3 
million  >INR 25,000  
≤INR 500,000 (INR 3 million for 
automobiles)  The procuring entity must select the lowest bid 
from at least three suppliers  
>INR 3 
million  >INR 500,000 (INR 3 million for 
automobiles)  The procuring entity must select the lowest bid 
through e -reverse auction  
Source:  Rule 149 of the 2017  GFRs, as amended in 2019.  
3.239.   Contracts for repair works  are awarded through limited tenders ( <INR 500,000) or open 
tenders (INR 500,000 to INR 3 million).259 Contract s for repair works of a val ue above INR 3 million , 
and all new work  of any value, are awarded to any public works department or any public 
enterprise.260 
3.240.   The 2017 GFRs apply to all sectors, including the defence, railway, postal, and telegraph 
sectors. However, given the characteristics of these sectors, sector -specific provisions were created 
within the framework of the GFRs. Thus, procurement related to defence adheres to the Defence 
Procurement Procedur e (DPP), 2016, and the Defence Procurement Manual, 2009. Under the DPP, 
 
255 Information provided by the authorities.  
256 Rules 159 -160 and 192 of the 2017 GFRs.  
257 Information provided by the authorities.  
258 Rules 148, 155 (as amended in 2019), and 156(1) of the 2017  GFRs; and Chapter 4 (Modes of 
Procurement and Bidding Systems) of t he Manual for Procurement of Goods, 2017 . 
259 Rules 133(1) and 139 of the 2017  GFRs. 
260 Rules 133(2) and 133(3) of the 2017  GFRs. WT/TPR/S/ 403/Rev.1  • India  
 
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  a new procurement method to promote the purchase of locally designed, developed, and 
manufactured goods was introduced.261 
3.241.   Over the review period, India maintained reservations and pref erences for MSEs and certain 
sectors; and it introduced preferences for locally  manufactured goods under the Make in India 
initiative. Accordingly, hand -woven (khadi) and hand -loom textiles must be purchased exclusively 
from the Khadi Village Industries Co mmission (KVIC) and from the Association of Corporations and 
Apex Societies of Handlooms.262 In addition, the Pharmaceutical Purchase Policy, 2013 , introduced, 
for a period of five years, a  reserv ation for the procurement of 103  medicines from certain state -
owned pharmaceutical enterprises  (whenever feasible) .263 
3.242.   Since  2015, central procuring entities must procure at least 25% (previously 20%) of their 
annual value of procurement from MSEs. Out of the 25%, 3% must be procured from MSEs owned 
by women.264 In ad dition, a 15% preference margin is granted to MSEs; and 358 items, including 
handicrafts, must exclusively be procured from MSEs.265 According to the 2018 Comptroller's audit 
report, more than 5,500 MSEs had benefitted from the preference, but some SOEs had procured 
items reserved for MSEs from other sources.266 
3.243.   The Public Procurement (Preference to Make in India) Order, 2017, revised i n 2018 and 
2019, was issued to promote the manufacturing and production of goods and services in India , with 
a view to enhancing income and employment .267 Under the Order, only local suppliers are eligible to 
bid for contracts (goods, services and works)  that are less than INR 5 million , or a higher threshold 
if the contracting entity so prescribes. Moreover , if there is sufficient  local supply and competition in 
the domestic market, no matter the value of the contract, only local suppliers are eligible to bid. For 
contracts above INR 5  million, a 20% preference margin is granted to local suppliers. Even if foreign 
suppliers provide  better conditions, the Order provides for various mechanisms to award local 
suppliers part of the contract , or to allow them to match the offer of the foreign supplier  (Box 3 .2). 
3.244.   In addition, a local content requirement of at least 50% applies. However, p rocuring entities 
may notify a lower /different  local content  requirement ; for instance, the minimum local content 
notified by the Department of Heavy Industry ranges from 40% to 95%.268 Procurement of less than 
INR 500,000 is not subject to the provisions c ontained in the Order.  
3.245.   Until 2017, a 20% preference was granted to locally manufactured electronic products , which 
qualified technically and complied with minimum value -addition requirements .269 In line with the 
Make in India initiative, under the National Digital Communications Policy, 2018 , the procurement 
of local goods and services containing domestically  owned IPRs is preferred .270 
 
261 PIB, Defence PSUs, 17 July 2019 . Viewed at: 
https://pib.gov.in/Pressreleaseshare.aspx?PRID=1579093 ; and PIB, Defence procurement Policy, 
24 March  2017. Viewed at: https://pib.gov.in/newsite/PrintRelease.aspx?relid=159864 . 
262 Rule 153 o f the 2017 GFRs.  
263 PIB, Pharmaceuticals Purchase Policy (PPP) for Pharmaceutical Central Public Sector Enterprises, 
30 October 2013 . Viewed at: https://pib.gov.in/newsite/PrintRelease.aspx?relid=100336 . 
264 Information provided by the authorities.  
265 Ministry of Micro, Small and Medium Enterprises, Public Procurement Policy for Micro and Small 
Enterprises Order, 2012 . Viewed at: http://dcmsme.gov.in/notification.pdf ; and viewed at: 
https: //msme.gov.in/public -procurement -policy -micro -and-small-enterprises -mses-order -2012. 
266 Office of the Comptroller and Auditor General of India, C&AG's Audit Report No. 18 of 2018 on 
General Purpose Financial Reports of CPSEs, Commercial tabled in Parliament  today,  7 August 2018 . Viewed 
at: https://cag.gov.in/sites/default/files/press_release/Press_18_of_2018.pdf . 
267 Department for Promotion of Industry and Internal Trade, Public Procurement . Viewed at: 
https://dipp.gov.in/public -procurements . 
268 Department of Heavy Industry Notification No. 9/45/2017, 8 June 2018.  
269 Information provided by the authorities; and Ministry of Electronics and Information Technology, 
Preference for Domestically Manufactured Elec tronic Goods (PMA) . Viewed at: https://meity.gov.in/esdm/pma . 
270 Department of Telecommunications, National Digital Communications Policy 2018. Viewed at: 
http://dot.gov.in/sites/default/files/EnglishPolicy -NDCP.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  Box 3.2 Procedures to award contracts under the Public Procurement (Preference to Make 
in India) Order, 2017  
Procurement of goods or works that may be divided , and which are above INR 5 million or above 
the threshold set by the contracting entity  
If the lowest b id is from a local supplier, the contract is awarded to the local supplier  
If the lowest bid is not from a local supplier, 50% of the contract is awarded to the lower bidder, and the rest 
to local suppliers that can match the lowest bid with a margin of preference of 20%  
For procurement of goods and services that cannot be divided , and of services where the bid is 
evaluated based on price  
If the lowest price is from a local supplier, the contract is awarded to the local supplier  
If the lowest bid is not from a local supplier, the contract is awarded to local suppliers that can match the 
lowest bid, within a margin of preference of 20%  
Source:  Section s 3 b) and c) of the Public Procurement (Preference to Make in India) Order, 201 7. 
3.3.7   Intellectual property rights  
National IPR Policy 2016  
3.246.   In 2016, India issued its first National IPR Policy (NIPR Policy) to support the creation of a 
knowledge -driven economy to promote economic and social development.  The Policy  aims at : 
(i) raising general awareness  on IPR ; (ii) promot ing R&D for IP generation; (iii) strengthen ing the 
IPR legal framework; (iv) improv ing IPR administration; (v) generat ing value through IPR 
commercialization; (vi) strengthen ing IPR enforcement; and (vii) enhanc ing IPR-related capacity -
building . The Department for Promotion of Industry and Internal Trade (DPIIT), through the Cell for 
IPR Promotion and Management (CIPAM), created in 2016, is in charge of implementing the NIPR 
Policy (Table  3.42).  
Table 3.42 Implementation of the NIPR Policy, 2016 -20 
Objectives  Measures implemented  since 2016  
IP generation  E-registration ; real -time application  status; electronic payment gateway for 
patent application fees; enhanced online search facilities  
Reduced fee s for patent filing and subsequent procedures for start -ups and 
MSMEs; reduced fee s for trademark  filing for start-ups and MSME s, and  
Scheme for Facilitating Start -Ups IP Protection (SIPP)   
Expedited examination for patent and trademark applications. The categories of 
applicants eligible to seek expedited patent examination  was expanded from 2 to 
10 
Legal framework  Amendments to the Patent Rules, 2003  
Trade Marks Rules, 2017  
Accession to WIPO treaties  
Institutional framework  Streamlining of IPR administration, and automation of procedures  
International cooperation for adoption of best practices  
IPR commercialization  Income tax deduction  
Awareness, capacity -
building, and IPR 
enforcement  Awareness campaigns  and programmes; establishment of Technology and 
Innovation Support Cent res (TISC) and of IP-facilitation centres in universities  
Recruitment of new examiners for patents and trademarks  
Capacity -building programmes for IP officials  
Toolkit for police officers  
State -level IPR enforcement  
Enforcement of the Commercial Courts, Commercial Division and Commercial 
Appellate Divisions Act, 2015  
Source:  WTO Secretariat, based on IP India, Annual Report  (various years). Viewed at: 
http://www.ipindia.nic.in/annual -reports -ipo.htm ; and SlidePlay er, National IPR Policy, 2016 & Its 
Implementation , 8 January 2019. Viewed at: https://slideplayer.com/slide/11714454/ . 
3.247.   The NIPR Policy considers the possibility of offering financial support and fiscal incentives to 
encourage IP generation and commercialization. In this regard, a reduction of 80% on patent filing WT/TPR/S/ 403/Rev.1  • India  
 
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  fees is granted to start -ups; and, since 2016, start -ups may  deduct profits and gains derived from 
IP activities from taxable income .271 
Changes to the IPR institutional and legal frameworks  
3.248.   Under the NIPR Policy, the institutional IPR framework was restructured to improve 
coordination, and to better promote and pro tect IPR. In 2016, the DPIIT  became India's single IPR 
nodal  agency , except with regard to the administration of plant varieties (Table  3.43). 
Table 3.43 Changes to the IPR institutional framework, 2015 -19 
IPR Before 2016  After 2016  
Copyright  Department of Higher Education  DPIIT  
Geographical indications  DPIIT  DPIIT  
Industrial designs  DPIIT  DPIIT  
Patents  DPIIT  DPIIT  
Plant varieties  Department of Agriculture , 
Cooperation and Farmers' Welfare  Department of Agriculture , 
Cooperation and Farmer's Welfare  
Semi-conductor integrated 
circuit layout -designs  Department of Information 
Technology  DPIIT  
Trademarks  DPIIT  DPIIT  
Note:  Before 2019, the DPIIT was known as the Department of Industrial Policy and Promotion (DIPP).  
Source:  WTO Secretariat.  
3.249.   In addition, in 2016, the Copyright Board  merged with the Intellectual Property Appellate 
Board (IPAB) .272 Thus, the IPAB deals with appeals regarding the granting of patents and the 
registration of copyright, industrial designs, geographical indications (GIs), and plant varieties.273 
3.250.   In order to meet the objectives outlined in the NIPR, the IPR legal framework was revised 
over the period under review (Table  3.44). The Copyright Rules, 2013, were amended in 2016, to 
prevent conflicts between copyright and trademark rights, in relation to services (previously, only 
goods were considered); the Patent Rules, 2003, were amended in  2016, 2017, and 2019, to 
streamline and digitalize filing procedures; and new Trade Marks Rules were enacted in 2017, to 
simplify and modernize the registration process, by repealing the Trade Marks Rules,  2002. In 2020, 
additional draft amendments to the  Copyright Rules, GI Rules, Designs Rules, and Patents Rules 
were under consideration.274 
Table 3.44 Changes to the IPR legislation, 2015 -19 (November 2019)  
IP Acts Changes 
since 
2015  Rules  Changes since 
2015  
Copyright  Copyright Act ,1957 (as 
amended  by the 
Copyright  
(Amendment)  Act, 
2012)  Not 
amended  Copyright Rules, 2013  Copyright 
(Amendment) Rules, 
2016 
GIs Geographical 
Indications of Goods 
(Registration and 
Protection) Act, 1999  Not 
amended  Geographical Indications 
of Goods (Registration and 
Protection) Rules, 2002  Not amended  
Industrial 
designs  Designs Act, 2000  Not 
amended  Designs Rules, 2001 (as 
amended by the Designs 
(Amendment) Rules, 2008 
and the Designs 
(Amendment) Rules, 
2014)  Not amended  
 
271 Finance Act, 2016; and information provided by the authorities.  
272 PIB, National IPR Policy, 27 December 2018 . Viewed at: 
http://www.pib.nic.in/Pressreleaseshare.aspx?PRID=1557418 . 
273 Information provided by the authorities.  
274 Information provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  IP Acts Changes 
since 
2015  Rules  Changes since 
2015  
Patents  Patents Act, 1970 (as 
amended by the 
Patents (Amendment) 
Act, 2005)  Not 
amended  Patents Rules, 2003  Patents 
(Amendm ent) Rules, 
2016; Patents 
(Amendment) Rules, 
2017; Patents 
(Amendment) Rules, 
2019 
Plant 
varieties  Protection of Plant 
Varieties and Farmers' 
Rights Act, 2001  Not 
amended  Protection of Plant 
Varieties and Farmers' 
Rights Rules, 2003  Not amended  
Semi-
conductor 
integrated 
circuit layout 
designs  Semi-conductor 
Integrated Circuit 
Layout Design Act, 
2000 Not 
amended  Semi-conductor Integrated 
Circuit Layout Design 
Rules, 2001  Not amended  
Trademarks  Trade Marks  Act ,1999 
(as amended by the 
Trade Marks 
(Amendment) Act, 
2010)  Not 
amended  Trademarks Rules, 2002  Repealed by the 
Trademarks Rules, 
2017  
Source:  WTO Secretariat; and information provided by the authorities.  
3.251.   In addition to the legislation, there are guidance documents on patents, trademarks, and 
GIs to assist examiners in implementing the relevant act and rules.275 For instance, to ensure 
consistent and identical interpretation, the guidelines for patents help determine the patentability of  
biotech, ph arma, traditional knowledge , and biological materials, and computer -related inventions.  
3.252.   There is no specific legislation to protect data-exclusivity rights  in India . There was an 
attempt  to introduce protection for data exclusivity in agro-chemicals, but the provisions were 
removed from the Pesticide Management Bill, 2008, which was revised in 2016 . 
3.253.   India has no specific legislation to protect trade secrets. Over the review period, parties 
continued to rely on contract clauses of non -disclo sure to safeguard trade secrets. India also 
recognizes the common law approach, which allows court proceedings against disclosure of trade 
secrets, based on breaches of  confidence , and contractual obligations .276 In addition, under the 
Information Technolog y Act, 2000 (Section 72A), the disclosure of unauthorized information may be 
punished by a fine (up to INR 500,000) and/or by a three -year imprisonment term; however, this 
protection is universal, not limited to the IT industry. The protection of trade sec rets is identified in 
the NIPR Policy as a prerequisite to strengthen the IPR legal framework. A toolkit to help stakeholders 
protect trade secrets was developed by the CIPAM in 2019.277  
3.254.   Over the review period, India acceded to various WIPO treaties (Table  3.45). India was the 
first WIPO member to ratify the Marrakesh Treaty  that sets mandatory obligations to make copyright 
works accessible to people with visual disabilities.278 The Copyright Act, 1957, was amended in 2012 
to facilitate the access to the works by people with visual disabilities.279 India's accession to the 
international classification systems for designs and trademarks is expected to ease the obtention of 
 
275 IP India, Resources, Guidelines. Viewed at: http://www.ipindia.nic.in/resources.htm . 
276 Centre for WTO Studies (2015), Trade Secret Protection in India: The Policy Debate , Working Paper 
CWS/WP/200/22, September. Viewed at: 
http://wtocentre.iift.ac.in/workingpaper/Trade%20Secret%20Protection%20in%20India -
%20The%20policy%20debate.pdf ; and Nikhil Nair, P. (2017), "Are the trad e secrets in India satisfactorily 
protected?", The World Journal on Juristic Polity . Viewed at: http://jurip.org/wp -
content/uploads/2017/03/Nikhil -Nair.pdf . 
277 CIPAM, A Guide to Protecting Trade Secrets . Viewed at: http://cipam.gov.in/wp -
content/uploads/2019/10/Tradesecret -Toolkit -1.pdf. 
278 PIB, 2 July 2014. Viewed at: http://pib.nic.in/newsite/Print Release.aspx?relid=106012 . 
279 Section 52( 1)(zb) of the Copyrig ht Act, 1957, incorporated in the Copyright (Amendment) Act, 2012; 
and Madhu, K., S. and Gagan, K. (2015), "Copyright Fair Use and Libraries", Transforming Dimension of IPR: 
Challenges for New Ag e Libraries , National Law University Delhi Press. Viewed at: 
http://nludelhi.ac.in/download/publication/2 015/Transforming%20Dimension%20of%20IPR%20 -
%20Challenges%20for%20New%20Age%20Libraries.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  protection in India, through the harmonization of classes for goods and services.280 India also 
initiated the procedure to accede to the UPOV Convention.  
Table 3.45 Accession to WIPO treaties, 2015 -19 
Treaty  Description  Entry 
into force  
Locarno Agreement  International classification for industrial designs  2019 
Marrakesh Treaty  Access to published works for blind or visually impaired 
persons  2016 
Nice Agreement  International classification of goods and services for 
trademark registration  2019 
Vienna Agreement  International classification for figurative elements of marks  2019 
WIPO Copyright Treaty (WCT)  Protection of works and rights of authors in the digital 
environment  2018 
WIPO Performances and 
Phonographs Treaty (WPPT)  Protection of works and rights of performers and 
producers/phonograms in the digital environment  2018 
Source:  WIPO, India. Viewed at: https://www.wipo.int/members/en/details.jsp?cou ntry_id=80 . 
Main features of the IPR regime over the review period  
3.255.   The requirements for , and terms of , IPR protection remained broadly  unchanged  over the 
review period (Table A3. 5). The term  of protection for patents in India cannot exceed 20  years from 
the date of filing; therefore, applicants cannot claim an extension of the term to compensate for 
delays in filing. Foreign GIs may be registered in India.  
3.256.   There are exceptions and limitations  to protection of IPR in India for public use of the work 
or when the right is not exploited. Protected IP works may be exploited through compulsory licences 
in the public interest. No compulsory licences were granted over the review period.  
3.257.   India allows parallel imports of trade -marked and patented works, as it recognizes the 
principle of international exhaustion of rights. Parallel imports of industrial designs and copyright are 
not allowed.281 
3.258.   Over the review period, streamlined  and modernized processes t o grant patents and register 
trademarks were introduced, to address the backlog in processing applications (Table  3.46). In 
addition, the Patent (Amendment) Rules, 2019 , included new categories of applicants eligible for 
expedited patent examination; and f ees for international applications (Patent Cooperation Treaty) 
were waived. New examiners were also recruited to help reduce the backlog in  undertaking 
examination.282 As a result, in 2018/19, 337,541 patent applications were examined, and 
316,798  trademarks were registered, compared with 168,026 and 41,583, respectively, in 
2014/15.283 
Table 3.46 Highlights of the Patents ( Amendment) Rules, 2016, and the Trade Marks 
Rules, 2017  
Patents (Amendment) Rules, 
2016 Common features  Trade Marks Rules, 2017  
E-filing is mandatory for patent 
agents  Hearings through video -
conferencing were introduced  The number of forms for filing 
was reduced from 74 to 8; one 
form may be used for multiple 
applications  
 
280 PIB, 13 March 2019. Viewed at: http://pib.gov.in/newsite/PrintRelease.aspx?relid=189403 . 
281 Federation of Indian Chambers of Commerce and Industry (FICCI), IP Toolkit for Customs Officials . 
Viewed at: http://ficci.in/events/22219/ISP/IP -Tool-Kit-for-Custom -Officials.pdf ; and Spicy IP, De-Coding 
Indian Intellectual Property Law . Viewed at: https://spicyip.com/2015/02/many -shades -of-grey-omega -v-
costco -and-its-implications -on-parallel -imports.html . 
282 CIPAM (2018), Intellectual Property Rights Regime in India – Initiatives by the Government . Viewed 
at: https://spicyip.com/wp -content/uploads/2018/01/IPR -Regime -In-India-Government -Initiatives.pdf . 
283 Information  provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Patents (Amendment) Rules, 
2016 Common features  Trade Marks Rules, 2017  
Withdrawal of applications and 
refund of fees are permitted, 
before the first examination report 
is issued  The number of hearings in 
opposition proceedings is limited 
to 2 per party; each adjournment 
should not exceed 30 days  A 10% discount on filing fees is 
offered for e -filing 
Examination may be done in any 
patent office, regardless of the 
office where the application was 
filed Timeline to ensure speedy 
disposal was introduce d The modalities to determine 
well-known marks  were laid down  
Requests for expedited 
examination may be filed by start -
ups and applicants who select 
India's  Patent Office as the 
International Searching Authorit y 
(ISA) or the International  
Preliminary Exam ining Authorit y 
(IPEA) under  the Patent 
Cooperation Treaty (PCT)  E-mails and digital documents are 
used for official communication 
(e.g. first exam rep ort is e -mailed 
to applicants; and patent and 
trademarks certificates are 
generated electronically)  Use o f digital audio  format  for the 
registration of sound marks  
 New definition of small entities 
was laid down; definition of 
start-ups was introduced  Expedited processing of the 
applications was extended to the 
entire registration process  
 Discount on  filing fees and other 
fees for start -ups Enlarged definition of opposition 
to trademark registrations  
Source:  CIPAM (2017), Intellectual Property – The Future!  Viewed at: http://cipam.gov.in/wp -
content/uploads/2017/09/bookletIPR.pdf ; IP India (2017), Annual Report 2016 -17. Viewed at: 
http://www.ipindia.nic.in/annual -reports -ipo.htm ; and Spicy IP, Trade Mark Rules, 2017 (Salient 
Features) . Viewed at:  https://spicyip.com/2017/03/trade -mark-rules-2017-salient -features.html . 
3.259.   Since 2016, start -ups (resident and non -resident) and Patent Cooperation Treaty applicants 
may request expedited patent examination . In addition, India's four patent offices284 adopted best 
uniform practices ; as a result, a unique numb ering system for patent applications was introduced, 
and examination of similar patent groups is done at the same time in all patent offices. Over the 
review period, the number of pending applications was reduced significantly, as was the average 
time to g rant a patent, which dropped from three to five years from filing to less than one year .285 
3.260.   The Trade Marks Rules,  2017, introduced modalities to determine well -known marks. The 
Trademark Registry has the authority to determine if marks are well -known. Prev iously, only the 
Indian courts could determine if a mark was well -known; therefore, only marks recognized by a 
court decision, as well -known marks, could be registered.286 In 2017, expedited processes were 
extended to the entire trademark registration proce ss; previously, expedited processes were limited 
to examination. In addition, since 2017, a sound mark may be filed using digital audio format (MP3) 
and digital graphic representation (digital sheet music).287 Since the last Review, the average time 
for the registration of a trademark has been reduced from 14  months to  1 month.288 
3.261.   Over the review period, e -filing and online search facilities were developed, to streamline 
the registration of designs; as a result, the average time for registration was reduce d from eight 
 
284 The head office is in Kolkata ; there are three local  branches in Chennai, Delhi, and Mumbai.  
285 WIPO (2018), World Intellectual Property Indicators 2018 . Viewed at: 
https://www.wipo.int/edocs/pubdocs/en/wipo_pub_941_2018.pdf ; IP India (2017), Annual Report 2016 -17. 
Viewed at: http://www.ipindia.nic.in/annual -reports -ipo.htm ; and  IP Watch, Is India's Expedited Examination 
Of Patents A Big Deal?  Viewed at: https://www.ip -watch.org/2017/09/04/indias -expedited -examination -
patents -big-deal/. 
286 Section 124, Trade Marks Rules, 2017; Spicy IP, Trade Mark Rules, 2017 (Salient Features) . Viewed 
at: https://spicyip.com/2017/03/trade -mark-rules-2017-salient -features.html ; Selvam & Selvam. Viewed at: 
https://selvams.com/kb/in/trademarks/well -known -trademarks/ ; and World Trademark Review, India: Courts 
step up when it comes to famous marks . Viewed at: https://www.worldtrademarkreview.com/enforcement -
and-litigation/india -courts -step-when -it-comes -famous -marks . 
287 Section 26(5), Trade Marks Rules, 2017; CIPAM (2018), Intellectual Property Rights Regime in India 
– Initiatives by the Government . Viewed at: https://spicyip.com/wp -content/uploads/2018/01/IPR -Regime -In-
India-Government -Initiatives.pdf ; Spicy IP, Trade Mark Rules, 2017 (Salient Features) . Viewed at:  
https://spicyip.com/2017/03/trade -mark-rules-2017-salient -features.html ; and Spicy IP, Yet another Sound 
Mark Granted. Viewed at: https://spicyip.com/2009/07/yet -another -sound -mark-granted.html . 
288 IP India (2017), Annual Report 2016 -17. Viewed at: http://www.ipindia.nic.in/annual -reports -
ipo.htm . WT/TPR/S/ 403/Rev.1  • India  
 
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  months to one. Registration of copyright  was also computerized, and it is possible to check the status 
of the application in real -time; at present, registration of copyright takes two months.289 
3.262.   No major changes regarding the registration of pl ant varieties were introduced over the 
review period. A consolidated  list of new varieties was published  in 2017; the list was subsequently 
amended, and currently contains 158 new varieties.290 Plant varieties that are in the public domain 
may also be regis tered, if they are " extant  varieties" (e.g. farmers' varieties) and essentially derived 
varieties.291 
3.263.   India encourages innovation by promoting IP generation by start -ups, MSMEs, and "less 
visible and silent IP generators", such as farmers.292 To enable IP ge neration, the Patent 
(Amendment) Rules, 2016, recognize d start-ups as a new category of applicants; and facilitates 
patent -filing procedures, by offering them expedited patent examination  and an 80% discount on 
filing fees. In addition, the definition of a  start-up, as per the Rules, was revised in 2017 to be more 
inclusive. Under the Scheme for Facilitating Start -ups Intellectual Property Protection (SIPP) , start -
ups may also apply to the Central Government for financial assistance (INR 8,000 to INR 35,000 ) to 
hire IP agents.293 The number of patent applications filed by resident start -ups grew from 160 in 
2016/17 to more than 1,700 at the end of May 2019.  MSMEs are also granted a 50% discount on 
filing fees.294 
Trends in IPRs  
3.264.   Over the review period , patent applications were filed mainly by non -residents, with 69.6 % 
of the total filings; the number of trademark applications filed by non -residents remained low, 
accounting for 5.4% of the total filings.295 In November 2019, 64,686 patents were in force296; 
2 million trademarks were registered297; 2 industrial designs and 2 layout designs related to 
semi-conductor integrated circuits were registered298; and so were 361 GIs. These are mainly 
agricultural products, handicrafts, and textiles. In 2015/16, GI protection was granted to basmati 
rice, which is India's main agricultural export product . In addition, 15 foreign GIs are protected in 
India. A GI "lo go and slogan" were launched in 2018 and are being used.299 
3.265.   It is not mandatory to get copyright protection, but registration is recommended; as at 
November 2019, 250,739  copyrights had been registered in India. In contrast, copyright societies 
must registe r to be protected. Three societies are registered: (i) the Indian Performing Rights Society 
(IPRS) that safeguards musical works and literary works associated with musical works; (ii) the 
Indian Singers Rights Association (ISRA) that safeguards the rights of performing singers; and 
(iii) the Indian Reprographic Rights Organization (IRRO) that safeguards photographic works.300 
 
289 IP India, Annual Report  (various years). Viewed at: http://www.ipindia.nic.i n/annual -reports -
ipo.htm . 
290 Protection of Plant Varieties and Farmers' Rights Authority. Viewed at: 
http://www.plantauthority.gov.in/gazette.htm  and information provided by the authorities . 
291 Sections 2(j) and 24(6) of the Protection of Plant Varieties and Farmers' Rights Act, 2001 ; and Plant 
Protection of Plant Varieties and Farmers' Rights Authority . Viewed at: 
http://www.plantauthority.gov.in/p df/FAQ_New.pdf . 
292 NIPR Policy, 2016.  
293 Scheme for Facilitating SIPP; Office of the Controller General of Patents, Designs, and Trade Marks 
(2017),  Frequently  Asked Questions  - Patents . Viewed at: 
http://www.ipindia.nic.in/writereaddata/Portal/Images/pdf/Final_FREQUENTLY_ASKED_QUESTIONS_ -
PATENT.pdf ; and information provided by the authorities.  
294 Patents (Amendment) Rules, 2016.  
295 IP India (2018), Annual Report 2017 -18. Viewed at: http://www.ipindia.nic.in/annual -reports -
ipo.htm ; and information provided by the authorities.  
296 Mainly in the chemical, computer/electronics, electrical, mechanical, and pharma sectors 
(Information provided by the authorities).  
297 Of these 23% were classified under two classes, and 4.2% under multiple classes.  
298 Information provided by the authorities; and I P India (2018), Annual Report 2017 -18. Viewed at: 
http://www.ipindia.nic.in/annual -reports -ipo.htm . 
299 CIPAM, Invaluable Treasures of Incredible India . Viewed at: 
https://wahgi.ncog.gov.in/logoSloganUrl ; and information provided by the authorities.  
300 IP India (2018), Annual Report 2017 -18. Viewed at: http://www.ipindia.nic.i n/annual -reports -
ipo.htm . WT/TPR/S/ 403/Rev.1  • India  
 
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  3.266.   In 2019, around 480 new plant varieties and 2,960 varieties that were in the public domain  
(51.7% are farmers' varieties) had been registered  in India .301 
IPR enforcement  
3.267.   Various measures to enforce IPRs were taken over the review period. Awareness campaigns, 
targeting specific  audiences (e.g. Customs/police/judiciary officers, academics, students, and 
start-ups) or regarding specific fie lds (e.g. GIs), were launched.302 In addition, a wide -spread 
campaign against film piracy was launched on social media.303 Capacity -building workshops were 
organized for state police officers and judges.304 Since 2015, IPR cells and innovation councils have 
been established in universities and higher education institutions, to create a conducive environment 
for IP awareness, generation, and commercialization .305 The CIPAM  provides financial support to 
organize awareness workshops and seminars; in 2018/19, it sp ent INR 43.6 million on various 
awareness initiatives.306 Counterfeiting and piracy are challenges for India to further develop 
e-commerce; therefore, customers are encouraged to act as whistle -blowers.307 Several measures 
to address counterfeiting and piracy are laid down in the draft National e -Commerce Policy, which is 
still under consultation.  
3.268.   Currently, online  intermediaries (e.g. Internet service providers, search engines, and 
e-commerce marketplaces ) may claim s afe-harbour protection under the Information Technology 
Act, 2000  (Section 79), and the Copyright Act, 1957 (Section 52(1)). Under Section 79, online 
intermediaries are not responsible for user -generated content , unless they have "actual knowle dge" 
that IPR is infringed. In addition, for the safe -harbour provision to apply, online intermediaries must 
observe "due diligence" in the interest of right holders. To this end, they must comply with a series 
of requirements, stipulated in the Informatio n Technology (Intermediaries Guidelines) Rules, 2011. 
For instance, if notified by the copyright owner  of an infringement, online intermediaries must act 
within 36 hours to remove the infringing works. To further curb online piracy, in 2018, draft 
amendmen ts to the 2011 Rules, which propose additional requirements (e.g. traceability and 
proactive filtering of content), are under consideration.308  
3.269.   The Copyright Act, 1957, protects copyright against infringement, including online 
infringement.309 In addition, in 2019, the High Court of Delhi allowed the use of dynamic injunctions ; 
thus, once an injunction order is granted against a rogue website310, a copyright owner may request  
the High Court to extend this  injunction to mirror  rogue website s.311 The High Court also 
recommended that online warning  messages  are sent to users consulting infringing works .312 In 
order to tackle film piracy, in  2019, a bill to amend the Cinematographic Act, 1952, introduced penal 
 
301 Compendium of  Registered Varieties, 27 October 2018. Viewed at: http://plantauthority.gov.in/ . 
302 IP India (2018), Annual Report 2017 -18. Viewed at: http://www.ipindia.nic.in/annual -reports -
ipo.htm . 
303 DPITT, CIPAM -DIPP launches anti -piracy video featuring Shri Amitabh Bachchan . Viewed at:  
https://dipp.gov.in/whats -new/cipam -dipp-launches -anti-piracy -video -featuring -shri-amitabh -bachchan . 
304 CIPAM (2018), Intellectual Property Rig hts Regime in India – Initiatives by the Government . Viewed 
at: https://spicyip.com/wp -content/uploads/2018/01/IPR -Regime -In-India-Government -Initiatives.pdf . 
305 PIB, National IPR Policy,  27 December 2018 . Viewed at: 
http://www.pib.nic.in/Pressreleaseshare.aspx?PRID=1557418 . 
306 Information provided by the authorities; and CIPAM,  Scheme for IPR Awareness – Creative India; 
Innovative India!  Viewed at: https://dipp.gov.in/sites/default/files/Scheme%20IPR%20Awareness.pdf .  
307 UNIDO (2017), National Report on E-commerce Development in India . Viewed at: 
https://www.unido.org/sites/default/files/2017 -10/WP_15_2017_.pdf . 
308 Information provided by the authorities; Ministry of Electronics & Information Technology, 
Information Technology (Intermediary Guidelines) Amendment Rules, 2018 . Viewed at: 
https://meity.gov.in/comments -invited -draft-intermediary -rules; and SFLC.in (2019), Intermediary Liability 
2.0: A Shifting Paradigm . Viewed at: https://sflc.in/sites/default/files/reports/Intermediary_Liability_2_0_ -
_A_Shifting_Paradigm.pdf . 
309 Information provided by the authorities.  
310 A rogue website is set up to host copyright -infringing  content . 
311 Mirror websites fully reproduce the contents of the already -blocked website.  
312 Nishith Desai Associates, Rogue or Not? – Delhi High Court Grants its First Dynamic Injunction to 
Curb Online Piracy . Viewed at: http://www.nishithdesai.com/information/news -storage/news -
details/article/rogue -or-not-delhi-high-court-grants -its-first-dynamic -injunction -to-curb-online -piracy.html . WT/TPR/S/ 403/Rev.1  • India  
 
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  provisions for unauthorized camcording and duplication of films;  the bill is still under 
consideration.313 
3.270.   State -level measures to promote IPR enforcement over the review period included the 
creation  of India's first anti -piracy  police unit in the state of Telangana  (2016)  and of a Cyber D igital 
Crime Unit (MCDCU)  in the state of Maharashtra (2017). In 2019, around 250 rogue websites  were 
closed by the state digital crime units ; and another 230 by the  CIPAM  in collaboration with the 
National Internet Exchange of India (NIXI) that manages the registration and operation of ".in" 
domains.314 The CIPAM issued a toolkit to help police officers identify IP crimes.315 
3.271.   Border measures are regulated under the Intellectual Property Rights (Imported Goods) 
Rules,  2007, that were amended in 2018. Under the Rules, right holders may register with the Ind ian 
Customs IPR Recordation  Portal (ICeR). ICeR registration  empowers customs officials to seize 
imports and suspend clearance of (allegedly) infringing goods. Right holders have 10 days (3 days 
for perishable goods) from the date of notification by Customs to give evidence of genuineness; 
otherwise, the imports ar e released. An extension of the period to provide evidence may be granted, 
upon request of the right holder.316 Since 2019, trademarks, copyright, designs, and GIs may be 
registered on the ICeR. Since 2018, right holders must update ICeR records by notifyin g any change 
regarding their status (e.g. suspension or revocation of rights). A single ICeR registration covers all 
ports of entry; currently, ICeR is used in 134  customs locations, which handle 98% of India's trade. 
ICeR registration is valid for five ye ars; a registration fee  (INR 2,000) is charged, but no annual 
fees.317 If goods have not been registered in the ICeR, Customs may ex officio  suspend clearance of 
goods on grounds of IPR infringement, to allow right holders to register. Right holders have fi ve days 
to register on the ICeR; otherwise, the goods are released.318 
3.272.   In 2018, patents were excluded from the application of the Intellectual Property Rights 
(Imported Goods) Rules.319 Thus, patented goods may no longer be registered in the ICeR. This 
measu re was taken to implement a ruling  by the High Court of Delhi, which stipulates that "the 
custom authority is an implementing authority which will only act … upon the orders of the court 
and cannot keep on interdicting with the consignments and proceed to adjudicate the infringement 
claims"320. As a result, Customs' powers to seize imported goods based on a complaint were revoked. 
Since 2018, a right holder requires a court injunction to allow Customs to  enforce the right at the 
border.321 According to the au thorities,  this measure has helped prevent groundless complaints 
against importers.  
3.273.   IP disputes are first filed at the district courts and, in certain instances, at the High Courts. 
The commercial courts/ divisions  hear only disputes that claim damages exce eding INR 300,000  
 
313 Information provided by the authorities; Cinematographic (Amendment) Bill, 2019; and PIB Press 
Release, 8 January 2019. Viewed at: http://pib.nic.in/newsite/PrintRelease.aspx?relid=187340 . 
314 DPIIT, Intellectual Property Rights Regime in India: Government Policies and Practices , 
22 March  2019. Viewed at: http://www.nja.nic.in/Concluded_Programmes/2018 -19/P-
1156_PPTs/1.Session%203%20IPR%20Regime%20in%20India.pdf ; and International Trade Administration , 
India – Commercial Guide . Viewed at: https://www.export.gov/article?id=India -Protecting -Intellectual -
Property . 
315 CIPAM, Enforcement of Intellectual Property Rights . Viewed at: http://cipam.go v.in/ipr -awareness -
2/police/ . 
316 Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 , as amended by the 
Intellectual Property Rights (Imported Goods) Enforcement (Amendment ) Rules, 2018 ; and FICCI, IP Toolkit 
for Customs Officials . Viewed at: http://ficci.in/events/22219/ISP/IP -Tool-Kit-for-Custom -Officials.pdf . 
317 ICEGATE /ICeR. Viewed at: https://ipr. icegate.gov.in/IPR/homePage . 
318 Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 , as amended by Intellectual 
Property Rights (Imported Goods) Enforcement (Amendment ) Rules, 2018 ; and CBIC, Customs and Intellectual 
Property Rights . Viewed at: http://www.cbic.gov.in/resources//htdocs -cbec/customs/ppt -ipr-border -
measures.pdf .  
319 Intellectual Property Rights (Imported Goods) Enforcement Am endment Rules, 2018 ; and Notification 
No. 56/2008 – Customs (N.T.), 22 June 2018.  
320 DPIIT, Intellectual Property Rights Regime in India: Government Policies and Practices, 
22 March  2019. Viewed at: http://www.nja.nic.in/Concluded_Programmes/2018 -19/P-
1156_PPTs/1.Session%203%20IPR%20Regime%20in%20India.pdf . 
321 Notification No. 57/2 018 – Customs (N.T.), 22 June 2018; ICEGATE. Viewed at: 
https://ipr.icegate.gov.in/IPR/HomeDocumentViewSuccess ; and Singh and Singh Law Firm, Amendments Made 
to IPR (Imported Goods) Enf orcement Rules . Viewed at: http://www.singhandsingh.com/in -the-
news/IPR%20Imported%20Goods%20Enforcement%20Rules%20amended.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  (USD 4,290 in 2018/19) .322 In order  to expedite court proceedings for commercial disputes, which 
includ e IPR infringeme nt, there is a plan to establish commercial courts at the district level and  
commercial divisions in the High Courts of Chennai, Delhi, Himachal Pradesh, Kolkata, and Mumbai . 
In addition, guidelines were established by various High Courts for commercial disputes to be 
resolved in an expedited  manner.323 So far, 247 commercial courts have been established, and most 
IPR-related commercial cases are being brought to these courts.324 India also promotes mediation 
in IPR -related commercial disputes ; parties are encouraged to use mediation  if urgent relief is n ot 
required.325 
3.274.   It has been estimated that in 2016, India exported 3.4% of the total global exports of 
counterfeit and pirated goods; the value reached some USD 17.4 billion.326 As a result, to help 
customs officers identify counterfeiting and pirated goods,  an IPR enforcement toolkit, designed by 
the Federation of Indian Chambers of Commerce and Industry ( FICCI ) started to be used.327 
However, India remains an important producer  of counterfeit and pirated goods ; the main 
counterfeit ed products manufactured in  and exported from India are pharmaceuticals, foodstuffs, 
cosmetics and perfumes, clothing, optical, photographic, and medical equipment, electronics and 
electrical equipment, footwear, and toys and games.328 In addition, India does not participate in the 
WCO Interface Public -Members (IPM) which allows for real -time communication between customs 
officers and the private sector to assist  in the identification of counterfeit products .329 
 
322 Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 
2015; Commercial Courts, Commerci al Division and Commercial Appellate Division of High Courts  
(Amendment)  Act, 2018; Commercial Courts. Viewed at: http://e -commcourt.gov.in/ ; and Grandhi Law 
Chambers, Commercial Courts Act and Evidence in Digital  Era, February  2017. Viewed at: 
http://www.apedb.gov.in/gallery/2017/february/240217/ipr -news-session2 -krishna -gandhi.pdf . 
323 Commercial Courts. Viewed  at: http://e -commcourt.gov.in/ . 
324 Information provided by the authorities.  
325 Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 
2015; Commercial Courts, Commercial Divis ion and Commercial Appellate Division of High Courts  
(Amendment)  Act, 2018; Grandhi Law Chambers, Commercial Courts Act and Evidence in Digital Era , February 
2017. Viewed at: http://www.apedb.gov.in/gallery/2017/february/240217/ipr -news-session2 -krishna -
gandhi.pdf ; and Spicy IP, The New Age of IP Mediation in India . Viewed at: https://spicyip.com/2018/07/the -
new-age-of-ip-mediation -in-india.html . 
326 OECD/EUIPO ( 2019), Trends in Trade in Counterfeit and Pirated Goods . Viewed at:  
https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/trends_in_trade_in_count erfeit_a
nd_pirated_goods/trends_in_trade_in_counterfeit_and_pirated_goods_en.pdf . 
327 FICCI, IP Tool Kit for Customs Officials . Viewed at: http://ficci.in/events/22219/ISP/ IP-Tool-Kit-for-
Custom -Officials.pdf . 
328 OECD/EUIPO ( 2018), Misuse of Small Parcels for Trade in Counterfeit Goods . Viewed at: 
https://www.oecd -ilibrary.org/docserver/9789264307858 -
en.pdf?expires=1566211624&id=id&accname=o cid195767&checksum=E89763373E38D3A95E7AAEB0226DCA
DB; and OECD/EUIPO (2017), Mapping the Real Routes of Trade in Fake Goods . Viewed at: 
https://euipo.europa.eu/tunnel -
web/secure/webdav/guest/document_library/observatory/documents/reports/Mapping_the_Real_Routes_of_Tr
ade_in_Fake_Goods_en.pdf . 
329 WCO IPM. Viewed at: http://www.wcoipm.org/ . WT/TPR/S/ 403/Rev.1  • India  
 
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  4  TRADE POLICIES BY SECTOR  
4.1  Agriculture  
4.1.  The agriculture se ctor's share of GDP declined from 18.6% in 2013/14 to 16.0% in 2018/19, 
but it continues to account for around half of India's employment.1 The sector is dominated by 
small -scale farmers, and around half of the area under cultivation is rainfed. Key crops  include 
cereals (rice, wheat, and coarse cereals), pulses, and sugarcane. The share of agricultural exports 
in total exports is around 13%; rice, marine products, buffalo meat, and spices are the most 
important exports. Vegetable oils account for almost h alf of India's imports of agricultural products 
(Table 4.1).  
Table 4.1 Agriculture, selected indicators, 2013 -19 
 
2013 /14 2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 
GDP at constant 
(2011 /12 prices, 
growth rate %)a 5.6 -0.2 0.6 6.3 5.0 2.7 
Agriculture as share 
of current GDP (%)  18.6 18.2 17.7 17.9 17.2 16.0 
Major agricultural production (million tonnes)b 
Rice 106.65  105.48  104.41  109.70  112.76  116.42  
Wheat  95.85  86.63  92.29  98.51  99.70  102.19  
Coarse (nutri) cereals  43.29  42.86  38.52  43.17  46.99  .. 
Pulses  19.25  17.15  16.32  23.13  25.42  23.40  
Food grains  265.04  252.03  251.54  275.11  285.01  284.95  
Oilseeds  32.75  27.51  25.25  31.28  31.46  32.26  
Sugarcane  352.14  362.33  348.45  306.07  379.90  400.16  
Cotton (million bales 
of 170 kg each)  35.90  34.81  30.01  32.58  32.81  28.71  
Agricultural 
exports (value in 
USD million)  43,433.09  39,199.69  32,900.77  33,792.31  39,027.03  .. 
% of total exports  13.79  12.64  12.55  12.26  12.86  11.90  
Rice, basmati  4,841.47  4,511.79  3,470.16  3,207.43  4,168.65  .. 
Rice, other than 
basmati  2,941.26  3,343.20  2,365.01  2,524.13  3,636.00  .. 
Buffalo meat  4,373.05  4,789.15  4,075.89  3,900.49  4,039.04  .. 
Spices  2,503.45  2,428.34  2,540.17  2,849.36  3,115.93  .. 
Cotton, raw (incl. 
waste)  3,692.09  1,904.15  1,958.37  1,626.21  1,892.69  .. 
Marine products  5,062.20  5,509.71  4,768.63  5,903.17  7,391.75  .. 
Agricultural 
imports (value in 
USD million)  14,169.35  19,841.65  21,428.51  24,559.69  23,595.69  .. 
% of total imports  3.16 4.43 5.63 6.39 5.07 3.81 
Vegetable oils  7,278.78  10,612.66  10,490.03  10,889.63  11,634.69  .. 
Pulses  1,824.20  2,790.63  3,913.19  4,252.62  2,908.61  .. 
Cashew  771.51  1,079.38  1,329.08  1,345.88  1,417.08  .. 
Spices  570.51  718.51  824.82  858.82  990.59  .. 
Cotton, raw (incl. 
waste)  392.68  507.32  391.98  945.09  978.42  .. 
Sugar  377.98  599.93  616.76  1,024.06  936.39  .. 
.. Not available.  
a Includes agriculture, forestry and fisheries.  
b 2017/18 figures are 4th advance estimates.  
Source:  Department of Agriculture, Cooperation and Farmers ' Welfare, Directorate of Economics and 
Statistics, Agricultural Statistics at a Glance 2018.  
4.2.  Under the Constitution, the state governments have responsibility for agriculture , with the 
Central Government providing a supporting role to increase production and productivity in the sector 
and for international trade policy. In the central Government, the Ministry of Agriculture and 
 
1 The most recent Periodic Labour Force Survey (2017 -18) estimates workers in the agricultural sector 
at 42.7%. WT/TPR/S/ 403/Rev.1  • India  
 
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  Farmers' Welfare is charged with the formulation of policies to improve agricultural production and 
trade.  The Ministry is divided into the Departments of Agriculture, Cooperation and Farmers' Welfare 
(DAC&FW); and Agricultu ral Research and Education (DARE). The Ministry focuses on policies 
relating to production, pre -harvest, and improving the state of the agricultural community. In 
addition, the Ministry of Food Processing Industries focuses on policies relating to value -added 
activities, post -harvest losses, and generation of off -farm employment. In May 2019, the Ministry 
of Fisheries, Animal Husbandry and Dairying was created to include departments previously under 
the Ministry of Agriculture and the Ministry of Food Proce ssing Industries. The new Ministry is 
responsible for policies relating to livestock production, preservation, protection from disease, and 
fisheries. A number of additional ministries, departments and agencies are responsible for 
formulating and implement ing various aspects of agricultural policy (Table 4.2).  
Table 4.2 Bodies responsible for formulating and implementing agricultural policy  
Body  Responsibility  
Ministry of Agriculture and 
Farmers ' Welfare  Set up as the Ministry of Agriculture in 1947; renamed Ministry of 
Agriculture and Farmers ' Welfare in August 2015 , to formulate and 
implement policies to improve agricultural production and trade  
Commission for Agricultural 
Costs and Prices (CAC P) To recommend annual minimum support prices (MSPs) for 
22 agricultural commodities to the Government  
Department of Fertilizers, 
Ministry of Chemicals and 
Fertilizers  To plan, promot e and develop  the fertilizer industry; plan and monitor 
production, impo rt, distribution and management of subsidies  
Department of Food and Public 
Distribution, Ministry of 
Consumer Affairs, Food and 
Public Distribution  To ensure food security through timely and efficient procurement and 
distribution of food grains; formulat e policies for sugar; export and 
import food  grains, sugar and edible oils  
Food Corporation of India (FCI)  To provide effective price support for farmers; ensure public distribution 
of food grains; and maintain satisfactory operational and buffer stocks 
of food  grains to ensure national food security  
Central Warehousing 
Corporation (CWC)  To provide warehousing in support of the functions of the FCI  
National Agricultural 
Cooperative Marketing 
Federation of India Ltd (NAFED)  To promote cooperative marketing of agricultural products  
Electronic National Agriculture 
Market (eNAM)  Electronic trading portal to connect "mandis" and create a national 
unified market for agricultural products  
Cotton Corporation of India  To provide marketing support to cot ton growers  
Jute Corporation of India  To provide marketing support to jute growers  
Directorate of Plant Protection, 
Quarantine and Storage  To inspect imported and exported agricultural commodities; plant 
quarantine if required  
Ministry of Fisheries, Animal 
Husbandry and Dairying  Established in May 2019 to include departments previously under the 
Ministry of Agriculture and the Ministry of Food Processing Industries. 
Responsible for policies relating to livestock production, preservation, 
protection from disease , and fisheries  
Ministry of Food Processing 
Industries  To help develop value -added products by encouraging investment in the 
sector  
Agricultural and Processed Food 
Products Export Development 
Authority (APEDA)  To promote the e xport of horticultural products  
Ministry of Jal Shakti  To manage the u se of water resources, including irrigation projects  
Ministry of Commerce and 
Industry  International trade policy  
Source:  WTO Secretariat, based on various government websites.  
4.3.  Given its socio -economic importance to the economy, government policy in the agricultural 
sector aims to provide food security for consumers while ensuring stable prices for farmers. The 
Essential Commodities Act, 1955 (amended in 2006 ), provides "in the interest of the general public, 
for the control of the production, supply and distribution of, and trade and commerce, in certain 
commodities".2 The agricultural products scheduled in the Act are foodstuffs, including edible 
oilseeds a nd oils, raw jute (and jute textiles), seeds of food crops, fruit and vegetables, and cattle 
fodder.  
 
2 The Essential Commodities Act of 1955, as amended in 2006. Viewed at: 
https://consumeraffairs.nic.in/sites/default/files/file -uploads/essential -commodities -order/EC_Act2006.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  4.4.  Frequent interventions are made, when necessary, including through import and export 
restrictions, and to ensure stability in supply and prices in the dome stic market. Most recently, 
following a heavy monsoon, India banned exports of onions, to ensure sufficient domestic supplies 
and stabilize domestic prices. The Agricultural Export Policy suggested that such frequent changes 
"break export supply chains and  affect India's image as a reliable supplier", and recommended that, 
apart from a few products that are essential for food security, export restrictions should not be used 
for processed agricultural products and organic products.3 To ensure stable domesti c production, 
input subsidies and price support are also provided.  
4.1.1   Measures  affecting imports  
4.5.  India regulates imports of agricultural products through various means, including tariffs, tariff 
rate quotas (TRQs), minimum import prices, import licensing and prohibitions, and state trading.  
4.6.  The average MFN applied tariff for agriculture in 2019/20 was 34.8%, a decline from 36.4% in 
2014/15. It rose back up to 36.5% in 2020/21.  The MFN tariff ranges up to 150% but remains well 
below the bound tariff which ranges up to 300%. While the statutory tariff rate is announced in the 
annual Budget, applied rates are changed from time to time, to ensure stable domestic supplies and 
prices. For example, in April 2019, the import tariff for wheat was raised from 30% to  40%.4 Import 
tariffs for sugar were also gradually increased from 40% in April 2015 to 50% in July 2017 and 
100% in February 2018. India's considerably higher bound tariff rates permit the adjustment of 
applied tariffs as and when domestic needs arise.  
4.7.  Similarly, for products subject to TRQs, quota quantities and in -quota rates are adjusted from 
time to time to meet domestic needs. India provides additional market access through MFN TRQs 
on imports of powdered milk and cream, maize, and edible oils (sunf lower seed, safflower, rape, 
colza and mustard). Since 2018, the quota fill rates have been negligible, except for rape, colza and 
mustard oils, and fractions thereof, for which the fill rate was 100%.5 Since 2017, India has also 
implemented a TRQ of 300,000 metric tonnes (MT) for raw sugar (HS1701) , at an in -quota rate of 
25%, as a unilateral market access trade facilitation measure.  India also maintains TRQs for tea, 
dessicated coconut, pepper, Vanaspati, bakery shortening and margarine  in its RTA with S ri Lanka, 
and v egetable fats  in its RTA with Nepal (Table 3.4).  
4.8.  Certain products may be imported subject only to minimum import prices. Under the Foreign 
Trade Policy, at the end of 2019, such agricultural products were cashew and areca nuts, black and 
green pepper, and cardamom (Section 3.1.5.1).  
4.9.  Restrictions are also used to regulate imports, including of agricultural products. For instance, 
the Government recently prohibited the import of cashew nut kernels6, after having subjected 
imports to minimum i mport prices. To protect the livelihood of farmers from cheap imports, 
quantitative restrictions on imports of peas of up to a 100,000 tonnes per year were imposed in 
April 2015, initially for three months7, and then extended three times. On 28 March 2020 , 
quantitative restrictions on imports of peas were announced, of up to 150,000 tonnes (for green 
peas and other peas) and 400,000 tonnes (for pigeon peas) for 2020/21.8 
4.10.   Imports are also regulated through state trading enterprises (STEs), which import rice and 
wheat for public procurement, and coconut and coconut oil and fertilizers (Section 3.3.5.1). Products 
subject to import licences and prohibitions are also notified from time to time under the Foreign 
Trade Policy (Section 3.1.5).  
 
3 Agricultural Export Policy, pg. 10.  
4 CBIC, Notification No. 13/2019 -Customs. Viewed at: http://www.cbic.gov.in/resources//htdo cs-
cbec/customs/cs -act/notifications/notfns -2019/cs -tarr2019/cs13 -
2019.pdf;jsessionid=57715BC9DCD4FBC3E061FB70D0E237E7 . 
5 WTO document G/AG/N/IND/17, 22 August 2019.  
6 DGFT Notification No. 8/2015 -20, 12 June 2019 . Viewed at : https://dgft.gov.in/sites/defa ult/files/ 
Notification%20no.08%20dated%2012.06.2019%20English.pdf . 
7 DGFT Notification No. 04/2015 -20, 25 April 2018. Viewed at: https://dgft.gov.in/sites/default/files/ 
04%20eng.pdf  on 18 September 2019.  
8 DGFT, Trade Notice No. 05/2020 -21. Viewed at: https://content.dgft.gov.in/Website/TN%205.pdf . The 
individual quota quantities are 75,000 MT each for HS 07131020 and HS 07131090.  WT/TPR/S/ 403/Rev.1  • India  
 
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  4.1.2   Measures a ffecting exports  
4.11.   According to the Agriculture Export Policy (AEP), the objectives are: to increase agricultural 
exports to reach a value of around USD 60 billion by 2022 and USD 100 billion in the following few 
years; to diversify exports and destinations,  and boost high -value and value -added exports, 
including a focus on perishable products; to promote novel, indigenous, organic, ethnic, traditional 
and non -traditional agriculture exports; to provide an institutional mechanism for pursuing market 
access, t ackling barriers and dealing with SPS issues; and to strive to double India's share in world 
agricultural exports by integrating with global value chains and enabling farmers to benefit from 
export opportunities in overseas markets.9 
4.12.   Acknowledging that fr equent use of export and import restrictions tends to reduce certainty 
in policy, the AEP aims to provide assurance that processed agricultural products and organic 
products will not be subject to export restrictions,10 while imports of agricultural produc ts will be 
liberalized for the purposes of value -added production and export of processed goods. The Policy 
also aims to identify the commodities that are essential for food security; any export restrictions on 
these commodities are to be based on a decisi on taken by a high -level committee and to be 
compatible with the rules of the WTO. The Committee is yet to deliberate on the issue.11 To increase 
value -added exports, the AEP recommends improvements in infrastructure; greater involvement of, 
and cooperatio n between, multiple ministries dealing not just with agriculture, but also research, 
public distribution, and transportation; and greater involvement by state governments in agricultural 
exports.  
4.13.   Export taxes, restrictions and prohibitions, minimum export prices (MEPs), and state trading 
are used as needed to regulate domestic supply of key agricultural products. For example, to ensure 
domestic supplies and contain inflation, in January 2018, India announced an MEP for onions of 
USD 700 per MT until 20 Febr uary 201812; the MEP was removed on 2 February 2018.13 Following 
this, in September 2019, the MEP was reinstated14; it was replaced by an export ban until further 
notice .15 On 30 November 2019, exports up to 9,000 MT were permitted through STEs. During the  
period under review, similar changes were made at various times to export conditions for other 
products, such as pulses, edible oils, rice, and potatoes . The export restriction on pulses was 
removed on 22  November 2017.16 India also maintains a 40% tax on  exports of hides, skins and 
leather, to promote domestic value -addition in this labour -intensive sector.17 
4.14.   Exports of some products are permitted only through STEs, although there have been no such 
exports since 2013/14.  
4.15.   To help sugar mills increase their  earnings and pay sugarcane producers, exports are 
encouraged through indicative export quotas, and assistance is provided (Box 4.1). India has 
country -specific allocations under the MFN TRQs maintained by the United States and the European 
Union. Exporter s are required to provide details of actual exports of sugar to the DGFT and the 
Agricultural and Processed Food Products Export Development Authority (APEDA). Quantitative 
 
9 The AEP was approved  in December 2018 . Department of Commerce, Agriculture Export Policy . 
Viewed at: https://commerce.gov.in/writereaddata/uploadedfile/ 
NTESCL636802085403925699_AGRI_EXPORT_POLICY.pdf . 
10 There is no change to the policy of export and import restrictions on primary or non -organi c 
agricultural products.  
11 Information provided by the authorities.  
12 DGFT Notification No. 45/2015 -20, 19 January 2018. Viewed at: 
https://dgft.gov.in/sites/default/files/Notification45.pdf . 
13 DGFT Notification No. 48/2015 -20, 2 February 2019. Viewed at: 
https://dgft.gov.in/sites/default/files/Noti48dated02.02.2018OnionEng.pdf . 
14 DGFT Notification No. 19/2015 -20, 13 September 2019 . Viewed at: 
https://dgft.gov.in/sites/default/files/Noti%2019%20dt%2013.09.2019%20Eng .pdf. 
15 DGFT Notification No. 21/2015 -20, 29 September 2019. Viewed at: 
https://dgft.gov.in/sites/default/files/Notification%20No%2021%20dated%2029.9_0.pdf . 
16 DGFT Notification No. 38/2015 -2020, 22 November 2017. Viewed at: 
https://content.dgft.gov.in/Website/Notification38eng.pdf . 
17 Information provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  ceilings for sugar exports to the United States and the European Union are announce d from time to 
time by the DGFT.18 
4.16.   Under the Merchandise Export from India Scheme (MEIS), the Government provides duty 
credit scrips to exporters, which can be used to pay import duties or excise duties on domestic 
goods. The scrips range from 3% to 5% of the realized f.o.b. value of exports (Section 3.2.5.1).19 
Under the Agriculture Export Promotion Scheme, the APEDA provides financial assistance to 
registered exporters of 14 groups of agricultural products listed in the APEDA Act.20 Export (and 
production) subsidies are also provided for marine products by the Marine Products Export 
Development Authority (MPEDA), a statutory body in the Department of Commerce (Section 4.1.4).  
4.17.   On 5 March 2019, the Government announced a scheme for Tra nsport and Marketing 
Assistance (TMA) for specified agricultural products. The scheme "aims to provide assistance for the 
international component of freight and marketing of agricultural produce which is likely to mitigate 
disadvantage of higher cost of tr ansportation of export of specified agriculture products due to 
trans-shipment and to promote brand recognition for Indian agricultural products in the specified 
overseas markets". The scheme initially applied from 1 March 2019 to 31 March 2020 but was 
extended, and applies to all products falling under HS Chapters 1 -24, as well as marine and 
plantation products, with certain exceptions.21 The TMA applies only to exports to certain markets, 
with varying rates. Exports through special economic zones, export zones, etc. are not eligible. 
Around INR 171.7 million had been disbursed as at 2 March 2020 (Section 3.2.5.4).22 
4.1.3   Measures affecting production  
4.18.   India's agricultural policy aims to provide stability in domestic food prices and food security. 
To meet these o bjectives, various measures are in place. India's subsidy for food accounts for almost 
half of the Government's total explicit subsidies (Table 3.25). An additional third of total explicit 
subsidies are accounted for by the subsidy for fertilizers. Electri city and water consumption are also 
subsidized. Recent independent research has estimated that the size of the Government's subsidies 
for agriculture has been rising over time, and was at around 8% of agricultural output in 2015/16, 
while public -sector inv estment in the sector has been declining.23 
4.1.3.1   Input support  
4.19.   Support is provided to farmers, including for seeds, fertilizer, irrigation and electricity, and 
through minimum support prices for certain crops. According to the Budget, subsidies for fertilizers 
are around a quarter of total explicit subsidies, second only to the food subsidy.  
4.20.   Fertilizer production is subsidized through price controls under the Fertilizer Control Order 
(FCO) under the Essential Commodities Act, 1955. Changes were made over the yea rs, following 
various reviews and recommendations, which removed price controls for phosphate and potash 
fertilizers. Urea, the main fertilizer consumed in India, remains subject to price controls. Maximum 
retail prices for urea are calculated by the Gover nment under the New Pricing Scheme (NPS), 
introduced originally in 2003, and amended several times since then. The Government provides a 
 
18 The annual quota quantity for the European Union is 10,000 MT, while for the United States it was 
8,424 MT in 2016/17 and 2017/18, increasing to 9,663 MT in 2018/19, and falling to 9,163 MT in 2019/20.  
19 Chapter 3, Foreign Trade Policy. The MEIS will end on 1 January 2021, and will be replaced by the 
Remission of Duties or Taxes on Export Products (RoDTEP), a s cheme for exporters to get a reimbursement on 
taxes, duties and levies which are not exempted or refunded under any other existing mechanism.  
20 The products include fruit and vegetables, meat, poultry, dairy, confectionary products, honey, 
alcoholic and no n-alcoholic drinks, cereals, and floriculture. APEDA. Viewed a t: http://apeda.gov.in . 
21 The products excluded are live animals, meat and edible meat offal, and products of animal origin not 
specified elsewhere falling un der HS 1, 2 and 5; other shrimp and prawns (HS 030617); dairy products (under 
HS 0401, 0402, 0403, 0404, 0405, and 0406); onions, shallots, garlic, leeks, and other alliaceous vegetables 
(HS 0703); wheat, meslin and rice (HS 1001 and 1006); lac, gums, resi ns, other vegetable saps and extracts, 
vegetable plaiting materials, and vegetable products not specified elsewhere (HS Chapters 13 and 14); cane or 
beet sugar and molasses (HS 1701 and 1703); and beverages, spirits and vinegar, and tobacco and 
manufacture d tobacco substitutes (HS Chapters 22 and 24).  
22 Information provided by the authorities.  
23 Gulati, A., Ferroni, M. and Zhou, Y. (eds) (2018), Supporting Indian Farms the Smart Way  Viewed at: 
http://icrier.org/pdf/Supporting_Indian_Farms_the_smart_way.pdf . The research finds that, as subsidies have 
risen, total public -sector investment in agriculture has declined from around 4.0% of agricultural GDP in 
1980/81 to 2.2% in 2014/15 . WT/TPR/S/ 403/Rev.1  • India  
 
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  subsidy to each fertilizer plant to cover the difference between production costs and the maximum 
retail price.24 While  India is largely self -sufficient in the production of urea, urea may be imported 
through STEs to cover for any shortfall in domestic production, with the difference between 
international and domestic prices being subsidized by the central Government. In a  recent paper the 
NITI Aayog suggested that "canalization" (use of STEs) is not efficient in filling the gap between 
demand and supply, as it causes bureaucratic delays. Instead, the paper suggests it would be more 
efficient to "decanalize" the import of u rea, and instead provide the subsidy to farmers through the 
direct benefit transfer scheme.25 The central Government is considering this issue.26 
4.21.   In 2010, after taking into account aspects related to agricultural productivity, balanced 
fertilizer use, the exponential increase in the subsidy, and the growth of the indigenous fertilizer 
industry, the nutrient -based subsidy (NBS) was introduced. The NBS is provided for each grade of 
phosphatic and potassic fertilizer, based on its nutrient content, to encourag e their use by farmers 
and to maintain the nutrient balance in the soil. Fertilizer companies may set the maximum retail 
price for these fertilizers at a "reasonable rate".27 In 2017/18, India provided a subsidy of 
USD 10.7 billion.  
4.22.   Subsidies are also provided for seeds whose prices are controlled under the Essential 
Commodities Act, 1955, with the aim of encouraging farmers to use certified and high -quality seeds. 
Electricity is provided either free of charge or at low flat rates, de pending on the state. Electricity 
for agricultural use is cross -subsidized, with higher rates being charged for industrial and, to some 
extent, commercial consumers, and also through subsidies provided by states to the electricity 
distribution companies. T he agricultural sector consumed around 18% of electricity in 2018/19. India 
notified a power subsidy of USD 7.6 billion to the WTO in 2017/18.28 
4.23.   A World Bank report notes that, as a result of such cross -subsidization, electricity for 
agriculture was priced  around 70% lower than the average cost of production in 2016/17. The report 
further estimates that removing the cross subsidies could increase India's net manufacturing exports 
by between 1% and 3%, depending on the sector.29 Farmers also have access to w ater at no cost; 
as a result of the lower cost of water and electricity, the use of groundwater has grown rapidly.30 
The Pradhan Mantri Krishi Sinchayee Yojana  (PMKSY), launched on 1 July 2015, aims to increase 
the use of more sustainable methods of irriga tion, such as drip and sprinkler irrigation. The 
Government has allocated INR 500 billion for the scheme for five years.  In 2017/18, India indicated 
that the scheme cost USD 437.45 million.31 
Support prices  
4.24.   Following each growing season,  the Government ann ounces minimum support prices (MSPs) 
for 24 crops, most of which are based on recommendations by the Commission for Agricultural and 
Costs and Prices (CACP).32 The price recommendations are based on a number of factors, including 
 
24 The subsidy takes into account a fixed cost, which is specific to each plant, and a variable cost, which 
is based on the main feedstock ( natural gas) whose prices are also regulated by the Government . 
25 NITI Aayog (2015), Raising Agricultural Productivity and Making Farming Remunerative for Farmers , 
Occasional Paper, 16 December. Viewed at: https://niti.gov.in/sites/default/files/2019 -07/RAP3.pdf . 
26 Informatio n provided by the authorities.  
27 The rate is determined to be reasonable if the net maximum retail price plus the subsidy is less than 
1.12 times the cost of sales; the net maximum retail price is defined as the maximum retail price minus the 
discount and minus the dealer's margin.  
28 Response provided by India to questions raised in the WTO Committee on Agriculture (meeting of 
25 June 2019).  
29 World Bank (2019), In the Dark: How much do power sector distortions cost South Asia? , Fan Zhang, 
South Asia Forum.  Viewed at : https://openknowledge.worldbank.org/bitstream/handle/ 
10986/30923/9781464811548.pdf?sequence=8 . 
30 Ministry of Finance, Economic Survey of India (2017 -18), Chapter 6 notes that there has been a 
steady decline in the water table in recent years. In 2017, the Central Ground Water Board estimated that 
annual groundwater consumption in some states in north India is higher than the annual extractable 
groundwater. Central Ground Water Board, National Compilation on Dynamic Ground Water Resources of Ind ia, 
2017.  Viewed at: http://cgwb.gov.in/GW -Assessment/GWRA -2017-National -Compilation.pdf . 
31 WTO document G/AG/N/IND/19, 31 March 2020.  
32 The CACP recommends prices for 22 products, and fair and remunerative prices for sugarcane. The 
MSPs for toria and de -husked coconut are fixed by the Department of Agriculture, Cooperation and Farmers' 
Welfare,  on the basis of MSPs for rapeseed/mustard seeds and copra, respectively. Price Support Scheme: the WT/TPR/S/ 403/Rev.1  • India  
 
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  demand and supply, cost of  production, trends in prices, and the terms of trade between agricultural 
and non -agricultural products. Among these, the cost of production is one of the most important 
factors, and is determined for the country on the basis of the weighted average cost of production 
across all the states. The Government offers to procure these crops at the MSP but farmers may 
also sell their crops on the open market if the prices are higher (Table 4.3). In addition, "fair and 
remunerative prices" for sugarcane are announ ced every year (Box 4.1).  
Table 4.3 Minimum support prices, 2014 –20 
(INR per quintal)  
Commodity/variety  2014 /15 2018 /19 2019 /20 
Paddy     
- common  1,360  1,750  1,815  
- grade 'A'  1,400  1,770  1,835  
Jowar     
- hybrid  1,530  2,430  2,550  
- Maldandi  1,550  2,450  2,570  
Bajra  1,250  1,950  2,000  
Maize  1,310  1,700  1,760  
Ragi 1,550  2,897  3,150  
Arhar (tur)  4,350  5,675  5,800  
Moong  4,600  6,975  7,050  
Urad 4,350  5,600  5,700  
Cotton     
- medium staple  3,750  5,150  5,255  
- long staple  4,050  5,450  5,550  
Groundnut s in shell  4,000  4,890  5,090  
Sunflower seed s 3,750  5,388  5,650  
Soybean s (yellow)  2,500  3,399  3,710  
Sesame  4,600  6,249  6,485  
Niger seed s 3,600  5,877  5,940  
Wheat  1,450  1,840  1,925  
Barley  1,150  1,440  1,525  
Gram  3,175  4,620  4,875  
Masur (lentil s) 3,075  4,475  4,800  
Rapeseed (mustard)  3,100  4,200  4,425  
Safflower seed s 3,050  4,945  5,215  
Toria 3,020  4,190  4,425  
Copra     
- milling  5,250  7,511  9,521  
- ball (calendar year)  5,500  7,750  9,920  
De-husked coconut  1,425  2,030  2,571  
Jute 2,400  3,700  3,950  
Sugarcane  (fair and 
remunerative price)  220 275 275 
Source:  Ministry of Agriculture and Farmers' Welfare, Directorate of Economics and Statistics.  
4.25.   The Government, through its agencies such as the FCI and others33, intervenes when the 
price of these products falls below the MSP, and purchases crops at the MSP.34 In practice, however, 
as noted by the Taskforce of the NITI Aayog on Agricultural Development, farmers are only 
guaranteed MSPs in regi ons in which the government agencies procure, and only for commodities 
that are procured. In other regions, even for commodities covered, not all farmers are able to sell 
their produce at the MSP.35  
 
Operational Guidelines . Viewed at: http://agricoop.nic.in/sites/default/files/p ssguidelines.pdf  on 
25 August  2020). 
33 While the FCI is the largest procurement agency, it principally procures wheat, rice and coarse grains. 
Other procurement agencies are the Cotton Corporation of India (CCI), the Jute Corporation of India (JCI), 
Centra l Warehousing Corporation (CWI), the National Agricultural Cooperative Marketing Federation of India 
(NAFED), the National Consumer Cooperative Federation of India (NCCF) and the Small Farmers Agro -
Consortium (SFAC).  
34 The procured grains are divided into operational stocks that are used for the targeted public 
distribution system, and the food security stocks that ensure grain supply in case of procurement or production 
shortfalls.  
35 NITI Aayog (2015), Raising Agricultural Productivity and Making Farming R emunerative for Farmers , 
Occasional Paper, November.  WT/TPR/S/ 403/Rev.1  • India  
 
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  4.26.   In September 2018 , the Government launched an umbrella scheme, the Pradhan Mantri 
Annadata Aay Sanrakshan Abhiyan  (PM-AASHA) , which is aimed at protecting farmer incomes 
through the Price Support Scheme ( PSS) for pulses, oilseeds and copra and , through  either the PSS 
or a "price deficiency payment" (under the Price Deficiency Payment System) , for all oilseeds for 
which MSPs are notified .36 The price deficiency payment ensure s that, if the market price falls below 
the MSP, the difference is paid directly to pre-registered  farme rs that sell their produce on the 
notified market . This ensure s that the procurement agencies do not need to intervene when the 
market price fall s below the MSP, thereby reducing the Government's subsidy bill as well as the cost 
of storage. Procurement und er the PSS is for a maximum of 90 days in the implementing states or 
union territories  (UTs) . The Pilot of Private Procurement and Stockist Scheme (PPPS) under the 
PM-AASHA scheme, allows  participation  by the private sector in stocking oilseeds .37 The selected 
private agency shall procure the commodity at the MSP in the notified markets during the notified 
period from the registered farmers, whenever prices in the market fall below the notified MSP and 
whenever authorized by the state or UT governme nt to enter the market. The maximum service 
charge to be paid to the  private agency , which is selected on the basis of criteria including its track 
record, corporate governance, management of agricultural products and targeted investment in the 
sector, is  15% of the MSP.  No state is implementing the scheme at present.38 
4.27.   In June 2020, the Government issued an ordinance amending the Essential Commodities 
Act.39 Under the amendment, the supply of cereals, pulses, potatoes, onions, and edible oilseeds 
(and oils ) may only be regulated under extraordinary circumstances (which may include war, famine, 
extraordinary price rises, and natural calamities).  In addition, limits on stocks of these commodities 
may only be imposed if: (i) there is a 100% increase in the ret ail price of horticultural products; or 
(ii) if there is a 50% increase in the retail price of non -perishable agricultural produce over the price 
prevailing in the immediately preceding 12 months or the average retail price over the previous five 
years, wh ichever is lower. The provision does not apply to any order relating to the public distribution 
system or the targeted public distribution system40; neither does it apply to the MSPs that are 
established every year. The ordinance was passed by both houses of Parliament in September 2020.  
4.28.   The Government also announces fair and remunerative prices for sugarcane, and maintains a 
number of schemes to assure farmer incomes (Box 4.1).  
4.29.   Other challenges facing agriculture include a distortion of cropping patterns i n favour of 
commodities procured by the central Government at the MSP (principally, wheat, rice, cotton and 
sugar) and away from other commodities, such as pulses, coarse grains and oilseeds; and a strain 
on water resources, especially in the states where most procurement takes place.41 (Section 4.1.3.3) 
The practice of procurement from certain states has also resulted in regional disparities in 
production. It is also suggested that, due to the fragmentation of agricultural markets and weak 
infrastructure, farmers receive only a fraction of the price paid by consumers, with the bulk going to 
intermediaries.42 
 
 
36 FCI, Amended Guidelines for Price Support Scheme (PSS) Under PM -AASHA . Viewed at: 
http://fci.gov.in/app/webroot/upl oad/Procurement/PSS%20Guidelines.pdf . 
37 The oilseeds covered include groundnuts in shell, soybeans, sunflower seeds, sesamum, Niger seeds, 
rapeseed/mustard seeds, safflower and toria. Department of Agriculture and Farmer Welfare, Guidelines for 
pilot of Private Procurement & Stockist Scheme und er umbrella scheme of PM -AASHA. Viewed at: 
http://agricoop.gov.in/sites/default/files/Guidelines%20PPSS.pdf . 
38 Information provided by the authorities.  
39 The Gazette of India,  The Essential Commodities (Amendment) Ordinance, 2020, No. 8 of 2020.  
Viewed at: https://consumeraffairs.nic.in/sites/default/file s/file-uploads/essential -commodities -
order/EC_Ordinance.pdf . 
40 The provision on limiting stocks does not apply to a processor or a participant in a value chain if the 
stock limit does not exceed their installed processing capacity, or export demand in the case of an exporter.  
41 Economic Survey 2018 -19, Chapter 6. Viewed at: 
https://mofapp.nic.in/economicsurvey/economicsurvey/pdf/082 -101_Chapter_06_ENGLISH_Vol_01_2017 -
18.pdf . 
42 NITI Aayog, Occasional Paper, Raising Agricultural Productivity and Making Farming Remunerative for 
Farmers , 16 December 2015.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Box 4.1 Support programmes for sugar  
Sugar  is subject to the Essential Commodities Act, 1955, which permi ts control of the production, supply and 
distribution of, and trade and commerce in , certain commodities in the interest of the general public. According 
to the Department of Food and Public Distribution , in the Ministry of Consumer Affairs, Food and Public 
Distribution, the current annual capacity of India's sugar mills is around 33 mill ion MT. Sugar production is 
mainly structured to meet domestic needs, with the excess being exported.  
Sugarcane producers are guaranteed a minimum price through the "fair and remunerative prices" (FRPs) 
announced each year. The prices are based on recommendations by the CACP , and are approved by the 
Cabinet Committee on Economic Affairs, chaired by the Pri me Minister. They are calculated under the 
Sugarcane (Control) Order , and take into account various factors , including the cost of production, returns to 
growers from alternative crops, the availability of sugar to consumers at a fair price, and reasonable  margins 
for sugarcane cultivators. No sugar mill may purchase sugarcane from farmers at prices below the FRP.  The 
states may also have set advisory prices (SAPs) for sugarcane , which may be higher or lower than the central 
Government's FRP. Four states (U ttar Pradesh, Uttarakhand, Punja b, and Haryana) currently set SAPs which 
are generally higher than the FRP . In addition, on 7 June 2018 , the Government , under the Sugar Price 
(Control) Order, 2018, introduced a minimum retail price (MRP) for sugar sold by sugar mills on the domestic 
market.43 According to the authorities, because the average ex -mill prices fell during 2017 /18, the MRP was 
introduced to ensure the smooth functioning of the sugar mills. The MRP was initially set at INR 29/kg, and 
was revised on 14 February 2019 to INR 31/kg.  
The difference between the FRP and the MRP meant that the cane mills were run at a loss and were unable to 
meet their payments to farmers. To help the mills meet such arrears, the Government provided assistance , 
in the fo rm of interest forgiveness (up to 12% of the rate charged by banks) on 5 -year loans. In 2015 , a 
"production subsidy" of INR 4.50 per quintal was provided to sugar mills. Under a new scheme, in 2017 /18, 
the Government provided INR 5.50 per quintal of crushe d cane to sugar mills , to ensure that they are able to 
pay sugarcane producers; the amount was increased to INR 13.88 per quintal in 2019.  
In addition, the Sugar Development Fund provides loans to sugar mills at concessional rates of 2% below the 
prevaili ng bank rate , for the modernization and expansion of sugar factories; cane development; bagasse -
based co -generation power projects; and production of ethanol from molasses.  
Other programmes to assist sugar mills include the Ethanol Blended Petrol (EBP) Programme , which aims to 
use molasses in years of surplus sugarcane production and low domestic prices. The targets for blending have 
been increased from 5% to 10% until 2022 , with a long -term target of 20% in 2030. Various incentives are 
provided , such as a waiving of excise duties on ethanol supplied for the EBP Programme , and a simplification 
of the procurement procedures. In 2018 , to increase ethanol production capacity , the Government provided 
an interest subvention on  loans to mills , to a maximu m of 6% for 5 years (including a 1 -year moratorium) for 
setting up new distilleries or upgrading existing ones , and for achieving zero liquid discharge.  
The central Government also created a buffer stock of 3 million MT of sugar in July 2018 , which was in creased 
to 4 million MT on 1 August 2019. The buffer stock is maintained to ensure supplies and regulate prices in the 
domestic market. The Government pays the sugar mills the cost of transportation and insurance of the stock. 
Around INR 11.75 billion  is reimbursed to sugar mills for such costs and for the mills to pay their dues to 
sugarcane farmers. The stock is allocated by the Government to the sugar mills , based on the fulfilment of 
exports under the minimum indicative export quota (MIEQ) allocated to them during the year.  
The MIEQ is set by the central Government for each sugar mill. Allocations for the MIEQ are based on the 
average production of each mill during the previous three years. The MIEQ for 2017 /18 was 2 million MT but 
only 619,000 MT was a ctually exported. The quota for 2018 /19 was 5 million MT but only  3.7 million MT was 
exported. For 2019 /20, a maximum admissible export quantity (MAEQ) of 6 million MT was  allocated ; the 
MAEQ replaced the MIEQ . The exports are carried out directly by the m ills and sugar exporters.  Assistance is 
provided for internal transport, freight, handling and other charges , to help sugar mills to export. In 2018 /19, 
the assistance provided was INR 1,000/MT for mills located within 100 km of the ports, INR 2,500/MT for  mills 
located more than  100 km from the ports , and INR 3,000/MT for mills located in non -coastal states, or actual 
expenditure, whichever was lower. The Department of Food and Public Distribution estimates that total 
expenditure was expected to be INR 13. 75 billion in 2018 /19. As a result of these measures, the arrears to 
farmers decreased  to INR 2.55 billion (on 5 November 2019).  
Source:  Department of Food and Public Distribution , Scheme for Assistance to Sugar Mills for Sugar Season 
2018-19. Viewed at: https://dfpd.gov.in/assistance_mills.htm;  and information provided by the 
authorities . 
4.30.   To respond to such concerns, some states have encouraged direct sales by farmers to 
consumers but the scale of such markets is relatively small. The electronic  National Agricultural 
 
43 According to the Department of Food and Public Distribution, the Order issued under the provisions of 
the Essential Commodities Act, 1955, was to "ensure at least the minimum cost of production" for ind ustry "so 
as to enable them to clear cane price dues of farmers". General Policy. Viewed at: 
https://dfpd.gov.in/gen_policy.htm . WT/TPR/S/ 403/Rev.1  • India  
 
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  Market (e -NAM) was launched on 14 April 2016. It aims to unify the state markets, currently 
administered by the state Agricultural Produce Marketing Committee (APMC), with its own marketing 
regulations, including for licences and fee s. The e -NAM allows farmers to auction produce either in 
the local market or on markets on the e -NAM platform. States may only join the portal once they 
have: put in place a single (unified) trading licence which is valid across the states; put in place a 
single point at which the market levy must be paid; and provided for e -trading or auction to 
determine prices. As at January 2019, 16 states and 2 UTs had implemented such measures, with 
around 585 wholesale APMC markets being integrated into e -NAM.44 Some  states provide incentives 
(mainly through rebates of market fees) to encourage transactions through e -NAM. 
4.31.   Further marketing reforms took place in June 2020, with the Farmers' Product Trade and 
Commerce (Promotion and Facilitation) Ordinance, 2020 (FPTC),  and the Farmers (Empowerment 
and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 (FAPAFS). The 
FPTC guarantees freedom to farmers and traders to conduct intra - or inter -state trade in the 
agricultural products listed, including foodstuffs, cattle fodder and raw cotton.45 The farmer or trader 
is not required to pay a marketing fee, and does not need to be licensed (except for needing a 
permanent account number (PAN) under the Income Tax Act). The FAPAFS encourages contract 
farming , and its goal is to protect and empower farmers so that they can engage with agri -business 
firms, processors, wholesalers, exporters or large retailers for farm services at mutually agreed 
prices and in a transparent manner.46 The Ordinances were passed b y Parliament in September 
2020.  
4.32.   The Government also implements a Market Intervention Scheme (MIS) for perishable 
agricultural/horticultural commodities for which MSPs are not announced. This is implemented in the 
event of prevailing market prices falling by 10% over the previous "normal"  year, or production 
rising by 10% from the previous marketing period, and on request by the affected state. Under the 
Scheme, perishable crops are procured by state procurement agencies at a pre -determined market 
intervention price (MIP) that covers produ ction costs. The MIS is implemented for a specific period 
or until the market prices stabilize (whichever is earlier). The cost of the Scheme is shared equally 
between the central and state governments (except for states from the north -east, which pay 25% 
of the cost, and the central Government the remainder). The Scheme is restricted to 25% of the 
total value of procurement (including the cost of the commodity procured plus permitted overhead 
expenses). At present, procurement is restricted to 20% of the a nticipated production of the 
commodity for that particular year or season.47 According to the authorities, over the review period, 
the MIS was not used extensively , and the procurement against the sanctioned quantity was 
minimal . 
Procurement and public dis tribution  
4.33.   Food grains are released for public distribution by the central Government. They are procured 
and sold to the state governments at the Central Issue Price (CIP), which is lower than the MSP. The 
size of the Government's food subsidy is the differ ence between the MSP and the CIP plus the cost 
of procuring, storing and transporting the grains. Once the grain is transferred to the states, they 
are responsible for transporting it from the storage facilities to the "fair price shops" for distribution 
to the beneficiaries. The states may also reduce prices for the beneficiaries below the CIP announced 
by the central Government; in such cases, the price difference is subsidized by the state 
government.48 According to India's notifications to the WTO, tota l support for buffer stock operations 
increased from USD 14.8 billion in 2013/14 to USD 18.0 billion in 2017/18.49 The stock of food grains 
 
44 PIB, Integration of Mandis With e -NAM. Viewed at: 
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1558623  (2 August 2020).  
45 Foodstuffs include cereals like wheat, rice or other coarse grains, pulses, edible oilseeds, vegetables, 
fruit, nuts, spices, sugarcane, products of poultry, swine, goats, fish and dairy intended for human 
consumption in their natural or processed forms (Chapter 1 of the Ordinance).  
46 Gazette of India, The Farmers (Empowerment and Protection) Agreement on Price Assurance and 
Farm Services Ordinance, 2020, No. 11 of 2020. Viewed at: 
http://agricoop.nic.in/sites/default/files/The%20Farmers%20%28Empowerment%20and%20Protection%29%2
0Agreement%20on%20Price%20Assurance%20and%20Farm%20Services%20Ordinance%2C%202020.pd f.  
47 Information provided by the authorities.  
48 The states may also increase the amount of food grains distributed, and extend coverage of the food 
grains, e.g. by including other crops, such as pulses.  
49 WTO documents G/AG/N/IND/11,13 July 2017; and G/AG/N/IND/13, 20 July 2018.  WT/TPR/S/ 403/Rev.1  • India  
 
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  in the Central Pool in December 2019 was 56 million MT (around 21 million MT of rice and 35 million 
MT of wheat).50 
4.34.   Under  the National Food Security Act, 2013 (NFSA), rice, wheat and coarse grains are to be 
provided at subsidized prices not exceeding INR 3, INR 2 and INR 1, respectively, initially for a 
period of three years, and as fixed by the central Government there after under the targeted public 
distribution system (TPDS). The Government decided to extend these subsidized rates to June 
201951 and beyond, until further notice.52 Each person in a priority household identified by the states 
is entitled to receive 5 kg of food grains per month at these prices.53 In addition, the poorest 
categories of households falling under the Government's Antyodaya Anna Yojana  (AAY) are entitled 
to 35 kg per household per month at these prices. The central Government currently provides a 
fixed subsidy of INR 18.50/kg for each AAY family.54 The NFSA aims to provide subsidized food to 
75% of the rural population and up to 50% of the urban population (approximately two -thirds of the 
Indian population).55 In 2020, to respond to the COVID -19 pandemic, the Government increased 
the provision of food for three months under the Prime Minister's Garib Kalyan Yojana  (PMGKY); for 
migrants a nd in the urban areas, state governments were permitted to provide free food and water 
for two months (Box 1.1).  
4.35.   Additional schemes which are implemented by the state governments are targeted specifically 
at pregnant and lactating women, who are entitled t o a free meal during pregnancy and six months 
after childbirth in order to meet the nutritional standards specified in the Act (Schedule II) and at 
least INR 6,000 in maternity benefits; and children up to the age of 14 years, who are entitled to 
free meal s to meet the nutritional standards specified in the Act.  
4.36.   Sugar is procured for distribution to AAY families under the TPDS but it is purchased on the 
open market by designated agencies of the state governments.  Around 300,000 MT of sugar is 
procured by th e states per year. The procurement of sugar is outside the ambit of the NFSA.  
4.37.    The Act also defines the responsibilities of the central (Chapter VIII) and state (Chapter IX) 
governments in implementing the Act. The central Government is responsible for (i)  procuring food 
grains through its agencies; (ii) allocating food grains to the states; (iii) transporting the food grains 
to the designated depots in each state; (iv) providing assistance to the state governments in meeting 
expenditures for transport with in the state; and (v) creating and maintaining storage facilities. The 
state governments are responsible for implementing and monitoring the various schemes under the 
Act, including identification of the households covered by the Act, delivery of food grai ns through 
fair price shops (FPSs), issuance of licences to the FPSs, and setting up a grievance redressal 
mechanism as required in Chapter VII of the Act. As at 1 November 2016, all states were 
implementing the NFSA. As at 1 June 2019, the Act covered abo ut 813.5  million persons, with an 
annual allocation of food under the NFSA and other welfare schemes of about 61 million MT during 
2019/20.56 The Government relies almost exclusively on public stocks to meet food needs under the 
NFSA. According to the auth orities, there are no plans at present to diversify the source of overall 
food requirements.  
4.38.   In 2015, the High -Level Committee on Restructuring the FCI recommended that the FCI 
should hand over all procurement of wheat and rice to states that had enough ex perience and 
sufficient infrastructure. At the time, six states had been identified. The FCI handed over 
 
50 Lok Sabha Unstarred Q uestion No. 1739. Viewed at: 
http://164.100.47.194/Loksabha/Questions/QResult15.aspx?qref=1866&lsno=17 . 
51 Department of Food and Public Distribution, Central Issue Pr ice under NFSA . Viewed at:  
https://dfpd.gov.in/pds -cipunfsa.htm . 
52 Department of Food and Public Distribution , Gazette of India, Notification . Viewed at: 
https://dfpd.gov.in/fgAvAHcAcgBpAHQAZQByAGUAYQBkAGQAYQB0AGEALwBQAG8AcgB0AGEAbAAvAE0AYQBn
AGEAegBpAG4AZQAvAEQAbwBjAHUAbQBlAG4AdAAvAA==/1_483_1_nfsaa -051119.pdf . 
53 Under the TPDS, 15 kg per month of subsidized wheat, rice, coarse grains, kerosene and sugar we re 
provided per household. For those judged to be below the poverty line, the amount was 35 kg per month.  
54 Lok Sabha Unstarred Question No. 1739. Viewed at: 
http://1 64.100.47.194/Loksabha/Questions/QResult15.aspx?qref=1866&lsno=17 . 
55 In March 2020, India notified the WTO under the Peace Clause that it had breached its de minimis  
level for rice in marketing year 2018/19 (WTO document G/AG/N/IND/18, 31 March 2020).  
56 Lok Sabha Unstarred Question No. 1739. Viewed at: 
http://164.100.47.194/Loksabha/Questions/QResult15.aspx?qref=1866&lsno=17 . WT/TPR/S/ 403/Rev.1  • India  
 
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  procurement operations to state governments in four of the six states.57 With regard to the NFSA, 
the Committee had recommended that the central Govern ment should defer payment of the subsidy 
to states that had not made the list of beneficiaries available online nor had established vigilance 
committees, as required by the Act. It also recommended that the target of reaching 67% of the 
population was too high, and could be reduced to 40%, which would still cover those below the 
poverty line. Moreover, pricing for products available under the NFSA should be linked to the MSPs 
(the Committee suggested it could be 50% of the MSPs), failing which the subsidy w ould continue 
to rise to the detriment of investment in agriculture.58 
4.39.   The NFSA 2013 provides for reforms of the TPDS, including cash transfers for purchasing 
food. Under the Cash Transfer of Food Subsidy Rules, 2015 , a pilot project was started in two UTs  
in September 2015, and extended to one other UT in March 2016. The cash equivalent of the subsidy 
is transferred directly to the bank accounts of eligible households, to allow them to purchase food 
on the open market. T he amount of food subsidy to be tran sferred is calculated by multiplying the 
entitled quantity of food  grains by the difference between 1.25 times the applicable MSP (derived 
MSP for rice) and the CIP, as revised from time to time by the central Government . The amount of 
cash transfers made by the Government under the scheme increased from INR 593 million in 
2015/16 to almost INR 1.6 billion in 2018/19.59 
4.1.4   Other measures  
4.40.   Assistance is provided through a number of central and state government schemes aimed at, 
inter alia , increasing productivity in agriculture.  
4.41.   The National Food Security Mission (NFSM), which was launched in 2007 /08 to increase the 
production of rice, wheat and pulses (pigeon pea s, green and black gram, pea s and lentils) , remains  
in place. Its focus is to provide extension services, cluster demonstration, training for farmers , and 
the supply of inputs. Kits containing inputs such as gypsum, micronutrients, rhizobium culture, 
phosphate solubili zing bacteria , plant protection chemicals, urea for foliar spray , and weedicides , 
are given to all farmers, free of charge,  for a maximum area of 2 hectares.  The contents of the kit 
are kept very broad to accommodate all the crops supported under the Mission . However, the overall 
cost of the kits should not exceed a spe cified limit. The areas covered by the Mission  have been 
extended , and new initiatives , such as  the distribution of quality seeds of newer varieties of pulses 
free of charge,  were introduced during 2016 /17. Subsidies for seed are provided for a number of 
crops, including rice, wheat, arhar, moong, ur ad, gram, lentil s, maize, and barley, in various states.60 
In its latest notification to the WTO, India indicated that the cost of the Mission in 2017/18 was 
USD 32.26 million.61 
4.42.   The Rashtriya  Krishi Vikas Yojana  (RKVY) - Remunerative Approaches for Agriculture and 
Allied Sector Rejuvenation (RKVY -RAFTAAR), which is in place since 2007, was extended to 2019/20, 
with an expenditure of INR 97.3 billion. In its latest notification to the WTO, Indi a indicated that the 
cost of the programme was USD 552.35 million in 2018/19.62 Its objective is to make farming a 
remunerative economic activity, through strengthening farmers' efforts through the creation of pre - 
and post -harvest agri -infrastructure, mit igating risk, and promoting agri -business entrepreneurship. 
The funds are to be used for specific activities: 70% should be used in pre - and post -harvest 
infrastructure, in value -addition -linked production -stream projects (agribusiness models) that 
provide  additional income to farmers, or in any projects related to innovative activities in agriculture 
and related sectors (maximum 20% of the 70%); of the remaining 30%, 20% should be used for 
national priorities, as notified by the central Government, and 10%  for encouraging innovation and 
 
57 The FCI also initially withdrew from p rocurement operations in the state of Haryana in 2015/16 but 
was requested to continue carrying out procurement operations by the state government. The FCI was also 
requested by the remaining state government to continue its procurement operations in that state.  
58 FCI, Report of the High -Level Committee on Reorienting the Role and Restructuring of Food 
Corporation of India, January 2015 . Viewed at: 
http://fci.gov.in/app2/webroot/upload/News/Report%20of%20the%20High%20Level%20Committee%20on%2
0Reorienting%20the%20Role%20and%20Restructuring%20of%20FCI_English.pdf . 
59 Department of Foo d and Public Distribution . Viewed at: https://dfpd.gov.in/pds -dbt.htm , 2 August 
2020.  
60 WTO document G/AG/W/199, 14 June 2019.  
61 WTO document G/AG/N/IND/19, 31 March 2020.  
62 WTO document G/AG/N/IND/19, 31 March 2020.  WT/TPR/S/ 403/Rev.1  • India  
 
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  agri-entrepreneurs through skill development and financial support (including 2% of administrative 
costs).63 
4.43.   The Pradhan  Mantri Kisan Samman Nidhi  (PM-KISAN) (Prime Minister Farmer's Honour Fund 
Scheme), implemented on 1 December  2018, provides  income support  to small marginal farmers 
(SMFs). Under the Scheme , income support of INR 6,000 per year was provided initially only to SMF  
households  that h eld a maximum of 2 hectares  (with certain exclusions); the Scheme was broadened 
on 1 June 2019 to cover all eligible farmer families, irrespective of the size of the cultivable 
landholding (subject to certain exclusions) . According to India's latest notific ation to the WTO, the 
cost of the measure in 2018/19 was USD 852.70 million.64 For financial year 2018 /19, INR 200  
billion  was allocated to the Scheme and for 2019 /20, INR 750  billion . As at 11 March 2020, the 
PM-KISAN Scheme had provided financial assista nce to almost 87 million beneficiaries.  
4.44.   Other support measures include financial assistance to increase investment, production, 
income and employment; priority bank -lending targets; and loans to farmers at subsidized rates of 
interest.  
4.45.   Through the NABARD, India provides grants for a portion of selected projects aimed at 
enhancing investment, income and employment in sectors of national importance, such as the dairy 
sector, livestock and other animal husbandry, and the production of organic/biological inputs . The 
level of the subsidy, especially in the case of the schemes under the National Livestock Mission and 
under the New Agricultural Marketing Infrastructure (AMI)65, may vary according to the region where 
producers are located, their income level, and th e type of beneficiary (e.g. women, and Scheduled 
Caste (SC) and Scheduled Tribe (ST) farmers) (Table 4.4).66 
Table 4.4 Credit -related subsidies/other assistance schemes, 2019 -20 
Dairy Entrepreneurship Developm ent Scheme (DEDS)  
Budget allocation: INR 3.25 billion  
Assistance: 25% of the project cost (33.33% for Scheduled Caste and Scheduled Tribe (SC/ST) farmers), 
with a maximum ceiling that varies according to the activity  
Capital Investment Subsidy Scheme for Commercial Production Units for Organic/ Biological 
Inputs  
Budget allocation:  INR 30 million (2018/19); no allocation for 2019/20 or 2020/21  
Assistance: subsidy is 25%, 33% or 40% of the capital cost of the project , subject to a ceiling of INR 4 
million to INR 6 million , depending upon the type of activity (e.g. fruit and vegetable waste compost 
production or soil -testing lab oratory  at village level)  
Entrepreneurship Development and Employment Generation (ED EG) component of National 
Livestock Mission  
• Poultry Venture Capital Fund (PVCF)  
• Integrated Development of Small Ruminants and Rabbit s (IDSRR)  
• Pig Development (PD)  
• Salvaging and Rearing of Male Buffalo Calves (SRMBC)  
Budget allocation: INR 1.99 billion  
Assistance: 25% of cost of project , with a ceiling that varies according to the activity  
New Agricultural Marketing Infrastructure (AMI)  
Budget allocation: INR 2.29 billion  
Assistance: eligible subsidy is 25% or 33.33% of the capital cost investment in storage and marketing 
infrastructure projects , depending upon the area and category of beneficiary.  
Source:  NABARD, Capital Investment Subsidy Scheme for Commercial Production Units for Organic/Biological 
Inputs . Viewed at: https://www.nabard.org/content1.aspx?id=592&catid=23&mid=530 . 
4.46.   The National Dairy Plan Phase I (NDP I) (2011 /12 to 2018 /19) was launched to help increase 
the productivity of milk ani mals and milk production to meet the rapidly growing demand for milk , 
and to help provide rural milk producers with greater access to the organized milk -processing sector. 
 
63 Rashtriya Krishi Vikas Yojana  - Remunerative Approaches for Agriculture and Allied Sector 
Rejuvenation . Viewed at: https://rkvy.ni c.in/static/download/pdf/RKVY_14th_Fin._Comm.pdf . 
64 WTO document G/AG/N/IND/19, 31 March 2020.  
65 NABARD, New Agricultural Marketing Infrastructure (AMI) sub -scheme of Integrated Scheme for 
Agricultural Marketing (ISAM) – Operational Guidelines. Viewed at: 
https://www.nabard.org/auth/writereaddata/tender/1412180913Cir_283_E%20.pdf . 
66 NABARD, Circular No. 205/DoR -58/2019, 27 June 2019.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Total funding for the project is INR 22.42 billion.67 In addition, India's leading m ilk-producing states, 
Gujarat and Maharashtra, offer a subsidy of INR  50,000 per tonne of exported skim -milk products. 
The central Government approved an additional subsidy of 10% to increase milk -powder exports, 
as domestic prices have been declining.68 
4.47.   The Interest Subvention Scheme  (Kisan Credit Card Scheme) for farmers aims to provide 
short-term credit to farmers at subsidized interest rates. The Scheme came into force in 2006/07 
and is being continued in 2018/19 and 2019/20. The subvention varies accor ding to the type of loan; 
there are loans for short -term crops, post -harvest loans, and relief for farmers affected by natural 
disasters. For short -term (up to one year) crop loans of up to INR 300,000, the interest rate of 7% 
may be reduced to 4% if the l oan is paid within one year. Post -harvest loans for storage in accredited 
warehouses are also available at an interest rate of 7%, for loans of up to six months and of up to 
INR 3 million.69 
4.48.   The Agriculture Infrastructure Fund was established in 2020 for f unding infrastructure 
projects. It will provide an interest subvention of 3% per year for seven years for short -term 
agricultural loans of up to INR 20 million for post -harvest management projects.70 The Fund will be 
implemented over the period 2020/21 to 2029/30.71 
4.49.   To provide relief to farmers affected by natural calamities72, an interest subvention of 2% is 
available to banks on restructured loans for the first year.  An additional subvention of 2% is available 
to banks for three years and up to a maximum of five years, to provide relief to farmers affected by 
severe natural disasters. Moreover, in all such cases, if the loan is repaid when it is due, an annual 
incentive of 3% is also provided to the farmers.73  
4.50.   Since the last Review, changes were made the insurance scheme for the agricultural sector. 
In February 2016, the Government introduced the Pradhan Mantri Fasal Bima Yojana  (PMFBY), a 
crop insurance scheme which replaced the National Agricultural Insurance Scheme. The Scheme 
aims to provide financial support for crop loss or damage due to unforeseen circumstances; stabilize 
farmers' incomes; encourage farmers to adopt innovative and modern agricultural practices; and 
ensure a flow of credit to the sector, th ereby contributing to food security, crop diversification and 
growth, and competitiveness, and protecting farmers from production risks.74 The Scheme divides 
the states into homogenous "clusters", based on their risk profile and agri -climatic zone; each cl uster 
 
67 The project is funded by se veral agencies: INR 1.8 billion from the central Government; 
INR 2.0 billion from the National Dairy Development Board; INR 28.2 billion from the implementing agencies; 
and INR 15.8 billion from the World Bank's International Development Agency (Department  of Animal 
Husbandry and Dairying). National Dairy Plan (Phase -1). Viewed at: 
http://dadf.gov.in/sites/default/filess/National%20Dairy%20Plan%20%28Phase -I%29%20%28NDP -I%29.pdf . 
68 WTO document G/AG/W/194, 15 February 2019.  
69 NABARD, Modified Interest Subven tion Scheme for Short Term Crop Loans during 2018 -19 and 
2019-20. Viewed at:  https://www.nabard.org/CircularPage.aspx?cid=504&id=2922 . 
70 Including supply -chain services, such as e -marketing platforms, warehouses, silos, pack -houses, 
assaying units, sorting and grading units, cold chains, logistics facilities, primary processing centres, ripening 
chambers, and other viable projects for building community farming assets, such as organic input production, 
bio-stimulant production units, infrastructure for smart and precision agriculture, and supply -chain 
infrastructure for clusters of crops, including for export. Department of Agriculture, Cooperation & Farmers 
Welfare, Circular regarding FAQs on implementation of Central Sector Scheme of Financing Facility under 
Agriculture Infrastructure Fund . Viewed at: http://agricoop.nic.in/sites/default/files/FAQs%20on%20AI F.pdf. 
71 The eligible entities are: primary agricultural credit societies; marketing cooperative societies; 
farmer -producer organizations; self -help group farmers; joint liability groups; multipurpose cooperative 
societies; agri -entrepreneurs; startups; and centra l/state agency - or local body -sponsored public private 
partnership projects. Department of Agriculture, Cooperation & Farmers Welfare, Circular regarding FAQs on 
implementation of Central Sector Scheme of Financing Facility under Agriculture Infrastructure  Fund. Viewed 
at: http://agricoop.nic.in/sites/default/files/FAQs%20on%20AIF.pdf . 
72 The granting of such benefits in cases of severe natural calamities is determined by the High -Level 
Committee, based on the recommendations of the Inter -Ministerial Central Team and the Sub -Committee of 
the National Executive Committee.  
73 Modified Interest Subvention Scheme for short -term crop loans during 2018/19 and 2019/20. Circular 
No. 100, 14  May 2018, on "continuation of ISS for Short Term Crop Loan on interim basis during the year 
2018-19". In continuation of the same, the Ministry of Agriculture and Farmers Welfare letter No. 1 -7/2018 -
Credit -I, 11 February 2019, conveyed a continuation of t he interest subvention scheme during the year 
2018/19 and 2019/20 in a modified form.  NABARD, Interest Subvention Scheme. Viewed at : 
https://www.nabard.org/content1.aspx?id=602&ca tid=23&mid=530 . 
74 Pradhan Mantri Fasal Bima Yojana . Viewed at : http://www.agri -insurance.gov.in/PMFBY.aspx . WT/TPR/S/ 403/Rev.1  • India  
 
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  is then allocated to a single insurance provider, through a system of competitive bidding.75 Insurance 
providers are selected on the basis of the lowest weighted premium rates. By end -March 2017, 
23 states had implemented the Scheme.76 During 2018/19 , around 56 million farmers, accounting 
for around 30% of the gross cropped area, were covered by the Scheme, compared to around 23% 
under the National Agricultural Insurance Scheme in 2015/16.  
4.51.   The priority sector lending requirements require domestic comm ercial banks (excluding 
regional rural banks and small finance banks) to reserve 18% of their adjusted net bank credit 
(ANBC) for the agriculture sector. In addition, since 2013, foreign banks are also required to meet 
this target (Section 4.4.1.1).  
4.52.   In the  fisheries sector, the Marine Products Export Development Authority ( MPEDA ), provides 
assistance for the production and export of fish products (Table 4.5). To increase trust in its fish 
products, India established a traceability system for both cultivated  and captured products , through 
a producers' registry; it also implemented a catch certification scheme , to prevent and discourage 
illegal, unreported  and unregulated (IUU) fishing. To facilitate export procedures, the MPEDA 
introduced a computerized system to issue online registration certificates, and to process 
applications for subsidies and for their disbursement. The pre -harvest testing of aquacult ure 
products, and National Residue Control Plan (NRCP) laboratory -testing are also computerized.  
Table 4.5 Measures to increase fish production and exports  
Financial assistance  
To owners of fishing vessels, t o install insulated fish holds/refrigerated seawater systems/ice -making 
machinery, for better preservation of catch.  
Technical and financial assistance for the development of new areas for shrimp and scampi culture in all the 
maritime states.  
To set up co mmon facilities so that small farmers may adopt sustainable practices to cultivate shrimp.  
For the cost of inputs (e.g. seed, feed and fencing) to promote crab farming.  
Financial/technical assistance to promote the production of species such as cobia, gene tically improved farmed 
tilapia (GIFT), high -health tiger shrimp, and sea bass.  
Up to 50% of the investment to set up modern ornamental fish breeding units, to encourage mass production 
of good -quality ornamental fish.  
To seafood processors, for the settin g-up of mini –laboratory and pre -processing centres.  
For cold -chain development, by subsidizing: the distribution of insulated fish boxes; the acquisition of 
refrigerated trucks/containers; the construction of new large cold storage; the construction of ne w ice plants 
and the renovation of existing ones; and the establishment of facilities to process and store frozen, fresh, 
chilled, live and dried marine products.  
For the conversion/construction of tuna long liners.  
For the setting -up of state -of-the-art processing facilities for value -added marine products meant for export.  
To operate a scheme of sea -freight assistance to promote exports of value -added marine products by 
registered seafood manufacturer -exporters.  
To operate a scheme to provide group insurance to workers employed in the seafood processing and 
pre-processing industries.  
Sanitary measures  
Technical assistance to implement seafood Hazard Analysis and Critical Control Points (HACCP) in the seafood 
industry.  
The MPEDA has four quality -control laboratories, to implement the National Residue Control Plan for 
aquaculture products.  
The quality -control laboratories are also undertaking a project for the Monitoring of Pesticide Residues at 
National Level, (MPRNL) funded by the Department of Agri culture (Ministry of Agriculture).  
Ensure production of quality seafood by setting up laboratories.  
Operate a network of laboratories to ensure that aquaculture exports are antibiotic - and residue -free. 
Extension services/ R&D 
Upgrade fishing harbours to  international standards.  
Provide extension packages to fishermen/farmers and workers engaged in various stages of processing of 
marine products.  
R&D activities for developing new aquaculture technologies.  
Extension education programmes, to promote conservation and sustainable fishing , with a special focus on 
small-scale fish farmers.  
 
75 Insurance Regulatory Authority of India (2018) IRDAI Journal Quarterly , April-June. Viewed at:  
https://www.irdai.gov.in/ADMINCMS/cms/Uploadedfiles/IRDAIJournalAprilJune2018final.pdf . 
76 Department of Financial Services, Pradhan Mantri Fasal Bima Yojana . Viewed at:  
https://fi nancialservices.gov.in/insurance -divisions/Government -Sponsored -Socially -Oriented -Insurance -
Schemes/Pradhan -Mantri -Fasal-Bima-Yojana(PMFBY) . WT/TPR/S/ 403/Rev.1  • India  
 
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  Marketing/information  
Establish the presence of Indian seafoods in major international markets, by co -branding Indian products with 
major buyers and organizing international marketing campaigns.  
Participate in international seafood shows, to showcase resources and the potential of Indian seafood, thereby 
gener ating new trade relationships.  
The MPEDA publishes weekly and monthly magazine information on trade developments and other issues 
related to the market, including indicative prices of seafood in different markets around the world.  
Source:  Department of Co mmerce, Marine Products Export Development Authority . Viewed at: 
https://commerce.gov.in/InnerContent.aspx?Id=219 . 
4.2  Energy  
4.53.   India is the third -largest producer and consumer of electricity in the world.77 Since 2014/15, 
consumption of electricity has increase d sharply, to over 1 million GWh (Table 4. 6). The industrial 
sector remains the largest consumer; as a result, a programme for industries , such as aluminium, 
cement, fertilizer, iron and steel, pulp and paper, and textile , to become more energy -efficient was 
implemented.78 Annual consumption per capita increased from 1,010 kWh in 2014/15 to 1,208  kWh 
in 2019/20 .79 
Table 4.6 Consumption of electricity, 2014/15 -2018/19  
Sectors  2014/15  2015/16  2016/17  2017/18  2018/19  
Total (GWh)  948,328  1,001,191  1,061,183  1,123,427  1,158,310  
 (% of the total)  
Industry  44 42 42 42 42 
Domestic  23 24 24 24 24 
Agriculture  18 17 18 18 18 
Commercial  8 9 8 8 8 
Other (including railways)  7 8 8 8 8 
Source:  Ministry of Statistics and Programme Implementation , Energy Statistics  (several years). Viewed at: 
http://mospi.nic.in/download -reports?main_cat=NzI2&cat=All&sub_category=All ; and information 
provided b y the authorities . 
4.54.   Since 2019, the Electricity Act, 2003  has re gulated g eneration, transmission, distribution, and 
trading in all states. Previously, the Act applied in all states except in the state of Jammu and 
Kashmir ; that state had its own Act, which has since been annulled .80 The Electricity Act, 2003  was 
not am ended over the review period; a draft amendment  bill is under consideration in 2020.81 
4.55.   In India , both the central and state governments supervise the electricity sector.82 The 
Ministry of Power formulates the National Electricity Policy and the Tariff Policy, following the advice 
of the Central Electricity Authority (CEA) and the states.83 The CEA formulates the National Electricity 
Plan to implement the Policy's objectives . Other central government agencies that intervene in the 
energy sector include the Ministry of New and Renewable Energy (MNRE); and the Department of 
Atomic Energy.  
4.56.   There are regulatory commissions at the central and state level s. These comprise the Centr al 
Electricity Regulatory Commission (CERC), the s tate Electricity Regulatory Commissions (SERCs) 
that were established in 2 6 states, and three Joint Electricity Regulatory Commissions (JERCs) that 
cover the remaining states and the UTs.84 
 
77 India Brand Equity Foundation ( IBEF), Power . Viewed at: https://www.ibef.org/download/Power -May-
2019.pdf . 
78 PIB Press Release, 22 March 2017. Viewed at: 
http://pib.nic.in/newsite/PrintRelease.aspx?relid=159670 . 
79 Central Electricity Authority, Executive Summary on Power Sector , May 2020. Viewed at: 
http://cea.nic.in/reports/monthly/executivesummary/2020/exe_summary -05.pdf . 
80 Information provided by the aut horities . 
81 Information provided by the authorities.  
82 Section 246(2) and Seventh Schedule (Part III) of the Constitution.  
83 Section 3 , Electricity Act, 2003.  
84 Information provided by the authorities; and CERC , State Electricity Regulatory Commissions - Links. 
Viewed at: http://www.cercind.gov.in/serc.html .  WT/TPR/S/ 403/Rev.1  • India  
 
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  4.57.   India's policy o bjectives regarding energy are to ensure reliable access to energy ("24x7 
Power for All") at affordable rates , and transition to renewable sources (Box 4. 2). During the period 
under review, the transition to renewable energies, especially solar and wind, accelerated to attain 
economic, social, and climate -related objectives.85 As at  March  2020, India had an installed 
renewable energy capacity of 87.91 GW.86 
Box 4.2 Policy objectives in the electricity sect or 
During 2015 -20, India continued to implement the National Electricity Policy, 2005 which focuses on ensuring 
the availability, quality, and reliability of supply ; and the financial viability of the sector.   
The Tariff Policy, 2016 is aimed at, inter ali a, ensuring affordable rates; attracting investment; promoting 
generation from renewable sources; and improving the quality and reliability of supply.  
In 2018, a new National Electricity Plan was launched to change India's energy mix by promoting the 
gener ation of renewable energy. Its target is to install 175 GW of renewable energies by 2022 , and to reduce 
gas emissions by improving the efficiency of thermal power plants, closing end -of-life coal plants, and moving 
towards electric vehicles.  
Source:  WTO Secretariat . 
4.58.   FDI in India 's electricity sector is allowed up to 100%. No government approval is required, 
except for FDI above 49% in power trading exchanges.87 Electricity generation from nuclear sources 
is reserved for the State. Foreign companies must b e established in India to operate in the sector.  
4.59.   Public and private operators are engaged in the generation, transmission, distribution and 
trading of electricity (Table  4.7). The public sector remains the most important stakeholder, holding 
53.2% of the t otal installed capacity in 201 9/20.88 The State owns India's largest power -generating 
company (NTPC Ltd.) , as well as the  Power Grid Corporation of India Ltd. (PGCIL), which operates 
90% of the inter-state transmission network and maintains the national grid. Distribution also 
remains largely dominated by the state distribution companies. India also has two power -trading 
exchanges (PXIL and IEX). Electricity supply is secured by load dispatch centres at the national, 
regional, and state levels.89 India's electricity grid is connected to Bangladesh, Bhutan, Myanmar, 
and Nepal.  Cross -border supply is regulated by bilateral agreements. Since  2019, power trading has 
been allowed across India, if both trading partners have in turn a bilateral agreement with India.90 
Table 4.7 Compositi on of the electricity sector, 2019  
 Public enterprises  
Private enterprises  Central 
Government  State 
governments  
Generation  21 companies  43 companies  105 companies  
Inter-state transmission  2 companies  n.a. 50 companies (including 13  joint 
ventures with PGCIL)  
Intra-state transmission  1 company  29 entities  16 companies (incl uding  4 subsidiaries 
of PGCIL)  
Cross -border interconnections  1 company  4 companies  2 joint ventures with PGCIL  
Distribution  1 company  74 companies  29 companies (in 8 states); 
8 distribution franchise agreements 
with states ' companies  
Inter-state trading  n.a. n.a. 37 companies  
Intra-state trading  .. .. .. 
.. Not available.  
n.a. Not applicable.  
Source:  Information provided by the authorities.  
 
85 NITI Aayog/International Energy Agency/Asian Development Bank (2018), The Indian Power Sector, 
Workshop Report 2018 . Viewed at: https://niti.gov.in/writereaddata/files/document_publication/Workshop -
Report -2018-The-Indian -Power-Sector -Low-Carbon -Strategy -for-Renewable -Energy -Integration.pdf . 
86 Information provided by the authorities.  
87 Invest India , FDI Policy . Viewed at: https://www.investindia.gov.in/foreign -direct -investment . 
88 CERC (2019), Annual Report on  Short -term Power Market. Viewed at: 
http://www.cercind.gov.in/report_MM.html ; and information provided by the authorities.  
89 Electricity Act, 2003.  
90 CERC (Cross Border Trade of Electricity) Regulations, 2019. Viewed at: 
http://www.cercind.gov.in/2019/regulation/CBTE -Regulations2019.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  4.60.   Large consumers (demand of 1  MW and above) may purchase electricity from any supplier. 
However, they must pay a "cross -subsidy surcharge" (compensation) to their local distribution 
company , to compensate for losses incurred  as they are not its  clients . The compensation varies 
from one state to the other, but it cannot exceed 20% of the average tariff.91 
4.61.   A licence issued by the relevant regulatory commission is required to engage in transmission, 
distribution, and trading. However, distribution companies do not need a separate licence to engage 
in trading. Local and foreign operators are subject to the same licensing requirements. The licence 
is granted for 25  years (renewable).92 A licence is not required to generate electricity. However, 
hydro -power projects, if capital expenditure exceeds a certain threshold (currently INR 10 billion) , 
must be approved by the CEA, which assesses the long -term viability and the environmental impact 
of the projects.93 Power -trading exchanges must be registered wi th the CERC.94 
4.62.   Competition in the sector is regulated by the Competition Act, 2002. The Electricity Act, 2003 
contains provisions to enhance best practices, by ensuring that electricity is procured by distribution 
companies through competitive bidding proc esses.95 
4.63.   The CERC regulates the tariffs of inter -state transmission, and the tariffs of 
electricity -generating companies, if: ( i) they are state -owned; or (ii) they produce and sell electricity 
in more than one state (i.e. companies that sell at least 10% of their production to a distribution 
company located in another state ).96 Otherwise, electricity tariffs are set by competitive bidding 
processes, subject to the guidelines issued by the Ministry of Power (conventional sources) or the 
MNRE (non -convention al sources). The tariffs determined through bidding must be adopted by the 
regulatory commissions.97 
4.64.   Retail  tariffs vary from one state to another.98 They are determined by the state regulatory 
commissions, based on  tariff regulations and the provisions contained in the Electricity Act, 2003 . 
Retail tariffs are generally reviewed every year.99 Tariffs are published in orders.100 Electricity at 
subsidize d rates is available to consumers below the poverty line (BPL) and small households and is 
either subsidized or free/unmetered  to the agriculture sector. This subsidy is financed by charging a 
higher rate to other households, and industrial and commercial (e.g. offices, shops) consumers.101 
At present, cross -subsidies to BPL consumers should be at least 50% of the average cost.102 
However, the Tariff Policy, 2016 recommends a reduction in cross -subsidies , to bring tariffs for all 
consumers within ±20% of the average cost.103 In addition, although electricity may be provided 
free/unmetered to the agriculture sector , the Tariff Policy , 2016 st ates that free/unmetered supply 
to the agriculture sector "encourages wasteful consumption of electricity" and may "lead t o rapid 
rise in demand of electricity putting severe strain on the distribution network thus adversely affecting 
the quality of supply of power".104 
 
91 Section 42 , Electricity Act, 2003; Section 8.5,  Tariff Policy , 2016; and information provided by the 
authorities . 
92 Sections 12 and 14, Electricity Act, 2003; and information p rovided by the authorities.  
93 Section 8 , Electricity Act, 2003; Ministry of Power Notification No. 550 , 18 April 2006; and CEA , 
Guidelines for accord of concurrence to Hydro Electric Schemes submitted to the Authority under Section 8 of 
the Electricity Ac t, 2003 . Viewed at: 
http://www.cea.nic.in/reports/others/hydro/hpa1/guidlines_accord_he.pdf . 
94 CERC (Power Market) Regulations, 2010. Viewed at: 
http://www.cercind.gov.in/updated_consolidated_reg1.html ; and information provided by the authorities . 
95 Section 63, Electricity Act , 2003; and information provided by the authorities.  
96 Section 79 , Electricity Act, 2003; and Tariff Policy , 2016.  
97 Section 63 , Electricity Act, 2003.  
98 FICCI Press Release, Government to inject competition in the distribution sector: Power Secretary , 
13 September 2018. Viewed at: http://ficci.in/pressrelease -page.asp?nid=3217 .  
99 Information provided by the authorities.  
100 Asian Development Bank (2018), Tariff Appraisal Study  - Balancing Sustainability and Efficiency with 
Inclusive Access , ADB South Asia Working Paper Series, No. 60. Viewed at: 
https://www.adb.org/sites/default/files/publication/462676/swp -060-tariff-appraisal -study.pdf . 
101 CERC (20 19), Annual Report on  Short -term Power Market. Viewed at: 
http://www.cercind.gov.in/report_MM.html . 
102 Section 8.3, Tariff Policy, 2016.  
103 Section 8.3, Tariff Policy, 2016.  
104 Section 8.3, Tariff Policy , 2016. WT/TPR/S/ 403/Rev.1  • India  
 
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  4.65.   During the period under review, the electricity distribution companies continued to face 
financial difficult ies, because their tariffs are not based on their costs. Hence, their revenues are 
insufficient to pay generators and cover incurred debts; this, in turn , hampers their ability to offer a 
reliable supply of electricity.105 To improve the financial health of these companies, in 2015 , the 
Central Government launched a voluntary scheme, the Ujwal Discom Assurance Yojana  (UDAY) 
Scheme , which instructs state governments to assume 75% of the debt of the companies (50% in 
2015/16 and 25% in 2016/17), by issuing bonds. The companies issued bonds to cover the 
remaining 25% of their debt. Under the Scheme, since 2017/18 , the state governments are also 
required to cover their companies' losses in their budgets (i.e. 5% in 2017/18, 10% in 2018/19, 
25% in 2019/20, and 50% in 2020/21).106 According to the RBI, as a result of the UDAY Scheme, 
there was a "significant improvement" in the financial performance of the distribution companies, as 
the overall revenue gap declined by 54%. However, interest payments, redemptions, and the loss 
of funding "continue to impact state finances" and is likely to continue once the Scheme 
terminates .107 
4.66.   In addition, the Ministry of Power granted  distribution companies  financial assistance to 
expand and improve  the distribution network in rural and urban areas ( Table  4.8).108 In 
November  2019, grants amounted to INR  893.8 billion .109 
Table 4.8 Selected Central Government incentive schemes to distribution companies  
Objectives  Financial assistance  Duration  
Expand the distribution network in 
rural and urban areas ( Saubhagya  
Scheme)  85% of the cost of the project in special -category states ; 60% 
in the remaining states.  If the project achieves certain 
objectives (e.g. timely completion or reduction in technical 
and commercial losses), an additional grant of 5% is given to 
special -category states and of 15% to the remaining states  2017-19 
Rural electrification ( Deendayal 
Upadhyaya Gram Jyoti Yojana  
Scheme)  85% of the cost of the project in the special -category states ; 
60% in the remaining states.  If the project achieves certain 
objectives (e.g. timely completion or reduction in technical 
and commercial losses), an additional grant of 5% is given to 
special -category states and of 15% to the remaining states  2014/15 -
2021/22  
Expand the distribution  network in 
urban areas (Integrated Power 
Development Scheme)  
Note:  Special -category states are the North Eastern states, Jammu and Kashmir, Himachal Pradesh, 
Uttarakhand, Lakshadweep, and Andaman and Nicobar Islands.   
Source:  Ministry of Power , Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) . Viewed at: 
https://powermin.nic.in/en/content/deendayal -upadhyaya -gram-jyoti-yojana -ddugjy ; CERC (2019), 
Annual Report on Short -term Power Market. Viewed at: http://www.cercind.gov.in/report_MM.html ; 
and information provided by the authorities.  
4.67.   India offers other financial and fiscal incentives to assist enterprises and to promote the use 
of renewable energy. Industrial "units", including MSMEs, were offered assi stance by the states, 
such as refunds on electricity bills, and exemption and reimbursement of local electricity taxes.110 
Goods imported for electricity -generation projects are exempt from customs duties , or are subject 
to concessional rates of duty of 2.5% and 5%.111 In addition, profits from thermal electricity projects, 
 
105 FICCI (2019), Project Report  - Facilitating Transparent Retail Tariff Design for the Electricity Sector . 
Viewed at: http://ficci.in/spdocument/23088/Retail -Tariff-Reforms.pdf ; and International Institute for 
Sustainable Development (2019), India's Energy Transition: Stranded coal power assets, work ers and energy 
subsidies , Issue Brief . Viewed at: https://www.iisd.org/sites/default/files/publications/india -energy -transition -
stranded -coal-power -assets_0.pdf . 
106 UDAY. Viewed at: https://www.uday.gov.in/home.php ; PIB Press Release, 5 November2015. Viewed 
at: https://pib.gov.in/newsite/printrelease.aspx?relid=130261 ; and RBI (2019), State Finances – A Study of 
Budgets of 2019 -20. Viewed at: 
https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/STATEFINANCE201920E15C4A9A916D4F4B8BF01608933FF0
BB.PDF . 
107 RBI (2019), State Finances – A Study of Budgets of 2019 -20. Viewed at: 
https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/STATEFINANCE201920E15C4A9A916D4F4B8BF01608933FF0
BB.PDF . 
108 CERC (2019), Annual Report on Short -term Power Market. Viewed at: 
http://www.cercind.gov.in/report_MM.html ; and FICCI (2019), Project Report  - Facilitating Transparent Retail 
Tariff Design for the Electricity Sector . Viewed at : http://ficci.in/spdocument/23088/Retail -Tariff-Reforms.pdf . 
109 Information provided by the authorities.  
110 WTO document s G/SCM/N/284/IND/Suppl.3 ; and G/SCM/N/315/IND/Suppl.1, 7 Mar ch 2019.  
111 Information provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  established before 2017, may be deducted from taxable income, for 10 consecutive years during the 
first 15 years of operations.112 According to the authorities, no other fiscal incentive s were granted 
during 2015 -20. 
4.68.   In addition, state -owned non -banking financial companies (NBFCs), such as the PFC, the REC, 
and the IREDA, exclusively finance electricity projects  (Table 4.9) . The state-owned India 
Infrastructure Finance Company Ltd. (IIFCL) also finances electricity projects (Section 2.4.3) . 
Between April 2015 and March 2019, it granted financing of INR  173.6 billion to 79  projects; the 
terms and condition of IIFCL financing may vary from one project to another.113 Commercial banks 
grant preferential loans only for renewable energies, under the priority -sector lending 
requirement.114 
Table 4.9 Financing of electricity projects by non -banking financial companies  
 Number of projects and 
financ ing Broad terms and conditions  
PFC 2,390 projects 
(2015 -December 2019) ; 
INR 4,166 billion (total value 
of authorized financing)  Debt-to-equity ratio not exceeding 90:10 for transmission projects and 
80:20 for generation projects;  
Interest rates based on the rating/grading of the project/borrower; 
Repayment period up to 80% of the initial economic life of the project, 
moratorium of up to 1 year.  
REC  3,431 projects (2015 -March 
2019) ; INR 3,728 billion (total 
value of authorized financing)  Loans to finance working capital given for a maximum period of 3 years;  
Interest rates based on the grading of the borrower and the type of 
project (interest rates may be adjusted);  
Repayment period from 3 to 20 years, moratorium of up to 6 months.  
Source: Information provided by the authorities.  
4.69.   GST on transmission and distribution is 0%.115 Coal, which remains India's main source of 
power generation, is subject to a 5% GST rate.  
4.70.   In 2018, India achieved 100% village electrification and 100% household ele ctrification in 
25 states.116 As at December 2019, the electricity system had an installed capacity of 367,280 MW. 
Since 2015, capacity in generation and transmission has gradually been upgraded to ensure 
electricity supply , as demand increased rapidly. As a result, electricity shortages were reduced from 
3.6% in 2014/15 to 0.7% in 2017/18; similarly, shortages during peak demand fell from 4.7% to 
2%.117 However,  aggregate technical and commercial losses in distribution and transmission, and 
variations in the efficiency of the plants , still hamper supply.118 Measures to reduce technical losses 
were implemented over the review period, such as a more optimized use of distribution feeders 
through a better management system or the bifurcation of overloaded feeders. In addition, measures 
to reduce commercial losses in cluded more facilities for consumers to pay,  and prevention against 
theft.119 As at November 2019, 22% of the electricity produced was lost along the way.120 
4.71.   Electricity generation relies on conventional and non -conventional sources. Thermal energy 
(mainly c oal) remains the main source, but the share of renewable energies from various sources 
 
112 Make in India , Thermal Power . Viewed at: http://www.makeinindia.com/sector/thermal -power . 
113 Information provided by the authorities  
114 Information provided by the authorities.  
115 Information provided by the authorities; and Rate of GST on Services . Viewed at: 
http://gstcouncil.gov.in/sites/default/files/NOTIFICATION%20PDF/services -booklet -03July2017.pdf .  
116 PIB Press R eleases , 5 June 2018  (viewed at:  
https://pib.gov.in/ PressReleasePage.aspx?PRID=1534383 ); 31 December 2018  (viewed at: 
https://pib.gov.in/PressReleasePage.aspx?PRID=1557979 ); and 25 January 2019  (viewed at: 
https://pib.gov.in/newsite/PrintRelease.aspx?relid=187778 ) 
117 Ministry of Power (2018), Annual Report 2017 -18. Viewed at: 
https:// powermin.nic.in/en/content/annual -reports -year-wise-ministry ; and CERC (2019), Annual Report on  
Short -term Power Market. Viewed at: http://www.cercind.gov.in/report_MM.html . 
118 CERC (2019), Annual Report on  Short -term Power Market. Viewed at: 
http://www.cercind.gov.in/report_MM.html ; Raikar, S. and Jagtap, K. (2018), Role of Dereg ulation in Power 
Sector and Its Status in India , 2018 National Power Engineering Conference. Viewed at: 
https://ieeexplore.ieee.org/stamp/stamp.jsp?arnumber=8476714 . 
119 PowerPoint Presentation, 19 September 2017. Viewed at: 
https://www.uday.gov.in/images/at_loss_workshop_sept2017/Mr_Subir_Saha_from_PFC_on_IT_Interv entions.
pdf. 
120 Information provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  (solar, wind, biomass, and small hydro) in the total installed capacity grew steadily, from  14.6% in 
December 2015  to 23.7% in June 2020  (Chart  4.1). 
Chart 4.1 Installed capacity, by energy source, 31 December 2015 and 30 June 2020  
 
Source:  National Power Portal . Viewed at: https://npp.gov.in/publishedReports# ; and information provided 
by the authorities . 
4.72.   Under the Electricity Act, 2003,  a Renewable Purchase Obligation (RPO) was established to 
further promote the use of renewable energies. In 2018, the Ministry of Power stipulated that, under 
the RPO, 21% of the total electricity supplied by 2021/22  must be from renewable sources of 
energ y.121 In addition, financial assistance is provided by the Central Government to increase 
small -hydro, biomass, and solar electricity generation (Table  4.10). Financial support is also granted 
to small -scale off -grid renewable energy projects, such as the i nstallation of solar panel roof -top 
systems, to meet the demand of isolated households.122 
Table 4.10 Selected incentive schemes provided by the Ministry of Natural and 
Renewable Energies  
Objectives  Eligible en tities  Financial assistance  Duration  
Small hydro -power projects 
(<25 MW) Private sector  INR 10 million/MW or INR  15 million/MW, 
depending on the location, subject to a 
maximum grant of INR  50 million  2014-17a 
Biomass -based 
co-generation projects  Sugar mills and 
other industries  INR 2.5 million/MW to INR  5 million/MW  2018-20 
Installation of solar water 
pumps  Farmers  50% of the project cost in the special -category 
states ; 30% in the remaining statesb 2019-22 
a In 2020, a new/modified  scheme was being finalized.  
b The state governments also provide financial assistance of 30% of the project cost.  
Note:  Special -category states are the North Eastern states , Jammu and Kashmir, Himachal Pradesh, 
Uttarakhand, Lakshadweep , and Andaman and Nicobar Islands.  
Source:  MNRE. Viewed at: https://mnre.gov.in/ ; and information provided by the authorities.  
4.3  Manufacturing  
4.73.   The manufacturing sector's share in gross value -added (current prices) grew from 16.3% in 
2014/15 to 17.1% in 2015/16, but has been declining  since (Table 1.2). Growth in manufacturing 
has also been decelerating  since 2015/16. India also runs a deficit in its balance of trade in 
manufactured goods, with growth in imports outstripping that of exports during the review period.  
4.74.   The National Manufacturing Policy (NMP), announced in 2011, continues to apply ; however , 
India expects to issue a new Industrial Poli cy shortly. Under the NMP , India aims to increase the 
share of manufacturing in GDP to 25% by 2022. The NMP aims to increase growth in the sector to 
 
121 Information provided by the authorities . 
122 MNRE. Viewed at: https://mnre.gov.in/grid -power . 
Coal  
55.4%
Gas  
6.7%
Diesel  
0.1%Nuclear 
1.8%Hydro  
12.3%Small hydro 
1.3%Wind 
10.2%Solar  
9.5%30 June 2020
Total installed capacity: 371,054 MW
Coal  
59.9%
Gas  
8.5% Diesel  
0.3%Nuclear 
2.0%Hydro  
14.8%Small hydro 
1.4%
Wind 
8.7%31 December 2015
Total installed capacity: 288,892 MWWT/TPR/S/ 403/Rev.1  • India  
 
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  between 12% and 14% over the medium term, increase job creation by up to 100 million by 2022, 
create approp riate skills among rural migrants and the urban poor to make growth inclusive, increase 
domestic value -added and technological "depth" in manufacturing, enhance the global 
competitiveness of the sector through appropriate policy support, and ensure sustain able growth.  
4.75.   The NMP aims to rationalize and simplify business regulations; simplify policies to close 
unviable units and pay suitable compensation to unemployed workers; and facilitate the 
redeployment of company assets. It also established the Technology  Acquisition and Development 
Fund for the acquisition of appropriate technologies, the creation of a patent pool, and the 
development of domestic manufacturing of pollution -control and reduced -energy -consumption 
equipment, including through incentives.123 Other provisions in the NMP include programmes for 
skills development, facilitation of access to finance for SMEs, the development of special focus 
sectors, increasing demand for manufacturing and infrastructure through government procurement, 
and the creat ion of national investment and manufacturing zones (NIMZs). NIMZs are large 
integrated townships with state -of-the-art infrastructure, land use on the basis of zoning, clean and 
energy -efficient technology, social infrastructure, skills, development facili ties, etc.124 At present, 
17 such NIMZs are established. The Government also launched the Make in India programme in 
September 2014, which aims to attract investment in order to achieve the 25% -of-GDP target by 
2022. The Budget for 2020/21 announced the est ablishment of five new "smart cities", in 
collaboration with states, based on PPPs.  
4.76.   Sectors that play an important role in merchandise trade include textiles and clothing, which 
accounts for 2.0% of GDP, and 11.4% of merchandise exports, and employs around  45 million 
people, mainly in the informal sector; and automobiles, with around 7.0% of GDP, and 8.0% of 
merchandise exports. The Make in India programme aims to encourage growth in a number of other 
sectors, notably electronics systems design and manufact uring; pharmaceuticals; and food 
processing.  
4.77.   In the textiles and clothing sector, the average tariff for textiles has increased from 10.0% in 
2014/15 to 12.4% (18.3% including AVEs for the tariff lines subject to alternate rates) in 2020/21; 
and, for cloth ing, from 10.0% to 19.7% (27.1% including AVEs). The central Government provides 
assistance through various schemes, including the Amended Technology Upgradation Fund Scheme 
(which replaced the Technology Upgradation Fund Scheme, 2016, and will last until 31 March 2022), 
which provides a subsidy of 15% of capital for textiles and clothing (up to USD 4.6 million) and 10% 
for weaving and handlooms (up to USD 3.0 million); the Integrated Skills Development Scheme; 
and the Scheme for Capacity Building in the Te xtiles Sector (SAMARTH Scheme) which provided 
assistance for the period 2017/18 to 2019/20 for training and skills development for up to 1 million 
people. The Scheme for Integrated Textile Parks (SITP) provides subsidies for setting up 
infrastructure for u se by textile manufacturers. There are currently 59 SITPs which have been 
approved, with 23 already completed; around INR 47.5 million was provided to the SITPs during the 
last three years.125 The Merchandise Exports from India Scheme (MEIS) provides duty r ebates of 
2% and 5% for selected textile and clothing exports to certain markets. An interest subvention of 
3% from 1 April 2015 to 31 March 2020; and the Market Access Initiative Scheme (MAI) are also 
available for textile and clothing exports (Section 3. 2.5.4). The hank yarn obligation under the 
Essential Commodities Act, 1955, requiring a share of yarn produced to be reserved for the domestic 
handloom sector, was reduced from 40% to 30% on 1 January 2019.126 
4.78.   India has the third -largest automobile market i n Asia. The Automotive Mission Plan, 2026 
aims to make the sector a driver of the Make in India programme, become a significant contributor 
to the Skills India programme, and increase exports. By 2026, the sector expects to contribute 
around 12% of GDP (fr om around 7% in 2019) and generate an additional 65 million jobs, directly 
and indirectly. The sector has been relatively shielded through high tariffs. The average MFN tariff 
in 2020/21 for motor vehicles (HS 8703) was 51.25%, with considerable variation between rates for 
 
123 The incentives included 5% reimbursement of the nominal interest charged by the lending agency, 
and 10% capital subsidy. Department of Industrial Policy and Promotion, National Manufacturing Policy.  Viewed 
at: https://dipp.gov.in/sites/default/files/po -ann4.pdf . 
124 DPIIT, National Manufacturing Policy - Guidelines for establishment of National Investment and 
Manufacturing Zones . Viewed at: https://dipp.gov.in/sites/default/files/po -ann3.pdf . 
125 PIB, Scheme for Integr ated Textile Park. Viewed at: 
https://pib.gov.in/Pressreleaseshare.aspx?PRID=1579541 . 
126 PIB, Hank Yarn Packing Provisions Amended. Viewed at: 
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1568058 . WT/TPR/S/ 403/Rev.1  • India  
 
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  automotive parts and completely built up units: 15% for completely knocked down (CKD) kits, 30% 
for engines and transmission mechanisms, and between 60% and 100% for completely built up units 
(CBUs) (based on c.i.f. value, fuel type and e ngine capacity). The central Government provides 
income tax incentives for R&D activities (deduction of 100% for funding expenditure on R&D by a 
company). The state governments also provide investment incentives, in the form of rebates on the 
cost of land,  stamp duty, power tariffs, concessional interest on loans, and subsidies on capital. The 
sector also qualifies for incentives under the MEIS, although this Scheme is scheduled to be 
discontinued on 1 January 2021. Following weak performance, especially in  the passenger motor 
vehicle sector towards the end of 2019/20, new incentives were provided, including a 15% 
depreciation benefit for all cars bought before March 2020, and the deferral of a proposed increase 
in the fee for vehicle registrations. The Gove rnment is also planning to introduce a vehicle scrappage 
policy.  
4.4  Services  
4.79.   In 2018/19, services accounted for around 54% of India's GDP  (Table 1.2), their share 
growing from almost 52% in 2014/15. The sector contributes almost 70% to India's GDP  growth.127 
Although decelerating since 2014/15, growth in services during the period under review was higher 
than average GDP growth. Services are also the largest recipient of FDI (Table 1.5).  
4.80.   With regard to  the external balance, for most of the period under review, India ran a surplus 
in its services trade of around 3% of GDP. Exports of services grew from USD 158 billion in 2014/15 
to USD 208 billion in 2019/20. Imports grew from USD 82 billion to USD 126 b illion. The largest 
exports are computer, information technology and telecommunications services, followed by other 
business services, travel, transportation and financial services. Other business services, travel and 
transportation are the main imports.  
4.4.1   Financial services  
Banking  
4.81.   The banking sector consists of 12 public sector banks (PSBs)128, 22 private sector banks, 
46 foreign banks, 45 regional rural banks (RRBs), and 1,541 urban banks and 397 rural cooperative 
banks.129 There is also a large number of no n-banking financial institutions (NBFCs). The PSBs 
continue to dominate the sector, although their share of total assets declined slightly from 72.7% 
at the time of the last Review to 70% in 2019.  
4.82.   During the review period, there was a steady increase in ba nk assets, although the returns 
on assets have declined since 2017 (Table 4.11). The sector's non -performing assets (NPAs) 
increased steadily until 2018, and declined in 2019 to 9.3%, in part due to capitalization by the 
central Government. The Reserve Ban k of India (RBI) estimated that they fell further to 8.5% by 
the end of March 2020.130 
Table 4.11 Trends in the banking sector's gross loans and deposits, and prudential 
indicators, 2015 -20 (as at 31 March)  
(INR billion  and %)  
 2015  2016  2017  2018  2019  2020a 
Assets  108,913  118,088  130,760  142,189  156,246  161,484  
Return on assets (%)  0.78 0.29 0.37 -0.19 -0.13 0.2 
Capital to risk -weighted assets ratio (CRAR) 
(%) 12.94  13.32  13.66  13.83  14.31  14.91  
Gross non-performing assets ( NPAs) to gross 
advances (%)  4.62 7.79 9.59 11.46  9.24 9.1 
Net NPAs to net advances (%)  3.40 4.63 5.49 6.10 3.75 3.5 
Total loans (gross advances)  66,911  72,733  75,981  83,992  95,196  97,639  
Loans by economic sector (% of total loans)        
Agriculture  12.31  13.13  14.63  14.21  13.93  12.66  
 
127 RBI (2019), Annual Report 2019 . 
128 The Government is required to hold at least 51% of the shares of these banks. On 1 April 2020, 
10 PSBs were merged into 4.  
129 In addition, there are 3 local area banks, 10 small finance banks, (SFBs) and 7 payment banks.  
130 RBI (2020), Annual Report 2020.  WT/TPR/S/ 403/Rev.1  • India  
 
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   2015  2016  2017  2018  2019  2020a 
Real estate  18.03  20.03  20.67  21.28  22.40  23.88  
Total deposits  88,351  95,073  105,688  113,081  124,480  131,064  
a Up to 31 March 2020.  
Source : WTO Secretariat, based on i nformation provided by the authorities  (off-site returns as reported by 
banks, and domestic operations ). 
4.83.   There were no changes to foreign investment policy in the sector since the last Review, which 
is restricted to 74% of the paid -up share capital of the bank (up to 49% through the automatic route 
and up to 74% with prior government approval). For investment in the PSBs, the limit is up to 20% 
with prior government approval.  
4.84.   Regulatory responsibility for the sector lies with the RBI under the Reserve B ank of India Act, 
1934, and the Banking Regulation Act, 1949. The RBI regulates commercial banks, urban 
cooperative banks, financial institutions (such as the Exim Bank, the National Bank for Agriculture 
and Rural Development (NABARD), the National Housing  Bank (NHB), and the Small Industries 
Development Bank of India (SIDBI)) and NBFCs, under the guidance of the Board for Financial 
Supervision (BFS). The NABARD supervises RRBs, state cooperative banks and district central 
cooperative banks, while the NHB s upervises housing finance companies. The RBI also fully owns 
two subsidiaries: the Deposit Insurance and Credit Guarantee Corporation of India (DICGC)131 and 
the Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL).132  
4.85.   To operate in India, domestic and foreign banks must be granted a licence by the RBI. Until 
2016, the RBI issued new private bank licences on a periodic basis. Since then, private banks may 
apply for licences at any time ("on tap" licences). Under the Guidelines issued by the RBI in Fe bruary 
2013 and August 2016, private -sector entities or groups that are "owned and controlled by residents" 
and public -sector entities may apply for a banking licence only through a wholly owned non -operative 
finance holding company (NOFHC).133 New private banks must have a minimum paid -up capital of 
INR 5 billion and, thereafter, maintain a net worth of at least INR 5 billion at all times. Other 
requirements include that the majority of directors of the bank be independent; and that prior 
approval is grante d by the RBI for any acquisition of shares of 5% or more by an individual, entity 
or group. No single entity, or group of related entities, other than the NOFHCs, may have direct or 
indirect shareholdings of more than 10% of the paid -up capital of the bank . As with existing banks, 
new banks must comply with the priority -sector lending targets and sub -targets (see below), and 
open at least 25% of their branches in unbanked rural centres.134 
4.86.   With regard to branches, under the Banking Regulation Act, 1949, bank s need the approval 
of the RBI to open new branches or change the location of existing branches. However, domestic 
scheduled commercial banks (other than RRBs) may open banking outlets (in Tier 1 -Tier 6 centres ) 
without permission.  Under new guidelines, is sued on 18 May 2017, the term "branch" was replaced 
with the term "banking outlet" (defined as a fixed point service delivery unit, manned either by bank 
staff or a business correspondent, providing services such as acceptance of deposits, encashment 
of cheques/cash withdrawal or money -lending, for a minimum of four hours per day for at least five 
days a week), allowing banks to expand their network further into rural areas.  
4.87.   To promote financial inclusion, the Pradhan Mantri Jan Dhan Yojana (PMJDY) Scheme w as 
launched in August 2014 to allow people who did not have a bank account to open one so they can 
receive salaries, subsidies, remittances and other payments directly into their bank accounts. The 
accounts, which do not require a minimum balance to stay o pen, have been increasing and, as at 
30 October 2019, almost 374 million such accounts had been opened. Furthermore, the priority 
sector lending requirements for commercial banks were continued. All commercial banks are 
 
131 Insurance for banks, which is provided by the DICGC, was raised from INR 100,000 per depositor, 
per bank, to INR 500,000, on 4 February 2020.  
132 In April 2019, the RBI divested its shares in the NABARD and the NHB, both of which are fully state -
owned.  
133 The NOFHC holds a minimum of 40% of the paid -up capital of the bank, which is locked -in for five 
years from the date of establishment. Shareholding by the NOFHC of above 40% is to be brought down to 40% 
within three years, 20% within 10 years, and 15% within  15 years. RBI, Guidelines for Licensing of New Banks 
in the Private Sector , 22 February, 2013; and RBI Guidelines for "on tap " Licensing of Universal Banks in the 
Private Sector , 1 August 2016.  
134 Rural centres are defined as having a population of under 10,000.  WT/TPR/S/ 403/Rev.1  • India  
 
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  required to lend a certain share of their adjusted net bank credit (ANBC) or credit equivalent of off -
balance sheet exposure, whichever is higher, to sectors identified as a priority (Table 4.12). Foreign 
banks, with 20 branches and over, established as of 2013, were also required to achieve  this target 
over five years between 2013 and 2018, while foreign banks with fewer than 20 branches were to 
have achieved the target by March 2020. The sub -targets for these banks, to be made applicable 
post-2020, will be decided in due course.  
Table 4.12 Priority sector lending requirement  
Sector/category  Domestic banks  Foreign banks with 20 
or more branches  Foreign banks with 
fewer than 20 branches  
Agriculture  (farm 
credit, agricultural 
infrastructure and  
ancillary activities)  18% of adjusted net bank 
credit ( ANBC ) or credit 
equivalent amount of off -
balance sheet exposure  
(COEBSE) , whichever is 
higher  18% of  ANBC or COEBSE , 
whichever is higher   n.a. 
- small and 
marginal farmers  8% of ANBC or COEBSE , 
whichever is higher  8% of ANBC or COEBSE , 
whichever is higher   n.a. 
Micro -
enterprises  7.5% of ANBC or COEBSE , 
whichever is higher  7.5% of ANBC or COEBSE , 
whichever is higher   n.a. 
Weaker sectionsa 10% of ANBC or COEBSE , 
whichever is  higher  10% of ANBC or COEBSE , 
whichever is higher   n.a. 
Export  Incremental export credit 
over corresponding date of 
the preceding year of up 
to 2% of ANBC or 
COEBSE , whichever is 
higher , from 1 April 2015, 
subject to an authorized 
limit of up to INR 400 
million per borrower  Incremental export credit 
over corresponding date of 
the preceding year of up 
to 2% of ANBC or 
COEBSE , whichever is 
higher , from 1 April 2017  Up to 32% of ANBC or  
COEBSE , whichever is 
higher  
Total  40%  40%  by March 2018  40% by March 2020  
n.a. Not applicable.  
a Small and marginal farmers; artisans, village and cottage industries with individual credit limits up 
to INR 100,000; beneficiaries of government -sponsored schemes , such as the National Rural 
Livelihood Mission (NRLM) , the National Urban Livelihood Mission (NULM) and the Self Employment 
Scheme for Rehabilitation of Manual Scavengers (SRMS); Scheduled Castes and Scheduled Tribes; 
beneficiaries of Differential Rate of Interest (DRI) Schemes; self-help groups; distressed farmers 
indebted to non -institutional lenders;  distressed persons other than farmers with loans up to INR 
100,000 per borrower to pre -pay their debt to non -institutional lenders; individual women 
beneficiaries with loans of up to INR 100,000; persons with disabilities; overdraft limit to PMJDY 
account holders between the ages of 18  and 65, of up to INR 10,000; and minority communities as 
may be notified by the Government from time to time.  
Source:  RBI, Master Direction -Priority Sector Lending -Targets and Cl assification, updated as on 
5 December  2019. Viewed at: 
https://rbidocs.rbi.org.in/rdocs/notification/PDFs/33MD08B3F0CC0F8C4CE6B844 
B87F7F990FB6.PDF . 
4.88.   The target for small finance banks, which have limited functions, principally accepting deposits 
and makin g loans, is higher, at 75% of their ANBC. On 10 May 2018, the RBI issued revised 
guidelines on lending to the priority sectors for urban cooperative banks, which added medium -sized 
enterprises, social infrastructure and renewable energy to the priority sec tors, with a 7.5% target 
for micro -enterprises; in addition, the distinction between direct and indirect agriculture, and loans 
for education in India and abroad, were removed. The total target for urban cooperative banks was 
raised from 40% to 75%, to be achieved by 31 March 2023135, with sub -targets for micro -enterprises 
at 7.5% and for weaker sections at 10%. In March 2020, the RBI issued a notification to gradually 
 
135 The targets are to be achieved gradually, to reach 50% of the ANBC or the CEOBSE by 
31 March  2021, 60% by 31 March 2022, and 75% by 31 March 202 3. RBI, Limits on exposure to single and 
group borrowers/parties and large exposures and Revision in the target for priority sector lending - UCBs. 
Viewed at: 
https://rbidocs.rbi.org.in/rdo cs/Content/PDFs/USB30122019F76187404A2B45FB8436D72C1E949CB2.PDF . WT/TPR/S/ 403/Rev.1  • India  
 
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  raise the target for urban cooperative banks to 75% by 31 March 2024.136 In August 2019, the RBI 
allowed bank credit to registered NBFCs for on -lending to agriculture and MSEs to be treated as 
priority -sector lending, subject to certain restrictions.  
4.89.   Since 2015, if banks are unable to meet these targets, they may buy priority sector lending 
certificates (PSLCs), thereby transferring funds to banks that are able to lend to the priority sector. 
The PSLCs may only be used during the current year and cannot be transferred to the following 
year.137 They may also continue, as  before, to invest the amount of the shortfall in the Rural 
Infrastructure Development Fund, (RIDF) run by the NABARD. The rates of return on this investment 
range from the bank rate minus 2 percentage points to the bank rate minus 4 percentage points, 
depending on the shortfall.138  
4.90.   Supervision of banks, cooperative banks and NBFCs is carried out by the RBI's Board for 
Financial Supervision through on -site inspections, off -site surveillance, and periodic meetings with 
the management of the banks. The RBI is  currently moving away from the transaction -based 
CAMELS139 framework to a risk -based framework whose aim would be to focus on the most critical 
risks facing each bank and assess the bank's management of these risks. The Prompt Corrective 
Action (PCA) Frame work allows the Board to monitor and suggest corrective actions to banks if their 
capital to risk -weighted assets ratio (CRAR), asset quality or profitability fall below certain 
thresholds.140 The RBI also established agreements for supervisory cooperation with 48 supervisory 
jurisdictions, to improve cross -border cooperation. In addition, the regulation of housing banks 
(previously supervised by the NHB under the National Housing Bank Act, 1987) was also entrusted 
to the RBI in 2019.   
4.91.   The RBI adopted the Ba sel III capital adequacy framework in 2013 , and banks were to 
implement the framework by 31 March 2019. Under capital adequacy norms applicable to all 
commercial banks (except local area banks and RRBs), the CRAR should be 9% on an ongoing basis. 
It may be  raised by the RBI , depending on its assessment of the risk profile of the bank. For instance, 
for payment banks and small finance banks, the CRAR is 15% on a continuous basis (or a higher 
percentage prescribed by the RBI) , while for new banks established under the new "on tap" licencing 
guidelines, it is 13% (or higher if prescribed by the RBI) for at least three years after the 
commencement of operations. Tier I CRAR for commercial banks must be at least 7%. All commercial 
banks are required to maintain a  4% cash reserve ratio , and a statutory liquidity ratio of 18.25%.  
4.92.   During the period under review, commercial banks remained well -capitalized, with the CRAR 
rising from almost 13% in 2015 to around 15% in 2020, considerably higher than the statutory 
requir ement of 9%. However, banks' NPAs have been rising, particularly among the PSBs.141 The 
level of gross NPAs rose from 4.6% in 2015, peaking at 11.5% in March 2018, before declining to 
9.1% by December 2019. The RBI set up the Central Repository of Informati on on Large Credits in 
2014, and reviewed asset quality in 2015. The review of the loan portfolios of the 36 largest banks, 
holding 93% of total assets in the sector, revealed significant quantities of NPAs, and banks were 
advised to increase provisioning for these assets. This was accompanied by a decision to issue "on 
tap" licences, to increase competition in the sector.  
4.93.   On 12 February 2018, the RBI published the Revised Framework for the Resolution of Stressed 
Assets, which is a harmonized and simplified  generic framework. It requires banks to identify defaults 
on loan accounts immediately, by classifying the stressed assets as "special mention accounts", and 
put in place board -approved policies for the resolution of such stressed assets under the Framewo rk. 
For large accounts with aggregate exposure of INR 20 billion and over, on or after 1 March 2018 
(reference date), the resolution plan had to be implemented within 180 days from that date, failing 
which, insolvency proceedings had to be mandatorily init iated against the borrower. Following a 
 
136 RBI, Limits on exposure to single and group borrowers/parties and large exposures and Revision in 
the target for priority sector lending – UCBs.  Viewed at: 
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11819&Mode=0 . 
137 RBI, Priority Sector Lending Certificates . Viewed online at:  
https://www.rbi.org.in/scripts/PublicationReportDetails.aspx?UrlPage=&ID=810#A5 . 
138 RBI, RIDF and other funds . Viewed at: 
https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=9397&fn=2754&Mode=0  on 5 August 2020.  
139 CAMELS stands for capital adequacy, asset classification, management, earnings appraisal, liquidity 
and se nsitivity.  
140 The PCA framework does not extend to NBFCs or cooperative banks.  
141 Non-performing loans are defined by the RBI as loans that are unpaid for 90 days.  WT/TPR/S/ 403/Rev.1  • India  
 
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  decision by the Supreme Court that the circular was ultra vires  Section 35AA of the Banking 
Regulation Act 1949, the Framework was revised on 7 June 2019.  The main change includes the 
requirement that the lenders rev iew the defaulting borrower's account within 30 days of the default 
(review period), during which period the lenders may decide on the resolution strategy, including a 
resolution plan which would require an inter -creditor agreement to be executed by the le nders that 
are exposed to such borrower. For accounts with aggregate exposure above INR 15 billion, if a viable 
resolution plan is not implemented within the prescribed timelines, the lenders are required to make 
additional provisions against the loan acco unt. The conditions for large accounts of INR 20 billion 
and above remain unchanged. To address additional stress in the financial system due to the 
COVID -19 pandemic, the RBI put in place certain flexibilities under certain conditions under the 
Framework for exposures other than for personal loans.142 
4.94.   To specifically address the problem of rising NPAs in PSBs, in October 2017, the central 
Government launched the Indradhanush  Plan to recapitalize PSBs. The Plan raised INR 2.1 billion 
during 2017/18, of which  INR 881.39 million was provided through the central government Budget 
and the rest in the form of bonds and capital raised by the PSBs. The 2019/20 Budget announced a 
further INR 700 billion for recapitalization of the PSBs, and the intention to consolida te 10 PSBs into 
4. As a result, the number of banks monitored by the RBI under its PCA Framework declined to 
4 PSBs (and two private banks) as at December 2019.143 The infusion of funds under the Plan made 
it possible for the PSBs to absorb losses and reduce the level of NPAs.144 In addition, f ollowing 
recommendations by the Committee to Review Boards of Governance of Banks in India in May 2014, 
the central Government also disinvested in the IDBI Bank Ltd. to below 50%. In the 2020 /2021 
Budget, it was an nounced that the central government shareholding would be brought down further.  
4.95.   In addition, the Banking Regulation (Amendment) Act was enacted on 25 August 2017, which 
permits the central Government to empower the RBI to initiate insolvency proceedings in  the case 
of default by banks, under the provisions of the Insolvency and Bankruptcy Code, which was enacted 
on 28 May 2016. The Act also permits the RBI to issue directions from time to time to any bank for 
the resolution of stressed assets.145 Based on th e Internal Advisory Committee set up by the RBI in 
2017,  the RBI issued directions to certain banks to initiate the corporate insolvency resolution 
process for 12 stressed accounts under the Code.  
4.96.   NPAs have also been rising in NBFCs, with gross NPAs at 6.6 % in March 2019. The RBI stepped 
up its supervision of these companies, including through on -site examination, off -site surveillance, 
market intelligence, and annual audit reports. Following the default by a large NBFC in 2018, the 
RBI issued guidelines to  improve supervision of these companies.  As at November 2019, all 
non-deposit taking NBFCs with assets of INR 1 billion and above, systemically important core 
investment companies , and deposit -taking NBFCs, irrespective of the size of their assets, must 
adhere to liquidity risk management guidelines , in a phased manner , by 2022.146 The RBI Act, 1934, 
was amended in 2019 , to empower the RBI to remove the directors, supersede the board and appoint 
administrators for all NBFCs, except public -sector N BFCs.147 
4.97.   As a result, the RBI has limited powers to address difficulties in public -sector NBFCs, PSBs 
and urban cooperative banks, whose management and governance structures continue to be 
influenced by the central Government, including through government -appointed  senior 
management.  The Indradhanush  Plan, in addition to providing funds to help PSBs, also aims to 
address governance issues, through the appointment of chairmen and managing directors, the 
establishment of the Bank Board Bureau (BBB) to replace the Appo intments Board for the 
 
142 RBI, Statement on Developmental and Regulatory Policies , 6 August 2020.  
143 RBI Trend and Progress of Banking in India 2018 -19. Viewed at: 
https://www.rbi.org.in/scripts/PublicationsView.aspx?Id=19364 . 
144 Information provided by the authorities.  
145 Articles 35 AA and 35AB, respectively, of the Banking Regulation (Amendment) Act, 2017.  
146 Systemically important NBFCs are defined as those whose asset size is INR 5 billion or more as per 
the last audited balance sheet, as their activities have a bearing on the fina ncial stability of the overall 
economy.  
147 There are 42 state-owned NBFCs registered with the RBI (16 owned by the c entral Government and 
26 by state governments) . RBI, Annual Report 2017 -18. Viewed at:  
https://rbidocs.rbi.org.in/rdocs/AnnualReport/PDFs/6VIREGULATIONA7CFBEF5F1BA4B90A78BD206EEFA8807.P
DF. WT/TPR/S/ 403/Rev.1  • India  
 
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  appointment of directors and other senior officials, and a new framework of accountability for 
PSBs.148 
4.98.   In this regard, the Banking Regulation (Amendment) Bill, 2020 was introduced in Parliament. 
It proposes to bring the cooperative b anks to the same level as other banks, through better 
management and proper regulation, and to ensure that the affairs of the cooperative banks are 
conducted in a manner that protects the interests of the depositors. It further proposes to strengthen 
such banks by increasing professionalism, enabling access to capital, improving governance, and 
ensuring sound banking.   
4.99.   In light of the deteriorating economic environment due to the COVID -19 pandemic, a number 
of steps were taken in 2020 to provide temporary r elief to borrowers, and enhance liquidity support 
for financial markets and other stakeholders. They include: a special refinance facility of INR 
650 billion for the NABARD, the Small Industries Development Bank of India (SIDBI), the NHB, and 
the EXIM Bank , to enable them to continue their funding activities as required.149 
Insurance  
4.100.   Insurance activities in India may only be performed by Indian companies, i.e. companies 
registered in India under the Companies Act, 2013. In 2019, the sector consisted of 70 insurance 
(and re -insurance) companies (compared to 53 in March 2014), of which 24 are life insurance 
companies and 27 are involved in general insurance activities. Of the 70, 8 are in the public sector, 
of which 2 are specialized insurers150, 1 life insuranc e company, 4 general insurance companies, and 
1 reinsurer (Table 4.13).151 
Table 4.13 Insurance and reinsurance market, October 2019  
(INR billion and %)  
Insurer  Private  Public  Total  
FDI % of FDI to 
total equity  No. Equity  No. Equity  No. Equity  
Life 23 275,150  1 1,000  24 276,150  97,460  35.36  
General  21 95,700  6 12,740  27 10,840  28,950  27.2 
Health  7 34,720  0 0 7 34,720  11,490  31.7 
Re-insurer  11 2,680  1 8,770  12 11,460  0 0 
Total  62 408,250  8 22,510  70 430,760  n.a. n.a. 
n.a. Not applicable.  
Source:  Information provided by the authorities.  
4.101.   In life insurance, the market is dominated by one public -sector company, the Life Insurance 
Corporation of India (LIC), although its share continues to fall (66% in January 2019, compared to 
75.4% in 2013/14). In the general insurance sector, private insurers had a market share of 55%.  
4.102.   Insurance penetration (premiums as a share of GDP) fluctuated over recent years but 
remains low (below 3.7% in 2018).  To make insurance more accessible to the population, a number 
of schemes were launched during the review period. These are: the PM Jan Suraksha Bima Yojana , 
to provide insurance in rural areas; PM Jeevan Jyoti Bima Yojana , for the informal sector; Atal 
Pension Yojana , for people in the informal sector who join the national pension system; and 
Ayushman Bharat Yojana , which provides medical insurance cover of up to INR 500,000. In addition, 
agricultural insurance under the PM Fasal Bima Yojana  was expanded during this period 
(Section  4.1). 
 
148 Department of Financial Services, Indradhanush: Plan for Revamp of Public Sector Banks , 
14 August  2015. Viewed at: https://financialservices.gov.in/sites/default/files/PressnoteIndardhanush_1.pdf . 
149 RBI, Statement on Developmental and Regul atory Policies  Viewed at: 
https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR150332B938A0C7E4C64AE20D15EA85F8DB1.PDF . 
150 The specialized insurers are the Export Credit Guarantee Corporation of India Ltd. (ECGC) and the 
Agricultural Insurance Company of India Ltd (AIC).  
151 IRDAI, Annual Report 2017 -18. Viewed  at: 
https://www.irdai.gov.in/ADMINCMS/cms/Uploadedfiles/english_hindi_annual%20report%202018%20webcopy
.pdf. WT/TPR/S/ 403/Rev.1  • India  
 
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  4.103.   The sector is regulated by the Insurance Regulatory and Development Authority of India 
(IRDAI), which is responsible, inter alia , for issuing certificates of registration and regulating 
insurance providers, protecting the interests of policy holders, and promoting efficiency in the 
conduct of insurance business. Regulation is subject to the Insurance Act, 1938, the Insurance 
Regulatory and Development Authority Act, 1999, the Life Insurance Corporation Act, 1956, and the 
General Insurance Business Act, 1972. The Insurance Laws (Amendment) Act, 2015 entered into 
force on 23 March 2015. It amended the Insurance Act, the General Insurance Business Act, and 
the Insurance Regulatory and Developmen t Authority Act.  
4.104.   The key changes brought in by the Insurance Laws (Amendment) Act, 2015 include raising 
the FDI limit in the sector, from 26% to 49% automatically (rather than requiring government 
approval), with control remaining with Indian shareholders;  permitting foreign re -insurers to open 
branches for re -insurance business in India (up to the 49% FDI limit); and allowing insurance 
companies to raise capital through capital instruments other than equity. Furthermore, since 
2 September 2019, up to 100% foreign equity is permitted in insurance intermediation services, 
subject to verification by the IRDAI and registration and licensing requirements and conditions.  
4.105.   Tariffs in the sector are not regulated (except third -party motor insurance, whose premium 
rates continue to be regulated by the IRDAI). However, insurers are required to file their tariffs with 
the IRDAI, and charge premiums on the basis of their filed tariffs. Insurers may file new schedules 
of tariffs with the IRDAI as and when required. The IR DAI accepts the schedules as provided by the 
insurer but retains the right to query or require changes.  
4.106.   Under the Insurance Regulatory and Development Authority (Obligations of Insurers to Rural 
and Social Sectors) Regulations, 2015, insurers must meet ann ual targets in certain sectors. The 
requirements in the rural sector  are: an increase in the annual number of policies written, by 7% in 
the first year to 20% by the tenth year and each year after for life insurance; for general insurance, 
the requirement is 2% of gross premiums in the first year to 7% by the ninth year and each year 
after. Health insurers must only meet 50% of the requirement for general insurance. In the social 
sector , the requirement for all types of insurance is 0.5% of newly insured pe rsons ("social sector 
lives") in the first year to 5% in the tenth year and each year after.152 
4.107.   Appeals against insurance companies are resolved by the Insurance Ombudsman in the 
IRDAI. Orders issued by the IRDAI may be appealed to the Securities Appellate Tribunal.  The IRDAI 
issued regulations in 2017 to protect policyholders, which include requirements for policies, products, 
and other matters to be stated in general and life insurance policies, as well as requiring each insurer 
to have a grievance -redress al officer.  
4.4.2   Telecommunications  
4.108.   India is the world's second -largest telecom and Internet market; and it became the world's 
largest consumer of mobile data in 2018, supported by affordable mobile tariff packages and 
increased 4G availability.153 Total telecom  subscriptions increased , to reach over 1 billion in 2016 , 
and continued to grow. Internet subscriptions also increased substantially  (Table  4.14). In addition, 
according to the International Telecommunications Union 's (ITU) Information and Communications 
Technology (ICT) Development Index (IDI), since 2015 , ICT access, use, and digital literacy in India 
have improved. In 2017, India was ranked 134th (out of 175) , four positions above its 2016 
 
152 Social sector includes  the informal sector, the unorganized sector, economically vulnerable or  
backward classes , and other categories of persons in rural and urban areas (IRDA (Obligations of Insurers to 
Rural and Social Sectors) Regulations, 2015. Taxmann, IRDA's new norms sets targets for insurers while 
insuring policies in rural sectors. Viewed at: 
https://www.taxmann.com/topstories/104010000000045867/irdas -new-norms -sets-targets -for-insurer s-while-
insuring -policies -in-rural-sectors.aspx . 
153 Telecom Regulatory Authority of India (2018), Annual Report 2017 -18. Viewed at: 
https://main.trai.gov.in/sites/default/files/Annual_Report_21022019.pdf ; Ministry of Finance (2018), Economic 
Survey 2017 -18, Volume II. Viewed at: https://www.indiabudget.gov.in/economicsurvey /; and IBEF , 
Telecommunications . Viewed at: https://www.ibef.org/download/telecommunications -feb-2019.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  ranking.154 However , there is still a major gap in teledensity between rural and urban areas. The ITU 
estimated that only 29.5% of the Indian population  was using the Internet in 2017.155 
Table 4.14 Selected telecom indicators, 2 015-19 
  2015  2016  2017  2018  2019 
(August)  
Telecom 
subscribers  Total (million)  996.1  1,059.3  1,195.0  1,211.8  1,191.8  
Wireline (%)  2.7 2.4 2.0 1.9 1.8 
Wireless (%)  97.3 97.6 98.0 98.1 98.3 
Rural (%)  41.8 42.3 42.0 43.4 42.8 
Urban (%)  58.2 57.7 58.0 56.6 57.1 
Public (%)  10.1 10.3 10.2 10.9 11.2 
Private (%)  89.9 89.7 89.8 89.1 88.8 
Telecom 
teledensity 
(%)  Overall  79.4 83.4 93.0 93.3 90.3 
Wireline  2.1 2.0 1.9 1.8 1.6 
Wireless  77.2 81.4 91.1 91.5 88.8 
Rural 48.0 51.3 57.0 59.2 57.0 
Urban  149.0  154.2  171.5  166.6  161.3  
Internet 
subscribers  Total (million)  302.4  342.7  422.2  493.9  665.4  
Wireline (%)  6.3 6.0 5.1 4.3 3.3 
Wireless (%)  93.7 94.0 94.9 95.7 96.8 
Narrowband (%)  67.2 56.3 34.5 16.5 10.6 
Broadband (%)  32.8 43.7 65.5 83.5 89.4 
Rural (%)  37.0 32.7 32.3 29.5 35.8 
Urban (%)  63.0 67.3 67.7 70.5 64.2 
Internet 
teledensity 
(%) Overall  24.1 27.0 32.9 38.0 50.4 
Rural  12.9 12.8 15.5 16.4 26.6 
Urban  49.1 58.3 70.8 84.7 101.2  
Source:  Information provided by the authorities.  
4.109.   To expand ICT penetration, in 2015 , India launched the Digital India Initiative ; as a result, 
all government services are available online, and connectivity and digital literacy  have improved .156 
To this end, common service centres (CSCs) were established in rural and remote areas to connect 
the unconnected to public and private services, such as banks, insurance companies, and health and 
education centres.157 CSCs are run by village -level entrepre neurs (VLEs); tariffs charged by the VLEs 
to use computers and access the Internet are regulated to ensure affordability.158 It is also expected 
that the Digital India Initiative w ill help increase e -commerce.159 In addition, public and private 
training init iatives , to promote the adoption of digital technology , were implemented to encourage 
MSMEs to diversify their business model through the use of Business -to-Business (B2B) and 
Business -to-Consumer (B2C) services.160 Despite these efforts, according to the b usiness 
community, issues such as lack of digital literacy, poor connectivity (including high equipment and 
connection costs), and cyber security a re a challenge to digitalization.161 A 2017  study revealed that 
 
154 IDI, India. Viewed at : https://www.itu.int/net4/ITU -D/idi/2017/index.html#idi2017economycard -
tab&IND . 
155 IDI, IDI 2017 Rank . Viewed at: https://www.itu.int/net4/ITU -D/idi/2017/index.html#idi2017rank -
tab.  
156 Digital India, About Digital India . Viewed at: https://www.digitalindia.gov.in/# . 
157 Common Service Centres Scheme , CSC e -Governance Services India Limited . Viewed at: 
https://csc.gov.in/aboutus . 
158 Information provided by the authorities.  
159 DPIIT, Draft National e -Commerce Policy 2019 . Viewed at : 
https://dipp.gov.in/sites/default/files/DraftNational_e -commerce_Policy_23February2019.pdf . 
160 KPMG and Google (2017),  Impact of internet and digiti sation on SMBs in India . Viewed at: 
https://assets.kpmg/content/dam/kpmg/in/pdf/2017/01/Impact -of-internet -and-digitisation.pdf ; and UNIDO 
(2017), National Report on E-commerce Development in India . Viewed at: 
https://www.unido.org/sites/default/files/2017 -10/WP_15_2017_.pdf . 
161 UNIDO (2017), National Report on E-commerce  Development in India . Viewed at: 
https://www.unido.org/sites/default/files/2017 -10/WP_15_2017_.pdf ; and KPMG and Google (2017),  Impact 
of internet and digitisation on SMBs i n India . Viewed at: 
https://assets.kpmg/content/dam/kpmg/in/pdf/2017/01/Impact -of-internet -and-digitisation.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  68% of MSMEs had no access to the Internet; 30 % were using it for online marketing and 
communication; and only 2% were engaged in e -commerce.162 
4.110.   On the other hand, in some  sectors of the economy (e.g. agriculture, banking, healthcare, 
and learning services) , the use of digital technologies is widesprea d. For instance, mobile apps were 
developed to disseminate information to farmers and to purchase inputs and sell products. In 
addition, to support efforts to demonetize, digital payment apps were put in place, and the use of 
other types of digital payment s, such as e -banking and e -wallets, increased.  
4.111.   Telecom services are regulated mainly by the Indian Telegraph Act, 1885; the Indian 
Wireless Telegraphy Act, 1933; the Indian Telegraph Rules, 1951; and the Telecom Regulatory 
Authority of India Act, 1997. No substantial changes were introduced to these pieces of legislation 
over the review period. The Personal Data Protection Bill, 2018 is under consideration to address 
online privacy.163 
4.112.   The Department of Telecommunications (DOT), at the Ministry of Communicat ions164, 
formulates and implements the national telecom policy (Box 4. 3). It also regulates the provision of 
services; issues licences to telecom service providers ; and manages the use of the spectrum. The 
Telecom Regulatory Authority of India (TRAI) regula tes tariffs and interconnection agreements and 
establishes mandatory quality standards for providers; it also makes recommendations to the DOT 
on policy and regulatory issues. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) 
resolves disputes  between the authorities, the providers, and the consumers. Orders by the TRAI, 
including tariff orders, may be appealed by telecom service providers to the TDSAT. High courts 
have the power to deal with telecom -related cases. TDSAT decisions may be appeal ed to the 
Supreme Court .165 
Box 4.3 National Digital Communications Policy (NDCP 2018)  
In 2018, the NDCP 2018 was launched to promote India's integration into the global digital economy, and 
thus to contribute to sustainable social and economic development.  
The NDCP 2018 is aimed to: (i) provid ing universal access and ensur e high-quality acc ess to broadband 
services;  (ii) attract ing investment to stimulate innovation in digital technologies (i.e. 5G) and manufacturing 
(e.g. semi -conductors);  (iii) promot ing local manufacturing and IPRs through the procurement of domestic 
goods and services wi th domestically  owned IPRs; and  (iv) creat ing capacity building to improve digital 
knowledge and an effective data protection regime.  
Source:  DOT, NDCP 2018 . Viewed at: http://dot.gov.in/relatedlinks/national -digital -communications -policy -
2018; and TRAI ( 2015), Inputs for Formulation National Telecom Policy 2018 . Viewed at: 
https://main.trai.gov.in/sites/default/files/Recommendation_NTP_2018_02022018.pdf . 
4.113.   FDI in the telecommunication sector is allowed up to 100%; however, approval is required 
for FDI above  49%.166 Foreign telecom service providers must be established in India to operate.167 
4.114.   Local and foreign telecom service providers, including virtual mobile network operators 
(VMNOs), require a unified licence (UL) to supply telecom services. ULs are subject to minimum 
equity and net worth requirements, which are the same for local and forei gn providers. The y are 
valid for 20  years (10 years for VMNOs), subject to an annual fee of 8% of the provider's adjusted  
gross revenue , out of which 5% goes to the Universal Service Obligation Fund (USOF). ULs may be 
renewed every 10  years.168 A UL allows a provider to supply different types of services (Table  4.15). 
However, providers also  require authorization to provide each different type of service per service 
 
162 KPMG and Google (2017),  Impact of internet and digitisation on SMBs in India . Viewed at: 
https://assets.kpmg/content/dam/kpmg/in/pdf/2017/01/Impact -of-internet -and-digitisation.pdf . 
163 PRS Legislative Research, Draft Personal Data Protection Bill, 2018 . Viewed at: 
http://www.prsindia.org/billtrack/draft -personal -data-protection -bill-2018.  
164 The Ministry of Communications was created in 2016 . If was formerly known as the Ministr y of 
Communication and Information Technology.  
165 Information provided by  the authorities.  
166 Invest Indi a, FDI Policy . Viewed at : https://www.investindia.gov.in/foreign -direct -investme nt. 
167 DOT, Amended Unified Licence Guidelines, 28 March 2016 ; and Guidelines for grant of unified license 
(Virtual Network Operators), 31 May 2016 . Viewed at: http://dot.gov.in/unified -licnse . 
168 Amended Unified Licence Guidelines, 28 March 2016; and Guidelines for grant of unified license 
(Virtual Network Operators), 31 May 2016. Viewed at: http://dot.gov.in/unified -licnse ; Amended Unified 
Licence Guidelines, 28 March 2016.  Viewed at: http://dot.gov.in/unified -licnse . WT/TPR/S/ 403/Rev.1  • India  
 
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  area. Authorizations are subject to an entry fee, which varies according to the service. If m ultiple 
authorizations are issued , the entry fee is capped at INR 150 million.169 
Table 4.15 Services covered by the unified licence (per service area)  
National area  22 service areas 
(major cities/states)  322 s econdary 
switching areas  
National long -distance  Access services  (fixed 
and mobile services)  Internet service 
providers 
(category  C) International long -distance  Public mobile radio 
trunk services (PMRTS)  
Internet service providers (category A)  Internet service 
providers (category B)  Very small aperture terminal (VSAT)  
Global mobile personal communication by satellite (GMPCS)  
INSAT Mobile Satellite System Reporting (MSS -R) 
Resale of international private leased circuit s (IPLC)  
Source:  Amended Unified Licence Guidelines, 28 March 2016. Viewed at: http://dot.gov.in/unified -licnse . 
4.115.   Since India's last Review in 2015, measures to ensure a more efficient use of the spectrum 
have been adopted. Consequently, in 2015 and 2016 , new freque ncies were auctioned to expand 
the possibility of offering more services . Since  2016, operators have been allowed to share and trade 
frequencies170; and , in 2016 , frequencies  across states were harmonized. As a result, the quality of 
voice and data service s improved.171 Licences to use the spectrum are granted for 20 years, subject 
to an annual Spectrum Usage Charge (SUC) of 3%-4% of the provider's adjusted  gross revenue  
(exclu ding revenues from wireline services) ; the SUC rate  for providers that share the spectrum was 
increased by 0.5% .172 
4.116.   Telecom services are supplied by public and private providers. The State owns two providers, 
Bharat Sanchar Nigam Ltd . (BSNL) and Mahanagar T elephone Nigam Ltd . (MTNL ), and the telecom 
infrastructure provider (BBNL) that installs, operates, and maintains the national optical fibre 
network.173 BSNL and MNTL remain the main provider s of fixed telecom services, but their combined 
market share decli ned from 75.1% in 2015 to 64.6% in 2019 (Chart  4.2). In contrast, mobile 
telecom services continue to be dominated by private providers. A new private provider , Reliance 
JIO, entered the market in 2016, which increased competition.174 VMNOs were authorized to operate 
in 2016175; in 2020, 112  VMNOs were licenced, but they were not operational.176 In August 2019, 
four Internet service providers (Reliance JIO, Bharti, Vodafone -Idea, and BSNL) held 98.4% of the 
Internet market.177 
 
169 Amended Unified Licence Guidelines, 28 March 2016 . 
170 Department of Telecommunications, Guidelines for Sharing of Access Spectrum by Access Service 
Providers. Viewed at: http://dot.gov .in/sites/default/files/2015_10_13%20Sharing -WPC_1.pdf?download=1 ; 
and DOT, Guidelines on Spectrum Trading . Viewed at: http://dot.gov.in/accessservices/guidelines -spectrum -
trading . 
171 DOT, Annual Report 2016 -2017. Viewed at: http://dot.gov.in/reports -statis tic/2471 ; and GSMA 
(2016), Best practice in mobile spectrum licensing . Viewed at: https://www.gsma.com/spectrum/wp -
content/uploads/2016/11/spec_best_practic e_ENG.pdf . 
172 TRAI Consultation Paper No. 09/2014, 31 July 2014. Viewed at: 
https://main.trai.gov.in/sites/default/files/CPonAGR_31Jul2014.pdf ; Guidelines on Spectrum Sharing ; and 
information provided by the authorities .  
173 DOT, Annual Report 2017 -18. Viewe d at: http://dot.gov.in/reports -statistic/2471 . 
174 Ministry of Finance, Economic Survey 2016 -17. Viewed at: 
https://www.indiabudget.gov.in/economicsurvey/ ; Sardana , M. M. K. (2017), Intensifying Competition in 
Telecom Sector in India , ISID Discussion Note 2017/09. Viewed at: http://isid.org.in/pdf/DN1709.pdf ; and 
OpenSignal, India – Mobile Network Experience Report, April 2019 . Viewed at: 
https://www.opensignal.com/reports/2019/04/india/mobile -network -experience .  
175 Guidelines for grant of unified license (Virtual Network Operators), 31 May 2016. Viewed at: 
http://dot.gov.in/unified -licnse . 
176 Information provided by the authorities.  
177 Information  provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Chart 4.2 Shares in the telecom market, March 2015 and August 2019  
 
Source:  TRAI (2015), Annual Report 2014 -15. Viewed at: https://main.trai.gov.in/about -us/annual -reports ; 
and information provided by the authorities . 
4.117.   Competition  in the  telecom sector is regulated by the Competition Act, 2002; the Guidelines 
for Mergers and Acquisitions, 2014 issued by the DOT , as amended in 2018178; and the 
Telecommunication Tariff Order, 1999 (as amended) , issued by the TRAI , which provide a definition 
of significant market power. This definition was revised in 2018; as a result, the criteria related to 
traffic volume and switching capacity were removed  as determinants of market power . Under the 
new definition, a telecom provider has significant market p ower if it has 30% of the total (fixed and 
mobile) subscribers or gross revenue.179 
4.118.   The CCI is in charge of determining if anti -competitive practices take place, and if merge rs 
are allowed . The TRAI monitors the market to determine if operators are complyin g with their 
obligations.  
4.119.   Since 2015, some providers have consolidated their operations (Table 4. 16).180 Vodafone 
and Idea merged in 2017 to create India's biggest telecom company (Vodafone Idea Ltd.); however, 
 
178 Department of Telecommunications,  Guidelines for Merger & Acquisitions – 2014.  Viewed at: 
http://dot.gov.in/relatedlinks/guidelines -merger -acquisitions -2014; and Amendments in the Guidelines for 
Transfer/Merger of various categories of Telecommunication service licenses/authorisation under Unified 
License (UL) on compromises, arrangements and a malgamation of the companies dated 20.02.2014. Viewed 
at: 
https://dot.gov.in/sites/default/files/Amendment%20dated%2030.05.2018%20%20in%20Merger%20and%20
Acquisition%20guideline%20dated%2020.02.2014.pdf?download=1 . 
179 Telecommunication Tariff (63rd Amendment ) Order, 2018.  
180 Sardana , M. M. K. (2017), Intensifying Competition in Telecom Sector in India , ISID Discussion Note 
2017/09. Viewed at: http://isid.org.in/pdf/DN1709.pdf . 
Bharti 
23.3%
Vodafone
19.0%
Idea 
16.3%Reliance
11.3%Aircel
8.4%BSNL
8.0%Tata
6.8%March 2015: mobile telecom services BSNL 
61.7%
MTNL
13.4%Bharti
12.8%Tata
6.3%Quandrant 
Televentures
0.9%Vodafone 0.3%
Sistema Shyam 
Teleservices
0.2%March 2015: fixed telecom services
Vodafone -Idea
32.0%
Reliance JIO
29.7%Bharti
28.0%BSNL
9.9%MTNL 
0.3%August 2019: mobile telecom servicesBSNL 
49.3%
Bharti 
20.7%MTNL
15.3%Tata
8.7%Vodafone -Idea 
1.9%Quadrant Televentures
1.0%August 2019: fixed telecom servicesWT/TPR/S/ 403/Rev.1  • India  
 
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  in 2019, they still operated using their origi nal brand  name s.181 Mergers and acquisitions in the 
sector are authorized if: (i) the combined market share does not exceed 50%; and (ii) the combined 
spectrum does not exceed 35% of the assigned total spectrum (25% prior to 2018) , and 50% of the 
spectrum a ssigned in  frequencies lower than 1 GHz , in the serviced area.182 To promote competition, 
cross-equity participation among telecom service providers that operate in the same service area is 
not permitted.183 
Table 4.16 Selected mergers and acquisitions in the telecom sector, 2015 -19 
Telecom service providers  Combination  Status  
Vodafone and Idea  Merger  Approved by the CCI  
Bharti and Telenor  Acquisition  Approved by the CCI  
Bharti and Tikona Digital Networka Acquisition  Approved by the CCI  
Reliance Communications and Aircel  Merger  Approved by the CCI, but withdrawn by the parties  
a Tikona Digital Network is a Mumbai -based Internet service provider.  
Source:  WTO Secretariat ; and information provided by the authorities.  
4.120.   The TRAI only regulates the tariffs of fixed services in rural areas, national roaming services, 
Unstructured Supplementary Service Data  (USSD)184, and leased -line services (private -line 
services). The tariffs for fixed services in urban areas , and mobile, Internet, and long -distance 
services , are fixed by the telecom services providers. These tariffs must be notified to the TRAI to 
ensure compliance with the Telecommunication Tariff Order , 1999 (as amended). The Order was 
amended in 2018 to ensure transparency and non -discrimination when service providers fix their 
tariffs; and to prevent providers with significant market power from using predatory pricing and to 
allow for the possibility to fine this practice .185 
4.121.   Since 2015, India has also taken measures to expand the coverage of services. For instance, 
in 2016, the procedure to apply for right -of-way permits, to deploy optical fibre cables , and install 
mobile towers on public land and buildings, was harmonized across the states; and a maximum 
period of 60 days to process application s was also introduced.186 However,  as at June 2020,  none of 
these provisions had been fully implemented .187 In addition, telecom services providers have been 
allowed to share passive infrastructure (e.g. towers) and, since 2016, active infrastructure (e.g. 
mobile roaming).188 New provisions regarding interconnection agreements between operators were 
adopted  in 2018, such as a maximum term (30 days) to finalize an agreement; flexibility to use 
interconnection ports to improve traffic; and the provision of a bank guarantee to secure the 
agreement.189 Since 2015, the Interconnection Usage Charges fixed by the TRAI ha ve gradually 
declined.190 
4.122.   During the period under review, m easures to safeguard consumers' interests were also 
adopted. In 2016, the TRAI prohibited telecom and Internet service providers from offering data 
plans based on content, to ensure that all Interne t communications are treated equally , and that 
there is no discrimination by charging differently.191 The portability charge paid by customers was 
 
181 OpenSignal, India – Mobile Network Experience Report – April 2019 . Viewed at: 
https://www.opensignal.com/reports/2019/04/india/mobile -network -experience ; and Idea. Viewed at: 
https://www.ideacellular.com/content/ideadigital/in/en/faqs/idea -vodafone -merger.html . 
182 Guidelines for Mergers and Acquisitions , 2014, as amended in 2018.  
183 Amended Unified Licence Guidelines, 28 March 2016.  
184 USSD is a communication mode used to deliver mobile financial services . TRAI (2017), A Twenty 
Year Odyssey 1997 -2017. Viewed at: 
https://main.trai.gov.in/sites/default/files/A_TwentyYear_Odyssey_1997_2017.pdf .  
185 Telecommunication Tariff (63rd Amendment)  Order, 2018. Viewed at: 
https://main.trai.gov.in/telecom/telecom -tariff. 
186 Indian Telegraph Right of Way Rules, 2016.  
187 Information provided by the authorities.  
188 DOT (2018), Annual Report 2017 -18. Viewed at: http://dot.gov.in/reports -statistic/2471 ; and ITU 
News. Viewed at: https://news.itu.int/indias -experience -in-passive -network -infrastructure -sharing/ .  
189 Telecommunication Interconnection Regulations, 2018 , and document AUSPI/12/2016/035, 
13 December 2016. Viewed at: https://main.trai.gov.in/sites/default/files/AUSPI_5.pdf . 
190 Telecommunication Connection Usage Charges Regulations, 2003, as amended in 2015 (11th and 12th 
amendments), 2017 (13rd amendment), and 2018 (14th amendment). Viewed at: 
https://main.trai.gov.in/telecom/interconnection . 
191 Prohibition of Discriminatory Tar iffs for Data Services Regulations , 2016. Viewed at: 
https://main.trai.gov.in/telecom/telecom -tariff. WT/TPR/S/ 403/Rev.1  • India  
 
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  reduced from INR  19 to INR 6.46 in 2019 .192 A single telecom service provider may provide a 
maximum of 25 tarif f plans per service area.193 
4.123.   The state-owned India Infrastructure Finance Company Ltd. (IIFCL) finances telecom 
projects (Section 2.4.3). Since India 's last Review, the IIFCL has financed one telecom project valued 
at INR 2.5 billion;  the terms and conditio n of IIFCL financing may vary from one project to another.194 
4.124.   All telecom service providers, except value -added service providers (e.g. Internet service 
providers ), must contribute to the Universal Service Obligation Fund (USOF). The contribution 
amounts to  5% of the adjusted gross revenue and is included as part of the UL fee. As at  June 2020 , 
projects under the USOF include d the deployment of Wi -Fi hotspots and submarine optical fibre 
cables, and the implementation of India's largest rural broadband connec tivity project (BharatNet). 
The funds collected by the USOF may also be used to compensate losses incurred in provid ing non-
economically viable services. In 2018/19, the USOF financed the state -owned BBNL and BSNL, and 
four private providers.195 
4.4.3   Transport  
4.125.   India's transportation network includes road, rail, airports, ports, and inland waterways.  
4.126.   Roads are one of the main modes of transportation; 69% of India's freight is transported by 
road. As a result, there is high road density . However, roads  are poorly maintained and are 
congested, thus increas ing the transportation time and , hence , costs. The national highway network 
account s for 2.2% of total roads. The development of roads has been a challenge due to the lack of 
resources, lengthy procedur es to acquire land, delays in construction, and environmental issues. In 
addition, several institutions are in charge of the road systems , including the Ministry of Road 
Transport and Highways and various other agencies196, which render s the decision -making  process 
complex, and impedes coherent implementation of policies.197 In 2017, the Central Government 
launched the Bharatmala Pariyojana programme to promote efficiency in the transportation of freight 
by road , by developing road corridors, expressways, and  port connectivity.198 In addition, to further 
develop road infrastructure through the use of PPPs, a new model (the hybrid annuity model) for 
PPP contracts to build highways was adopted, which aim s to reduc e the risks associated with 
financing for private investors.199 
4.127.   The Ministry of Railways is in charge of formulating and implementing  policies related to rail 
transportation. In 2020, the Ministry was preparing the National Rail Plan 2030 ; the Plan is aimed 
at expanding the network and promoting multi -moda l transportation . The railway network is 
managed and operated by the state-owned Indian Railways, the largest employer in India 
(1.23 million employees as at March 201 9). Daily traffic amounts to 23 .1 million passengers and 
3.3 million tonnes of freight. T he importance of railways in freight transportation has declined over 
the years, mainly due to high cost (as freight subsidizes passenger traffic)  and capacity constraints. 
Since  2016, measures such as tariff rationalization, containerization, and expanded  capacity have 
been implemented to revitalize rail freight. In addition, t he construction of the western (Delhi -
Mumbai) and eastern rail freight corridors is expected to reduce costs and increase capacity, as well 
as enhance port connectivity , as India's l argest container port (Jawaharlal Nehru  Port Mumbai) will 
 
192 Telecommunication Mobile Number Portability Regulations, 2009; and Telecommunication Mobile 
Number Po rtability Per Port Transacti on Charge and Dipping Charge ( Second Amendment) Regulations, 201 9. 
193 Telecommunications Tariff (21st Amendment) Order, 2002.  
194 Information provided by the authorities.  
195 USOF , What we do . Viewed at: http://www.usof.gov.in/usof -cms/home.jsp . 
196 The National Highways Authority of India, state/ UT public works departments, the National Highway 
and Infrastructure Development Corporation Ltd., the Border Roads Organization, and the Indian Academy of 
Highway Engineers.  
197 NITI Aayog (2018), Transforming India's Mobility – A perspective , Global Mobility Summit 
7-8 September. Viewed at: https://niti.gov.in/content/transforming -indias -mobility -perspective . 
198 Ministry of Finance (2018), Economic Survey 2017 -18, Volume II. Viewed at: 
https://www.ind iabudget.gov.in/economicsurvey/index.php  ; Ministry of Finance (2019), Economic Survey 
2018-19, Volume II. Viewed at: https://www.indiabudget.gov.in/economicsurvey/index.php  ; and NITI  Aayog 
(2018), Transforming India's Mobility – A perspective , Global Mobility Summit 7 -8 September. Viewed at: 
https://niti.gov.in/content/transforming -indias -mobility -perspective .  
199 FICCI/CRISIL (2019), Rekindling private investment in roads and highways . Viewed at: 
https://www.crisil.com/content/dam/crisil/our -analysis/reports/Infratstru cture-Advisory/documents/rekindling -
private -investment -in-roads -and-highways.PDF . WT/TPR/S/ 403/Rev.1  • India  
 
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  be connected to Delhi through the western corridor. In addition, a high -speed passenger train 
corridor ( Mumbai -Ahmedabad ) is under construction.  
4.128.   Private investment , including FDI , is permitted in some railway operations (Section 2.4).  In 
this context, Indian Railways  announced that some passenger routes will be run by private train 
operato rs that will use their own rolling stock .200 
4.129.   In 2019 , the cost of logistics was estimated at so me 13% -14% of India's GDP; India aims 
to reduc e these  costs by 5% percentage points.201 Multi-modal transportation and adequate freight 
facilities (e.g. warehouses and rail interchange facilities) are critical to attain this goal . To this end, 
under the Log istics Efficiency Enhancement Programme, which was introduced by the Ministry of 
Road Transport and Highways in 2015, 35 multi -modal logistics parks are being established to 
provide, in a single location: multi -modal freight transfers, shipment aggregation , value -added 
services (e.g. packaging/labelling), and storage facilities.202 In addition, the draft National Logistics 
Policy, 2019 , which  also seeks to reduc e costs by promoting multi -modal transportation, is under 
consultation.203 
4.130.   Incentives are provided  to promote the development of transport -related infrastructure . For 
instance, until 2017 , investors in projects related to roads, highways, ports, airports, and inland 
waterways were granted a 100% tax holiday for 10  consecutive years during the f irst 20  years of 
the project's operation.204 
4.131.   In addition, projects may be financed by the state -owned India Infrastructure Finance 
Company Ltd. (IIFCL) (Section 2.4.3).  Between April  2015 and March 2019, the IIFCL finance d 
71 projects, including projects to build 60 road s.205 
4.132.   The Central Government continues to finance  the cost of transporting goods and raw 
materials from remote areas via air, inland waterways , and rail , through several schemes. One of 
these, the Freight Subsidy  Scheme (FSS) , which applied to the transportation of raw materials and 
finished goods, was discontinued in 2016 ; however,  those registered under the Scheme may 
continue benefit ting from the assistance up to 2021.206 Other incentive schemes were introduced in 
2017 and 2018 to support the transportation of finished and or perishable goods (Table  4.17).207 In 
general, the support granted under the different schemes is for a period of five years.  
Table 4.17 Support for cost of transportation of goods, 2015 -19 
Scheme  Beneficiaries  Percentage of assistance  Duration of 
the Scheme  
Freight Subsidy Scheme 
(FSS), 2013  New and existing industrial 
units in the North -Eastern 
region  50%, 75%, or 90%, depending on the 
type of goods (raw materials or finished 
goods), transportation mode, and 
destination  Discontinued 
in 2016  
New and existing industrial 
units in Sikkim and Jammu 
and Kashmir  50% or 90%, depending on the type of 
goods (raw materials or finished goods), 
transportation mode, and destination  
 
200 Ministry of Finance ( 2020), Economic Survey 2019-20, Volume II ; Ministry of Finance ( 2019), 
Economic Survey 2018-19, Volume II; Ministry of Finance ( 2018), Economic Survey 2017-18, Volume II. 
Viewed at: https://www.indiabudget.gov.in/economicsurvey/ ; Make in India , Railways . Viewed at: 
http://www.makeinindia.com/sector/railways ; and information provided by the authorities.  
201 Draft National Logistics Policy, 2019. Viewed at: 
https://commerce.gov.in/writereaddata/uploadedfile/MOC_636 850448855371480_Notification -Draft-
05022019.pdf ; and i nformation provided by the authorities.  
202 PIB Press Release, 15 March 2017. Viewed at: 
http://pib.nic.in/newsite/PrintRelease.asp x?relid=159271 ; and Make in India , Roads and Highways . Viewed at: 
http://www.makeinindia.com/sector/roads -and-highways . 
203 Draft National Logistics Policy, 2019.  
204 Information provided by the authorities; and Section 80 -IA, Income Tax Act . 
205 Information provided by the authorities.  
206 WTO documents G/SCM/N/343/IND/Suppl.1; G/SCM/N/315/IND/Suppl.3; 
G/SCM/N/284/IND/Suppl.5; and G/SCM/N/253/IND/Suppl.4, 18 October 2019 . 
207 PIB Press Release,  Transport Subsidy Scheme,  7 January 2019 . Viewed at: 
http://www.pib.nic.in/Pressreleaseshare.aspx?PRID=1558868 . WT/TPR/S/ 403/Rev.1  • India  
 
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  Scheme  Beneficiaries  Percentage of assistance  Duration of 
the Scheme  
New and existing industrial 
units in Andaman and 
Nicobar Islands and 
Lakshadweep  90% depending, on the type of goods 
(raw materials or finished goods), 
transportation mode, and destination  
New and existing industrial 
units in Himachal Pradesh, 
Uttarakhand, and 
Darjeeling (West Bengal)  75% or 90% depending, on the type of 
goods (raw materials or finished goods), 
transportation mode, and destination  
North East Industrial 
Development Scheme 
(NEIDS), 2017  New industrial unitsa  20% or 33%, depending on the type of 
goods (finished or perishable goods) and 
transportation mode  2017-22 
Industrial Development 
Scheme for Jammu and 
Kashmir, 2017  New industrial unitsa 20% or 33%, depending on the type of 
goods (finished or perishable goods) and 
transportation mode  2017-22 
Lakshadweep and 
Andaman and Nicobar 
Islands Industrial 
Development Scheme 
(LANIDS), 2018  New and existing industrial 
unitsa 20% or 33%, depending on the type of 
goods (finished or perishable goods) and 
transportation mode  2018-20 
a Excluding certain industrial units (Annex I of the Scheme).  
Source:  WTO document s G/SCM/N/343/IND/Suppl.1 ; G/SCM/N/315/IND/Suppl.3 ; 
G/SCM/N/284/IND/Suppl.5 ; and G/SCM/N/253/IND/Suppl.4, 18 October 2019; DPIIT, Transport 
Subsidy Scheme . Viewed at: https://dipp.gov.in/programmes -and-schemes/himalayan -north -
eastern/transport -subsidy -scheme ; Ministry of Commerce and Industry Notification F. 
No. 10(6)/2016 -DBA-II/NER on NEIDS. Viewed at: 
https://dipp.gov.in/sites/default/files/NEID S_2017_16April2018.pdf ; Ministry of Commerce and 
Industry Notification F. No. 2(2)/2017 -SPS on Industrial Development Scheme for Jammu and 
Kashmir, 2017. Viewed at: 
http://industrieskashmir.nic.in/Central%20Industrial%20Development%20Policy%202018.pdf ; and 
Ministry of Commerce and Industry Notification F. No. 16(35)/2018 -NER on LANIDS, 2018. Viewed 
at: https://dipp.gov.in/sites/default/files/LANIDS_notification_11012019.pdf . 
4.4.3.1   Air transport  
4.133.   Air transport services are regulated by the Aircraft Act, 1934 and the Aircraft Rules, 1937 , 
which have not been substantially amende d since the last Review in 2015. The Civil Aviation 
Requirements (CARs) , issued by the Directorate General of Civil Aviation (DG CA), set the 
requirements for, inter alia , airworthiness, licensing, operations, standards, and air safety.208 
4.134.   India is a member of the International Civil Aviation Organization (ICAO) , and is a party to 
various multilateral conventions/protocols on civil aviation.209 In addition, India has signed 
116 bilateral air services agreements , 14 of which  since 2015.210 However, in non e of them does  
India grant seventh air freedom rights.211 
4.135.   The institutions involved in air transport remained unchanged during the review period. The 
Ministry of Civil Aviation supervises the formulation of policies for air transport. The DG CA regulates 
air transport services to/from and within India. The Airports Economic Regulatory Authority (AERA) 
regulates the tariffs of aeronautical services and the fees charged for passengers; it is also 
responsible for measuring airport performance. The Airports Autho rity of India (AAI) controls India's 
airspace, and operates and manages public airports. The State owns Air India Ltd. and Pawan Hans, 
a helicopter company that provides services within India to tourists and offshore platforms; 
disinvestment plans in both enterprises are underway.212 
 
208 DGCA. Viewed at: http://www.dgca.nic.in/rules/rule -ind.htm . 
209 ICAO. Viewed at: 
https://www.icao.int/secretariat/legal/Status%20of%20individual%20States/India_EN.pdf . 
210 Barbados (2015),  Fiji (2017),  Georgia (2017),  Greece (2017),  Lao PDR (2019),  Mongolia (2015),  
New Zealand (2016),  Malaysia (2017),  Morocco (2018),  Mozambique (2017),  Nigeria (2019),  Rwanda (2017),  
Serbia (2018),  and Seychelles  (2015).  
211 Information provided by the authorities.  
212 FICCI/KPMG (2018), Vision 2040 for the Civil Aviation Industry in India , Global Aviation Summit 
2019. Viewed at: https://www.globalaviationsummit.in/documents/VISION -2040-FOR-THE-CIVIL -AVIATION -
INDUSTRY -IN-INDIA.pdf ; and information provided by the authorities.  WT/TPR/S/ 403/Rev.1  • India  
 
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  4.136.   In 2016, India started implementing the National Civil Aviation Policy 2016 (NCAP 2016) to 
enhance air transport to/from and within India. Under the Policy, India plans to sign open skies 
agreements , on a reciprocal basis , with destinations located more than 5 ,000 km from New  Delhi. 
However, cabotage will remain prohibited.  
4.137.   Another objective of the NCAP 2016 is to reconnect unserved/underserved domestic airports 
by ensuring affordable ticket prices. To this end, the Regional Connectivity Scheme (RCS) was 
launched in 2016 , for a period of three years. Under the Scheme, which is administered by the AAI, 
a regional cess (INR 5,000) is levied on aircraft servicing international routes from major airports, 
to finance seats  on RCS routes. Passengers flying RCS routes may obtain a refund from the airline 
for a specific portion  of the air ticket price. RCS routes are awarded by the AAI to the airlines through 
a bidding process.213 
4.138.   In addition to the NCAP 2016 , India implemented  the National Air Cargo Policy Outline , 2019, 
which is aimed at increas ing the efficiency of air cargo clearance systems (Section 3.1.1).214 As a 
result, the a ir cargo -handling infrastructure facilities in major airports was expanded. In terms of 
value , some 30% of India's trade is carried via air transport.215 
4.139.   Since 2015, the air transport sector has been further opened to FDI (Table 4. 18). 
Accordingly, 100% FDI is allowed in all air transport activities, but government approval is still 
required for investments above  49% of the paid -up capital of Indian scheduled air carriers, except 
for non -resident Indians (NRIs).  
Table 4.18 Changes to FDI policy in air transport services, 2015 and 2020  
 2015  2020  
FDI cap  Up to  Above  
FDI cap  Up to  Above  
Automatic 
routea  Gov't 
routeb  Automatic 
routea  Gov't 
routeb  
Scheduled a ir transport 
services /domestic scheduled 
passenger airlines  
Regional air transport services  49% 49% n.a. 100%  49% 49% 
100% NRIs  100% NRIs  n.a. 100% NRIs  100% NRIs  n.a. 
Non-scheduled air transport 
services  74% 49% 49% 100%  100%  n.a. 
100% NRIs  100% NRIs  n.a. 100% NRIs  100% NRIs  n.a. 
Airports: existing airports  100%  74% 74% 100%  100%  n.a. 
Other services, including ground 
handling  74% 49% 49% 100%  100%  n.a. 
100% NRIs  100% NRIs  n.a. 100% NRIs  100% NRIs  n.a. 
n.a. Not applicable.  
a No government approval is required.  
b Government approval is required.  
Source:  WTO document WT/TPR/S/313/Rev.1, 14 September 2015; and Invest India. Viewed at: 
https://www.investindia.gov.in/foreign -direct -investment . 
4.140.   Total international passenger traffic in 2019/20 was estimated at 47.8 million. Foreign 
airlines continued to carry most international passenger and cargo traffic (Table  4.19). Five 
international airports (Delhi, Mumbai, Chennai, Kochi, and Bengaluru) acco unted for 70% of the 
international passenger traffic in the first quarter of 2019.216 
 
213 Information pro vided by the authorities.  
214 Ministry of Civil Aviation, National Air Cargo Policy Outline, 2019 . Viewed at: 
https://www.globalaviationsummit.in/documents/NATIONAL -AIR-CARGO -POLICY -OUTLINE -2019.pdf . 
215 Ministry of Civil Aviation (2018), Annual Report 2017 -18. Viewed at: 
http://www.civilaviation.gov.in/sites/default/files/annual_report -2017_18_en.pdf ; and ASSOCHAM/Yes Bank 
Ltd (2014), Civil Aviation - Developing Remote and Regional Connectivity . Viewed at: 
https://www.yesbank.in/pdf/civil_aviation_developing_remote_and_regional_connectivity.pdf . 
216 DGCA. Viewed at:  http://dgca.gov.in/reports/rep -ind.htm . WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 4.19 Selected international air traffic indicators, 2014/15 -2019/20  
 2014/15  2015/16  2016/17  2017/18  2018/19  2019/20a 
Total international passengers (million)  45.7 49.8 54.7 60.6 63.9 47.8 
Foreign carriers (% of total)  63.0 63.4 62.3  61.1 59.9 63.2 
Total freight ('000 tonnes)  1,368  1,404  1,513  1,734  1,799  1,201  
Foreign carriers (% of total)  82.2 83.1 81.2 79.5 79.6 86.4 
a Provisional.  
Source:  DGCA, Statistics . Viewed at: http://www.dgca.nic.in/reports/hand -ind.htm ; and information 
provided by the authorities . 
4.141.   India recognizes air operator certificates issued by ICAO member s.217 The DG CA is 
responsible for issuing certificates (permits) to Indian air carriers.218 To operate international routes, 
Indian air carriers are subject to specific requirements. For instance, they must use 20  aircraft or 
20% of their entire fleet (whichever is higher) on domestic route s; and , until 2016, they were 
required to fly domestic routes for five years.219 As at November  2019, India had air connectivity 
with 5 8 countries, through 346 routes ; and it  was serviced by 93  scheduled international air carriers , 
7 domestic and 86 foreign.220 
4.142.   National and international passengers departing  India must pay  an Aviation Security Fee221 
and a User Development Fee .222 These fees are fixed, in consultation with airpor t operators, by the 
AERA (User Development Fee) and by the Ministry of Civil Aviation (Aviation Security Fee).223 Fees 
vary according to the airport and to the type of passenger  (domestic or international). The revenue 
collected is used to finance security -related services , and infrastructure and amenities for 
passengers.224 
4.143.   Airlines may also charge their own fees, such as fuel surcharges.225 In 2018, the Competition 
Commission of India (CCI) fined three airlines for concerted action in fixing fuel surcharges levied 
on domestic air cargo flights.226 
4.144.   Economy and business class tickets are subject to GST at 5% and 12% , respectively.227 At 
present, aviation turbine fuel (A TF) is not subject to the GST228; it is still subject to the Central Sales 
Tax and the states ' VAT.229 
4.145.   India has 17 international airports, of which 11 are operated and managed by the AAI , and 
6 are operated and managed by private airport operators through PPPs, including Delhi's 
internati onal airport , which is India 's main port of entry for tourists .230 PPP projects currently being 
 
217 DGCA. Viewed at: http://dgca.nic.in/operator/main_ops.htm . 
218 CAR Section 3 – Air Transport.  
219 AAI, NCAP 2016 . Viewed at: 
https://www.aai.aero/sites/default/files/basic_page_files/Final_NCAP_2016_15 -06-2016-3%20%281%29.pdf . 
220 Information provided by the authorities.  
221 Formerly known as the Passenger Service Fee . DGCA Aeronautical Information Circular 15 of 2019. 
Viewed at: http://dgca.nic.in/rules/aero -ind.htm . 
222 Also known as Development Fee in Delhi and Mumbai international airports. AAI, Amount of 
UDF/Development Fee (Rs.) Inclusive of all taxes . Viewed at: https://www.aai.aero/en/node/4011 .  
223 Information provided by the authorities.  
224 Rules 88 and 89 , Aircraft Rules, 1937; Section 22 A, Airports Authority of India, 1994; Section  13(4) , 
Airports Economic Regulatory Authority of India Act, 2008; AERA. Viewed at: 
http://aera.gov.in/content/innerpage/faqs.php ; PIB Press Release. Viewed at: 
http://pib.nic.in/newsite/PrintRelease. aspx?relid=132772 ; and information provided by the authorities.  
225 Air India , Explanation of Taxes, Fees & Charges . Viewed at: http://www.airindia.in/explanation -of-
taxes -fees-charges.htm . 
226 CCI, CCI imposes penalties upon Airlines for concerted action in fixing fuel surcharge (FSC) on cargo 
transport . Viewed at: https://www.cci.gov.in/node/3743 ; and PIB Press Release, 7  March 2018. V iewed at: 
http://pib.nic.in/newsite/PrintRelease.aspx?relid=177106 . 
227 CBIC, Rate of GST on services . Viewed at: https://cbic -gst.gov.in/pdf/services -booklet -
03July2017.pdf . 
228 Section 9(2), Goods and Services Tax Act, 2017; PIB Press Release, 25 April 2017. Viewed at: 
http://pib.nic.in/newsite/PrintRelease.aspx?relid=161273 ; and PIB Press Release, 2 January 2019. Viewed at: 
http://164.100.158.168/PressReleseDetail.aspx?PRID=1558103 . 
229 Information  provided by the authorities.  
230 AAI, AAI Managed Airports . Viewed at: https://www.aai.aero/en/content/how -many -international -
airports -are-india-and-which -are-they.  WT/TPR/S/ 403/Rev.1  • India  
 
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  implemented include  the construction of Mumbai's second international airport.231 In 2018, the 
NextGen Airport for Bharat Nirman (NABH)  was implemented  to further  encourage private 
participation in airport operations and management. This introduced a new model for concession s 
and prolonged the period during which  concessions are in force .232 
4.146.   Aeronautical tariffs are set by the AERA (major airports) and the AAI (non-major airports).233 
In major airports , they  are fixed every five years, subject to annual adjustments, in consultation 
with the airport operators.234 
4.147.   A permit is required to provide ground -handling services. The number of service providers 
per airport d epends upon the volume of traffic. A maximum of three providers may operate in 
airports with annual traffic of less than 10 million passengers; and there must be at least three 
suppliers in the remaining airports.235 Airlines may also provide ground -handlin g services for their 
own flight operations; however, security services cannot be handled by foreign airlines. Currently, 
ground -handling services are provided by the AAI, Air India's subsidiaries (AIATSL and AISATS), and 
private suppliers.236 
4.148.   Since  2016, fo reign aircrafts may remain  in India for up to 180 days, without permission 
from the DG CA, to undergo maintenance, repairs, and overhaul (MRO); previously, a permit was 
required for stays of over 15 days. Imports of parts used by MRO suppliers are exempt fr om customs 
duties; and parts imported duty -free must be used within three years (one year , before 2016).237 
Maritime transport  
4.149.   About 90% of India's trade in volume terms and 68% in value terms is transported by sea.238 
In 2018, India had 1,400 vessels, with a total gross tonnage of 12.7 million.239 The flag -carrier, the 
Shipping Corporation of India Ltd. , which  carries 25.5% of the total gross tonnage , is owned by the 
State . Indian -flag vessels carried only 7.1% of India's total merchandise trade in 2017/19.240 To 
increase their participation in transportation, a series of measures were implemented over the review 
period . These included : a reduction in the GST rate for bunker fuel, from 18% to 5% in 2017241; 
and the introduction of the right of first refusal for vessels built in India in bids for chartering 
vessels.242 
4.150.   Maritime services are regulated by the Merchant Shipping Act, 1958, which was not amended 
over the review period. The Ministry of Shipping formulates and implements the polic ies and 
 
231 IBEF, Aviation . Viewed at: https://www.ibef.org/download/aviation -april-2019.pdf . 
232 Ministry of Civil Aviation , Proposed transaction structure for Greenfield airports . Viewed at: 
http://www.civilaviation.gov.in/sites/default/files/proposed%20transaction%20structure%20for%20greenfiel d
%20airport%20.pdf . 
233 Major airports have annual traffic exceeding 1.5  million passengers . AERA. Viewed at: 
http://aera.gov.in/content/innerpage/faqs.php ; Ministry of Civil Aviation (2018), Annual Report 2017 -18. 
Viewed at: http://www.civilaviation.gov.in/sites/default/files/annual_report -2017_18_en.pdf ; and DG CA 
Aeronautical Information Circulars. Viewed at: http://dgca.nic.in/rule s/gen -ind.htm . 
234 Section  13(4) , Airports Economic Regulatory Authority of India Act, 2008; and AERA. Viewed at: 
http://aera.gov.in/content/innerpage/faqs.php . 
235 DGAC Aeronautical Information Circular 18/2019, 28 October 2019 . Viewed at: 
http://dgca.nic.in/ rules/aero -ind.htm . 
236 FICCI/KPMG (2018), Vision 2040 for the Civil Aviation Industry in India , Global Aviation Summit 
2019. Viewed at: https://www.globalaviationsummit.in/documents/VISION -2040-FOR-THE-CIVIL -AVIATION -
INDUSTRY -IN-INDIA.pdf . 
237 NCAP 2016.  
238 Ministry  of Finance (2020), Economic Survey 2019 -20, Volume II. Viewed at: 
https://www.indiabudget.gov.in/economicsurvey/ . 
239 Ministry of Shipping (2019), Indian Shipping Statistics 2018 . Viewed a t: 
http://shipmin.gov.in/showfile.php?lid=2845 . 
240 Information provided by the authorities.  
241 PIB Press Release, 11  October 2017. Viewed at: 
http://pib.nic.in/newsite/PrintRelease.aspx?relid=171586 . 
242 DGS, Development Circular No. 02 of 2019, 22 March 2019 . Viewed at: 
http://www.dgshipping.gov.in/Content/DGSCircu lars.aspx?branchid=10 ; and PIB Press Release,  Ships built in 
India to get priority in chartering under revised guidelines of Shipping Ministry,  18 February  2019. Viewed at: 
http://ww w.pib.nic.in/Pressreleaseshare.aspx?PRID=1564970 . WT/TPR/S/ 403/Rev.1  • India  
 
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  programmes to develop the sector. The Directorate General of Shipping (DGS) is the regulatory 
authority.  
4.151.   FDI in p orts and shipping is allowed up to 100% without approval.243 
4.152.   Foreign vessels cannot register  in India.244 In general, c abotage , regarding transportation of 
cargo and passengers,  is reserved for Indian vessels245; however, foreign vessels may provide the 
service if no Indian vessels are available . This requires a licence issued by the DGS.246 Moreover, in 
2015-18, cabotage was relaxed for speci alized vessels and certain types of commodities and 
containers, to encourage a shift from road/rail to coastal shipping (Table  4.20).247 In 2018/19, 
23.9% of India's cabotage trade was handled by foreign vessels.248 Since 2009, passenger cabotage 
has been li beralized  for foreign cruise vessels ; hence , they are able to carry passengers along the 
Indian coast, without requiring a licence from the DGS (Table  4.20).  
Table 4.20 Cabotage relaxation  
Type of foreign vess els or cargo  Starting 
year End-year 
Cruise vessels (Department of Shipping Letter No. SR -11021/1/2009 -MG, 
06.02.2009 and Ministry of Shipping Letter No. SW -17011/2/2016 -CT, 08.08.16) 2009 2024a 
Specialized vessels (e.g. Ro -Ro) (Ministry of Shipping, General Order 
No. SR-14020/5/2009 -MG/CS -Vol-VII, 02.09.15)  2015 2020 
Container vessels for transhipment portsb (Ministry of Shipping, General Order No. 
SW-15011/8/2015 -CS, 07.03.16; and General Order No. 01 of 2018, 21.05.18)  2016 2018 
EXIM tra nshipment containers (Ministry of Shipping, General Order No. 01 of 
2018, 21.05.18)  2018 n.a. 
Empty containers (Ministry of Shipping, General Order No. 01 of 2018, 21.05.18)  2018 n.a. 
Agriculture, horticulture, fisheries, and animal husbandry commodities (Ministry of 
Shipping, General Order No. 02 of 2018, 22.05.18)b 2018 n.a. 
Fertilizers (Ministry of Shipping, General Order No. 03 of 2018, 22.06.18)  2018 n.a. 
n.a. Not applicable.  
a Initially for 10 years; extended for a further 5 years in 2016 . 
b Transhipment ports were ports that transhipped at least 50% of the containers they handled.  
Source:  WTO Secretariat; and information provided by the authorities.  
4.153.   Maritime servi ces are covered by the Competition Act, 2002. However, v essel-sharing 
agreements, which allow shipping companies to share space in each other's vessels, are exempt 
from the application of Section 3 (anti -competitive agreements) of the Act.249 The exemption applies 
only if the vessel -sharing agreements do not result in price -fixing, limited capacity/sales, or 
allocation of markets/customers. Otherwise, they are covered by the Act. Vessel -sharing agreements 
must be notified to the DGS, which monitors them.250 Agreements that are likely to affect 
competition are reported to the CCI.  
4.154.   The Central Government has a programme in place to grant financial support to vessel 
builders. The programme, which is aimed at promoting competitiveness in the sector, has been in 
place since 2016 , and is expected to end in 2026. The support amounts to a specific percentage of 
 
243 Invest India , FDI Policy . Viewed at: https://www.investindia.gov.in/foreign -direct -investment.  
244 Merchant Shipping Act, 1958.  
245 Indian vessels are: (i ) vessels owned by nationals/local shipping companies  and registered in India; 
(ii) foreign -flag vessels charted by nationals/local shipping companies ; and (iii) foreign -flag vessels registered 
abroad and owned by nationals/local shipping companies  (i.e. "Indian -controlled tonnage" vessels) . Sections 
21 and 406, Merchant Shipping Act, 1958; and DGS Order No. 10 of 2014, 23  July 2014.  
246 Section 407 , Merchant Shipping Act, 1958.  
247 DGS, e-newsletter  of the DGS, July 2016.  Viewed at: 
http://www.dgshipping.gov.in/WriteReadData/UserFiles/file/1st%20english%20editon_eng.pdf . 
248 Information provided by the authorities.  
249 The Ministry of Co rporate Affairs periodically extended the exemption , which was initially introduced 
in 2013; in 2018, the exemption was extended to 2021.  
250 Notification of the Ministry of Corporate Affairs, 4  July 2018. Viewed at: 
http://www.mca.gov.in/Ministry/pdf/VSAExemption_16072019.pdf . WT/TPR/S/ 403/Rev.1  • India  
 
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  the contract price or "fair price "251, whichever is lower. This percentage will be gradually reduced by 
3% on an annual basis, from 20% (in 2016/17) to 11% in 2 025/26.252 In 2018/19, INR 290.2 million 
were provided to shipyards under this programme.253 To further support the industry, inputs used 
in shipbuilding and repair are exempt from customs duties and the GST.254 
4.155.   Ports are classified by major and non -major ports. All ports are owned by the State , and are 
regulated by the Indian Ports Act, 1908. Major ports are also regulated by the Major Port Trust Act, 
1963, which was not revised during the period under review. The Major Port Trust Auth orities Bill, 
2019 is under consideration; this would repeal the 1963 Act.255 
4.156.   Ports are under the responsibility of central and state governments.256 India has 12 major 
ports administered by the Ministry of Shipping. Each major port is run by a port trust (p ort authority), 
except Kamarajar port (formerly Ennore port) (Chennai), that is run by a company incorporated 
under the Companies Act, 1956 (Kamaraja Port Ltd.). Sixty-eight (out of 200) non -major ports are 
also operational. Non -major ports are administere d and run  by the state maritime boards/port 
departments.257 Terminals, berths, and port services in all ports may be operated/provided by 
private operators.  
4.157.   According to the SagarMala Programme, launched in 2016  to reduce the cost of export s and 
import s through the development of port infrastructure in India, more than 600 projects should be 
developed, including building six new major ports, establishing 14 coastal economic zones (CEZs), 
and increasing road and rail connectivity.258 At end -September 2018, 522  projects were being 
implemented. Some of  these projects may be eligible for financial assistance granted by the Central 
Government (Table  4.21). 
Table 4.21 Central Government financial assistance under the Sa garMala Programme  
Projects  Maximum amount of financial assistance  Total outlay  
(Nov. 2019)  
Building/upgrading berths in all ports  50% of the total cost of the project, or INR 250 million  
INR 1.2 billion  Construction of breakwaters in all ports  50% of the total cost of the project, or INR 500 million  
Combatting oil pollution in all ports  50% of the total cost of equipment  
Mechanization of berths in major ports  50% of the total cost of the project, or INR 150 million  
Capital dredging works in non -major ports  50% of the total cost of the project, or INR 500 million  INR 40 million  
Source:  Sagar Mala, Schemes . Viewed at: http://sagarmala.gov.in/notification/schemes . 
4.158.   Services in major ports are subject to tariff ceilings. Tariffs are determined based on a cost -
plus-return formula, as stipulated by the 2018 Tariff Po licy, issued by the Tariff Authority for Major 
Ports (TAMP). The TAMP approve s the tariffs.259 Tariffs at Kamaraja (Chennai) are fixed by the 
 
251 The DGS (standard vessels) or one of three approved international valuers (specialized vessels) 
determine if the pric e is fair and reasonable, considering international prices. The approved international 
valuers are listed in Schedule III of the Guidelines for Implementation of Shipbuilding Financial Assistance 
Policy . 
252 DGS, Guidelines for Implementation of Shipbuilding  Financial Assistance Policy . Viewed at: 
https://www.dgshipping.gov.in/Content/DGSCirculars.aspx?branchid=69 . 
253 WTO documents G/SCM/N/343/IND/Suppl.1; G/SCM/N/315/IND/Suppl .3; 
G/SCM/N/284/IND/Suppl.5; and G/SCM/N/253/IND/Suppl.4, 18 October 2019.  
254 PIB Press Release,  2 December 2015 . Viewed at : 
http://pib.nic.in/newsite/PrintRelease.aspx?relid=132200 . 
255 Information provided by the authorities . 
256 Section 246(2) and Seventh Schedule (Part III) , Constitution.  
257 IBEF, Ports. Viewed at: https://www.ibef.org/download/Ports -August -2019.pdf .  
258 CEZs would house industrial clusters in energy, materials (steel and cement), and discrete 
manufacturing (e.g. electronics, apparel, and food -processing) . Sagar Mala Programme. Viewed at: 
http://sagarmala.gov.in/ .  
259 Ministry of Shipping, Tariff Policy for Major Port Trusts, 2018 , 16 January 2019; and Working 
Guidelines to operationalize the Tariff Policy for Major Port Trusts, 2018 for determination of tariff for Major 
Port Trusts,  30 January 2019. Viewed at: http://tariffauthority.gov.in/ViewData/Multiple?mid=1209 .  WT/TPR/S/ 403/Rev.1  • India  
 
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  Kamaraja Port Ltd. , which follows the tariff guidelines issued by the TAMP.260 Tariffs in non -major 
ports can be fix ed by operators in consultation with the state maritime boards/port departments.261 
4.159.   The Competition Act, 2002 and the Policy for Preventing Private Monopolies in Terminal 
Operations in Major Ports, issued by the Ministry of Shipping in 2010, regulate compet ition policy in 
India's ports. Th e Policy relates only to cargo handling. It states that a private operator that handles 
a specific traffic in a berth cannot bid to handle the same traffic in another berth at the same 
terminal.262 The CCI is responsible for  determining  anti-competitive practices and  approving 
combinations regarding ports.  
4.160.   Over the review period, cargo -handling capacity in major ports increased significantly, as 
various expansion projects were completed , such as the new terminal for container ized cargo at 
Jawaharlal Nehru Port (Nhava Sheva) (Mumbai).263 In addition, various trade -facilitation measures 
were implemented to reduce the time and handling costs. As a result, the total tonnage handled 
increased (Table  4.22). 
Table 4.22 Selected indicators of ports, 2014/15 -2018/19  
 2014/15  2015/16  2016/17  2017/18  2018/19  
Total cargo -handling capacity (million 
tonnes)  1,560.5  1,703.1  2,147.6  2,307.4  2,424.4  
Major ports  871.5  965.4  1,359.0  1,451.2  1,514.1  
Non-major ports  689.0  737.7  788.6  856.2  910.3  
Total cargo handled (million tonnes)  1,052.2  1,071.8  1,133.7  1,208.6  1,280.3  
 (% of total cargo handled)  
Major ports  55.2 56.5 57.2 56.2 54.6 
Non-major ports  44.8 43.5 42.8 43.8 45.4 
 (% of total cargo handled)  
Containers  15.5 16.2 16.1 17.2 18.0 
Dry bulk cargo  41.7 38.5 39.7 39.5 41.4 
Liquid bulk cargo  36.1 38.3 38.0 37.5 36.2 
Break bulk  6.6 7.0 6.1 5.7 4.5 
Source:  Information provided by the authorities.  
4.4.4   Tourism  
4.161.   In 2020, India had the world's eighth -largest tourism sector.264 According to the latest 
Tourism Satellite Account (released in 2018), in 2015/16, the sector accounted for 5.1% of GDP and 
12.7% of emplo yment .265 It is India's third -largest source of foreign exchange; it gener ated a total 
of USD 30.1 billion in 201 9.266 In 201 9, 10.9 million foreign tourists visited India, up from 8 million 
in 201 5 (Table  4.23). 
  
 
260 Information provided by the authorities.  
261 Ministry of Shipping, Tariff Policy for Major Port Trusts, 2018 , 16 January 2019 ; and  IBEF, Ports. 
Viewed at: https://www.ibef.org/download/Ports -September -2019.pdf . 
262 Policy for preventing private -sector monopol ies in major ports, 2010.  
263 JOC.com, PSA's JNPT terminal preps for faster growth . Viewed at: https://www.joc.com/port -
news/asian -ports/port -jawaharlal -nehru /psa%E2%80%99s -jnpt-terminal -poised -accelerated -
growth_20190502.html . 
264 Invest India , Incredible India . Viewed at: https://www.investindia.gov.in/sector/tourism -hospitality . 
265 Inform ation provided by the authorities.  
266 Ministry of Tourism (2019), India Tourism Statistics at a Glance 2019 . Viewed at: 
http://tourism.gov.in/market -research -and-statistics ; and IBEF, Indian Tourism and Hospitality Industry 
Analysis . Viewed at: https://www.ibef.org/industry/indian -tourism -and-hospitality -industry -analysis -
presentation . WT/TPR/S/ 403/Rev.1  • India  
 
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  Table 4.23 Selected tourism indicators, 2015 -19 
 2015  2016  2017  2018  2019  
Total foreign tourist arrivalsa (million)  8.0 8.8 10.0 10.6 10.9 
Estimated foreign exchange earnings (USD billion)  21.0 22.9 27.3 28.6 30.1 
Share of India in international tourist arrivals (%)  1.2 1.2 1.3 1.2 1.2 
Share of India in international tourism receipts (%)  1.7 1.8 2.0 2.0 .. 
.. Not available.  
a Excluding non -resident Indians (NRIs).  
Source:  Ministry of Tourism, India Tourism Statistics  (several years). Viewed at: 
http://tourism.gov.in/market -research -and-statistics ; and information provided by the authorities . 
4.162.   The Ministry o f Tourism (MOT) formulates and implements the national tourism policy. 
During 2015 -20, India continued to implement the National Tourism Policy (NTP) 2002, which is 
aimed at making tourism a sustainable tool for economic and social growth.267 The Policy's main 
objectives were to: enhance India's competitiveness, expand tourism -related products and 
destinations, and create a world -class tourism -related infrastructure.  In 2020, a  new, draft NTP 
2015, that focuses on a sustainable and inclusive touris m model , was being reviewed .268 
4.163.   India also planned to increase  its share in the world's total tourist arrivals .269 In this context,  
several initiatives were implemented over the review period . To this end, the development of niche 
tourism products was identi fied as a priority to overcome seasonality and make India a "365 -day 
destination".270 Initiatives to advertise niche products in potential markets include the global  media 
campaign "Incredible India! ". In addition, to support these initiatives, the e -visa f acility was 
improved in 2015. As at 2019, nationals of 1 71 countries could apply for e -visas in 28 international 
airports and 5 cruise terminals.271 
4.164.   Foreign tourism providers may operate in India, if they are based in India. The y may provide 
all types of to urism -related services, except tourist guide services.272 
4.165.   Tourism is not regulated by the Central Government; and India has no legislation to regulate 
tourism at the central level.273 Nevertheless, the MOT continues to issue voluntary certificates of 
approva l to tour operators, travel agencies, online travel aggregators274 (since 2018), tourist 
transport operators, hotels and other types of accommodation, and restaurants. Local and foreign 
providers are subject to the same eligibility criteria for obtaining ce rtificates of approval. These 
requirements are outlined in guidelines issued by the MOT275; requirements related to sustainability 
may apply.276 
4.166.   Public and private (local and foreign) tourism providers operate in India. Private suppliers 
operate mainly in th e hotel industry, which is dominated by local chains. The State owns the India 
Tourism Development Corporation Ltd. (ITDC) that runs hotels, restaurants, and duty -free shops. 
E-travel activities are mainly carried out by local private suppliers.277 
 
267 National Tourism Policy , 2002. Viewed at: http://touris m.gov.in/tourism -policy . 
268 Information provided by the authorities; Draft National Tourism Policy , 2015. Viewed at: 
http://tourism.gov.in/tourism -policy -archive ; and Make in India , Tourism and Hospitality . Viewed at: 
http://www.makeinindia.com/sector/tourism -and-hospitality . 
269 IBEF, Indian Tourism and Hospitality Industry Analysis . Viewed at: 
https://www.ibef.org/industry/indian -tourism -and-hospitality -industry -analysis -presentation .  
270 The niche tourism products are: adventure; cruise; eco; film; medical and wellness; meetings, 
conferences, and exhibitions; and sport (golf and p olo) tourism . 
271 MOT (2019), Annual Report 201 8-19. Viewed at: http://tourism.gov.in/annual -report -2018-19; and 
information provided by the authorities.  
272 Information provided by the authorities.  
273 Information provided by the authorities.  
274 Online travel aggregators  are intermediaries that set up online platforms to sell tourism products and 
services on behalf of tourism services providers.  
275 MOT. V iewed at: http://tourism.gov.in/guidelines -schemes . 
276 Information provided by the authorities.  
277 Invest India , Tourism and Hospitality . Viewed at: https://www.investindia.gov.in/sector/tourism -
hospitality ; IBEF, Tourism and Hospitali ty. Viewed at: https://www.ibef.org/download/tourism -and-hospitality -
jan-2019.pdf ; MOT (2019), Annual Report 201 8-19. Viewed at: http://tourism.gov.in/annual -report -2018-19. WT/TPR/S/ 403/Rev.1  • India  
 
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  4.167.   Tourism service providers require an authorization to import certain  restricted  goods  
essential to their activities ; the import value must not exceed 10% or 25%  of the foreign exchange 
earned during the preceding year.278 
4.168.   Tourism is subject to the GST. The rate dep ends on the type of service provided.279 To 
enhance the competitiveness of the hotel industry, in 2019, the GST rate levied on hotel tariffs was 
reduced from 28% to 18% for tariffs above INR 7,501; and from 18% to 12% for tariffs ranging 
from INR 1,001 to INR 7,500.280 
4.169.   To further develop the sector , India provides assistance , mainly regarding  building 
infrastructure and particip ating in overseas travel fairs  (Table  4.24). To obtain assistance to 
participate in travel fairs , providers must hold a certificate of approval.281 In 2018/19, the total 
support provided by the MOT was INR 18.3 million.282 Assistance is also granted at the s tate level.283 
Table 4.24 Selected Central Government incentive schemes in tourism, 2019  
Objectives  Schemes description  
Promote PPPs 
in tourism 
infrastructure 
projects  Viability Gap Scheme for Revenue Generating Tourism Projectsa: 20% of the total cost of 
the project; eligible projects include facilities used by tourists that generate revenue 
through user fees (e.g. touris t trains)  
Swadesh Darshan Scheme: 100% of the total cost of the project; eligible projects include 
15 types of thematic circuits (e.g. coastal, eco, rural, and wildlife circuits)  
Pilgrimage Rejuvenation and Spiritual, Heritage Augmentation Drive (PRASHAD) Scheme: 
100% of the total cost of the project; eligible projects include 52 pilgrimage sites  
Participation in 
overseas 
travel fairs  Marketing Development Assistance (MDA):  
• Medical/wellness tourism: 90% of the total cost of the project, or INR  250,000  
• Other tourism products: 90% of the travel cost, 90% of the cost of furnished stalls and 
participation fees, and hotel cost up to INR 8,000/night (maximum 5 nights), subject t o 
a maximum of INR 250,000  
a This Scheme was introduced in January 2018. It replaced the Scheme for Assistance to Large 
Revenue Generating Projects and the Scheme for Support to PPPs in Infrastructure Development.  
Source:  Information provided by the authorities; and MOT. Viewed at: http://tourism.gov.in/guidelines -
schemes . 
4.170.   The state-owned Tourism Financial Corporation of India (TFCI) exclusively finances projects 
in the sector. It offers a range of financial products, such as loans and guarantees. Loans are directed 
to large-scale projects (i.e. minimum capital cost of INR 200 million), but smaller -scale projects may 
be considered as well. The TFCI finances  up to 75% of the project cost.284 Additional financing is 
provided, a s in other sectors, by t he state-owned IIFCL (Section 2.4.3) , which mainly finances 
projects in 3-star or higher hotels in cities with a population of less than 1 million. However, 
according to the authorities, to date, the IIFCL has not financed any touri sm projects.285 In addition, 
new investment in hotels ( 2-stars and above) may be fully deducted from taxable income.286 
 
278 DGFT, Paragraph 2.52, Chapter 2, Hand Book of Procedures . Viewed at: https://dgft.gov.in/ . 
279 CBIC, Rate of GST on Services . Viewed at: https://cbic -gst.gov.in/pdf/services -booklet -
03July2017.pdf ; and Invest India , Tourism and Hospitality . Viewed at: 
https://www.investindia.gov.in/sector/tourism -hospitality . 
280 Inform ation provided by the authorities.  
281 MOT. Viewed at: http://tourism.gov.in/guidelines -schemes ; and Make in India , Tourism and 
Hospitality . Viewed at: http://www.makeinindia.com/sect or/tourism -and-hospitality . 
282 MOT (2019), India Tourism Statistics 2019. Viewed at: http://tourism.gov.in/market -research -and-
statistics ; and information provided by the authorities.  
283 FICCI (2019), Indian Tourism Infrastructure – Investment Opportunities & Challenges . Viewed at: 
http://ficci.in/spdocument/23099/FICCI -report -TIM-2019.pdf . 
284 TFCI, About . Viewed at: http://www.tfciltd.com/Tourism_Project_financing.aspx . 
285 Information provided by the authorities.  
286 Section 35 AD , Income Tax Act , 1961; and Make in India , Tourism and Hospi tality. Viewed at: 
http://www.makeinindia.com/sector/tourism -and-hospitality . WT/TPR/S/ 403/Rev.1  • India  
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports, by HS sections and major HS chapters/subheadings, 
2014 -20 
(USD billion)  
HS section/chapter/subheading  2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20 
Total exports  310.3  262.3  275.9  303.5  330.1  313.2   
(% of total exports)  
01 Live animals and products  3.4 3.5 3.6 3.8 3.2 3.2 
03 Fish and crustaceans, molluscs, 
etc. 1.7 1.7 2.0 2.3 1.9 2.0 
02 Vegetable products  6.4 5.7 5.5 5.8 5.3 5.0 
10 Cereals  3.1 2.4 2.2 2.7 2.5 2.1 
1006 Rice  2.5 2.2 2.1 2.6 2.3 2.0 
03 Fats and oils  0.3 0.3 0.3 0.4 0.3 0.4 
04 Prepared food, beverages and 
tobacco  1.9 2.2 2.2 2.0 2.2 2.3 
05 Mineral products  19.5 12.9 13.1 14.0 15.7 15.3 
27 Mineral fuels and oils, 
products thereof  18.6 11.9 11.8 12.7 14.5 13.6 
2710 Petroleum oils, other than 
crude  18.0 11.5 11.3 12.1 13.9 13.0 
06 Chemicals and products thereof  10.8 12.8 12.4 13.0 14.0 15.1 
29 Organic chemicals  3.9 4.4 4.2 4.9 5.5 5.6 
30 Pharmaceuticals  3.7 4.9 4.7 4.4 4.5 5.2 
07 Plastics and rubber  2.5 2.9 2.8 3.1 3.4 3.2 
39 Plastics  1.6 2.0 1.9 2.1 2.4 2.2 
08 Raw hides and skins; leather, 
furskins and articles thereof  1.2 1.3 1.2 1.1 1.0 0.9 
09 Wood, cork, straw  0.1 0.2 0.2 0.1 0.2 0.2 
10 Pulp of wood; paper and 
paperboard  0.5 0.6 0.5 0.6 0.7 0.7 
11 Textiles and textile articles  12.1 14.0 13.2 12.1 11.4 10.9 
52 Cotton  2.5 2.8 2.4 2.3 2.4 1.8 
61 Clothing, knitted or crocheted  2.5 2.9 3.0 2.6 2.4 2.4 
62 Clothing, not knitted or 
crocheted  3.0 3.6 3.3 2.9 2.5 2.6 
12 Footwear, headgear, etc.  1.1 1.2 1.1 1.0 1.0 0.9 
13 Articles of stone, plaster, cement  0.9 1.1 1.1 1.1 1.2 1.4 
14 Precious stones and metals  13.4 15.1 15.8 13.8 12.3 11.5 
7102 Diamonds, not mounted 
or set  7.8 8.3 8.8 8.3 7.6 6.3 
15 Base metals and articles thereof  8.3 7.4 8.2 9.6 8.0 7.9 
72 Iron and steel  2.8 2.1 3.1 3.7 3.0 3.0 
73 Articles of iron and steel  2.4 2.3 2.1 2.2 2.2 2.2 
16 Machinery, electrical equipment  7.3 8.2 8.1 9.0 10.2 11.5 
84 Machinery and mechanical 
appliances  4.4 5.2 5.1 5.9 6.4 6.7 
85 Electrical machinery  2.8 3.1 3.0 3.1 3.9 4.8 
17 Transport equipment  8.4 8.5 8.4 7.6 7.9 7.3 
87 Motor vehicles and parts 
thereof  4.7 5.5 5.4 5.7 5.5 5.3 
18 Precision equipment  0.8 1.0 1.0 1.0 1.0 1.1 
19 Arms and ammunition  0.02 0.05 0.04 0.03 0.03 0.05 
20 Miscellaneous manufactured 
articles  0.6 0.8 0.8 0.8 0.8 0.9 
21 Works of art, etc.  0.1 0.1 0.1 0.0 0.0 0.0 
Other  0.3 0.2 0.2 0.0 0.1 0.1 
Source:  WTO calculations, based on data from the Department of Commerce . Viewed at: https://commerce -
app.gov.in/eidb/default.asp . 
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  Table A1. 2 Merchandise imports by HS section and major HS chapter/subheading, 
2014 -20 
(USD billion)  
HS section/chapter/subheading  2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20 
Total imports  448.0  381.0  384.4  465.6  514.1  474.0  
 (% of total imports ) 
01 Live animals and products  0.04 0.04 0.04 0.04 0.04 0.05 
02 Vegetable products  1.5 2.3 2.6 1.8 1.3 1.5 
03 Animal/vegetable fats and oils  2.4 2.8 2.8 2.5 1.9 2.1 
04 Prepared food, beverages and 
tobacco  0.5 0.6 0.7 0.6 0.5 0.6 
05 Mineral products  37.2 27.5 28.5 30.3 34.0 33.5 
27 Mineral fuels and oils  34.9 25.4 26.8 28.4 32.7 32.4 
2701 Coal; sol id fuels 
manufactured from coal  3.8 3.5 3.9 4.6 4.8 4.6 
2709 Petroleum oils, crude  26.0 17.3 18.4 18.8 22.2 21.7 
2711 Petroleum gases and 
other gaseous hydrocarbons  3.6 3.0 2.8 3.0 3.7 3.7 
06 Chemicals and products thereof  8.6 9.7 8.9 8.9 9.7 9.6 
29 Organic chemicals  4.0 4.1 4.0 4.1 4.4 4.2 
07 Plastics and rubber  3.3 3.8 3.8 3.7 3.7 3.7 
39 Plastics  2.6 3.0 3.0 3.0 3.0 3.0 
08 Raw hides and skins; leather, 
furskins and articles thereof  0.2 0.3 0.2 0.2 0.2 0.2 
09 Wood, cork, straw  0.6 0.6 0.5 0.5 0.4 0.4 
10 Pulp of wood; paper and 
paperboard  1.0 1.2 1.2 1.2 1.2 1.1 
11 Textiles and textile articles  1.3 1.5 1.6 1.5 1.4 1.7 
12 Footwear, headgear, etc.  0.1 0.1 0.2 0.2 0.2 0.2 
13 Articles of stone, plaster, cement  0.5 0.6 0.6 0.6 0.6 0.6 
14 Precious stones and metals, 
pearls  13.9 14.8 14.0 16.0 12.6 11.5 
7102 Diamonds, not mounted 
or set  4.6 4.4 5.0 6.3 5.0 4.4 
7108 Gold , unwrought or in 
semi-manuf actured  form 7.7 8.3 7.1 7.2 6.4 6.0 
15 Base metals and articles thereof  6.3 6.7 5.8 6.1 6.5 6.3 
72 Iron and steel  2.8 3.0 2.1 2.2 2.4 2.3 
16 Machinery, electrical equipment  14.5 18.1 18.4 18.5 18.7 19.5 
84 Machinery and mechanical 
appliances, parts thereof  7.1 8.6 8.3 8.1 8.5 9.1 
85 Electrical machineries and 
parts thereof  7.4 9.4 10.0 10.4 10.1 10.4 
17 Transport equipment  3.3 3.9 5.0 4.0 3.9 4.4 
18 Precision instruments  1.7 2.0 2.0 2.0 2.0 2.0 
19 Arms and ammunition  0.00 0.01 0.01 0.01 0.01 0.01 
20 Miscellaneous manufactured 
articles  0.5 0.6 0.6 0.7 0.6 0.6 
21 Works of art, collectors' pieces 
and antiques  0.0 0.0 0.0 0.1 0.0 0.0 
Other  2.5 2.7 2.4 0.5 0.5 0.4 
Source:  WTO calculations, based on data from the Department of Commerce.  Viewed at: https://commerce -
app.gov.in/eidb/default.asp . 
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  Table A1. 3 Merchandise exports by destination, 2014 -20 
(USD billion)  
  2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20 
Total exports  310.3  262.3  275.9  303.5  330.1  313.2   
(% of total exports ) 
Americas  19.1 20.2 19.9 20.7 20.9 22.3 
United States  13.7 15.4 15.3 15.8 15.9 17.0 
Other America  5.3 4.7 4.6 4.9 5.0 5.3 
Brazil  1.9 1.0 0.9 1.0 1.2 1.3 
Europe  18.4 19.7 19.8 20.0 19.7 19.5 
EU-28 16.2 17.4 17.6 17.8 17.5 17.4 
United Kingdom  3.0 3.4 3.1 3.2 2.8 2.8 
Netherlands  2.0 1.8 1.8 2.1 2.7 2.7 
Germany  2.4 2.7 2.6 2.9 2.7 2.6 
Belgium  1.8 1.9 2.1 2.0 2.0 1.9 
France  1.6 1.8 1.9 1.6 1.6 1.6 
Italy 1.6 1.6 1.8 1.9 1.7 1.6 
EFTA 0.4 0.6 0.4 0.5 0.5 0.5 
Other Europe  1.8 1.6 1.7 1.7 1.7 1.6 
Turkey  1.7 1.6 1.7 1.7 1.7 1.6 
Commonwealth of independent states 
(CIS)  1.1 0.9 1.0 1.0 1.1 1.3 
Africa  10.6 9.5 8.4 8.2 8.7 9.3 
South Africa  1.7 1.4 1.3 1.3 1.2 1.3 
Middle East  19.5 18.9 18.0 15.9 15.9 16.3 
United Arab Emirates  10.6 11.6 11.3 9.3 9.1 9.2 
Saudi Arabia, Kingdom of  3.6 2.4 1.9 1.8 1.7 2.0 
Asia 30.1 29.9 31.9 33.4 33.0 30.5 
China  3.8 3.4 3.7 4.4 5.1 5.3 
Japan  1.7 1.8 1.4 1.6 1.5 1.4 
Other Asia  24.5 24.7 26.9 27.4 26.4 23.7 
Hong Kong, China  4.4 4.6 5.1 4.8 3.9 3.5 
Singapore  3.2 2.9 3.5 3.4 3.5 2.8 
Bangladesh  2.1 2.3 2.5 2.8 2.8 2.6 
Nepal  1.5 1.5 2.0 2.2 2.4 2.3 
Malaysia  1.9 1.4 1.9 1.9 1.9 2.0 
Viet Nam  2.0 2.0 2.5 2.6 2.0 1.6 
Korea, Republic of  1.5 1.3 1.5 1.5 1.4 1.5 
Thailand  1.1 1.1 1.1 1.2 1.3 1.4 
Indonesia  1.3 1.1 1.3 1.3 1.6 1.3 
Other  1.3 0.9 0.9 0.8 0.9 0.8 
Memorandum:        
ASEAN  10.3 9.6 11.2 11.3 11.4 10.1 
APEC 39.6 40.6 43.0 44.4 44.0 43.6 
Source:  WTO calculations, based on data from the Department of Commerce. Viewed at: https://commerce -
app.gov.in/eidb/default.asp . 
  WT/TPR/S/ 403/Rev.1  • India  
 
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  Table A1. 4 Merchandise imports, by origin, 2014 -20 
(USD billion)  
  2014 /15 2015 /16 2016 /17 2017 /18 2018 /19 2019 /20 
Total imports  448.0  381.0  384.4  465.6  514.1  474.0   
(% of total imports ) 
Americas  12.5 12.1 12.2 12.0 12.7 12.9 
United States  4.9 5.7 5.8 5.7 6.9 7.5 
Other America  7.6 6.4 6.3 6.3 5.8 5.3 
Europe  16.5 17.0 16.0 15.0 15.4 15.0 
EU-28 11.0 11.5 11.0 10.3 11.4 10.8 
Germany  2.9 3.2 3.0 2.9 2.9 2.8 
Belgium  2.4 2.2 1.7 1.3 2.0 1.9 
United Kingdom  1.1 1.4 1.0 1.0 1.5 1.4 
EFTA 5.2 5.2 4.6 4.2 3.6 3.7 
Switzerland  4.9 5.1 4.5 4.1 3.5 3.6 
Other Europe  0.4 0.2 0.3 0.5 0.5 0.5 
Commonwealth of independent states 
(CIS)  1.7 1.9 2.4 2.8 1.8 2.5 
Russian Federation  0.9 1.2 1.4 1.8 1.1 1.5 
Africa  8.7 8.4 7.5 8.1 8.0 8.0 
Nigeria  3.1 2.6 2.0 2.0 2.1 2.2 
South Africa  1.5 1.6 1.5 1.5 1.3 1.5 
Middle East  24.9 19.9 20.9 20.6 23.1 22.9 
United Arab Emirates  5.8 5.1 5.6 4.7 5.8 6.4 
Saudi Arabia, Kingdom of  6.3 5.3 5.2 4.7 5.5 5.7 
Iraq 3.2 2.8 3.0 3.8 4.4 5.0 
Qatar  3.3 2.4 2.0 1.8 2.1 2.0 
Kuwait, the State of  3.0 1.3 1.2 1.5 1.4 2.0 
Asia 34.0 38.5 39.1 39.4 38.9 38.8 
China  13.5 16.2 15.9 16.4 13.7 13.8 
Japan  2.3 2.6 2.5 2.4 2.5 2.6 
Other Asia  18.3 19.7 20.6 20.7 22.7 22.4 
Hong Kong, China  1.2 1.6 2.1 2.3 3.5 3.6 
Korea, Republic of  3.0 3.4 3.3 3.5 3.3 3.3 
Indonesia  3.3 3.4 3.5 3.5 3.1 3.2 
Singapore  1.6 1.9 1.8 1.6 3.2 3.1 
Malaysia  2.5 2.4 2.3 1.9 2.1 2.1 
Australia  2.3 2.3 2.9 3.0 2.6 2.1 
Viet Nam  0.7 0.7 0.9 1.1 1.4 1.5 
Thailand  1.3 1.4 1.4 1.5 1.4 1.4 
Other  1.7 2.3 1.9 2.0 0.0 0.0 
Memorandum:        
ASEAN  10.0 10.5 10.6 10.1 11.5 11.7 
APEC 41.3 46.7 47.7 48.9 48.5 49.2 
Source:  WTO calculations, based on data from the Department of Commerce. Viewed at: https://commerce -
app.gov.in/eidb/default.asp .  
  WT/TPR/S/ 403/Rev.1  • India  
 
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  Table A2. 1 Sectors in which FDI is restricted, April 2020  
Sector  Foreign equity 
limit/route  Additional conditions  
Agriculture  FDI not permitted , 
except for the following 
in which FDI up to 
100% is automatic:   
(i) floriculture, horticulture, and 
cultivation of vegetables and 
mushrooms under controlled 
conditions;  
(ii) development and production 
of seeds and planting material;  
(iii) animal husbandry 
(including dog -breeding), 
pisciculture, aquaculture, and 
apiculture ; and  
(iv) services related to agro and 
allied sectors.  100%/automatic   
Tea sector, including tea 
plantations; coffee plantations; 
rubber plantations; cardamom 
plantations; palm tree 
plantations; olive tree 
plantations  100%/automatic  Prior approval of th e state government 
concerned is required in case of any future 
land-use change.  
Mining and petroleum    
Mining and mineral separation 
of titanium -bearing minerals 
and ores, its value addition , and 
integrated activities, subject to 
sectoral regulations and  the 
Mines and Mineral 
(Development and Regulation) 
Act, 1957 100%/ government  For the separation of titanium -bearing minerals 
and ores: (i) value -addition facilities are set up 
in India , along with transfer of technology; 
(ii) disposal of tailings during m ineral 
separation in accordance with regulations 
framed by the Atomic Energy Regulatory 
Board , such as the Atomic Energy (Radiation 
Protection) Rules, 2004 , and the Atomic 
Energy (Safe Disposal of Radioactive Wastes) 
Rules , 1987; and (iii) FDI is not allow ed in 
mining of "prescribed substances" listed in 
Notification S.O. 61(e), of 18.1.2006, issued by 
the Department of Atomic Energy.  
Petroleum refining by public 
sector undertakings (PSUs) 
without any disinvestment or 
dilution of domestic equity in 
existing PSUs  49%/automatic   
Power    
Power exchanges registered 
under the Central Electricity 
Regulatory Commission (Power 
Market) Regulations , 2010 49%/automatic  No non -resident investor/entity, including 
persons acting in concert, may hold more than 
5% of the equity of these companies; and FDI 
to be in compliance with SEBI regulations, 
other applicable laws/regulations, and security 
and other conditionalities.  
Manufacturing    
Pharmaceuticals    
Brownfield (except for 
manufacture of medical 
devices)  100% (automatic up to 
74%; government 
approval required 
above 74%)  (i) "Non-compete" clause not allowed in either 
automatic or government route , except in 
special circumstances with government 
approval; (ii) the prospective investor and 
investee must provide a certificate and 
application for foreign investment (as in 
Annexure 1 0); (iii) the Government may 
incorporate appropriate conditions for 
brownfield investment at the time of granting 
approval; and (iv) subject to additional 
conditions.a WT/TPR/S/ 403/Rev.1  • India  
 
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  Sector  Foreign equity 
limit/route  Additional conditions  
Defence    
Defence industry subject to 
industrial licence under the 
Industries (Develop ment and 
Regulation) Act , 1951; and 
manufacture of small arms and 
ammunitions under the Arms 
Act, 1959  100% (automatic up to 
49%, government 
approval above 49%) 
wherever it is likely to 
result in access to 
modern technology or 
for other reasons  (i) Infusio n of fresh FDI under the automatic 
route in a company not seeking an industrial 
licence which changes the ownership pattern, 
or transfer of stake by existing investor to a 
new foreign investor, requires government 
approval; (ii) licences considered and gra nted 
by the DPIIT, in consultation with the Ministries 
of Defence and External Affairs; (iii) subject to 
security clearance and guidelines of the 
Ministry of Defence; (iv)  the investee should be 
self-sufficient in product design and 
development; and (v) the company and 
manufacturing facility should also provide 
maintenance and life -cycle support for the 
product being manufactured in India.  
Services    
Communication services    
Broadcasting content services    
- Terrestrial broadcasting FM 
(FM radio)  49%/Government  Terms and conditions as specified from time to 
time by the Ministry of Information and 
Broadcasting for the grant of permission to set 
up FM radio stations  
- Uplinking of "news and 
current affairs " TV channels  49%/Government   
- Uploading/streaming of news 
and current affairs through 
digital media  26%/Government   
Print media    
- Publishing of newspaper s and 
periodicals dealing with news 
and current affairs  26%/Government   
- Publication of Indian editions 
of foreign magazines dealing 
with news and current affairs  26%/Government  FDI also subject to the Guidelines for 
Publication of Indian Editions of Foreign 
Magazines dealing with News and Current 
Affairs, issued by the Ministry of Information 
and Broadcasting on 4  December 2008.  
- Publishing, and printing of 
scientific and technical 
magazines, specialty journals, 
periodicals, subject to 
compliance with t he legal 
framework , as applicable , and 
guidelines issued in this regard 
by the Ministry of Information 
and Broadcasting  100%/Government  FDI to be by the owner of the original foreign 
newspaper whose facsimile edition is proposed 
to be published in India. P ublication of the 
facsimile edition may only be by an entity 
incorporated or registered in India under the 
Companies Act, as applicable, and subject to 
the Guidelines for the publication of 
newspapers and periodicals dealing with news 
and current affairs a nd the publication of 
facsimile editions of foreign newspapers issued 
by the Ministry of Information and 
Broadcasting on 31 March 2006 , as amended.  - Publication of facsimile 
edition s of foreign newspapers  100%/Government  
Telecommunications services    
- Telecommunications services  
All telecom servicesb 
infrastructure provider s, 
Category I (providing dark 
fibre, right of way, duct space, 
and tower s), except other 
service providers  100% (automatic up to 
49%; government 
approval above 49%)  Subject to observance of licensing and security 
conditions by the licensee as well as investors , 
as notified by the Department of 
Telecommunications from time to time, except 
"other service provider s" for which FDI of up to 
100% is permitted through the automatic 
route.  
Satellite  establishment and 
operation  100%/Government  Subject to the sectoral guidelines of the 
Department of Space/ISRO  
Financial services    
- Banks (private sector)  74% (includin g foreign 
institutional investors) 
(automatic up to 49%; 
government approval 
above 49% up to 74%  At least 26% of paid -up capital to be held by 
residents except for wholly owned subsidiaries 
of a foreign bank . 
- Banks (public sector)  20% (FDI and 
portfolio)/Government  Subject to the Banking Companies (Acquisition 
and Transfer of Undertakings) Act , 1970 and 
1980.  WT/TPR/S/ 403/Rev.1  • India  
 
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  Sector  Foreign equity 
limit/route  Additional conditions  
- Commodity exchanges  49%/automatic  Subject to the Forward Contracts (Regulation) 
Act, 1952.  
- Infrastructure companies in 
securities markets (stock 
exchanges, commodity 
exchanges, depositories and 
clearing corporations in 
compliance with SEBI 
regulations)  49%/automatic  Subject to the Securities Contracts 
(Regulations)  (Stock Exchanges and Clearing 
Corporations) Regulations , 2012, and the 
Securities and Exchange Board of India 
(Depositories and Participants) Regulations, 
1996, as amended, and other 
guidelines/regulations issued by the Central 
Government, the SEBI and the R eserve Bank 
of India. 
- Insurance compan ies 49% (including 
portfolio investors) 
/automatic  Subject to approval/licence from the Insurance 
Regulatory and Development Authority 
(IRDAI) . 
Intermediaries or insurance 
intermediaries , including 
insurance brokers, re -insurance 
brokers, insurance consultants, 
corporate ag ents, third -party 
administrator s, surveyors and 
loss assessors , and such other 
entities as may be notified by 
the IRDAI.  100% (including 
portfolio investors) 
/automatic  Subject to approval/licence from the IRDAI . 
- Pension sector  49%/automatic  As per the Pension Fund Regulatory and 
Development Authority (PFRDA) Act , 2013.  
Air transport services    
Scheduled air transport 
services/domestic scheduled 
passenger airline s 
 
Regional air transport services  49%/automatic (100% 
for non-resident 
Indians 
(NRIs)/ automatic)  
Government approval 
above 49%  Foreign airlines may invest in the capital of 
companies operating cargo airlines, and 
helicopter and seaplane services; they may 
also invest in the capital of Indi an companies 
(but not Air India) operating scheduled and 
non-scheduled air transport services up to 
49% of their paid -up capital (FDI and foreign 
institutional ( FII)/foreign portfolio ( FPI) 
investment) , subject to government approval 
and to compliance with  the relevant rules of 
the SEBI as well as other applicable rules and 
regulations.  
Private security agencies  74% (automatic up to 
49%; government 
approval above 49% 
and up to 74%)  Subject to compliance with Private Security 
Agencies (Regulation) Act , 2005, as amended.  
Distribution services    
Trading    
- Multi-brand retail trading  51%/Government  Fresh agricultural produce to be unbranded. 
Minimum FDI of USD 100 million, at least 50% 
of which to be invested in backend 
infrastructure within 3 years; at least 30% of 
the value of procurement of 
manufactured/processed products to be 
sourced from Indian small industries , with total 
investment in plant and machinery not 
exceeding USD  2 million. The procurement 
requirement to be met as an average of 
purchase s in five years as at 1 April of the year 
in which the first FDI tranche is received , and 
annually thereafter. The Government has first 
refusal  regarding  purchas ing agricultural 
products. Subject also to state government 
policies.  
a (i) Production levels of  drugs in the National List of Essential Medicines (NLEM) and/or consumables , 
and their supply to the domestic market at the time of foreign investment, to be maintained over the 
following  five years at an absolute quantitative level. The benchmark for thi s level is the highest level 
of production of NLEM drugs and/or consumables in the three financial years immediately preceding 
the year of foreign investment; ( ii) R&D expenses to be maintained in value terms for five years , at 
an absolute quantitative lev el at the time of foreign investment. The benchmark for this level is the 
highest level of R&D expenses incurred in any of three financial years immediately preceding the WT/TPR/S/ 403/Rev.1  • India  
 
- 166 - 
 
  foreign investment; and (iii) the administrative ministry is to be provided with complete information 
on the transfer of technology, if any, along with the foreign investment made in the company. The 
administrative ministry (Ministry of Health and Family Welfare, Department of Pharmaceuticals , or any 
other regulatory agency as notified by the Central Government) monitor s compliance with these 
conditionalities.  
b Including Telecom Infrastructure Providers Category I basic, cellular, united access services, Unified 
Licence (Access Services), Unified Licence, National/Int ernational Long Distance, Commercial V -SAT, 
Public Mobile Radio Trunked Services, Global Mobile Personal Communications Services, all types of 
Internet service provider  licences, voice mail/audiotex/UMS, resale of IPLC, and mobile number 
portability services. 
Source:  DPIIT, Consolidated FDI Policy Circular of 2017 , 28 August 2017; FDI Policy 2019, Revised on 
19 September 2019. Viewed at: . https://static.investindia.gov.in/2019 -
09/FDI%20Policy%202019%20 revised_19%20 Sept%202019.pdf ; and press notes 2020.  
  WT/TPR/S/ 403/Rev.1  • India  
 
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  Table A3. 1 Tariff summary, 2019/20  
 
Applied MFN  Bound 
tariff  
Number 
of lines  Average 
(%) Standard 
deviation  Range (%)  Range 
(%) 
Total  11,755  13.9 
(14.9)  (14.5) 
18.8 0-150 
(0-637.7)  0-300 
HS 01 -24 1,653  36.1 26.7 0-150 10-300 
HS 25 -97 10,102  10.4 (11.6)  7.3 (15.1)  0-100 (0 -
637.7)  0-150 
By WTO category       
WTO agricultural products  1,502  34.8 29.1 0-150 10-300 
 Animals and products thereof  124 30.4 14.3 5-100 35-150 
 Dairy products  33 34.2 9.9 30-60 40-150 
 Fruit, vegetables, and plants  380 28.1 (28.0)  15.8 0-100 10-150 
 Coffee and tea  75 74.8 33.6 30-100 55-150 
 Cereals and preparations  142 32.7 16.8 0-80 35-150 
 Oilseeds, fats, oil and their products  208 26.7 12.7 0-80 15-300 
 Sugars and confectionary  41 35.4 14.9 10-60 45-150 
 Beverages, spirits and tobacco  128 81.1 56.8 5-150 35-150 
 Cotton  11 2.7 8.6 0-30 100-150 
 Other agricultural products, n.e.s.  360 25.1 15.9 0-70 10-150 
WTO non -agricultural products  1,253  10.8 (12.0)  6.7 (14.7)  0-100  
(0-637.7)  0-150 
 Fish and fishery products  325 29.7 2.9 0-30 35-150 
 Minerals and metals  1,920  8.7 3.8 0-40 0-55 
 Chemicals and photographic supplies  2,526  8.3 2.3 0-20 0-150 
 Wood, pulp, paper and furniture  552 9.7 3.5 0-20 25-40 
 Textiles  1,557  12.3 (18.2)  4.9 (29.9)  5-25 (5 -637.7)  20-40 
 Clothing  397 19.6 (27.1)  1.8 (26.0)  10-20 (10 -246) 35-40 
 Leather, rubber, footwear and travel goods  324 12.8 (12.7)  8.0 (7.9)  0-70a 3-40 
 Non-electric machinery  1,109  7.5 2.9 0-20 0-40 
 Electric machinery  543 7.9 4.2 0-20 0-40 
 Transport equipment  298 23.0 16.1 0-100b 3-40 
 Non-agricultural products, n.e.s.  683 10.5 4.9 0-25 0-40 
 Petroleum  19 5.0 (4.7)  0.0 (1.1)  0-5 (5-5) n.a. 
By HS section       
 01 Live animals and products  498 30.1 6.6 0-100 35-150 
 02 Vegetable products  605 35.9 (35.8)  25.6 0-100 10.0-150 
 03 Fats and oils  121 31.8 11.1 7.5-80 15-300 
 04 Prepared food, beverages and tobacco  429 44.8 40.2 0-150 35-150 
 05 Mineral products  322 4.9 2.9 0-40 5-55 
 06 Chemicals and products thereof  2,295  8.6 3.3 0-25 0-150 
 07 Plastics, rubber, and articles thereof  583 10.0 (9.9)  4.3 (4.1)  3-70a 3-40 
 08 Raw hides and skins, leather, and its 
products  134 6.8 4.7 0-10 25-100 
 09 Wood and articles of wood  247 8.8 2.1 5-10 25-40 
 10 Pulp of wood, paper and paperboard  272 9.2 2.5 0-20 25-40 
 11 Textiles and textile articles  1,908  13.8 (20.1)  5.6 (29.7)  0-30 (0 -637.7)  20-150 
 12 Footwear, headgear, etc.  105 18.7 7.0 10-25 n.a. 
 13 Articles of stone, plaster, cement  258 10.6 4.8 5-40 0-40 
 14 Precious stones and metals, pearls  91 11.9 6.4 0-20 40-40 
 15 Base metals and articles thereof  1,267  9.0 2.7 0-15 25-40 
 16 Machinery, electrical equipment, etc.  1,685  7.7 3.4 0-20 0-40 
 17 Transport equipment  317 22.2 16.0 0-100b 3-40 
 18 Precision equipment  352 8.9 4.3 0-20 0-40 
 19 Arms and ammunition  20 10.0 0.0 10-10 n.a. 
 20 Miscellaneous manufactured articles  229 15.0 5.2 0-20 35-40 
 21 Works of art, etc.  17 8.2 3.8 0-10 n.a. 
n.a. Not applicable.  
a Tariff lines with applied rates at 70% are unbound.  
b Tariff lines with applied rates at 100% are unbound.  
Note:  Calculations for averages are based on tariff lines at the 8 -digit level. Figures in brackets include 
AVEs, as available. For alternate rates, where AVEs were no t available only the ad valorem  part of 
the rate was used.  
Source:  WTO Secretariat calculations, based on data provided by the authorities; and the Ministry of 
Commerce and Industry, Department of Commerce. Viewed at: https://commerce -
app.gov.in/eidb/defau lt.asp . 
  WT/TPR/S/ 403/Rev.1  • India  
 
- 168 - 
 
  Table A3. 2 India's tariff summary, 2020/21  
  Applied MFN  Bound 
tariff  
Number 
of lines  Average 
(%) Standard 
deviation  Range (%)  Range (%)  
Total  11,900  14.3 (15.4)  15.1 (19.2)  0-150 
(0-637.7)  0-300 
HS 01 -24 1,682  37.5 27.3 0-150 10-300 
HS 25 -97 10,218  10.5 (11.7)  6.4 (14.7)  0-100 
(0-637.7)  0-150 
By WTO category       
WTO agricultural products  1,523  36.5 29.6 0-150 10-300 
  Animals and products thereof  124 30.2 14.5 0-100 35-150 
  Dairy products  33 36.7 9.7 30-60 40-150 
  Fruit, vegetables, and plants  398 29.0 (28.9)  16.3 0-100 10-150 
  Coffee and tea  75 74.8 33.6 30-100 55-150 
  Cereals and preparations  149 35.1 18.8 0-100 35-150 
  Oilseeds, fats, oil  and their products  206 35.1 22.6 7.5-100 15-300 
  Sugars and confectionary  41 47.0 30.3 25-100 45-150 
  Beverages, spirits and tobacco  125 79.4 56.5 5-150 35-150 
  Cotton  11 2.7 8.6 0-30 100-150 
  Other agricultural products, n.e.s.  361 25.3 15.7 0-70 10-150 
WTO non -agricultural products  10,377  11.1 (12.3)  7.1 (14.9)  0-100 
(0-637.7)  0-150 
  Fish and fishery products  330 29.7 2.9 0-30 35-150 
  Minerals and metals  1,959  8.9 4.5 0-40 0-55 
  Chemicals and photographic supplies  2,563  8.3 2.3 0-20 0-150 
  Wood, pulp, paper and furniture  550 10.0 4.4 0-25 25-40 
  Textiles  1,558  12.4 (18.3)  5.0 (29.9)  2.5-35 
(2.5-637.7)  20-40 
  Clothing  416 19.7 (27.1)  1.8 (25.8)  10-20 
(10-246) 35-40 
  Leather, rubber, footwear and travel goods  324 15.4 (15.3)  10.7 (10.6)  0-70a 3-40 
  Non-electric machinery  1,110  7.7 3.2 0-20 0-40 
  Electric machinery  536 8.5 4.7 0-20 0-40 
  Transport equipment  298 24.2 15.9 0-100b 3-40 
  Non-agricultural products, n.e.s.  682 11.3 6.6 0-60 0-40 
  Petroleum  51 4.6 (4.5)  1.0 (1.2)  0-5  n.a. 
By HS section       
 01 Live animals and products  503 30.2 6.8 0-100 35-150 
 02 Vegetable products  631 36.6 (36.5)  25.7 0-100 10.0-150 
 03 Fats and oils  122 45.1 23.3 7.5-100 15-300 
 04 Prepared food, beverages and tobacco  426 45.3 40.0 0-150 35-150 
 05 Mineral products  360 5.0 3.8 0-40 5-55 
 06 Chemicals and products thereof  2,319  8.6 3.3 0-25 0-150 
 07 Plastics, rubber, and articles thereof  593 10.0 4.3 (4.1)  3-70a 3-40 
 08 Raw hides and skins, leather, and its 
products  134 9.5 5.6 0-15 25-100 
 09 Wood and articles of wood  247 8.8 2.1 5-10 25-40 
 10 Pulp of wood, paper  and paperboard  270 9.2 2.3 0-10 25-40 
 11 Textiles and textile articles  1,928  13.8 (20.2)  5.6 (29.7)  0-30 
(0-637.7)  20-150 
 12 Footwear, headgear, etc.  105 25.1 11.3 10-35 n.a. 
 13 Articles of stone, plaster, cement  258 11.5 5.4 5-40 0-40 
 14 Precious stones and metals, pearls  123 9.7 6.8 0-20 40-40 
 15 Base metals and articles thereof  1,268  9.4 3.4 0-20 25-40 
 16 Machinery, electrical equipment, etc.  1,679  8.0 3.8 0-20 0-40 
 17 Transport equipment  317 23.3 15.8 0-100b 3-40 
 18 Precision equipment  351 8.9 4.3 0-20 0-40 
 19 Arms and ammunition  20 10.0 0.0 10-10 n.a. 
 20 Miscellaneous manufactured articles  229 17.8 8.5 0-60 35-40 
 21 Works of art, etc.  17 8.2 3.8 0-10 n.a. 
n.a. Not applicable.  
a Tariff lines with applied rates at 70% are unbound.  
b Tariff lines with applied rates at 100% are unbound.  
Note:  Calculations for averages are based on the national tariff lines level (8 -digit).  
Figures in brackets include ad valorem  equivalents (AVEs), as available. For mixed duties, where 
AVEs were not available only the ad valorem  part of the rate was used.  
Source : WTO Secretariat calculations, based on data provided by the authorities; and Ministry of Commerce 
and Industry, Department of Commerce. Viewed at: https://commerce -app.gov.in/eidb/default.asp . 
  WT/TPR/S/ 403/Rev.1  • India  
 
- 169 - 
 
  Table  A3.3 Subsidies notified to the WTO, 2015 –19 
Programme  Form of subsidy  Policy 
objective  In force/  
implementa
tion Notified  
Central government level  
Central Capital Investment 
Subsidy Scheme for States 
of Jammu and Kashmir, 
Himachal Pradesh and 
Uttarakhand. 
http://www.dipp.nic.in.  Exemption from income 
tax 
Subsidized interest 
rates on working -
capital loan  
Reimbursement of 
insurance premium  
Subsidy on c apital 
investment  Promote 
industrialization  2002-17 G/SCM/N/284/IND/Suppl.3 and 
G/SCM/N/315/IND/Suppl.1, 7 
March 2019  
Industrial Development 
Scheme, 2017, for States 
of Jammu and Kashmir, 
Himachal Pradesh and 
Uttarakhand  G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Integrated Development 
of Leather Sector Scheme  Grant of 20% to 30% 
of cost of plant and 
machinery  
Maximum INR 30 
million per product line  Industry 
upgrade  2005-20 G/SCM/N/284/IND,  
27 October 2016;  
G/SCM/N/284/IND/Suppl.3 and 
G/SCM/N/315/IND/Suppl.1, 7 
March 2019  
North East Industrial and 
Investment Promotion 
Policy  Fiscal incentives  
Exemption from excise 
duty and income tax  
Subsidized interest 
rates on working -
capital loan  
Reimbursement of 
insurance premium  
Subsidy on capital 
investment  Development of 
disadvantag ed 
areas  2007-17 
 
Grandfathere
d until 2027  G/SCM/N/284/IND,  
27 October 2016  
G/SCM/N/284/IND/Suppl.3 and 
G/SCM/N/315/IND/Suppl.1, 7 
March 2019  
Freight Subsidy Scheme  Grant  
Subsidy of 50% to 90% 
of the cost of 
transportation of raw 
materials and finished 
goods from the 
production unit to the 
designated rail -head 
Subsidy is not available 
for intra -state 
movement of goods  Development of 
remote areas  2013-16 
 
Grandfathere
d unti l 2021  G/SCM/N/284/IND/Suppl.3 and 
G/SCM/N/315/IND/Suppl.1, 7 
March 2019  
North East Industrial 
Development Scheme  Grant and  
Reimbursement of 
taxes  Promote 
industrialization  2017-22 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Faster Adoption and 
Manufacturing of Hybrid 
and Electric Vehicles 
Scheme  Consumer subsidy  
Reduction of market 
price Environment  2015-19 G/SCM/N/284/IND/Suppl.3 and 
G/SCM/N/315/IND/Suppl.1, 7 
March 2019  
Enhancement of 
Competitiveness in the 
Indian Capital Goods 
Sector  Grant  Upgrade 
technology in 
manufacturing  2014 – not 
specified; 
continuing  G/SCM/N/284/IND/Suppl.3 and 
G/SCM/N/315/IND/Suppl.1, 7 
March 2019  
Shipbuilding Subsidy/  
Financial Assistance Policy  Grant  Promote 
shipbuilding  2016-26 G/SCM/N/284/IND,  
27 October 2016  
G/SCM/N/284/IND/Suppl.3 and 
G/SCM/N/315/IND/Suppl.1, 7 
March 2019  
Technology Up -Gradation 
Fund Scheme  
Amended Technology 
Upgradation Fund 
Scheme/Revised 
Restructured Technology 
Upgradation Fund Scheme  Reimbursement of 
interest paid  Upgrade 
technology in 
textile industry  1999-2022 G/SCM/N/284/IND,  
27 October 2016  
G/SCM/N/284/IND/Suppl.3 and 
G/SCM/N/315/IND /Suppl.1, 7 
March 2019  
Focus Market Scheme  Duty exemption  Promote 
exports  Eliminated in 
2015 G/SCM/N/284/IND,  
27 October 2016  
Product Focus Scheme  Duty exemption  Promote 
exports  Eliminated in 
2015 G/SCM/N/284/IND,  
27 October 2016  
Market Linked Focus 
Product Scheme  Duty exemption  Promote 
exports  Eliminated in 
2015 G/SCM/N/284/IND,  
27 October 2016  WT/TPR/S/ 403/Rev.1  • India  
 
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  Programme  Form of subsidy  Policy 
objective  In force/  
implementa
tion Notified  
Subsidy schemes at the state government level  
Andhra Pradesh  
Schemes (Incentives) 
under Industrial 
Development Policy, 2015 -
20 Grant/tax exemption 
reimbursement  Industrial 
development  2015-20 G/SCM/N/284/IND/Suppl.1, 5 
September 2017  
G/SCM/N/284/IND/Suppl.3 
G/SCM/N/315/IND/Suppl.1, 7 
March 2019  
G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/25 3/IND/Suppl.4,  
18 October 2019  
Bihar  
Industrial Incentive Policy, 
2006  Grant  
Tax exemption  Balanced 
industrial 
growth  2006-11 G/SCM/N/284/IND/Suppl.1, 
5 September 2017  
Industrial Investment 
Promotion Policy, 2016.  
 Grant  
Tax exemption  
Tax reimbursement  
Interest rate subsidy  Industrial 
development  2016-21 G/SCM/N/284/IND/Suppl.3 
G/SCM/N/315/IND/Suppl.1, 7 
March 2019,  
G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Chhattisgarh  
Schemes under the 
Industrial Policy, 2014 -19 Grant  
Tax exemption  
Tax reimbursement  Industrial 
development  2014-19 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Gujarat  
Financial assistance by 
way of Net VAT/Net State 
Goods and Services Tax 
reimbursement to MSMEs, 
Large, Mega and Ultra 
Mega Industrial 
Undertakings  Tax reimbursement  Industrial 
development  2016-21 G/SCM/N/284/IND/Suppl.3 
G/SCM/N/315/IND/Suppl.1, 7 
March 2019  
G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Financial assistance for 
the Plastic Industry of Net 
VAT/Net State Goods and 
Services Tax 
reimbursem ent to MSMEs  Tax reimbursement  Industrial 
development  2015-19 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Gujarat Aerospace and 
Defence incentive scheme 
for aerospace and defence 
enterprises  Tax reimbursement  Industrial 
development  2016-25 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
New Industrial Policy, 
2015: Scheme for 
Assistance for Labour -
Intens ive Industries  Tax reimbursement  Development of 
labour -
intensive 
industries  2015-19 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Scheme of Assistance to 
Mega/Innovative Projects  Tax reimbursement  Promote 
certain focus 
sectors  2016-21 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Schemes under Gujarat 
Textile Policy, 2012  Interest subsidy  
Power tariff subsidy  
VAT/Goods and 
Services Tax assistance  Strengthen 
value chains in 
the textile 
industry  2013-19 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Haryana  
Schemes under the 
Enterprises Promotion 
Policy, 2015  Grant  
Tax exemption  Industrial 
development  2015 - no 
end-date 
specified  G/SCM/N/284/IND/Suppl.3 and 
G/SCM/N/315/IND/Suppl.1, 
7 March 2019  
Himachal Pradesh  
Mukhya Mantri 
Swawlamban Yojna  Various subsidies (e.g. 
interest, power and 
capital)  Attract 
investment  2019 –  no 
end-date 
specified  G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  WT/TPR/S/ 403/Rev.1  • India  
 
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  Programme  Form of subsidy  Policy 
objective  In force/  
implementa
tion Notified  
Rules Regarding Grant of 
Incentives, Concessions 
and Facilities to the 
Industrial Units in 
Himachal Pradesh, 2004, 
as amended up to 
17.07.2018 (Incentive 
Rules)  Tax reimbursement/ 
exemption  
Marketing assistance  
Grants  
Land at concessional 
rates Promote 
innovation  
Promote self -
employment  2004 - no 
end-date 
specified  G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Chief Minister's Start -up/ 
Innovation Projects/ New 
Industries Scheme  2016 – no 
end-date 
specified  
State Mission on Food 
Processing (SMFP)  2016 – no 
end-date 
specified  
Rural Engineering Based 
Training Programme 
(REBTP)  2013 – no 
end-date 
specified  
Jharkhand  
Industrial Policy  Grants  
Concessions  
Exemptions  Industrial 
growth  2001 – no 
end-date 
specified  G/SCM/N/284/IND/Suppl.1, 
5 September 2017  
Kerala  
Entrepreneur Support 
Scheme, 2012 (Industrial 
Policy 2012 -13) Grants  Promote 
investment and  
innovation  2012–19 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Scheme for Interest 
Subvention to Nano 
Household Enterprises  
(Industrial Policy 2017 -18) Interest subvention  Promote 
employment  2017-19 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Karnataka  
Subsidy schemes under 
the Industrial Policy 2014 -
19 Interest free loans  
Tax refund  
Grants  Promote 
industrialization  2014-19 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Madhya Pradesh  
Schemes under the 
Industrial Promotion 
Policy, 2014 (amended in 
2018):  Grants  
Exemptions  
Reimbursements  
Concessions  Promote 
industrialization 
and 
employment  2014-19 G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 Oct ober 2019  Department of Industrial 
Policy and Investment 
Promotion  
Maharashtra  
Package Incentive 
Scheme, 2007  Tax exemption  
Tax refund  
Interest subsidy  
Electricity subsidy  Sustainable 
economic 
growth  2007-13  G/SCM/N/284/IND/Suppl.1, 
5 September 2017  
Package Scheme of 
Incentives, 2013  Tax exemption  
Tax refund  
Interest subsidy  
Electricity subsidy  Industrial 
development in 
less-developed 
areas  1964, 
renewed 
until  
2013 - no 
end-date 
specified  G/SCM/N/284/IND/Suppl.3 
G/SCM/N/315/IND/Suppl.1, 
7 March 2019  
G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Odisha  
VAT Scheme (Industrial 
Policy 2007 –15) Tax reimbursement  Industrial 
development  2007 - no 
end-date 
specified  G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Punjab  
Textile Policy  Concessions  
Exemptions  
Waiver of electricity 
duty Development of 
the textile 
industry  2006 - no 
end-date 
specified  
 G/SCM/N/284/IND/Suppl.1, 
5 September 2017 
G/SCM/N/284/IND/Suppl.3 
G/SCM/N/315/IND/Suppl.1, 
7 March 2019  
G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Supp l.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  WT/TPR/S/ 403/Rev.1  • India  
 
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  Programme  Form of subsidy  Policy 
objective  In force/  
implementa
tion Notified  
Tripura  
Industrial Investment 
Promotion Incentive 
(Amendment) Scheme, 
2017 Grant  
Reimbursement 
Concessions  
25% reimbursement of 
electricity bill  Industrial 
development  2017-22 
 G/SCM/N/284/IND/Suppl.3 
G/SCM/N/315/IND/Suppl.1, 
7 March 2019  
G/SCM/N/343/IND/Suppl.1 
G/SCM/N/315/IND/Suppl.3  
G/SCM/N/284/IND/Suppl.5 and 
G/SCM/N/253/IND/Suppl.4,  
18 October 2019  
Uttarakhand  
Incentives under MSME 
Policy, 2015  Grants  
Exemptions 
Reimbursements 
Concessions  Development of 
MSMEs  2015-20 G/SCM/N/284/IND/Suppl.3 and 
G/SCM/N/315/IND/Suppl.1, 
7 March 2019  
West Bengal  
Incentive Scheme, 2004  Exemptions  
Refunds  Support large 
and medium 
industrial 
projects  2004-08 G/SCM/N/284/IND/Suppl.1, 
5 September 2017  
 
Support for Industries 
Scheme, 2008  Exemptions  
Refunds  Support large 
and medium 
industrial 
projects  2008–33 G/SCM/N/284/IND/Suppl.1, 
5 September 2017  
Source:  WTO documents G/SCM/N/284/IND, 27 October 2016; G/SCM/N/284/IND/Suppl.1, 
5 September  2017; G/SCM/N/284/IND/Suppl.3; G/SCM/N/315/IND/Suppl.1, 7 March 2019; and 
G/SCM/N/343/IND/Suppl.1; G/SCM/N/315/IND/Suppl.3; G/SCM/N/284/IND/Suppl.5; and 
G/SCM/N/253/IND/Suppl. 4, 18 October 2019.  
  WT/TPR/S/ 403/Rev.1  • India  
 
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  Table A3. 4 Selected disinvestment, 2014/15 -2019/20  
CPSEs  Year Central Government's shares 
offered for disinvestment  Central Government's share 
after disinvestment (%)  
Antrix  Corporation Ltd.  2017/18  15.0 100.0  
Bharat 22 EFT  2017/18  .. .. 
2018/19  .. .. 
2018/19  .. .. 
Bharat Dynamics Ltd.  2015/16  .. .. 
2017/18  25.0 100.0  
2017/18  12.0 88.0 
Bharat Electronics Ltd.  2016/17  0.61 74.41  
2016/17  5.0 69.41  
2017/18  0.25 67.94  
2017/18  5.0 66.72  
Bharat Heavy 
Electricals Ltd.  2018/19  3.15 63.17  
Coal India Ltd.  2014/15  10.0 78.65  
2016/17  1.248  79.78  
2018/19  3.19 75.46  
2018/19  0.01 75.12  
2018/19  0.19 72.33  
Cochin Shipyard Ltd.  2017/18  25.0 75.0 
2018/19  3.233  75.21  
Container Corporation 
of India Ltd.  2016/17  0.25 56.79  
2015/16  5.0 56.8 
CPSE-Exchange Traded 
Fund 2018/19  .. .. 
2018/19  .. .. 
2016/17  .. .. 
Dredging Corporation 
of India Ltd.  2016/17  0.09 73.47  
2015/16  5.0 73.56  
Engineers India Ltd.  2016/17  0.5 59.32  
2015/16  10.0 59.37  
2017/18  6.64 54.17  
Garden Reach 
Shipbuilders and 
Engineers Ltd.  2017/18  7.5 100 
2018/19  25.5 74.5 
Hindustan Aeronautics 
Ltd. 2017/18  10.0 90.0 
2015/16  .. .. 
2017/18  7.5 100.0  
Hindustan Copper Ltd.  2017/18  6.93 76.05  
2017/18  0.0064  76.046  
2014/15  0.05164  89.95  
2016/17  7.0 82.95  
2017/18  .. 82.88  
Housing and Urban 
Development 
Corporation Ltd.  2017/18  10.193  89.807  
HSCC (India) Ltd.  2017/18  25.0 100.0  
India Oil Corporation 
Ltd. 2015/16  10.0 58.57  
2016/17  0.5 58.28  
2018/19  3.3875  53.88  
IRCON International 
Ltd. 2018/19  10 89.18  
2017/18  5 99.71  
KIOCL Ltd.  2018/19  1.983  99.06  
Manganese Ore India 
Ltd. 2016/17  5.36 66.21  
2016/17  10 56.21  
2017/18  7.5 56.01  
MDL  2017/18  10.0 100.0  
Metal and Mineral 
Trading Corporation of 
India Ltd.  2014/15  0.073  89.9268  
Mishra Dhatu Nigam 
Ltd.  2018/19  25.0 75.0 
MSTC Ltd.  2018/19  25.1 64.75  
National Aluminium 
Company Ltd.  2016/17  6.36 74.57  
2017/18  9.2125  65.38  WT/TPR/S/ 403/Rev.1  • India  
 
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  CPSEs  Year Central Government's shares 
offered for disinvestment  Central Government's share 
after disinvestment (%)  
2017/18  0.4 64.96  
2014/15  0.13 80.93  
2018/19  1.8 56.77  
National Building 
Construction 
Corporation Ltd.  2016/17  15.0 75.0 
2017/18  0.21 74.29  
National Fertilizers Ltd.  2014/15  0.29 89.71  
2017/18  15 74.71  
National Hydroelectric 
Power Corporation Ltd.  2016/17  11.36  74.6 
2016/17  0.09 74.51  
2016/17  0.01 74.5 
2018/19  .. 73.83  
National Mineral 
Development Company 
Ltd.  2016/17  5.06 74.94  
2017/18  2.52 73.42  
2018/19  2.56 72.28  
National Thermal 
Power Corporation Ltd.  2014/15  0.04 74.96  
2015/16  5.0 69.96  
2016/17  0.22 69.74  
2017/18  6.63 63.11  
2017/18  0.12 62.99  
Neyeli Lignite 
Corporation Ltd.  2017/18  5.0 84.32  
2018/19  0.48 84.42  
2016/17  0.68 89.32  
Oil and Natural Gas 
Corporation Ltd.  2018/19  0.43 65.22  
Oil India Ltd.  2017/18  5.6 66.13  
2018/19  .. .. 
Power Finance 
Corporation Ltd.  2015/16  5.0 67.8 
Rail Vikas Nigam Ltd.  2019/20  .. 87.88  
Rashtriya  Chemicals 
and Fertilizers Ltd.  2017/18  5.0 75.0 
RITES Ltd.  2018/19  12.6 87.4 
Rural Electrification 
Corporation Ltd.  2015/16  5.0 60.64  
Security Printing and 
Minting Corporation of 
India Ltd.  2017/18  10.0 100.0  
SJVN Ltd.  2017/18  5.0 63.93  
Steel Authority of India 
Ltd.  2014/15  5.0 75.0 
.. Not available.  
Source:  Department of Investment and Public Asset Management, Strategic Disinvestment . Viewed at: 
https://dipam.gov.in/ . 
  WT/TPR/S/ 403/Rev.1  • India  
 
- 175 - 
 
  Table A3. 5 Overview of the IPR regime, 2019  
 Requirements  Term of protection  
Copyright and 
related rights  Upon creation or publication in 
material form  Literary, artistic, dramatic, and musical works: 
lifetime of the author + 60 years af ter his/her 
death;  
Anonymous/pseudonymous works, works of 
domestic and international public entities: 60  years 
from the year the work was first published;  
Sound recordings, films and broadcasts: 60 years 
from the year the work was published;  
Performers'  rights: 50 years from the beginning of 
the calendar year following the year in which the 
performance was made  
GIs Qualities, characteristics, 
features  or reputation should be 
essentially due to, and linked 
to, the original place of 
production  10 years, renewable for successive periods of 
10 years  
Industrial designs  New; individual character  10 years from the date of filing, renewable for a 
further 5 years  
Layout designs of 
semi-conductor 
integrated circuits  Original; distinctive; not 
commercially exploited in India 
or in a convention country for 
more than 2 years from the 
filing date  10 years from the filing date or the date of first 
commercial exp loitation, whichever is earlier  
Patents  New; inventive step; industrial 
applicability  20 years from the date of filing  
Plant varieties 
(new varieties)  New; distinctive; uniform; 
stable  Trees and vines: 9 years from the registration date, 
renewable for  a further 9 years; other varieties: 6 
years from the registration date, renewable for a 
further 9 years  
Trademarks  Unique; distinctive  10 years from the date of filing, renewable for 
successive periods of 10 years  
Source:  CIPAM, Patent Trends . Viewed at: http://cipam.gov.in/ ; and CIPAM (2017), Intellectual Property – 
The Future!  Viewed at: http://cipam.gov.in/wp -content/uploads/2017/09/bookletIPR.pdf . 
__________