WT/REG300/2  
 
10 September 2013  
(13-4735)  Page: 1/8  
Committee on Regional Trade Agreements  Original: English  
 
FREE TRADE AGREEMENT BETWEEN JAPAN AND INDIA  
(GOODS AND SERVICES) 
QUESTIONS AND REPLIES 
 The following communication, dated 9 September 2013, is being circulated at the request of 
the delegations of Japan and India. 
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 This document reproduces the questions addressed to the Parties and the responses 
submitted.  
Questions from the Delegation of Australia 
 
Provisions on Trade in Goods 
 1.1.  Australia notes that 986 and 1508 prod ucts for Japan and India respectively will 
remain dutiable at the end of implementation.  
 Australia would appreciate if the Partie s could elaborate the reason behind these 
exclusions from tariff elimination.   Each side has agreed to respective exclusions from tariff elimination, taking into account 
various domestic interests and sensitivities such as food security, livelihood security, items 
predominantly produced by tiny and small sector etc. as a result of negotiation, while also 
ensuring conformity with the requirement of GATT Article XXIV.  
 
1.2.  Article 54 of the Agreement, on Co-o peration on Generic Medicine, provides in 
paragraph 3 that an application by a pers on of a Party for registration and other 
approvals required for release of a generic medicine in the market of the other Party 
shall be accorded, in the relevant procedur e, treatment no less favourable than that 
accorded to like applications by its own person. Such procedure shall be completed 
within a reasonable period of time fr om the date of such application.  
 Australia would appreciate if the Partie s could elaborate its interpretation of 
'within a reasonable period of time'.  
 No specific interpretation of 'within a reasonable period of time' can be provided.  
Provisions on Trade in Services and Investment 
 
General Comments 
 
1.3.  Tables 4.7 and 4.8 clearly show the significant improvements in the level of 
commitments made by India and Japan  on services compared with both countries' GATS 
commitments. Australia supports ongoing lib eralization of services trade and the 
reduction in gaps between commitments on services and actual levels of market 
openness, and commends both Indi a and Japan on their efforts. 
 
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  General provisions on trade in servic es and investment: 4.3.1 Market access 
 
1.4.  Australia notes the Secretariat's report (para 4.10) outlines that the "endeavours" clause – to reduce the requirements for a se rvice supplier to establish a representative 
office or any other form of enterprise or to  be resident in its Area as a condition for 
cross border supply of a service (Article 59.3) – contained in the Agreement is 
apparently greater in depth than the eq uivalent GATS "endeavours" clause.  
 Could the Parties provide an explanatio n of the implications of the broader 
"endeavours" clause contained in the Agreem ent? Will the Parties undertake regulatory 
change to implement this provision? How do the Parties envision this provision 
operating in practice? 
 
 The implications of the broader "endeavours" clause in this Agreement is that both Parties, though not mandated would undertake efforts to implement the "endeavours" provisions contained 
in the Agreement. 
 Movement of natural persons 
 1.5.  Australia is interested in hearing more about the Social Security Agreement signed by the Parties on 16 Novemb er 2012 (para 4.17).  
a. Could the Parties provide details of the Social Security Agreement?  
 The Social Security Agreement (SSA) provides for the following benefits to a person who is 
or has been subject to the legislation of a contracting state and other persons who derive rights from such person: 
 
a) For short term detachments up to five years, no pension contribution would need to be 
paid under the pension legislation of a contracting state to which employees are sent, 
provided that they continue to be covered under the pension legislation of the other 
contracting state.   
b) The benefit described in a) may be extended beyond five years with the mutual consent of 
both contracting states.  
c) The benefits described in a) and b) shall be available even when the company sends its 
employees to the other contracting state from a third country. 
 
d) A person who is or has been subject to the legislation of a contracting state and other 
persons who derive rights from such person wi ll be entitled to the export of the social 
security benefit if they relocate to the other contracting state, after the completion of their 
service in the first contracting state.  
e) The period of coverage in a contracting state will be totalized to the period of coverage in 
the other contracting state for determining the eligibility for pension benefits under respective legislation. In this case, the amount of pension to be paid under each pension 
system will be calculated based on period s of coverage under that pension system. 
 
 The full text of this Agreement is available on the internet:   ( http://www.mofa.go.jp/policy/ treaty/pdfs/pr otocol_75.pdf ). 
 
1.6.   Does the Agreement extend the social  security benefits of one Party to natural 
persons of the other Party? 
 This Agreement shall apply to a person who is or has been subject to the legislation of a 
contracting state and other persons who derive rights from such person.   
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  Regulatory provisions: 4.5.2 Recognition 
 
1.7.  Can the Parties provide an update on negotiations (para 4.60) concerning 
recognition of education, experience, licence s or certification in respect of specific 
services sectors? When do Parties envisa ge that the negotiations will commence? 
 Regarding paragraph 2 and 3 of Article 65, bo th Parties will discuss the proceeding of the 
negotiation under the Sub-committee on Trade in Services pursuant to Article 72. 
 
Sector-specific provisions on services  
 1.8.  Is services Mode 3 (para 4.6) covere d exclusively by Chapter 6 Services or are 
services Mode 3 commercial presence also re garded as an investment and afforded the 
protections under Chapter 8 Investment? If not, why not.  
 Answered along with Question 1.8. below. 
 
1.9.  Is the coverage and protections under the India-Japan FTA that a Mode 3 services 
commercial presence is afforded the same as a non-Mode 3 investment covered 
exclusively by the Investment chapter? 
 The provisions of the Chapters on Services and Investment need to be read together for a 
comprehensive understanding  of their inter-relati onship. Delivery of services under Mode 3 is 
addressed under the Chapter 6 on Services, and in respect of the investment made into the 
territory of a party, it will also be governed by the provisions of Chapter 8. The inter-linkages 
between Chapter 6 (Trade in Services) and Chapter 8 (Investment) is governed by the following provisions of the India-Japan FTA: 
 
i. Article 83(3) under the Chapter on Investment states that in the event of any 
inconsistency between the Chapter on Invest ment and the Chapter on Services, with 
regard to the Articles in the Chapter in Investment dealing with: National Treatment, 
Performance Requirement, and MFN, the provisions of Chapter on Services shall prevail. The same provision goes on to state that with respect to all other matters, the Chapter on Investment would prevail in respect of any inconsistency.  
ii. Furthermore, under Entry 19 under Annex 8 (Part I- India's Reservations), India has 
reserved the right to maintain any measur e relating to NT, MFN and PR, provided 
that such reservations do not violate an y provisions of Chapter on Services.  
1.10.  Article 73.2 provides that the Chap ter (on MNP) also applies to investment 
activities undertaken by natural persons (p ara 4.17). How does this interact with 
Chapter 8, 6? 
 Entry and temporary stay of natural pers ons who engage in supplying services and 
investment activities is covered by the Chap ter 7 and Annex 7 (Specific Commitments) of the 
Agreement. Immigration measure other than those concerning the entry and temporary stay as described in Horizontal Commitments of Annex 6 is curved out from the Chapter 6; Nothing in 
Chapter 8 imposes any obligation on either Party regarding measures pursuant to immigration 
laws and regulations. (Article 83).  
SCHEDULE OF JAPAN - HORIZONTAL COMMITMENTS 
 
 4) With respect to the measures pursuant to immigration laws and regulations: Unbound 
except for measures concerning the entry and temporary stay of a natural person of India who 
falls in one of the categori es referred to in Annex 7. 
 ARTICLE 83 Scope 
  4) Nothing in this Chapter shall impose any obligation on either Party regarding measures 
pursuant to immigration laws and regulations. 
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  1.11.  In relation to paras 4.27-29, co uld India provide more detail on why (a) 
accounting and book-keeping services is the on ly service listed as covered by Section 4 
of Part 1 of Annex 7 (independent professional s) that is not covered by Section 3.1. of 
Part 1 of Annex 7 (Contractual Service Suppliers)?  
 Commitments have been taken based on a balance of mutual rights and obligations. 
 1.12.  Why did the Parties decide not to include a chapter on E-Commerce? 
 Both India and Japan mutually agreed not to include a chapter on e-commerce. 
 1.13.  Australia notes each Party has listed its own separate specific "categories of 
person" commitments in Annex 7 to the MNP Ch apter. Did this approach facilitate each 
Party to put forward GATS-plus offers wh ile avoiding the added complexity of 
negotiating categories of persons agreeable to  both sides? If not, why did the Parties 
use this approach? 
 The approach taken for specific commitments on MNP depends on the request from the 
other Party. Though this approach helped both Parties in taking commitments under Mode 4 in areas of critical interest to the other Party, whichever approach taken, the coverage of categories 
of natural person in the existing EPAs is wider than that in GATS commitments.  
 Telecommunications 
 
1.14.  Australia notes that the scope of Annex 5 of the Agreement (para 4.71), which 
contains supplementary provisions on teleco mmunication services, is broader than the 
GATS Annex of Telecommunications.  
 Australia congratulates the Parties on this. 
  We would be interested in further inform ation on Section 17 of the Annex. How do 
the Parties consider action against unsolicited commercial emails for advertising 
purposes will be implemented?   The Information Technology Act 2000 has b een amended by the Information Technology 
(Amendment) Act 2008 with effect from 27.10.2009. Section 66A of the Act provides 
for punishment for sending spam or unsolicited Email messages from communication services. The Information Technology (Amendment) Act 2008 is available at: 
http://deity.gov.in/sites/upload_files/di t/files/downloads/it act2000/it_amendment_a
ct2008.pdf. 
 
 In Japan, transmission of unsolicited commercial emails without receiver's consent is 
forbidden in principle by the Act on Regulation of Transmission of Specified Electronic Mail. And JADAC (Japan Data Communications Association) and related organizations of the some other Party make it a rule to exchange information with regards to sources of IP addresses of unsolicited 
commercial emails. As the situation is prepared, Japan and India will begin the cooperative action 
as above.  
Questions from the Delegation of Canada 
 
1.15.  Paragraph 5.13, (reference 5.11.  Chapter 10, government procurement):  
India: 
 
 Negotiations to revise the WTO GPA have  recently concluded and its entry into 
force should happen soon. Included in the changes to the Agreement are new 
provisions that provide for consideration of special and differential treatment for 
developing countries to help in their tran sition to becoming a Party to the GPA. 
Given India's status as an observer to the GPA and the existence of these new 
flexibilities, does India intend to request formal accession to the GPA? If so, when 
can GPA members expect to receive India's formal request?  
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   India's domestic legislation pertaining to government procurement is under the 
consideration of its Parliament. Only after passing of the domestic legislation any further steps can be considered.  
 
Japan: 
 
 Paragraph 5.13 noted that "if a Party offers a non ‑Party any advantageous 
treatment concerning measures regardin g government procurement, including 
access to its government proc urement market, the Party shall, upon request of the 
other Party, afford the other Party an adequate opportunity to enter into 
negotiation with a view to extending su ch advantageous treatment to the other 
Party on a reciprocal basis" (as per Arti cle 114 of Japan-India FTA). Does Japan 
include a similar provision in its agreemen ts with its other trading partners? Could 
Japan provide further details on how this provision would be triggered? 
  We have similar provisions in the EPAs: Mexico (Article 130-2), Chile (Article 155), 
Switzerland (Article 132-2) the Philippines (Article 132) and Peru (Article 165). Although differing 
in detail, these provisions would be triggered when a Party offers a non-Party advantageous measures including access to its government procurement market through, for example, concluding an international agreement.  
 
1.16.  Paragraph 3.27: Is there a limit on the total number of time s a Party may impose 
a safeguard measure within the transition period? 
 No. There is no transition period provided in the Agreement nor is there any limit on the 
total number of times a party may impose a safeguard measure.  
 
1.17.  Paragraph 3.28: Bilateral safeguards ma y not be maintained except to the extent 
and for the time necessary to prevent or remedy serious injury and to facilitate 
adjustment, provided it does not exceed th ree years although the total period can be 
extended to five years in exceptional ci rcumstances; What mechanism is used to 
determine if a safeguard may be extended beyond the three year period provided for in 
the Agreement? 
 For extending a safeguard measure beyond three years, the party maintaining the measure 
has to take into consideration the highly exceptional circumstances for the purpose of facilitating 
the adjustment of the domestic industry. Furthe r, adequate opportunity shall be provided for 
consultations as per paragraph 4(c) of Article 23 of the Agreement. None of the Parties to the 
Agreement has so far initiated any investigation to enforce the bilateral safeguard measure. 
  Safeguard investigation procedures are to comply with the requirements set out in 
Article 3 and sub-paragraph 2(c) of Articl e 4 of the WTO Agreement on Safeguards. 
The investigation must be completed with in a year of the date of initiation 
(Article 23.3(b)). Is there any time limit  on when a measure must be initiated 
following a positive finding of a potentia l threat by a safeguard investigation? 
 
 There is no specified time limit stated in the Agreement for the imposition/enforcement of the measure. However, in the eventuality of applying the measure, the Party applying the measure 
has to give adequate opportunity for prior consultations to the other Party before applying the 
measures, as stated in paragraph 4 (c) of Article 23 of the Agreement.  
 1.18.  Paragraph 4.45: Article 71.1 provid es that the Parties shall review their 
commitments on services within three years of the date of entry into force of the 
Agreement with a view to improving th e overall commitments undertaken by the 
Parties. Since the Agreement has been in forc e for more than two years, can the Parties 
explain whether such a review has taken place?  If not, are there any plans in the near 
future for such a review? 
 Not yet. The Review of the Agreement will ta ke place as per the obligations and time lines 
set in the Agreement. 
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  1.19.  Paragraph 4.65: Article 66.2 provides that "each Party shall endeavour to provide 
to the other Party and make public a list of all measures within the scope of Chapter 6 
which are inconsistent with Articles 59 and/ or 60, whether or not those measures are 
included in the Schedule of Specific Commitm ents set out in Annex 6." Has either Party 
provided such information to the other Party?  If not, can the Parties provide an update 
in terms of the work with respect to this obligation? When do the Parties expect that 
information to be made public? 
 Most of such measures/legislations are available already on the websites of the respective 
countries. However, both Parties are making best endeavour to abide by the deliverables contained in the said Article.  
 
Questions from the Delegation of the European Union 
 
Provisions on Trade in Services and Investment 
Scope and definitions 
 1.20.  Chapter 6 of the Agreement, Articles 57-72 and Annexes 4, 5 and 6 concern trade 
in services. The EU acknow ledges that India has taken considerably improved 
commitments on trade services in the Japan-India FTA. As regards the commitments on professional services, India has not entere d limitations on national treatment even 
though Indian regulatory framework does not allow the provision of services by 
foreigners in several professional services (Architects, Urban Planning and landscape, 
medical and dental services). 
 Does India foresee changes in its regula tory framework for professional services 
and apply the liberalization on MFN basis, or  will these commitments be applied strictly 
on a preferential basis?  
 It will be governed by the provisions of the Agreement as well as of the concerned Article on 
Recognition.  
 1.21.  What is the rationale for having separate Chapters providing for different 
obligations for investment in services and in non-services? 
 It was mutually decided to have separate ch apters for providing different obligations for 
trade in services and investment. Chapter 6 applies to all four modes of supply of services as in 
the GATS. Chapter 8 applies to measures adopted or  maintained by a Party relating to investments 
of the other Party and to their investments in all sectors of the economy. However, with regard to measures by a Party affecting trade in services, Chapter 6 shall prevail to the extent of the 
inconsistency with respect to matters covered by Article 85, 86 and 89. 
 1.22.  What is the reason for not extending the prohibition on perf ormance requirements 
to ALL investors rather than exclusiv ely to investors of each Party?  
 It is a result of mutual agreement between both Parties. 
 1.23.  Could the Parties explain their under standing of the standard of treatment 
required by the "customary international law minimum standard of treatment of aliens"? 
 It is standard understanding on customary international law minimum standard of treatment 
of aliens with respect to all customary international law principles that protect the economic rights 
and interests of aliens. 
 1.24.  Could the Parties clarify the intentio n and effect of the following exception: 
 - 2. An investor of a Party whose investment s are not made in compliance with the 
laws and regulations of the other Party whic h are consistent with this Agreement shall 
not be entitled to submit an investment disp ute to conciliations or arbitrations referred 
to in paragraph 4 of Article 96.  
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  How would this affect an existing invest or having made an investment which was 
compliant with the laws and regulations of the Party at the time that the investment was made but where the Party has since changed its legislation to make it more restrictive, 
while remaining compliant with its obligations under the Agreement? 
 
 This provision prescribes the investments which are not made in compliance with the laws and regulations of the other Party which are consistent with this Agreement, at the time of 
establishment of investment. 
 1.25.  Is there an overlap/duplication between  the provisions of Article 85 on National 
Treatment and Article 60 on National Treatm ent for the commercial presence of service 
suppliers? If so, what is the purpos e of creating such an overlap? 
 There is no overlap or duplication between the two. Paragraph 3 (a) and (b) of Article 83 
deals with situations of inconsistency between Ch apter 6 and 8. Chapter 6 prevails over Chapter 8 
regarding matters covered by Article 85, 86 and 89 to the extent of the inconsistency. 
 1.26.  Is it the intention of the Parties to make public to all WTO members the lists of 
measures provided for transparency under Article 66? 
 It is on endeavour basis. Article 66.2 prescribes the endeavours clause to prepare and make 
public the list of measures which are inconsistent with Article 59 (Market Access) and 60 (National Treatment). 
 
General Provisions of the Agreement 
Cooperation 
 1.27.  According to paragraph 5.20, Ch apter 13 (Articles 128-132) establishes a 
framework for Cooperation in several areas, for example, environment, trade and 
investment promotion, SMEs, energy, sc ience and technology, among others.  
a. Could the Parties indicate which actions have been taken to present for 
enhancing the cooperation as refe rred to in this Chapter?  
 Reply as in question 1.26.b. below. 
 
b. Which are the results obtained to present? 
 The main function of the Sub-Committee on Cooperation is to coordinate cooperation 
activities and promote discussions between releva nt implementing entities with a view to 
expanding potential cooperation activities in the respective field. Interaction of concerned 
Ministries/Departments of both Governments through established consultation mechanisms has 
been productive and there are no specific issues of concern, so such meeting stipulated in the 
Article 131.3. has not been held so far. 
 Questions from the Delegation of the Sepa rate Customs Territory of Taiwan, Penghu, 
Kinmen and Matsu 
 
Provisions on trade in Services and Investment  
Japan 
(Para. 4.57) 
 
1.28.  On financial services1 and insurance services, Japan has removed its 60% 
limitation in respect of mode s 1-3 on market access, thus  improving the scope of its 
commitments under the Agreement compared to the GATS. The limitations on market 
access in respect of banking and other fina ncial services are redrawn and are more 
liberal on mode 3 than the GATS. 
 Could Japan please elaborate further on its reasons for removing the 60% 
limitation in respect of modes 1-3 on market access for insurance services?  
                                               
1 See also Annex 4 of the Agreement. WT/REG300/2 
 
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   There is no limitation in respect to reinsurance on compulsory automobile third party liability 
insurance in the Japan-India-CEPA, other EPAs, or the Revised Conditional Offer on the GATS. 
Japan removed the limitation based on the revision of the Automobile Liability Security Act.  
Government procurement 
 
1.29.  According to Article 111 of this FTA, each Party shall provide treatment to the 
goods, services and suppliers of the other Pa rty no less favourable than that it accords 
to a non-Party's goods, services and suppliers. According to Article 114 of this FTA, if a Party offers a non-Party any advantageous treatment concerning the measures regarding government procurement, includ ing access to its government procurement 
market, the former Party shall, upon the re quest of the other Party, afford adequate 
opportunity to enter into negotiations with the other Party with a view to extending such advantageous treatment to the other Party on a reciprocal basis. 
 Since the principle of non-discrimination is  prescribed in Article 111 of the FTA, are 
negotiations in accordance with Article 114 st ill necessary? If so, does this mean that 
the government procurement market will be op en to the other Party in accordance with 
Article 114? 
  With respect to measures regarding government procurement Article 111 is to ensure MFN treatment to the goods, services and suppliers of the other Party, whereas Article 114 is to ensure 
adequate opportunity to enter into negotiation where a Party offers a non-Party any advantageous 
treatment concerning government procurement. In th is respect, the objectives of the two Articles 
are different, and negotiation in accordance with Article 114 is necessary to this extent. 
 
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