WT/TPR/S/313/Rev.1  
14 September 2015  
(15-4668)  Page: 1/171  
Trade Policy Review Body   
 
TRADE POLICY REVIEW 
 REPORT BY THE SECRETARIAT  
INDIA 
Revision 
This report, prepared for the sixth Trade Policy Review of India, has been drawn up by the 
WTO Secretariat on its own responsibility. The Se cretariat has, as required by the Agreement 
establishing the Trade Policy Review Mech anism (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 Mr. Masahiro Hayafuji 
(Tel: 022/739 5873) or Mrs. Rohini Acharya (Tel: 022/739 5874).  
Document WT/TPR/G/313 contains the policy statement submitted by India. 
 
 
Note: This report was drafted in English. WT/TPR/S/313/Rev.1 • India 
 
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  CONTENTS 
SUMMARY ....................................................................................................................... . 8 
1   ECONOMIC ENVIRONMENT ........................................................................................ 12  
1.1   Recent Econ omic Developments.................................................................................. 12 
1.2   Fisca l Policy ........................................................................................................... .. 15 
1.3   Monetary and Ex change Rate  Policy ............................................................................ 16 
1.4   Balance of Payments ................................................................................................. 17 
1.5   Developments in Trade .............................................................................................. 19 
1.5.1   Composition of trade in  goods ................................................................................. 19 
1.5.2   Direction of  trade in  goods ...................................................................................... 19 
1.5.3   Trade in services ................................................................................................... 19 
1.6   Foreign Dire ct Invest ment ......................................................................................... 21 
2   TRADE AND INVE STMENT RE GIME ............................................................................ 23  
2.1   Genera l Framework .................................................................................................. 23 
2.2   Trade Policy Form ulation and Ob jectives ...................................................................... 24 
2.2.1   Trade policy formulation ......................................................................................... 24 
2.2.2   Trade policy goals .................................................................................................. 25 
2.3   Trade Agreements and Arrangements .......................................................................... 26 
2.3.1   WTO ................................................................................................................... . 26 
2.3.2   Regional and pr eferential agreements ....................................................................... 28 
2.3.2.1   Regional trade agreements ................................................................................... 28 
2.3.2.2   Preferential  trade arra ngements ............................................................................ 29 
2.3.3   Other agreements and arrangements ........................................................................ 29 
2.4   Investme nt Regime .................................................................................................. 29 
2.4.1   Legal fram ework for business .................................................................................. 29 
2.4.1.1   Compulsory Industrial licensing ............................................................................. 30 
2.4.1.2   Micro, small and medium en terpri ses ..................................................................... 31 
2.4.2   Foreig n investment ................................................................................................ 31 
2.4.2.1   Policy .............................................................................................................. .. 31 
2.4.2.2   Incentives .......................................................................................................... 33 
3   TRADE POLICIES AND PRACTICES BY MEASURE ........................................................ 34  
3.1   Measures Direct ly Affectin g Imports ............................................................................ 34 
3.1.1   Customs procedur es and requirements ..................................................................... 34 
3.1.1.1   Preshipment inspection ........................................................................................ 35 
3.1.2   Custom s valuation ................................................................................................. 35 
3.1.3   Rules of origin .......................................................................................................  36 
3.1.4   Tariffs ............................................................................................................... ... 37 
3.1.4.1   Applied tariffs .....................................................................................................  37 
3.1.4.2   Bo und tariffs ...................................................................................................... 41 
3.1.5   Other charge s affecting imports ............................................................................... 41 WT/TPR/S/313/Rev.1 • India 
 
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  3.1.6   Tariff  conce ssions .................................................................................................. 43 
3.1.7   Tariff rate quotas ................................................................................................... 43 
3.1.8   Preferential tariffs ..................................................................................................  45 
3.1.9   Import prohibitions, restrictions, an d licensing ........................................................... 46 
3.1.9.1   Import prohibitions ............................................................................................. 46 
3.1.9.2   Import licens ing and rest rictions ........................................................................... 48 
3.1.9.3   Import surveillance ............................................................................................. 50 
3.1.9.4   Impo rt quotas .................................................................................................... 50 
3.1.9.5   Other impo rt restri ctions ...................................................................................... 50 
3.1.10   Stat e trading ....................................................................................................... 51 
3.1.11   Anti-dumping, countervai ling, and safegu ard measures ............................................. 52 
3.1.11.1   Anti-dumping an d countervailing  measures ........................................................... 52 
3.1.11.2   Safeguards ....................................................................................................... 56 
3.1.12   Standards and othe r technical re quirements ............................................................ 57 
3.1.12.1   Standards ........................................................................................................ 57 
3.1.12.2   Techni cal regula tions ......................................................................................... 58 
3.1.12.3   Certification an d conformity assessment ............................................................... 59 
3.1.12.4   Ac creditat ion .................................................................................................... 60 
3.1.12.5   Labelling ..........................................................................................................  61 
3.1.13   Sanitary and phyt osanitary requ irements ................................................................ 61 
3.2   Measures Directly Affecting Exports ............................................................................. 63 
3.2.1   Export procedur es and requirements ........................................................................ 63 
3.2.2   Export taxes, charges, an d levies ............................................................................. 64 
3.2.3   Minimum export prices ........................................................................................... 65 
3.2.4   Export prohibitions, restrictions, and licensing ............................................................ 66 
3.2.4.1   Export prohibitions .............................................................................................. 66 
3.2.4.2   Export li censing and quotas .................................................................................. 66 
3.2.5   State trad ing enterprises ........................................................................................ 66 
3.2.6   Export suppo rt and pr omotion ................................................................................. 67 
3.2.6.1   Special econ omic zones (SEZs) ............................................................................. 67 
3.2.6.2   Export-oriented units ........................................................................................... 69 
3.2.6.3   Drawback schemes .............................................................................................. 70 
3.2.6.4   Other duty and tax concessions ............................................................................. 71 
3.2.6.5   Export promotion and marketing assistance ............................................................ 71 
3.2.7   Export finance, insurance and guarantees ................................................................. 71 
3.3   Measures Affectin g Production and Trade ..................................................................... 72 
3.3.1   In centives ............................................................................................................  72 
3.3.1.1   Tax incentives .................................................................................................... 72 
3.3.1.2   Explicit subsidies ................................................................................................. 73 
3.3.1.3   Credit policies ..................................................................................................... 73 WT/TPR/S/313/Rev.1 • India 
 
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  3.3.1.4   Micro- an d small ente rprises ................................................................................. 75 
3.3.2   Competition policy and price controls ........................................................................ 75 
3.3.2.1   Competition policy .............................................................................................. 75 
3.3.2.2   Pric e contro ls ..................................................................................................... 77 
3.3.3   State-owned enterp rises, and pr ivatization ................................................................ 78 
3.3.3.1   Role of state-owned enterprises (other than state-trading companies), and 
disinvestment .................................................................................................................. 78 
3.3.4   Governme nt procurement ....................................................................................... 80 
3.3.4.1   Overview ........................................................................................................... 80 
3.3.4.2   Regula tory fram ework ......................................................................................... 81 
3.3.4.3   Preferential policies at the central Go vernment level ................................................ 82 
3.3.4.4   Procurem ent of se rvices ....................................................................................... 82 
3.3.4.5   Procurement at the state level .............................................................................. 82 
3.3.4.6   Procurement in the rail way and other spec ialized se ctors .......................................... 83 
3.3.5   Intellectual property rights ...................................................................................... 83 
3.3.5.1   In troducti on ....................................................................................................... 83 
3.3.5.2   Patents .............................................................................................................. 84 
3.3.5.3   Trademarks ........................................................................................................ 88 
3.3.5.4   Indust rial designs................................................................................................ 90 
3.3.5.5   Copyright ........................................................................................................... 91 
3.3.5.6   Geograph ical indications ...................................................................................... 93 
3.3.5.7   Protection of new plant varieties ............................................................................ 93 
3.3.5.8   Trade secrets an d test data protection ................................................................... 94 
3.3.5.9   Enforcement ....................................................................................................... 95 
4   TRADE POLICIES BY SECTOR ..................................................................................... 98  
4.1   Agriculture ............................................................................................................. . 98 
4.1.1   General po licy fram ework ....................................................................................... 98 
4.1.1.1   Measures affecting imports ................................................................................... 98 
4.1.1.2   Measures affecting exports ................................................................................... 99 
4.1.1.3   Intern al measures ............................................................................................. 100  
4.2   Energy ..................................................................................................................  104 
4.2.1   Oil and gas ......................................................................................................... 1 04 
4.2.2   El ectricity ...........................................................................................................  106 
4.3   Manufac turing ........................................................................................................ 10 7 
4.4   Services ................................................................................................................  109 
4.4.1   Financial services ................................................................................................. 109  
4.4.1.1   Banking ........................................................................................................... 1 09 
4.4.1.1.1   Overview ...................................................................................................... 109  
4.4.1.1.2   Comme rcial ba nks .......................................................................................... 110  
4.4.1.1.3   Urban cooperative banks (UCBs) and other financial institutions ............................ 113  
4.4.1.2   In suranc e ........................................................................................................ 11 4 WT/TPR/S/313/Rev.1 • India 
 
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  4.4.1.3   Securities ........................................................................................................ 1 15 
4.4.2   Telecommunications ............................................................................................. 120  
4.4.3   Transport ........................................................................................................... 1 23 
4.4.3.1   Mariti me transp ort ............................................................................................ 123  
4.4.3.1.1   Shipping ....................................................................................................... 12 3 
4.4.3.1.2   Ports ............................................................................................................ 124 
4.4.3.2   Air transport ..................................................................................................... 125  
4.4.3.3   Road an d rail transport ...................................................................................... 127  
4.4.4   Profession al services ............................................................................................ 128  
4.4.5   Tourism .............................................................................................................. 129  
REFERENC ES ................................................................................................................ 131  
5   APPENDIX TABLES .................................................................................................. 135  
 
CHARTS 
 
Chart 1.1 Product composition of merchandis e trade by HS sectio n, 2010/11 and 2013/14 ......... 20 
Chart 1.2 Direction of merchand ise trade, 2010/11 and 2013/ 14 ............................................ 21 
Chart 3.1 Distribution of MFN applied tariff rates, 2014-15 ..................................................... 39 
Chart 3.2 Average effective applied MFN and bo und tariff rates, by HS section,  2014-15 ............ 41 
Chart 3.3 Import licensing by HS sectio n, 2014- 15 ............................................................... 49 
Chart 3.4 Anti-dumping meas ures, 2011 to June 2014 .......................................................... 53 
Chart 3.5 Patent applicatio ns in India,  1999- 2013 ................................................................ 84 
Chart 3.6 Patent applications by top fields of te chnology, 1999-201 3....................................... 85 
Chart 3.7 Industrial design applications, 1999-2013 .............................................................. 90 
Chart 3.8 Industrial design registrations, 1999-2013 ............................................................. 91 
 
TABLES 
 
Table 1.1 Selected macroeco nomic indicato rs, 2010- 15 ......................................................... 12 
Table 1.2 Basic economic and social indicators, 2010-15 ....................................................... 14 
Table 1.3 Central Governme nt's tax reve nue, 2010- 15 .......................................................... 16 
Table 1.4 Balance of payments, 2010-15 ............................................................................. 17 
Table 1.5 Foreign direct investment inflow s/outflows, by econom ic activi ty, 2010- 15 ................. 22 
Table 1.6 Foreign direct investment in flows/outflows (co untry-wise) , 2010-15  .......................... 22 
Table 2.1 Notifications to the WT O, 1 January 2011– 13 March 2015 ........................................ 26 
Table 2.2 WTO dispute settlement cases involving India as complainant, respondent, 
2011-13 Marc h 2015  ........................................................................................................ 27 
Table 2.3 Industries for which indust rial licences are compulsory , 2014  ................................... 30 
Table 2.4 Sectors in which FDI is prohib ited, 2014 ................................................................ 32 
Table 3.1 Tariff values (r eference pric es), 2009-14 ............................................................... 35 
Table 3.2 General rules of origin  under trade ag reements , 2015 ............................................. 36 WT/TPR/S/313/Rev.1 • India 
 
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  Table 3.3 India's tariff structure, 2010-11 and 2014-15 ......................................................... 38 
Table 3.4 Summary analysis of Indian tariff, 2010-11 and 2014-15 ......................................... 39 
Table 3.5 Summary analysis of In dia's import ch arges, 2014-15  ............................................. 42 
Table 3.6 Products subject to tariff rate qu otas, 2010 -14 ....................................................... 44 
Table 3.7 Summary analysis of India's preferential tariffs, 2014-15 ......................................... 45 
Table 3.8 Import prohibitions, 2014 .................................................................................... 47 
Table 3.9 Items whose import is free, su bject to minimum impo rt price,  2014-15  ..................... 49 
Table 3.10 Value of imports subj ect to state tr ading, 2011-14  ................................................ 51 
Table 3.11 Export  taxes,  2014  ........................................................................................... 65 
Table 3.12 Export cess, 2014 ............................................................................................. 65 
Table 3.13 Goods subject to minimum export prices, December 2014 ...................................... 66 
Table 3.14 Incentives gran ted to SEZ units,  2014 ................................................................. 68 
Table 3.15 Exports fr om SEZs, 2011-14  .............................................................................. 68 
Table 3.16 Incentives granted to EOUs, 2014 ....................................................................... 69 
Table 3.17 Exports from EOUs, 2011-14 .............................................................................. 70 
Table 3.18 Explicit subsidies,  2012-16  ................................................................................ 73 
Table 3.19 Preferential interest rates to exporters, 2014 ........................................................ 74 
Table 3.20 Targets for lending to priority se ctors, 2014 ......................................................... 74 
Table 3.21 Overview of disinvestmen t, 2011- 15 ................................................................... 79 
Table 3.22 Pate nts, 2009 /13 ............................................................................................. 85 
Table 3.23 Trademarks 2009/13 ........................................................................................ 88 
Table 3.24 Desi gns, 2009 /14 ............................................................................................. 90 
Table 3.25 Geographical indications,  2009/14  ...................................................................... 93 
Table 3.26 Approved registration of various IP rights, 2010 and 2014 ...................................... 96 
Table 3.27 IPR infr ingements,  2012- 14 ............................................................................... 96 
Table 4.1 Selected indicators  for agricult ure, 2009- 13 ........................................................... 98 
Table 4.2 Agriculture sector schemes/programme s, 2014 .................................................... 100  
Table 4.3 Minimum suppo rt prices, 2010-15 ...................................................................... 102  
Table 4.4 Trends in the banking sector's gross loans and deposits and prudential 
indicators, 2010-14  ........................................................................................................ 11 0 
Table 4.5 Insurance and reinsura nce market, end- March 2014  ............................................. 114  
Table 4.6 Securities  market, 2012-15 ............................................................................... 116  
Table 4.7 Market access and national treatment conditions for foreign investment in the 
securities ma rket, 2014  .................................................................................................. 119  
Table 4.8 Selected telecom indicators, 2011-14 .................................................................. 121  
Table 4.9 Selected support sch emes for touris m, 2014 ........................................................ 130 
 
APPENDIX TABLES 
 Table A1. 1 Merchandise exports by HS se ction and major HS ch apters, 2010-14 .................... 135
 
Table A1. 2 Merchandise imports by HS section and major HS chapters, 2010-14 .................... 136  
Table A1. 3 Merchandise export s by destinatio n, 2010-14  .................................................... 137  WT/TPR/S/313/Rev.1 • India 
 
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  Table A1. 4 Merchandise impo rts by origin , 2010-14  ........................................................... 138  
Table A2. 1 Sectors in wh ich FDI is pe rmitted .................................................................... 139  
Table A2. 2 India's regional trade agre ements in force, end-March 2015 ................................ 143  
Table A3. 1 IEC exemptions for imports and expo rts, 2014  .................................................. 147  
Table A3. 2 Safeguard investigations, 2011-14 ................................................................... 148  
Table A3. 3 Institutions responsible for formulation and enforcement of standards and 
technical regula tions, 2014 ............................................................................................. 151  
Table A3. 4 Export prohibitio ns, 2014 ............................................................................... 153  
Table A3. 5 Export ince ntive schemes , 2014 ...................................................................... 155  
Table A3. 6 Amount forgone/disbursed on imports under export promotion schemes, 
2011-1 4 .......................................................................................................................  158 
Table A3. 7 Selected incentive schemes/programmes for MSMEs, 2014 .................................. 159  
Table A3. 8 Top 20 patent applicants, 2014 ....................................................................... 162  
Table A4. 1 Legislation related to pipeline tr ansport for petroleum an d natural ga s, 2014 ......... 163  
Table A4. 2 India's banking system, 2011 and 2014 ............................................................ 164  
Table A4. 3 Telecom lice nsing regime s, 2014  ..................................................................... 168  
Table A4. 4 IMO Conventions and prot ocols ratified by  India,  2014 ........................................ 169  
Table A4. 5 Air service agreemen ts concluded by  India,  2014 ............................................... 170  WT/TPR/S/313/Rev.1 • India 
 
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  SUMMARY 
1. During the period under review, India continued its efforts to liberalize and facilitate trade, 
such as through the introduction of self-assessment in customs procedures and the elimination of state-trading requirements for some agricultural products. India also proceeded with further 
structural reforms including by eliminating price controls on diesel and relaxing foreign direct 
investment (FDI) restrictions in some sectors. Nonetheless, the tariff structure remains complex and the simple average MFN tariff rate increased during the review period.  
2. India's trade policy is largely driven by domest ic supply considerations and also intended to 
attain short-term objectives, such as containing fluctuations in commodity prices. This requires constant fine-tuning of policies, for example, through notifications by the Directorate General of Foreign Trade (DGFT) and Customs, rendering the trade regime less predictable and creating 
additional costs.  
3. India's economic growth has been accelerating in recent years, although it is still below the 
10% rate achieved in fiscal year 2010-11. Under the newly-revised series of national accounts 
released in January 2015, real GDP growth was 6.9% in 2013-14 and estimated to be around 
7.4% in 2014-15; these revised figures show a more  positive trend and outlook than that based 
on the previous series. India's per capita GDP was around US$1,500 in 2013-14. Inflation stood at 
5.9% in July-September 2014; food prices, although  lower recently, continued to put pressure on 
overall consumer prices. In the past few years, inflation became slightly milder due partly to declining oil prices. The Reserve Bank of India has recently been focusing on containing inflation. In February 2015, India introduced a new framework of "inflation targeting" for the medium term. 
During the period under review, the repo rate  was increased several times until January 2015, 
when it was lowered by 0.25 percentage points . India does not publish official unemployment 
figures; the authorities state that the largest employment sector in India is agriculture. 
4. India has continued its process of fiscal consolidation. Nonetheless, throughout the review 
period, India continued to post sizeable public sect or deficits. According to India's regulations, the 
Government is required to reduce its fiscal deficit to 3% by 2017-18. It also intends to further 
streamline taxes including by introducing a goods and services tax (GST).  
5. The current account deficit has recently been  decreasing, to around 1.7% of GDP in 
2013-14, mainly due to a decreasing merchandise trade deficit. Trade (exports and imports) in goods and non-factor services as a percentage of GDP was around 53% during the review period. 
The merchandise trade deficit increased until 2012-13 but decreased in 2013-14. The services 
trade surplus continued to increase, to 3.9% of GDP in 2013-14. The current account deficit has been financed through large capital inflows, both foreign direct and portfolio investment.  
6. As recognized by the Government, structural bottlenecks remain a barrier to achieve a 
higher growth. This includes delays in project approval, ill-targeted subsidies, low manufacturing base and low agricultural productivity, difficulty in land acquisition, weak transportation network 
and power supply, and strict labour regulations and skill mismatches. These bottlenecks are being 
addressed through investment in infrastructure and education, simplification of the business environment by eliminating overregulation, and incr easing predictability in trade and investment 
regimes. 
7. India is an original Member of the WTO an d provides MFN treatment to all Members and 
other trading partners. It accepted the Fourth and Fifth Protocols of the GATS. India is a strong advocate of the multilateral trading system and has historically been party to few regional trade 
agreements. However, despite India's reservations, regionalism has increasingly become an 
element of its overall trade policy objective of enhanced market access for its exports. This is evidenced by the 15 agreements currently in forc e and its involvement in the negotiation of other 
agreements.  
8. India's trade policy objectives are stipulated in its Foreign Trade Policy (FTP), which is issued 
every five years, but revised peri odically to take into account internal and external factors. The 
new 2015-20 FTP, released on 1 April 2015, aims to make India a significant participant in 
international trade and to raise its share of global exports to 3.5% in 2020. This is expected to be 
achieved by providing a sustainable and stable policy environment for foreign merchandise and WT/TPR/S/313/Rev.1 • India 
 
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  services trade; linking rules, procedures and incentives for trade with other recent initiatives such 
as "make in India", "digital India" and "skills Indi a"; promoting the diversification of India's exports 
by assisting key sectors to become more competitive; and creating an architecture for India's engagement with key regions of the world.  
9. Measures to attract FDI have included gradually increasing the number of sectors in which 
FDI is permitted and reducing sectoral restrictions. Since its last Review, India has continued to liberalize its investment policies, including raising foreign-ownership limits in some sectors, such 
as insurance and railway transport.  
10. India has continued to streamline customs procedures and implement trade-facilitation 
measures. With a view to facilitating trade, India adopted the use of self-assessment in its customs procedures in 2011, and around 97.6% of India's imports were processed via the risk 
management system. Despite the implementation of these measures, India's import regime 
remains complex, especially its licensing and perm it system, and its tariff structure, which has 
multiple exemptions, with rates varying according to product, user or specific export promotion 
programme. 
11. In general, the value of imports is based on the transaction value. A landing charge (for 
loading, unloading, and handling) of 1% is added to the c.i.f. value, to calculate the transaction 
value. India uses "tariff values" (reference prices),  to calculate customs duty levied on imports of 
certain palm oils, crude soybean oil, poppy seeds, brass scrap, gold, silver, and areca nuts. These reference prices are, in principle, revised every two weeks and adjusted to align them with international market prices. 
12. India's tariff is announced in the annual Budget; however, individual tariff rates may be 
changed during the fiscal year. In addition to the standard tariff rate, importers are required to pay an additional duty and a special additional duty instead of local taxes. To determine the 
"effective" applied tariff rate (i.e. basic duties and other customs duties) on a particular product, 
separate customs and excise tax schedules must be consulted, which adds to the complexity of the 
tariff. India's tariff comprises mainly ad valorem  rates (around 94% of tariff lines), levied on the 
c.i.f. value of imports, and some alternate or specific duties (6.1% of tariff lines). 
13. The simple average MFN tariff rate rose to 13% in 2014-15, up from 12% in 2010-11. This 
reflects a rise in tariffs in agriculture, particularly for cereals and preparations thereof, oilseeds and fats, and sugars and confectionary. The average for WTO non-agricultural products (9.5%) is 
considerably lower than the average for WTO agri cultural products, which is 36.4%. In 2014-15, 
tariffs ranged from zero to 150%. The largest proportion of tariff lines (71.7%) was subject to a tariff rate between 5% and 10%, while 10.7% of lines was subject to a tariff rate greater than 
zero but lower than 5%. The percentage of duty-f ree lines has declined slightly, from 3.2% to 
2.7% of the total. 
14. Non-ad valorem  rates apply to 700 tariff lines. Of these, three are specific rates, while 
697 are alternate rates affecting textiles and clothing as well as natural rubber products, which 
were not previously subject to alternate rates. Ad valorem  equivalents of non- ad valorem  rates 
were not available.  
15. India's WTO bound tariff levels are much higher than the applied rates, especially for many 
agricultural products. These gaps allow the Government to modify tariff rates in response to 
domestic and international market conditions, but at the same time, they reduce tariff predictability. 
16. India uses tariff rate quotas on some agricultural products and crude oil. The quotas are 
allocated by the DGFT with eligible importers being state-trading entities.  
17. Imports may also be subject to non-tariff barriers including prohibitions, licences, and 
restrictions, as well as packaging, quality, and sanitary requirements. Import restrictions may be 
imposed on grounds, inter alia , of health, safety, moral and security reasons, and for 
self-sufficiency and balance of payments reasons.  In 2012, India discontinued monitoring of some 
imported goods that were considered sensitive. In 2014, exclusive rights accorded to import 
11 agricultural products were removed; nonetheless, India continues to apply import quotas on WT/TPR/S/313/Rev.1 • India 
 
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  marble and similar stones and sandalwood. State trading applies to certain agricultural goods, 
urea, and certain petroleum oils as a policy tool to ensure, inter alia , a "fair" return to farmers, 
food security, the supply of fertilizer to farmers, and the functioning of the domestic price support 
system. 
18. India is one of the most active users of an ti-dumping measures among WTO Members; it 
initiated more than 80 anti-dumping investigations against 23 trading partners during the period under review. During the same period, significan t changes were made to India's anti-dumping 
legislation including new rules defining situations that are considered to represent the 
circumvention of anti-dumping duties, and providing for anti-circumvention investigations to address such circumvention. India initiated one countervailing investigation during the period; no definitive countervailing measure is in place. Since its last Review, India has also initiated 
18 safeguard investigations. 
19. Since India's last Review, there have been no significant changes to its SPS and TBT 
regulations. Some trade concerns were raised regarding its notified measures.  
20. As in the case of imports, export prohibitions and restrictions are mainly in place, inter alia,  
to ensure domestic supply of specific goods and thus may be removed and applied as the circumstances require. In order to reduce the an ti-export bias inherent in India's import and 
indirect tax regimes, a number of duty remission and exemption schemes are in place to facilitate 
exports. Tax holidays are also available to investors through special economic zones and export-oriented units. 
21. India grants direct and indirect assistance to various sectors. Most central government 
subsidies are destined for agriculture. Other key subsidies include those for fertilizers and 
petroleum. Price controls, which apply to some commodities, including liquefied petroleum gas, 
natural gas, kerosene, and agricultural products, are mainly aimed at providing subsidies to 
farmers and the population under the poverty line. In 2012, new price controls on drugs were 
introduced with a view to ensuring av ailability of "essential medicines".  
22. Since its last Review, India has made several amendments to its competition policy 
legislation, which concerned, inter alia,  mergers and recovery of monetary penalty. India is an 
observer to the WTO Agreement on Government  Procurement. While its procurement system 
continues to be decentralized, comprising a multiplici ty of entities at different levels of Government 
(including numerous central public-sector enterprises), India has started to use an e-procurement 
portal for government procurement at the central level. Public procurement is considered an 
important government policy instrument and is used to achieve certain socio-economic objectives. As a result, the Government maintains reservations and price preferences as part of the 
procurement system. However, competition from foreign suppliers is ordinarily allowed. 
23. Since its last Review, India has taken several initiatives to modernize its IPR administration 
and continue its efforts to enforce IPRs. The Copyright Act was amended, inter alia,  to implement 
the 1996 WIPO Copyright Treaty and guidelines were  issued on patents for biological materials, 
both in 2012. In March 2012, India issued its first and only compulsory licence (on certain anti-cancer medicine). 
24. Improving productivity of agriculture has been among the Government's main policy 
objectives; the sector's contribution to GDP has remained around 18% since 2011, while it 
accounts for around 56% of the total workforce (including non-organized labour). The sector is also critical for achieving the Government's objectives of food security and price stability. Tariff 
protection and support accorded to this sector remains greater than to others. Average tariff 
protection for agriculture (36.4%) remains, therefore, substantially higher than for 
non-agricultural products (9.5%). India initiated a new support scheme through the National Food 
Security Act 2013, which aims to provide food grains procured by the Government at subsidized 
prices to around two-thirds of the population. This is likely to have a significant impact on the overall subsidy provided by the Government. 
25. During the period under review, the share of manufacturing in GDP declined slightly, to 
around 13% of GDP. Against the background of low productivity in the sector, the Government 
issued a new manufacturing policy in 2011, which aims at increasing the sector's share in GDP to WT/TPR/S/313/Rev.1 • India 
 
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  25%. The Government also launched a "make in Indi a" campaign in 2014 to strengthen the sector 
and attract investment.  
26. The services sector, which accounts for more than half of India's GDP, is the main driver of 
economic growth. Regulatory changes were introduced (notably in financial services, 
telecommunications, and transport), such as the introduction of a scheme for setting up 
wholly-owned banks subsidiaries, raising foreign equity limit in insurance to 49%, amending the main securities legislation, adopting the National Telecom Policy 2012, and allowing FDI in railway 
transportation except in the operation of railways. 
 
 WT/TPR/S/313/Rev.1 • India 
 
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  1  ECONOMIC ENVIRONMENT 
1.1  Recent Economic Developments 1.1.  India's economic growth has been accelerating in recent years although it is still below the 
10% rate achieved in 2010-11. Under the newly-revised series of national accounts released in 
January 2015, real GDP growth was 6.9% in fiscal year 2013-14
1 and estimated to be around 
7.4% in 2014-15; these revised figures show a more  positive trend and outlook than data based 
on the previous series (Table 1.1).2 India's per capita GDP was around US$1,500 in 2013-14. 
Inflation (in terms of CPI) stood at 5.9% in July -September 2014; food prices, although somewhat 
declining recently, have grown, thus continuing to affect overall consumer prices. In the past few years, inflation became slightly milder due partly to declining oil prices. Nonetheless supply-side constraints remain, resulting in a still high rate of inflation. India does not publish official 
unemployment figures; the authorities state that the largest employment sector in India is 
agriculture.
3 The current account deficit has recently been decreasing, to about 1.7% of GDP in 
2013-14, mainly due to decreasing merchandise trade deficit. Trade (exports and imports) in 
goods and non-factor services as a percentage of  GDP was around 53% during the review period.  
Table 1.1 Selected macroeconomic indicators, 2010-15  
 2010-11  2011-12  2012-13  2013-14a 2014-15a 
Real GDP at market prices (Rs billion, 
2004-05 prices) 52,823.9 56,330.5 58,998.5 61,958.4 .. 
Real GDP at market prices (US$ billion, 
2004-05 prices) 1,159.0 1,175.5 1,084.3 1,024.1 .. 
Current GDP at market price (Rs billion) 77,841.2 90,097.2 101,132.8 113,550.7 .. 
Current GDP at market price (US$ billion) 1,707.9 1,880.2 1,858.7 1,876.9 .. 
GDP per capita at current market price 
(US$) 1,440.1 1,564.2 1,527.3 1,522.2 .. 
National accounts (Percentage chan ge unless otherwise indicated)  
Real GDP growth  10.3 6.6 4.7 5.0 5.5 
Consumption 8.2 8.9 5.2 4.7 .. 
Private consumption 8.7 9.3 5.0 4.8 .. 
Government consumption 5.8 6.9 6.2 3.8 .. 
Gross fixed capital formation 11.0 12.3 0.8 -0.1 .. 
Exports of goods and non-factor services 
(XGS) 19.6 15.6 5.0 8.4 .. 
Imports of goods and non-factor services 
(MGS) 15.6 21.1 6.6 -2.5 .. 
Share of XGS in GDP (%) 22.0 23.9 24.0 24.8  
Share of MGS in GDP (%) 26.3 30.2 30.7 28.4 .. 
Prices, interest rates and money  
Inflation (%age change)      
CPI - industrial workers 10.4 8.3 10.3 9.8 5.0 
WPI 9.6 8.9 7.4 6.0 .. 
Deposit rateb 8.25-9.0 9.3 8.75-9 8.75-9.25 8.5-8.75 
Base ratec 8.25-9.0 10.0-
10.75 9.7-10.25 10.0-
10.25 10.0-
10.25 
Broad money (M3) 16.1 13.2 13.6 13.6 .. 
                                               
1 India's fiscal year runs from April to March. 
2 Main changes in the new series of national acco unts included: (i) change of the base year from 
2004-05 to 2011-12; (ii) measuring economic growth in terms of GDP at constant market prices, instead of GDP at factor cost; and (ii) improv ing the coverage of information, inter alia,  on corporate entities in 
manufacturing and services sectors.   
3 The authorities have indicated that this is due to the relatively large segment of non-organized (not 
formally employed) workers, and that only figures for organized employment are avai lable. In the absence of 
annual statistics on employment, the authorities make use of indicators including: quick quarterly survey on employment – unemployment by the Labour Bureau, which has been conducted in selected sectors; Industrial Outlook Survey of the RBI, which has been conducted on a quarterly basis since 1998, and gives performance 
indicators concerning employment in public and priv ate limited companies engaged in manufacturing. Other 
employment-related indicators include: monthly Naukri  Job Index (NJI); Monster Employment Index (MEI); 
and HSBC Purchasing Managers Index (PMI). WT/TPR/S/313/Rev.1 • India 
 
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   2010-11  2011-12  2012-13  2013-14a 2014-15a 
Exchange rate  
Rs/US$ (financial year  - annual average) 45.6 47.9 54.4 60.5 61.0i 
Real effective exchange rated (Percentage 
change) 12.5 -2.8 -3.5 -3.9 6.2i 
Nominal effective exchange rated 
(Percentage change) 5.3 -7.9 -10.6 -10.5 1.0i 
Central Government balance (% GDP)  
Current balance -3.2 -4.4 -3.6 -3.3 -3.0 
Current revenue (revenue receipts) 10.1 8.3 8.7 8.9 9.2 
Tax revenue (net) 7.3 7.0 7.3 7.2 7.6 
Current expenditure  13.4 12.7 12.3 12.1 12.2 
Capital receipts 5.3 6.1 5.3 4.8 4.7 
Capital expenditure 2.0 1.8 1.6 1.7 1.8 
Gross fiscal balancee -4.8 -5.7 -4.8 -4.5 -4.1 
Primary balancef -1.8 -2.7 -1.8 -1.2 -0.8 
Central Government total debt 50.6 50.2 55.2 .. .. 
Domestic debt 48.6 48.2 53.4 .. .. 
Saving and investment (% of GDP)  
Gross domestic savings 34.2 30.8 30.8 31.5 31.8 
Gross domestic investment 36.8 35.0 35.6 34.8 34.9 
External sector (% of GDP)  
Current account balance -2.8 -4.2 -4.8 -1.7 -1.3j 
Net merchandise trade -7.5 -10.3 -10.7 -7.9 .. 
Services balance 2.6 3.5 3.5 3.9 .. 
Financial account .. .. .. .. .. 
Direct investment 0.7 1.2 1.1 1.1 .. 
Terms of trade, goods (1999/00=100) 91.8 63.1 61.9 60.2 .. 
Merchandise exportsg (Percentage 
change) 40.4 20.9 -1.0 3.9 .. 
Merchandise importsg (Percentage 
change) 27.6 30.3 0.5 -7.2 .. 
Service exportsg (Percentage change) 29.8 14.2 2.4 4.0 .. 
Service importsg (Percentage change) 34.2 -2.9 3.2 -2.8 .. 
Foreign exchange reservesh (US$ billion, 
end-period) 274.3 260.1 259.7 276.4 .. 
In months of imports 9.5 7.1 7.0 7.8 .. 
Total external debt (US$ billion, as at 
end-March) 317.9 360.8 409.5 442.3 .. 
Debt service ratio 4.4 6.0 5.9 5.9 5.9 
.. Not available. 
a Provisional. 
b Refers to the deposit rates of five major bank s with maturity rates of one to three years. 
c Relates to five major banks. d Six currency trade based weight (including the euro, Japanese yen,  U.S. dollar, UK pound, Chinese 
renminbi, HK dollar). 
e Revenue receipts plus capital re ceipts (not including borrowing and other liabilities) minus total 
expenditure. 
f Fiscal balance minus interest payments. g Growth rates are based in US$.  
h Excluding gold, SDRs (Special Drawing Righ ts), and Reserve Tranche Position in IMF. 
i As at 6 March 2015. j RBI estimate as given in Sixth Bi-Monthly Monetary Policy Statement 2014-15, 3 February 2015. 
Source: Reserve Bank of India online information; Ministry of Finance (2015), Economic Survey 2014-15 ; 
IMF (2015), India – Staff Report for the 2015 Article IV Consultation ; and information provided by 
the authorities. 
1.2.  In recent years, growth has been led mainly by services, which is the largest contributor to 
GDP, in particular in financing, insurance, real estate, and business services (Table 1.2); under the 
revised series of national accounts issued in January 2015, manufacturing's contribution to growth is higher than that using the previous series. Th e authorities have noted that, despite the decline WT/TPR/S/313/Rev.1 • India 
 
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  in its relative share, agriculture continues to be  the mainstay of the majority of the population, 
occupying some 56% of the total workforce (including non-organized labour).4 
1.3.  The authorities aim to achieve a sustaine d growth of 7-8% or above within the coming 
3-4 years.5 However, to achieve sustained growth at the potential rate, structural reforms would 
be needed; for example, bottlenecks will need to be eliminated and investment expanded in 
infrastructure, education (including vocational training), and health care. The business environment will also need to be simplified by streamlining the regulatory environment, including 
reforms in taxes and further trade liberalization. In this context, it has been reported that India's 
structural bottlenecks may include: (i) delays in project approvals reflecting difficulties in taking quick decisions
6; (ii) ill-targeted subsidies, whose cost has been increasing steadily in recent years 
and benefitting the rich and the middle-class7; (iii) low manufacturing base and low value addition 
in manufacturing8; (iv) presence of a large informal sector and inadequate labour absorption in the 
formal sector due, inter alia,  to absence of required skills; (v) low agricultural productivity; 
(vi) difficulty in land acquisition9; (vii) a need for a better transportation network (e.g. road, rail, 
and coastal shipping) and infrastructure (e.g. ports and airports) within India; (viii) unreliable 
power supply; and (ix) strict labour regulations and skill mismatches.10  
1.4.  While social conditions improved (e.g. the infant mortality rate declined to 42 per 1,000 in 
2012 (compared with 66 per 1,000 in 2001)11 and the literacy rate reached 73% in 2011 
(compared with 48% in 2001)12), poverty alleviation remains a challenge. In 2011-12, 21.9% of 
the entire population lived below the poverty line.13 Although these levels are considerably below 
those of around a decade ago (e.g. 27.5% in 2004-05), there is still a large number of the poor, 
especially in the rural areas (25.7% in 2011-12). Th e authorities are of the view that India's trade 
and related policies and measures are influenced by development and poverty-alleviation challenges. 
Table 1.2 Basic economic and social indicators, 2010-15 
 2010-11 2011-12 2012-13 2013-14 2014-15a 
 Annual % change  
GDP by economic activity at constant prices  
Agriculture, forestry, and fishing 8.6 5.0 1.4 4.7 .. 
Mining and quarrying 6.5 0.1 -2.2 -1.4 .. 
Manufacturing 8.9 7.4 1.1 -0.7 .. 
Electricity, gas, and water 5.3 8.4 2.3 5.9 .. 
Construction 5.7 10.8 1.1 1.6 .. 
Services 9.7 6.6 7.0 6.8 .. 
Trade, hotels, and restaurants 12.0 1.2 4.5 1.0 .. 
Transport, storage, communication 12.6 9.4 6.0 6.1 .. 
Financing, insurance, real estate, and business 
services 10.0 11.3 10.9 12.9 .. 
Community, social, and personal services 4.2 4.9 5.3 5.6 .. 
 (%) 
Share of sectors in current GDP at factor cost  
Agriculture, forestry, and fishing 18.2 17.9 17.5 18.2 .. 
Mining and quarrying 2.8 2.7 2.4 2.1 .. 
Manufacturing 14.8 14.7 14.1 12.9 .. 
Electricity, gas, and water 1.6 1.6 1.7 1.9 .. 
                                               
4 Data provided by the Indian authorities. 
5 Budget Speech 2014-15. 
6 The Cabinet Committee on Investment (CCI) was established in 2012; in 2013, it approved 
previously-stalled projects amounting to about 5% of GDP (IMF, 2014). 
7 According to some studies, substantial leakages in food subsidies, including widespread diversion to 
the black market, have been estimated (OECD, 2014). The Government announced the establishment of the Expenditure Management Commission in Budget 2014-15 with a view to reviewing expenditure and suggesting reforms. 
8 The Government aims to raise the sh are of manufacturing in GDP to 25%. 
9 The Government is considering revisions to the current Land Acquisition Act in order to avoid delay in 
the implementation of infrastructure projects. 
10 Ministry of Finance (2014) and OECD (2014).  
11 Planning Commission online information. Viewed at: 
http://planningcommission.nic.in/data/datatable/data_2312/DatabookDec2014%20176.pdf . 
12 Planning Commission online information. Viewed at: 
http://planningcommission.nic.in/data/datatable/data_2312/DatabookDec2014%20224.pdf . 
13 Planning Commission online information. Viewed at: 
http://planningcommission.nic.in/data/datatable/data_2312/DatabookDec2014%20101.pdf . WT/TPR/S/313/Rev.1 • India 
 
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   2010-11 2011-12 2012-13 2013-14 2014-15a 
Construction 7.9 8.2 8.1 7.8 .. 
Services 54.6 54.9 56.3 57.0 .. 
Trade, hotels, and restaurants 17.3 17.4 17.2 16.5  
Transport, storage, communication 7.3 7.3 7.5 7.5 .. 
Financing, insurance, real estate, and business 
services 16.1 16.5 17.2 18.5 .. 
Community, social, and personal services 14.0 13.8 14.3 14.5 .. 
Share of sector in total employmentb 
Agriculture, forestry, and fishery 4.9 4.8 .. .. .. 
Mining and quarrying 4.3 4.1 .. .. .. 
Manufacturing 22.4 22.5 .. .. .. 
Electricity, gas, and water 3.1 3.0 .. .. .. 
Construction 3.3 3.2 .. .. .. 
Services 62.1 62.3 .. .. .. 
Wholesale and retail trade 2.5 2.6 .. .. .. 
Transport, storage, and communication 9.0 9.2 .. .. .. 
Financing, insurance, real estate, etc. 10.7 11.2 .. .. .. 
Public administration and defence, and other 
services 39.9 39.2 .. .. .. 
.. Not available. 
a Provisional. 
b Organized sector employment only. 
Source: Ministry of Statistics and Programme Implementation online information. Viewed at: 
http://mospi.nic.in/Mospi_New/site/inner.aspx?status=3&menu_id=82 . Reserve Bank of India online 
information, and Ministry of Finance (2014), Economic Survey 2013-14 . 
1.2  Fiscal Policy 
1.5.  India's fiscal deficit as a ratio to GDP ha s declined in recent years. Based on the Fiscal 
Responsibility and Budget Management Act (FRB MA) and a Medium-Term Fiscal Policy Statement 
in each year's annual budget, India has continued a process of fiscal consolidation; the central 
Government deficit stood at 4.5% in 2013-14, a decline from 5.7% in 2011-12, mainly achieved by reduction in expenditure. The current target for fiscal consolidation under the FRBMA, as 
revised in September 2012, is to achieve a central Government deficit of 3% of GDP by 2017-18; 
accordingly, the Government aims to achieve a target of reducing the fiscal deficit to 3.5% in 2016-17. Although progress has been made recently, achieving fiscal consolidation in the medium-term still remains a challenge for India, in particular considering its infrastructure needs 
and growth targets. The ratio of central Govern ment debt to GDP decreased in 2013-14 to 46.3% 
(estimates) compared with 50.6% in 2010-11.
14 Some 96% of India's (central Government) debt 
is domestic. Fiscal deficits of States amounted to around 2.3% of GDP in 2014-15 (compared with 
1.9% in 2011-12). 
1.6.  India classifies its expenditure as revenue  (current) and capital, and plan and non-plan 
(interest payments, subsidies, defence expenditure,  payrolls, and pensions). The thrust of public 
expenditure management policies has been to rationalize non-plan revenue expenditure by, for 
example, requiring cash-rich public sector enterpri ses to transfer higher dividends to the central 
Government, and raising the levels of plan expenditure, preferably capital expenditure. In this context, the authorities consider that certain subsidies, e.g. the food subsidies, have huge 
overhead costs, and not all the budget allocated to the subsidy reaches the poor; in other cases, 
e.g. subsidies on fertilizers, the expenditures generate a distorted resource allocation to the detriment of productivity.
15 Expenditures on subsidies can be streamlined in various ways, such as 
approving a new direct tax code that would entail streamlined and smaller tax deductions, 
reforming untargeted subsidies on fuel and fertilizer, and strengthening governance and transparency in the allocation of subsidized food  and making use of direct cash transfers instead.
16 
In 2014, India began adopting unique identification  numbers for individuals (Aadhaar) with a view, 
inter alia,  to identifying beneficiaries of subsidies and providing know-your-customer (KYC) norms 
in financial services.17 While a new system of subsidized proc urement and distribution of food has 
                                               
14 The authorities estimate that the ratio will decline to 46.1% in 2015-16. 
15 Ministry of Finance (2014). 
16 IMF (2014). 
17 The Direct Benefit Transfer (DBT) scheme wa s introduced in 2013, supported by the Aadhaar 
numbers and Aadhaar-linked bank accounts (OECD 2014). Aadhaar numbers have been granted to 757 million citizens as at January 2015.  WT/TPR/S/313/Rev.1 • India 
 
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  been introduced under the National Food Security Act 2013, the authorities consider that it is 
increasingly feasible and more effective for poverty reduction than the existing subsidy programmes to adopt direct cash transfer to the poor with the use, inter alia, of the identification 
numbers and payment through mobile phones.
18  
1.7.  India's tax-to-GDP ratio stood at 7.4% in 2013-14 and is estimated to stand at 7.6% in 
2014-15 (Table 1.3); the authorities consider this ratio to be low and in need of improvement by, 
for example, broadening the tax base.19 The authorities consider that India has a complex tax 
system that suffers from problems in structure (e.g. tax exemptions, tax rebates, uneven tax 
treatment of similar economic activities) and administration.20 Parliament is still in the process of 
approving the goods and services tax (GST) as well as a direct tax bill, which is envisaged to remove a large number of cesses and tax exemptions.
21  
Table 1.3 Central Government's tax revenue, 2010-15  
(Rs billion and %) 
 2010-11 2011-12 2012-13 2013-14 2014-15a 
Total tax revenue, net of states' 
share (Rs billion) 5,698.7 6,297.6 7,402.6 8,360.3 9,772.6 
(% of GDP) 7.3 7.0 7.3 7.4 7.6 
 (% of total tax revenue) 
Direct taxes 55.3 54.9 53.4 54.4 53.7 
Corporation taxes 37.7 36.3 34.4 34.0 33.0 
Personal income taxes 17.5 18.5 19.0 20.4 20.4 
Indirect taxes 43.4 44.1 45.7 44.8 45.8 
Customs 17.1 16.8 16.0 15.1 14.8 
Excise duties 17.4 16.3 17.0 15.4 15.1 
Service taxes 9.0 11.0 12.8 14.2 15.8 
a Provisional estimates. 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. 
1.3  Monetary and Exchange Rate Policy 
1.8.  The Reserve Bank of India (RBI) formulates , implements, and monitors monetary policy. On 
20 February 2015, the Government signed an agreement with the RBI on a monetary policy 
framework, which is intended to meet the challenge of an increasingly complex economy.22 The 
main objective of monetary policy to be operated by the Reserve Bank will primarily be to maintain 
price stability while keeping in mind growth object ives. As per the agreement, the RBI will aim to 
bring inflation below 6% by January 2016 and the target for financial year 2016-17 and all 
subsequent years will be 4% with a band of +/- 2 percentage points. Inflation is the year-on-year 
change in the monthly Consumer Price Index – Combined expressed in percentage terms. The RBI is required to publish the operating target(s) and establish an operating procedure of monetary policy through which the operating target will be achieved so as to explain the deviation from the 
target band for three consecutive quarters from 2016-17. 
1.9.  The RBI has recently been focusing on containing inflation and tightening its monetary policy 
stance, although in 2015 this stance was slightly  eased. In May 2011, following the change in 
policy stance to fix only one rate, the repo rate was increased to 7.25%.
23 The rate was then 
increased several times, to 8% on 28 January 2014. On 15 January 2015, the rate was lowered by 0.25 percentage point to 7.75%, and on 4 March 2 015 it was brought down by 25 basis points to 
                                               
18 Ministry of Finance (2014).  
19 Budget Speech 2014-15 and Ministry of Finance (2014). 
20 Ministry of Finance (2014). 
21 The Government's continued intention is to introduce a GST and to consolidate the Income Tax Act 
1961 and the Wealth Tax Act 1957 in a Direct Tax Code.  
22 Ministry of Finance online information. Viewed at: 
http://finmin.nic.in/reports/MPFAgreement28022015.pdf . 
23 Since 3 May 2011, the RBI has been using the repo rate (RBI's lending rate to commercial banks) as 
the only independently varying policy rate. The RBI im plements monetary policy through the use of several 
direct and indirect instruments. The main direct instru ments used to conduct moneta ry policy include the cash 
reserve ratio (CRR), the statutory li quidity ratio (SLR), and refinance fa cilities. The RBI uses the liquidity 
adjustment facility (LAF), as its main  indirect instrument which enables it to adjust short term liquidity through 
repo and reverse repo auctions. The RBI al so makes use of open market operations. WT/TPR/S/313/Rev.1 • India 
 
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  7.5%. In the Sixth Bi-Monthly Monetary Policy statement of 2014-15 issued on 3 February 2015, 
the statutory liquidity ratio (SLR) of scheduled commercial banks was lowered by 0.5 percentage points from 22% to 21.5% of their net time deposit liabilities (NDTL) with effect from 7 February 2015. In addition, export credit refinance was withdrawn and replaced with 
system-level liquidity.
24 
1.10.  Regarding other monetary policy measures, banks were required, inter alia,  to meet at least 
99% of the cash reserve ratio (CRR) on a daily basis, and limit the provision of liquidity under the 
Liquidity Adjustment Facility (LAF) to 0.5% of the bank's own NDTL; the statutory liquidity ratio 
(SLR) of scheduled commercial banks was lowered by 0.5 percentage points from 22% to 21.5% of their NDTL in February 2015.
25  
1.11.   Reforms in India's monetary policy are gr adually being adopted in accordance with an RBI 
expert committee's recommendation in January 201426, such as the adoption of the CPI, instead of 
the wholesale price index (WPI)27, as the key measure of inflation, and making a transition from a 
quarterly to a bi-monthly monetary policy cycle since April 2014.  
1.12.  India's exchange rate is classified by the IMF as floating, determined by the interbank 
market. The RBI may intervene in the market when deemed necessary, such as to modulate excessive volatility in order to maintain orderly conditions, in accordance with its general monetary 
policy stance. In 2014, subject to certain conditions, India allowed all residents and non-residents 
(except citizens of Pakistan and Bangladesh) to take out Indian rupee notes up to Rs 25,000 when 
leaving the country
28; in the case of Nepal and Bhutan there is no limit on rupee notes to be 
carried into or taken out of India for denomination below Rs 100 only. 
1.4  Balance of Payments 
1.13.  India's current account deficit increased up until 2012-13; it declined significantly. While 
India posts a structural merchandise trade deficit, it has a sizeable surplus in the services balance. 
During the period under review, the merchandise trade deficit moderated and the services trade 
surplus increased (Table 1.4).  
Table 1.4 Balance of payments, 2010-15  
(US$ million) 
 2010-11 2011-12 2012-13 2013-14 2014-15a 
Current account -47,909 -78,179 -87,843 -32,358 -17,940 
Goods and services balance -83,084 -125,661 -130,741 -74,644 -37,145 
Goods balance -127,164 -189,690 -195,656 -147,609 -73,214 
Exports f.o.b. 256,318 309,843 306,581 318,607 166,974 
Imports c.i.f. 383,481 499,533 502,237 466,216 240,188 
Services balance 44,080 64,029 64,914 72,965 36,069 
Receipts 124,635 140,935 145,677 151,475 75,925 
Transportation 14,298 18,257 17,334 17,380 8,992 
Travel 15,793 18,462 17,999 17,922 9,225 
Construction 677 804 1,004 1,339 841 
Insurance and pension 1,945 2,632 2,227 2,121 1,138 
Financial 6,508 5,967 4,949 6,650 2,944 
Charges for use of intellectual 
property 193 281 302 585 274 
Computer, information, and 
telecommunications 55,217 63,972 67,785 72,010 36,257 
Other business 22,823 24,557 28,447 28,482 14,144 
Personal, cultural, and recreational 227 393 911 1,323 624 
                                               
24 The export credit refinance was re duced in phases. It was 50% of eligible export credit outstanding as 
at 2 June 2014. 
25 IMF (2014). 
26 Reserve Bank of India online information. Viewed at: 
http://rbi.org.in/Scripts/PublicationReportDetails.aspx?ID=743. 
27 The RBI had traditionally been using the WPI as the key inflation measure. 
28 RBI, Second Bi-Monthly Monetary Policy Statement 2014-15. WT/TPR/S/313/Rev.1 • India 
 
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   2010-11 2011-12 2012-13 2013-14 2014-15a 
Government goods and services, 
n.e.s. 531 478 574 488 270 
Other 6,424 5,133 3,962 2,809 1,089 
Payments 80,555 76,906 80,763 78,510 39,856 
Transportation 13,947 16,454 14,806 14,792 8,041 
Travel 11,026 13,762 11,823 11,810 7,961 
Construction 1,157 1,006 1,220 1,236 564 
Insurance and pension 1,400 1,497 1,409 1,116 565 
Financial 7,483 7,984 4,633 5,814 2,266 
Charges for use of intellectual 
property 2,424 3,207 4,159 3,980 2,314 
Computer, information, and 
telecommunications 3,748 3,258 3,511 3,928 2,025 
Other business 26,626 25,467 30,349 27,189 13,086  
Personal, cultural, and recreational 543 275 616 831 738 
Government goods and services, 
n.e.s. 820 780 813 979 500  
Other 11,382 3,214 7,011 6,525 1,674 
Income balance -17,951 -15,987 -21,455 -23,028 13,554  
Credit 9,587 10,144 10,276 11,352 5,319 
Debit 27,537 26,130 31,731 34,380 18,873  
Secondary income 53,125 63,469 64,353 65,315 32,759  
Credit 55,618 66,129 67,696 69,948 35,016  
Debit 2,494 2,660 3,343 4,633 2,258 
Capital account 40 -61 -294 659 3 
Gross acquisitions/disposals of 
non-produced non-financial assets 25 -86 -71 6 5 
Capital transfers 16 25 -223 652 9  
Financial account 50,505 80,673 85,449 32,581 20,459 
Direct investment 11,834 22,061 19,819 21,564 16,183  
Foreign direct investment in India 29,029 32,952 26,953 30,763 16,763  
India's direct investment abroad -17,195 -10,892 -7,134 -9,199 580  
Portfolio investment  28,243 16,573 26,704 4,802 22,202  
Portfolio investment in India 29,422 16,812 27,582 5,009 22,337  
Portfolio investment by India -1,179 -239 -878 -207 135 
Financial derivatives (other than reserves) 
and employee stock options 0 0 -45,173 2,006 26  
Other investment 23,478 29,208 45,173 19,717 176 
Other equity 2,049 597 187 20 0  
Currency and deposits 3,768 12,095 15,312 39,386 6,702 
Loans 18,295 16,770 10,726 -1,129 3,210  
Trade credit and advances 12,034 6,668 21,657 -5,044 69 
Other -12,668 -6,922 -2,708 -13,443 338  
Reserve assets  -13,050 12,831 -3,826 -15,508 18,076  
Errors and omission -2,636 -2,432 2,688 -882 2,522  
a April to September 2014. 
Source: Reserve Bank of India online in formation, "RBI Bulletin". Viewed at: 
http://rbi.org.in/scripts/BS_ViewBulletin.aspx. 
1.14.  India's current account deficit reflects the extent by which gross domestic investment needs 
exceed gross domestic savings; during the revi ew period, public investment was consistently 
greater than public sector savings. The financing of the current account deficit has not been a problem: there have been large capital inflows on average, both as foreign direct investment (FDI) 
and as portfolio investment. Nonetheless, capital inflows have been highly volatile in recent years; 
there was substantial decline in portfolio investment in 2013-14. The Government has adopted 
measures to increase capital inflows; these include: increasing the cap for foreign institutional WT/TPR/S/313/Rev.1 • India 
 
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  investment in government securities29 and corporate bonds, deregulating the interest rate on 
non-residents' deposits, allowing public financial institutions to raise funds abroad through quasi-sovereign bonds, and easing restrictions on external commercial borrowing.
30 It would 
appear that net portfolio investment in India rose in 2014-15. The authorities consider that these 
measures, in combination with a decline in the current account deficit and revival in equity flows, 
have helped in building up foreign exchange reserves in 2013-14 and 2014-15 to date. 
1.5  Developments in Trade 
1.5.1  Composition of trade in goods 
1.15.  Exports increased from US$251.1 billion in 2010-11 to US$314.4 billion in 2013-14, 
although in 2012-13 they decreased slightly over  2011-12. Over the review period, the share of 
vegetable products, mineral products, chemicals, and textiles and textile articles increased, while 
the share of precious stones and metals, and pe arls decreased. Petroleum and mineral products 
and precious stones and metals are the main compon ents of Indian exports, followed by textiles 
and textile articles (Table A1.1 and Chart 1.1).  
1.16.  In 2013-14, imports totalled US$450.2 billion, up from US$369.8 billion in 2010-11. In 
2013-14, petroleum and mineral products represented around 42% of India's total imports, followed by machinery and electrical equipmen t, precious stones and metals, and chemicals 
(Table A1.2).  
1.5.2  Direction of trade in goods 1.17.  In 2013-14, India's main export markets were the EU28, followed by the United States and 
the United Arab Emirates (Table A1.3 and Chart 1. 2). India's main sources of imports were China, 
the EU28, the Kingdom of Saudi Arabia, and the Un ited Arab Emirates (Tab le A1.4). During the 
period under review, the share of the United States and Africa as India's export destinations increased while that of EU28 and the United Arab Emirates decreased. As regards the origin of 
India's imports, although China and the EU28 are st ill major exporters to India, the share of the 
Kingdom of Saudi Arabia has been increasing.  
1.5.3  Trade in services 
1.18.  India is a net exporter of services. The services trade surplus as a percentage of GDP 
increased from 2.6% in 2010-11 to 3.9% in 2013-14,  mainly owing to growth in exports (receipt) 
of computer, information, and telecommunications, and other businesses services. On the other hand, imports (payment) of charges for use of imports of intellectual property increased 
substantially up until 2012-13; it decreased by 12% in 2013-14.   
 
                                               
29 The investment limit in government securities by  registered foreign portfo lio investors (FPIs) is 
capped at US$30 billion, of which US$5 billio n is reserved for long-term investors.  
30 OECD (2014). WT/TPR/S/313/Rev.1 • India 
 
- 20 - 
 
  Chart 1.1 Product composition of merchandise trade by HS Section, 2010/11 and 
2013/14  
2010/11 2013/14
Total:   US$251.1 billion Total:  US$314.4 billion  
Base metals & 
articles thereof
5.9%
Chemicals 
7.9%Precious stones
& metals  17.4%Machinery;
electrical equipment
7.1%
Base metals &
articles thereof
5.0% 
Total:   US$369.8 billio n Total:   US$450.2 billion Transport 
equipment
6.8%
Textiles &
textile articles
11.9%Other
8.7%
Other 
10.9%Base metals &
articles thereof
8.5%
Other
12.0%Vegetables &
cereals  3.9%
Transport
equipment
3.5%Transport 
equipment
6.4%  Other
11.7%
Chemicals 
8.0%Transport
equipment
3.1%Petroleum  & 
mineral products
19.6%
Textiles & 
textile articles
11.5% Base metals &
articles thereof
7.4%Machinery; 
electrical equipment
7.6%
Plastics & rubber
2.6%Petroleum & 
mineral products
21.9%
Machinery;
electrical equipment
15.2% Machinery; 
electrical equipment
13.3% 
Plastics & rubber 
3.0% 
Plastics & rubber
2.8% Plastics & rubber
2.3%
Precious stones
& metals  13.0% 
Precious stones
& metals  20.8%Petroleum & 
mineral products
33.3%Petroleum & 
mineral products
42.3%Precious stones
& metals
13.3%
Chemicals 
10.4%Chemicals 
9.2%Live animals & 
products thereof  1.9%Live animals & 
products thereof
3.2%
Vegetables & 
cereals 6.6%Exports 
Imports 
 
Source: WTO calculations, based on Department of Co mmerce online information, "Export Import Data 
Bank". WT/TPR/S/313/Rev.1 • India 
 
- 21 - 
 
  Chart 1.2 Direction of merchandise trade, 2010/11 and 2013/14  
2010/11 2013/14
Exports 
Asia
30.7%
Total:   US$251. 1 billion Total:  US$314.4 billion
EU28
12.1%
China
11.8%United States
5.4%Other
7.6%
EU28
11.1%Other
7.7%United States
5.0%
Total:   US$369.8 billion Total:   US$450.2 billionUnited Arab 
Emirates
13.5%
China
11.3%
Other Middle East
7.4%Saudi Arabia  
5.5%United States
10.1% United States
12.5%
Singapore
4.0%
Kuwait
3.8%United Arab 
Emirates
8.9%Other Asia
16.5%
EU28
16.5%
Singapore
3.9%Other
11.7%
Other Middle East
12.6%Other Asia
16.2%
Switzerland
6.7%EU28
18.4%
China
6.2%Hong Kong, China
4.1%
United Arab 
Emirates
9.7%Africa
7.9%
Other
Middle East
9.8%
Indonesia
3.3%Other Asia
17.2%
Saudi Arabia
8.1%Other Asia   
20.9%Africa
9.9%Other
12.9%
Hong Kong, China
4.0%
Asia
30.8%Asia
32.6%Asia
29.9%
United Arab 
Emirates
6.4%China
4.7%
Iraq
4.1%Other 
Middle East
6.5%
Africa
8.6%Venezuela
3.1%
Other Africa
5.0%Switzerland
4.3%
Nigeria
3.1%Imports 
 
Source: WTO calculations, based on Department of Co mmerce online information, "Export Import Data 
Bank". 
1.6  Foreign Direct Investment 
1.19.  India has benefited from la rge inflows of capital during the period under review, both in the 
form of portfolio investment and as foreign direct investment (FDI). Annual FDI inflows grew from US$34.8 billion in 2010-11 to US$36 billion in 2013-14,  although these are lower than a recent 
peak of US$46.6 billion in 2011-12.  
1.20.  FDI inflows have been strong in services including financial, banking, insurance, business, 
outsourcing, R&D, courier, and technical services, and the automobile industry and 
telecommunications (Table 1.5).  WT/TPR/S/313/Rev.1 • India 
 
- 22 - 
 
  Table 1.5 Foreign direct investment infl ows/outflows, by economic activity, 2010-15a 
(US$ million) 
 2010-11 2011-12 2012-13 2013-14 2014-15 
(up to 
December 
2014) 
Total FDI inflows 34,847 46,556 34,298 36,046 31,853 
 (% of FDI equity inflows) 
Servicesb 15.4 14.9 21.6 9.2 10.9 
Automobile industry 6.1 2.6 6.9 6.2 7.5 
Telecommunications 7.8 5.7 1.4 5.4 12.7 
Drugs and pharmaceuticals 1.0 9.2 5.0 5.3 5.8 
Construction  7.8 9.0 6.0 5.0 3.4 
Computer software and hardware 3.7 2.3 2.2 4.6 4.6 
Power 6.0 4.7 2.4 4.4 2.7 
Chemicals (other th an fertilizers) 11.0 11.5 1.3 3.6 2.6 
Metallurgical industries 5.1 5.1 6.5 2.3 1.2 
Hotel and tourism 1.4 2.8 14.5 2.0 2.8 
Total outflows, net 17,195 10,892 7,134 9,199 .. 
.. Not available. 
a Financial years. b Including financial, banking, insurance, bu siness, outsourcing, R&D, courier, technical 
Note: Percentages are based FDI equi ty inflows only, taken from the Depa rtment of Industrial Policy and 
Promotion. 
Source: Reserve Bank of India and De partment of Industrial Policy and Promotion online information, and 
information provided by the Indian authorities. 
1.21.  Between 2010-11 and 2013-14, Mauritius wa s the largest source of FDI, followed by 
Singapore, except in 2013-14 (Table 1.6). It would appear that part of these large flows may result from the advantages of the tax treaty between Mauritius and India, which may make it 
attractive for investors to route their investment through Mauritius to take advantage of the 
preferential provisions, which include exemption from capital gains tax. Other major sources 
during the period under review are the United Kingdom, the Netherlands, and Japan. 
1.22.  India's total net FDI outflows decreased from US$17.2 billion in 2010-11 to US$9.2 billion in 
2013-14.  
Table 1.6 Foreign direct investment inflows/outflows (country-wise), 2010-15
a 
(US$ million) 
 2010-11 2011-12 2012-13 2013-14 2014-15 
(up to 
December 
2014) 
Total inflows, net 34,847 46,556 34,298 36,046 31,853 
FDI equity inflow 21,383 35,120 22,424 24,299 21,045 
 (% of FDI equity inflows only) 
Singapore 8.0 15.0 10.3 24.6 20.5 
Mauritius 32.7 28.3 42.4 20.0 28.0  
United Kingdom 12.7 22.4 4.8 13.2 4.9 
Netherlands 5.7 4.0 8.3 9.3 12.3  
Japan 7.3 8.5 10.0 7.1 6.8 
Germany 0.9 4.6 3.8 4.3 3.7  
United States 5.5 3.2 2.5 3.3 7.0 
Cyprus 4.2 4.5 2.2 2.3 2.3  
France 3.4 1.9 2.9 1.3 2.7 
Total outflows, net 17,195 10,892 7,134 9,199 ..  
.. Not available. 
a Financial years.  Note: Percentages are based FDI equi ty inflows only, taken from the Depa rtment of Industrial Policy and 
Promotion. 
Source: Reserve Bank of India and De partment of Industrial Policy and Promotion online information, and 
information provided by the Indian authorities.  WT/TPR/S/313/Rev.1 • India 
 
- 23 - 
 
  2  TRADE AND INVESTMENT REGIME 
2.1  General Framework 2.1.  There have been no changes to India's over all institutional and legal framework since the last 
Review. Under the Constitution of India, which entered into force on 26 January 1950, India is a 
union of its States and Union Territories. It has a Parliamentary system of Government with a 
bicameral Parliament, an independent Executive and Judiciary. Parliament comprises the President, the Council of States (Rajya Sabha or Upper House) and the People's House (Lok Sabha or Lower 
House). The Lower House is re-elected every fi ve years through universal suffrage. The Upper 
House is not subject to dissolution but every two ye ars one-third of its members shall retire. It has 
a federal system of Government with each Stat e electing its own State legislature. There are 
currently 29 States and seven Union Territories, with the most recent State of Telangana created 
on 2 June 2014.
1  
2.2.  The Head of State is the President of India who is elected for five years by the members of an 
electoral college comprising members of both houses of Parliament and the state legislative 
assemblies.2 The President appoints the Prime Minister and, on the advice of the Prime Minister, 
the other Ministers in the Council of Ministers. All members of the Council of Ministers must be members of Parliament.
3 The role of the Council of Ministers is to aid and advise the President but 
in practice executive power is vested in the Council of Ministers. 
2.3.  In addition to the Centre, each State elects  a legislative assembly which, along with the State 
Government, enacts legislation as empowered to do so under the Constitution. The Seventh Schedule of the Constitution determines the division of legislative powers between the Centre, the 
States and issues for which both have concurrent power.
4 The President appoints a Governor for 
each State, who is the Head of the State and exercises executive authority in that State.  
2.4.  With the exception of money bills, a bill may originate in either House of Parliament. They 
must be passed by a simple majority of both Ho uses. Once a bill is passed by one House, it is 
transmitted to the other, which, subject to any amendments, is passed by the other House. Once 
it has been adopted by both Houses, the bill is se nt to the President for approval. If both Houses 
are unable to agree on the bill within six months, the President may summon both Houses to 
meet, discuss and vote on the bill. If the bill is passed by a majority of members of both houses 
present at the joint session, it is deemed to have been passed by Parliament. 
2.5.  Money bills may only be introduced in the House of the People (Lower House).5 Once they are 
passed by the Lower House, they are tran smitted to the Council of States for any 
recommendations. If the bill is not returned within  14 days of receipt to the House of the People 
                                               
1 The Union Territories are administered by the central Government. 
2 There is also a Vice President who is elected for fi ve years by an electoral college of both houses of 
Parliament and the state assemblies; the Vice President is the ex officio  Chairman of the Upper House of 
Parliament (Rajya Sabha or Council of States). 
3 Under Article 75:5 "A Minister who for any period of  six consecutive months is not a member of either 
House of Parliament shall at the expiration of that period cease to be a Minister". 
4 The First List (Union List) includ es issues related to defence, arms  and firearms and atomic energy, 
foreign affairs and the United Nations, international treaties, railways, highways, maritime shipping and navigation, and also international trade, banking and insurance, taxes on income other than agricultural 
income, customs and excise duties, corporate tax; the Se cond list (State List) gives power to the States for 
issues such as agriculture, fisheries, mining and mineral development, trade and commerce within the State, taxes on agricultural income, certain excise duties su ch as on alcoholic products and narcotics, taxes on 
consumption and sale of electricity. The Third List (Concurrent List) contains items including forests, commercial and industrial monopolies , education, legal, medical and ot her professions, and commerce in 
products such as foodstuffs, cotto n, and jute, and price controls. 
5 The Constitution (Article 110) defines money bills as bills containing provisions dealing with all or any 
of: imposition, abolition, remission, al teration or regulation of any tax; re gulation of the borrowing of money or 
the giving of any guarantee by the Government of India or the amendment of laws with respect to any financial obligations undertaken or to  be undertaken by the Go vernment of India; cust ody of the Consolidated 
Fund or the Contingency Fund of India, the payment of moneys into or the withdrawal of moneys from any such Fund; the appropriation of any moneys out of the Consolidated Fund of India; declaring of any 
expenditure to be expenditure charged on the Consolidated  Fund of India or increasing the amount of any such 
expenditure; the receipt of money on ac count of the Consolidated Fund of In dia or the public account of India, 
or the increasing of the amount of any such expendit ure; or any matter incidental to these provisions. WT/TPR/S/313/Rev.1 • India 
 
- 24 - 
 
  w i t h  a n y  r e c o m m e n d a t i o n s ,  i t  i s  d e e m e d  t o  h a v e  b e e n  p a s s e d  b y  b o t h  H o u s e s  o f  P a r l i a m e n t .  
The recommendations of the Council of States may or may not be accepted by the House of the People. In both cases, once the House of the People passes the bill, it is deemed to have been passed by both Houses. 
2.6.  Once a bill is passed by both houses of Parliament it must be signed by the President to 
become law. Except for money bills, the President may amend the bill and return it to either house 
for consideration. However, if the bill is approved  by both houses with or without the amendments 
suggested, the President may not withhold assent a second time. The Act is then published in the 
Gazette of India and, unless a date of entry into force is indicated, becomes law on the date of 
assent by the President. 
2.7.  Under Chapter III of the Constitution, the President also has the authority to promulgate 
o r d i n a n c e s  w h e n  P a r l i a m e n t  i s  i n  r e c e s s  w h e n  i t  i s  d e e m e d  t h a t  i t  i s  n e c e s s a r y  t o  d o  s o  
immediately. The Ordinance shall have the same force and effect as an Act of Parliament but must be laid before both houses of Parliament and approved within six weeks of the reassembly of 
Parliament. If it is not approved by Parliament during this period, it ceases to exist. The Ordinance 
may also be withdrawn by the President at any time. 
2.8.  The Indian legal system is based on commo n law. The Judiciary is headed by the Supreme 
Court of India, comprising a Chief Justice and 30 other judges appointed by the President in 
consultation with the Chief Justice. It is the highest appellate court with the power to take up appeals against decisions by the High Courts of the States and Union Territories, and has sole jurisdiction over disputes between the Governme nt of India and the States, and between two or 
more States. Any law passed by the Supreme Court is binding on all other courts in India. The 
highest court in each State and Union Territory is the High Court. There are currently 24 High 
Courts with five having jurisdiction over more th an one State. The States are further divided into 
districts, with district courts and subordinate courts of civil and criminal jurisdiction. Decisions 
taken by district courts may be appealed with the High Court with jurisdiction over that particular state or union territory. 
2.2  Trade Policy Formulation and Objectives 
2.2.1  Trade policy formulation 2.9.  Trade policy is formulated and implemented by the Department of Commerce in the Ministry 
of Commerce and Industry, with the assistance of  other Ministries and agencies, including the 
Ministry of Finance, the Reserve Bank of India an d other sectoral Ministries such as Agriculture, 
Consumer Affairs, Food and Public Distribution , Textiles, Petroleum and Steel. The role of the 
Department of Commerce, according to its Annual Report for 2012-13 is "to facilitate creation of 
an enabling environment and infrastructure for accelerated growth of exports". Its mandate is 
regulation, development and promotion of Indi a's international trade and commerce through 
formulation of appropriate trade and commercia l policy and implementation of its various 
provisions.
6 The Department formulates, implements and monitors the Foreign Trade Policy (FTP) 
which is issued every five years and reviewed annually, and forms the basic policy framework for the promotion of exports and trade. The Departme nt is also responsible for multilateral and 
bilateral commercial relations, special economic zones, state trading, export promotion and trade 
facilitation, and development and regulation of ce rtain export-oriented industries and commodities. 
2.10.  There are a number of offices that are attached to the Department to help in the 
formulation and implementation of trade policy. The Directorate General of Foreign Trade (DGFT) 
whose role has evolved from the prohibition and co ntrol of exports and imports to "facilitator" of 
foreign trade, formulates and implements the Foreign Trade Policy. The DGFT also issues authorizations to exporters and monitors their corresponding export obligations. The Directorate 
General of Anti-Dumping and Allied Duties (DGAD)  is responsible for conducting investigations, 
where required under the Customs Tariff Act, into the amount of anti-dumping or countervailing duty to be applied if injury to the domestic industry is determined. The Tariff Commission was established in September 1997 to look at the impact  of the tariff on domestic industry and export 
potential; in this regard it also looks at the inverted tariff structure of the Indian tariff and 
suggests remedial action. According to the authorities it has conducted studies on around 
                                               
6 Department of Commerce (2014). WT/TPR/S/313/Rev.1 • India 
 
- 25 - 
 
  30 products during the last two years and suggeste d that there was an inverted duty structure in 
some of these cases.  
2.11.  There are also a number of subordinate offices such as the Directorate General of 
Commercial Intelligence and Statistics (DGCIS), which collects, compiles and disseminates India's 
trade and commercial statistics; Office of Development Commissioner of Special Economic Zones; 
and autonomous bodies, notably the Coffee, Rubb er, Tea, Tobacco and Spices Board which are 
statutory bodies responsible for the development of these crops; the Marine Products Export 
Development Authority, responsible for the deve lopment of the marine industry particularly 
exports; the Agricultural and Processed Food Pr oducts Export Development Authority (APEDA), 
which is responsible for export promotion of 14 agricultural and processed food products and the monitoring of the import of sugar; the Export Inspection Council (EIC) which carries out quality 
control of exports; the Indian Institute of Fore ign Trade; and the Indian Institute of Packaging 
(IIP). 
2.12.  The Department also has a number of pu blic sector undertakings (PSUs) involved in 
international trade such as the State Trading Corporation of India (STC) responsible for trading 
agricultural products such as spices; the Minerals and Metals Trading Corporation (MMTC) which is responsible not only for trading in minerals and metals but also precious stones and fertilizers; and 
the Project and Equipment Corporation of Indi a (PEC) which is responsible for trading in 
engineering and defence equipment and non-engi neering items. Finally, 29 export promotion 
councils (EPCs) provide advice on export promotion and other functions outlined in the FTP. 
2.2.2  Trade policy goals 
2.13.  Increasing India's share in global export s remains the main thrust of the Government's 
trade policy goals. The main goal of the FTP 2009-14 was to make India a global player in world trade by doubling its share of global trade by 2020. This was to be achieved through fiscal 
measures such as tax incentives, credit for export schemes, institutional changes, rationalization 
of procedures, diversification of export markets and increased market access, including through regional trade agreements. The FTP is announced every five years and reviewed and adjusted 
annually. The new FTP for 2015-2020 was released on 1 April 2015. Its goal is to make India a 
significant participant in international trade and to raise India's share of global exports from 2% to 3.5% by 2020. This is expected to be achieved  by providing a sustainable and stable policy 
environment for foreign merchandise and services trade; linking rules, procedures and incentives 
for trade with other recent initiatives such as "make in India", "digital India" and "skills India"; 
promoting the diversification of India's exports by assisting key sectors to become more competitive; and creating an architecture for India's engagement with key regions of the world.
7 
The acceleration in exports is expected to be achieved through exemption and remission of indirect 
taxes on inputs for producing final export products , imports of capital goods at concessional rates 
of duty, and by stimulating services exports an d focusing on specific products and markets. 
2.14.  Despite this focus on increasing exports, India continues to use trade policy as a means to 
regulate domestic supply and to address short-term objectives such as containing inflation and fluctuations in commodity prices. Thus export taxe s, minimum export price, as well as adjustments 
to import duties, are used on an ad hoc basis through a notification by the DGFT. During the 
period under review for instance, exports of onio ns, sugar and potato were subject to changing 
minimum export prices to regulate domestic supply of these products. Export prohibitions on edible oils have been extended on an annual basis since March 2008 with some exceptions 
introduced on 8 June 2013.
8 Onions are a particularly sensitive item and export prohibitions and 
minimum export prices are used liberally to contro l exports. For instance, exports of onions were 
banned on 29 June 2012.9 Exports of onions were then permitted but subject to a minimum export 
price of US$650 per metric tonne on 14 August 201310 which was increased to US$900 per metric 
tonne on 19 September 201311 and US$1,150 per metric tonne on 1 November 201312, before 
                                               
7 Department of Commerce (2015). 
8 Department of Commerce, Notification No. 22 (RE-2013)/2009-2014 dated 18 June 2013. 
9 Department of Commerce, Notification No. 3 (RE-2013)/2009-2014 dated 29 June 2012. 
10 Department of Commerce, Notification No. 35 (RE-2013)/2009-2014 dated 14 August 2013. 
11 Department of Commerce, Notification No 41 (RE-2013)/2009-2014 dated 19 September 2013. 
12 Department of Commerce, Notification No. 22 (RE-2013)/2009-2014 dated 1 November 2013. WT/TPR/S/313/Rev.1 • India 
 
- 26 - 
 
  being reduced to US$800 per metric tonne on 16 December 201313, US$350 per metric tonne on 
19 December 201314 and to US$150 per metric tonne on 26 December 201315, and then removed 
on 4 March 2014.16 Minimum export prices of US$500 per metric tonne were then reinstated on 2 
July 201417, and reduced to US$300 per metric tonne on 21 August 2014.18 Similarly minimum 
export prices and/or export prohibitions are used periodically for other agricultural products such 
as potatoes, rice, sugar and pulses. During the period 3 July 2009 and 31 March 2013, export 
restrictions were placed on wheat flour and export s of cotton were subject to prior registration of 
contracts with DGFT. In February-March 2014, the Government decided to provide a subsidy of 
Rs 3,333 per metric tonne (US$55), raised to Rs 3,371 per tonne for August-September 2014, to sugar mills to export raw sugar of up to 4 million tonnes during the 2013/14 and 2014/15 marketing years. 
2.15.  Import policy is also largely driven by domestic supply considerations. In the case of sugar 
for instance, import duties were lifted temporarily in 2012 to allow an increase in imports but reinstated at 10% in July 2012. Such frequent changes to policy are disruptive and reduce 
predictability in India's trade policy. In a report prepared on sugar policy, headed by the Chairman 
of the Economic Advisory Council to the Prime Mini ster on 5 October 2012, it was stated that "the 
export-import policy of the Government does not allow firms to have a long-term relation 
internationally and impedes the growth of the sector. The policies are unanticipated and create 
uncertainty for the firms. Also the short term cyclicality, which is largely a consequence of Government intervention, adversely affects the long-term strategic development of the sector".
19 
The authorities note that India's autonomous measures are occasionally taken to provide a stable 
and predictable policy regime for agricultural trade. In February 2013, some of the major 
processed and/or value added agricultural prod ucts such as wheat of meslin flour (HS 1101), 
cereal flours (HS 1102), milk products (HS 3501), butter and other fat derivatives from milk 
(HS 0405) etc. were exempted from export restrictions/bans. 
2.3  Trade Agreements and Arrangements 2.3.1  WTO 
2.16.  India is a founding Member of the WTO. It provides MFN treatment to all other WTO 
Members and other trading partners. India has also accepted the Fourth and Fifth Protocols and is a party to the Information Technology Agreement. It has been an observer to the WTO Government Procurement Agreement since 10 February 2010. 
2.17.  India's most recent notifications (Table 2.1) include those for domestic support for 
agriculture, import licensing procedures, and quantitative restrictions with regard to the WTO Trade Facilitation Agreement. India has not yet submitted its Category A notification.  
Table 2.1 Notifications to the WTO, 1 January 2011–13 March 2015  
WTO Agreement Description Document symbol 
(most recent notification) Date 
Agreement on Agriculture  
Article 18.2 (DS:1) Domestic support G/AG/N/IND/10; 
G/AG/N/IND/10/Corr.1 10/09/2014 
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/5 07/03/2011 
Article 18.2 (ES:1) Export subsidies G/AG/N/IND/9 30/07/2012 
Agreement on Sanitary and Phytosanitary Measures  
Article 7 Annex B Notification of measure G/SPS/N/IND/92 03/11/2014 
                                               
13 Department of Commerce, Notification No. 57 (RE-2013)/2009-2014 dated 16 December 2013. 
14 Department of Commerce, Notification No. 59 (RE-2013)/2009-2014 dated 19 December 2013. 
15 Department of Commerce, Notification No. 61 (RE-2013)/2009-2014 dated 26 December 2013. 
16 Department of Commerce, Notification No. 72 (RE-2013)/2009-2014 dated 4 March 2014. 
17 Department of Commerce, Notification No. 86 (RE-2013)/2009-2014 dated 2 July 2014. 
18 Department of Commerce, Notification No. 91 (RE-2013)/2009-2014 dated 21 August 2014. 
19 Department of Food and Public Distribution (2013). WT/TPR/S/313/Rev.1 • India 
 
- 27 - 
 
  WTO Agreement Description Document symbol 
(most recent notification) Date 
Enabling Clause  
Paragraph 2 Notification of preferential 
tariff treatment for LDCs G/C/W/651 and 
WT/COMTD/N/38 12/09/2011 
Paragraph 2c Notification of regional trade 
agreement WT/COMTD/N/37 12/09/2011 
Agreement on the Implementation of Ar ticle VI of the GATT 1994 (Anti-dumping)  
Article 16.4 – ad hoc Semi-annual report G/ADP/N/259/IND 10/09/2014 
Article XVII and Understanding on the Interp retation of Article XVII (State trading) 
Article XVII:4(a) Notification on State Trading 
Enterprises G/STR/N/14/IND 30/11/2012 
Agreement on Import Licensing  
Article 7.3 Replies to questionnaire on 
import licensing procedures G/LIC/N/3/IND/14 03/10/2014 
Decision on Notification Procedures for Quantitative Restrictions  
G/L/59/Rev.1 Notification of quantitative 
restrictions in force G/MA/QR/N/IND/1 20/06/2014 
Agreement on Subsidies and Countervailing Measures  
Article 25 Semi-annual report G/SCM/N/274/IND 10/09/2014 
Article 25 Notification pursuant to 
Article XVI.1 of the GATT and 
Article 25 of the Agreement G/SCM/N253/IND and 
G/SCM/N/253/Suppl. 1 02/05/2014 
21/11/2014 
Agreement on Safeguards  
Article 12.1(a) Initiation of an investigation G/SG/N/6/IND/40 21/10/2014 
Article 12.1(b) Preliminary finding of serious 
injury and to impose a 
measure G/SG/N/8/IND/26/Suppl.1; 
G/SG/N/10/IND/17/Suppl.1; 
G/SG/N/11/IND/12/Suppl.1 22/10/2014 
Article 12.1(b) Finding of serious injury and 
proposal to impose a measure G/SG/N/8/IND/27; 
G/SG/N/10/IND/18; 
G/SG/N/11/IND/13 16/10/2014 
Article 12.6 Notification of laws, 
regulations and 
administrative proceedings 
relating to safeguard 
measures G/SG/N/1/IND/3/Suppl.1 25/09/2012 
Agreement on Technical Barriers to Trade 
Article 2.9 Proposed technical regulation G/TBT/N/IND/46 24/10/2013 
General Agreement on Trade in Services  
Article V Notification of Economic 
Integration Agreement S/C/N/599 12/09/2011 
Source: WTO Secretariat. 
2.18.  India also remains active in taking issues to the WTO Dispute Settlement Mechanism. 
During the period under review it was involved in three disputes each as complainant and as 
defendant (Table 2.2). In addition, it was involved in 29 disputes as a third party. 
Table 2.2 WTO dispute settlement cases invo lving India as complainant, respondent, 
2011-13 March 2015  
Dispute Member Status (July 2014) WTO document series 
India as respondent 
Certain taxes and other 
measures on imported 
wines and spirits  EU Consultations commenced 
on 22 September 2008 WT/DS380 
Measures concerning the 
importation of certain 
agricultural products 
from the Unit ed States United States Panel re port circulated on 
14 October 2014; Appeal by India WT/DS430 
Certain measures 
relating to solar cells 
and solar modules United States Panel established 23 May 
2014 and composed on 29 
September 2014 WT/DS456 WT/TPR/S/313/Rev.1 • India 
 
- 28 - 
 
  Dispute Member Status (July 2014) WTO document series 
India as complainant    
Seizure of generic drugs 
in transit EU(Netherlands)/ India Consultations commenced 
11 May 2010 WT/DS408 
Safeguard measures on 
imports of cotton yarn Turkey/India Consultations commenced 
13 February 2012 WT/DS428 
Countervailing measures 
on certain hot rolled 
carbon steel flat 
products United States/India Panel report circulated on 
14 July 2014 WT/DS436 
Source: WTO Secretariat. 
2.3.2  Regional and preferential agreements 
2.3.2.1  Regional trade agreements 
2.19.  While India remains a supporter of multilat eral trade liberalization, like other WTO Members 
it has negotiated a number of regional trade agr eements. India currently has a network of 15 RTAs 
in force that have been notified to the WTO. These are mainly with its neighbours and other Asian 
countries. In addition, it has a few RTAs with countries in Latin America (Chile, MERCOSUR), and is a party to the Global System of Trade Preferences (GSTP) but these are partial in their scope and cover very few tariff lines (Table A2.1).  
2.20.  Since the previous Review in 2011, two agr eements, with Malaysia and Japan, have entered 
into force. In addition, the parties to the South Asian Free Trade Area (SAFTA) have now completed negotiations to add services commitments to the Agreement, although this has not yet 
been notified to the WTO. India is also party to an early harvest agreement in goods with Thailand 
but this has also not been notified to the WTO. According to the authorities the process to notify 
these agreements will be initiated in consultations with India's trading partners. On 
9 September 2014, India signed the Trade in Se rvices and Investment Agreement with ASEAN 
(the Agreement on Goods has been in force since 1 January 2010 and was notified by the parties to the WTO). The Services and Investment Agr eement is expected to come into force on 
15 July 2015. 
2.21.  With regard to its RTA negotiations, India has made "early announcements" of negotiations 
with the European Union, EFTA, SACU and the Bay of Bengal Initiative on Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) with Bangladesh, Bhutan, Myanmar, Nepal, Sri Lanka and 
Thailand. Negotiations are also ongoing with Australia, Canada, GCC, Indonesia, Israel and 
New Zealand and being considered with Egypt and Mauritius. Finally, India is also a party to negotiations on a Regional Comprehensive Econ omic Partnership (RCEP) Agreement between the 
10 members of the Association of South East Asia n Nations (ASEAN) and six of their FTA partners 
(Australia, China, India, Japan, the Republic of Korea and New Zealand); negotiations which 
commenced in August 2012 are expected to be completed by end 2015. 
2.22.  Out of 15 RTAs notified by India to the WTO,  four include provisions on services as well as 
goods (with the Republic of Korea, Malaysia, Japa n, and Singapore) although, as noted, the SAFTA 
Trade in services (SATIS) agreement is in force but not notified to the WTO while India and ASEAN 
have recently signed a Services and Investment Agreement. India's tariff liberalization in its RTAs 
tends to vary greatly depending on the negotiating partner. Among its notified RTAs that have 
been considered by either the Committee on Re gional Trade Agreements or the Committee on 
Trade and Development, India's tariff liberalization commitments range from zero tariffs liberalized 
in the partial scope Agreement with Chile, to 23.6% in its FTA with Singapore, 75.3% with 
Malaysia and 86.6% with Japan. With ASEAN, India commits to liberalize 75% of its tariff lines for imports from ASEAN countries. According to the authorities partial scope agreements should not 
be a measure for computing the level of liberalization; liberalization should be looked at only in 
reference to full scope agreements.  
2.23.  In services, India's agreements are largely based on a GATS positive list approach and they 
have made incremental improvements to its GATS commitments. However, as stated by India in 
its most recent services agreement with ASEAN "a ll the schedules tabled by India are well within WT/TPR/S/313/Rev.1 • India 
 
- 29 - 
 
  the existing autonomous regime of India"20, suggesting that while commitments on services go 
beyond its GATS commitments, India's applied regime remains more liberal. 
2.24.  There have been concerns expressed in recent years regarding the potentially negative 
impact of RTAs, notably on Indian industry. Th e Department of Commerce recently conducted an 
internal analysis of various FTAs, and found that the utilization of several FTAs by India's FTA 
partners was not significant.21 Given the low impact of FTAs on Indian industry, it is not clear what 
the immediate benefits of existing FTAs are and what if any implications for India's policy there 
may be on its current RTA negotiations. According to the authorities each negotiation is driven by 
the overall balance of interests with the specific trading partner(s). 
2.3.2.2  Preferential trade arrangements 2.25.  India is a recipient of preferences under  the Generalized System of Preferences from 
Australia, Canada, the European Union, Japan, New Zealand, Norway, Switzerland, Turkey, the 
United States and the Customs Union between Bela rus, Kazakhstan and the Russian Federation.  
2.26.  Since 13 August 2008, India also provides  duty free and quota free treatment (Duty Free 
Tariff Preference Scheme) to least developed countries following the WTO Hong Kong Ministerial 
Declaration of December 2005.
22 The scheme is open to all LDCs, and as of 1 January 2015 
31 LDCs had indicated their interest in the schem e and therefore received preferential treatment.23 
The scheme was to reduce duties on around 85% of the tariff by 20% per year and phase them 
out over five years. Effective 1 April 2014, the scheme now provides duty free market access on around 96% of India's tariff lines at the HS 6 digi t level with 1.8% of the tariff excluded from the 
scheme.
24 In the 2014/15 tariff, 94.7% of the tariff was covered by the scheme with 94.1% being 
duty free (section 3.1.8). 
2.3.3  Other agreements and arrangements 2.27.  India has signed bilateral investment treaties with 83 countries. Double tax avoidance 
agreements have been signed with 71 countries.  
2.4  Investment Regime 2.4.1  Legal framework for business 
2.28.  Investment and incorporation of companies is regulated by the Companies Act, 2013. The 
Act regulates the establishment of domestic and fo reign companies, the power and responsibilities 
of senior management as well as details relating to audits and accounts. Other key legislation includes the Industries (Development and Regulation) Act 1951 which guides Government 
industrial policy objectives. The Indian Contract Act 1872 governs transactions relating to industry 
and trade, while the Industrial Disputes Act 1947 de termines the settlement of industrial disputes. 
Other Acts that are relevant for business are the Competition Act of 2002, and laws and 
regulations relating to intellectual property rights (section 3.3.5). 
2.29.  Foreign investors can establish in India through multiple routes: as a branch, as joint 
ventures with Indian partners, as a limited liability company or a wholly-owned subsidiary. There 
are certain advantages to incorporation as a domestic company. They are required to obtain 
                                               
20 Press Release online information. Viewed at: 
http://commerce.gov.in/pressrelease/pressrelease_detail.asp?id=3116 . 
21 According to a speech by the Secretary of Commer ce to a meeting of the Confederation of Indian 
Industries, "of Japan's total trade with India, only 22% could be attributed to the FTA, Malaysia 3.47%, ASEAN 17%, and Rep. of Korea 25%". Financial Express, 27 October 2014. Viewed at: 
http://indianexpress.com/article/business/economy/co mmerce-industry-sec ys-speak-in-different-tones-on-fta-
impact/ . 
22 WTO documents G/C/W/651 and WT/COMTD/N/38, 12 September 2011. 
23 According to the scheme, in order to benefit from preferences individual  LDCs were required to submit 
to the Government of India a letter of intent and details of officials who would be responsible for issuing 
certificates of origin as prescribed by the scheme. 
24 Customs Notification No. 8/2014 dated 1 April 2014. WT/TPR/S/313/Rev.1 • India 
 
- 30 - 
 
  approval from the Reserve Bank of India and ar e subject to policies, FDI limits and sectoral 
legislation relating to foreign investment (section 2.4.2.1).  
2.30.  Establishing a company in India requires investors to register or obtain licences from 
various Government agencies, both in the Central and relevant State Governments. This is 
time-consuming and confusing. The Department of Industrial Policy Promotion based in the 
Ministry of Commerce and Industry (DIPP) indicate s that some 16 steps must be completed before 
an investor can establish a company. This has led to India being consistently ranked poorly by the 
World Bank's "starting a business" ranking (179 out of 189 economies in 2014 compared to 177 in 
2013).25 To streamline the process, the Government through the DIPP is establishing "eBiz", a 
web-based portal which is a one-stop shop for delivery of services to investors by the Government which is expected to address the needs of business from inception through its lifecycle. This is 
expected to significantly reduce the amount of time and money spent by investors in obtaining 
licences to start a business.
26 According to the September 2014 "Make in India" initiative of the 
new Government, all Central and State Government departments and ministries were expected to 
be integrated in eBiz by end-2014. The project which is being operated as a public-private 
partnership covers five pilot States during th e first year covering 65 services (18 central 
Government and 47 State services, with a further 21 (eight Central and 13 State) services to be 
added during the second and third years of the project. The project is also expected to be 
extended to a further five States. The Government expects to provide over 200 State and central Government services through this plat form during the next seven years. 
2.4.1.1  Compulsory Industrial licensing 
2.31.  The Industries (Development and Regulati on) Act, 1951 enables the Government "to direct 
investment into desired channels of industrial activity, inter alia,  through the mechanism of 
licensing keeping with national development objectives and goals".
27 T h u s  i n  a d d i t i o n  t o  
procedures for establishment, industrial licences are required for investing in certain industries and 
sectors. These industries (Table 2.3) remained unchanged from the time of the previous Review. In addition to these industries, licences are required for investment by non-medium and 
small-scale enterprises manufacturing items reserved for the medium- and small-scale sector.
28 
Table 2.3 Industries for which indust rial licences are compulsory, 2014 
Industry 
Electronic aerospace and defence equipment 
Industrial explosives including deto nating fuses, safety fuses, gunp owder, nitrocellulose and matches 
Cigars and cigarettes of tobacco and manufactured to bacco substances (new lice nces for which have been 
discontinued since 1999 on health grounds) 
Specified hazardous chemicals: hydr ocyanic acid and its derivatives; phosgene and its derivatives; and 
isocyanates and diisocyantes of hy drocarbon not elsewhere specified 
The distillation and brew ing of alcoholic drinks 
Source: Department of Indust rial Policy and Promotion, Annual Report 2012-2013 . Viewed at: 
http://commerce.nic.in/MOC/publications. 
2.32.  There are also two industries reserved fo r the public sector: atomic energy and railway 
operations other than construction, operation and maintenance of: (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) freight terminals; (viii) passenger 
terminals; (ix) infrastructure in industrial parks pertaining to railway line or sidings including electrified railway lines and connections to main railway lines; and (x) mass rapid transport systems.
29 Investors in all other sectors and industries do not require approval from the 
Government but must file an "Industrial Entrep reneurs Memorandum" (IEM) with the Secretariat 
for Industrial Approval (SIA) in the DIPP. Proced ures for filing the IEM have been simplified by 
making it possible to do so electronically since January 2014. The IEM, according to the 
                                               
25 International Finance Corporation and the World Bank (2014). 
26 Viewed at: http://dipp.nic.in/English/Ebiz/Integrated_MMP-eBiz.pdf . eBiz portal online information. 
Viewed at: https://www.ebiz.gov.in/home/ . 
27 Department of Industrial Policy and Promotion (2014a). 
28 Department of Industrial Po licy and Promotion (undated). 
29 Department of Industrial Policy and Promotion Notification No. S.O. 2113 (E) on 22 August 2014. WT/TPR/S/313/Rev.1 • India 
 
- 31 - 
 
  authorities, is required principally for data collection purposes on investment and type of industrial 
activity. Industrial licences are valid for an initial period of three years following which they are extendable for up to a maximum period of seven years.
30 If the licensee commences production 
during this period, the licence continues to be valid. 
2.33.  In November 2011, the DIPP also notified the National Manufacturing Policy (NMP) whose 
overall goal is to raise the share of manufacturing  in GDP to 25% and create 100 million jobs over 
a decade or so. To implement the policy, national investment and manufacturing zones (NIMZs) 
have been created which provide infrastructure, land use on the basis of zoning, clean and 
energy-efficient technology and social infrastructure and skill development facilities.31 The NIMZs 
are to be declared industrial townships with their own planning and investment clearance facilities. According to the authorities these will be different  from special economic zones (SEZs) in terms of 
size, infrastructure, governance structures related to regulatory procedures, exit policies and fiscal 
incentives. The NIMZ will be much larger – a minimum of 5,000 hectares, compared to 
500 hectares for a SEZ – although sector-specific NIMZs can be as small as 50 hectares; 
incentives for the NIMZ will include assistance with water and environment audits, easing access 
to finance, rationalization and simplification of business regulations, as well as for acquiring technology, compared to tax incentives provided for SEZs. The NIMZ must be declared so by the 
relevant State Government under the Constitution so that it can function as a self-governing and 
autonomous body while the SEZ operates under its own Act (SEZ Act, 2005).  
2.34.  In addition to compulsory industrial li censing and reservations for the public sector, 
environmental clearance under the Environment Protec tion Act, 1986, is required from the Ministry 
of Environment and Forests, for 29 industries prior to establishing industrial units.
32 At the level of 
State Governments, companies are subject to land use, and industrial location laws. Most States also provide incentives for investment. 
2.4.1.2  Micro, small and medium enterprises 
2.35.  Micro, small and medium enterprises (MSM s) as defined in the Micro, Small and Medium 
Enterprises Development Act, 2006 (section 3), a ccount for around 8% of India's GDP, 45% of 
manufacturing output and 42% of exports, and pr ovide employment for a significant share of the 
population according to estimates by the Mini stry of Micro, Small and Medium Enterprises.
33 
Historically, in order to support these enterprises, the production of certain products could only be carried out by them. The number of such reserv ed items has been reduced gradually over the 
years with around 20 items currently on the list (section 3.3.1.4).
34 Despite this reservation, 
approved non-medium and small-scale companies may also produce items reserved for the MSMs on condition they obtain an industrial licence fr om the DIPP and undertake to export at least 50% 
of their annual production.  
2.4.2  Foreign investment 2.4.2.1  Policy 
2.36.  India's foreign investment policy has been consolidated in the Circular on Consolidated FDI 
Policy which is updated every year by the DIPP; the latest version available has been updated up to 17 April 2014. 
2.37.  It is implemented through the Foreign Investment Promotion Board (FIPB) comprising 
representatives from the Departments of Economic Affairs, Industrial Policy and Promotion, and 
Commerce and the Ministries of External Affairs an d Overseas Indian Affairs. The FIPB can also 
                                               
30 Department of Industrial Policy and Promotion (2014b). 
31 To date 17 NIMZs have been given approval in principle.  
32 The industries include petrochemical complexes and petroleum refineries, cement, thermal power 
plants, bulk drugs, fertil izers, dyes and paper. 
33 Ministry of Micro, Small and Medium En terprises online info rmation. Viewed at: 
http://msme.gov.in/Web/Portal/New-Default.aspx . 
34 The products at the 6 and 8 digi t classification include pickles and chutneys, bread, edible oils, 
wooden furniture and fixtures, exercise books and regi sters, some chemical and chemical products, glass 
bangles and some metal products. The full list is availabl e in Annex V of the Annual Re port of the Ministry of 
Micro, Small and Medium Enterprises 2012-13. Viewed at: http://msme.gov.in/WriteReadData/Docum entFile/ANNUALREPORT-MSME-2012-13P.pdf. WT/TPR/S/313/Rev.1 • India 
 
- 32 - 
 
  co-opt senior officials from other Ministries, financial institutions, and industrial sectors as and 
when required. 
2.38.  There are two main routes for FDI in India: the automatic route requires investors to 
register with the regional office of the Reserve Bank of India (RBI) and provide information to the 
RBI within 30 days of inward investment or issuing shares to non-resident shareholders. The 
non-automatic route requires approval from the Government through an application to the FIPB. Most sectors are currently open for investment through the automatic route (except for investment 
by citizens of Bangladesh and Pakistan, which ar e subject to Government approval). FDI remains 
prohibited in certain agricultural activities, gambling and lotteries and real estate (Table 2.4). Those which require Government approval include tea, including plantations, defence, titanium 
mining, pharmaceuticals (brownfield), some broadcasting services, print media, 
telecommunications (above 49%), public and private banks (above 49%), non-scheduled air 
transport services (above 49%) as well as retailing services (above 49% for single brand and up to 51% for multi-brand) (Table A2.2).  
2.39.  For activities that require prior Government approval, the FIPB considers all investment 
valued at below Rs 12,000 million (around US$200 m illion); FDI above this amount is considered 
by the Cabinet Committee on Economic Affairs as are any other proposals referred to it by the 
FIPB of the Minister of Finance. 
2.40.  Since the previous Review in 2011, a number of changes have been made to investment 
policies. The key changes include permitting FDI in limited liability partnerships; FDI up to 100% is permitted in pharmaceuticals (greenfield and brownfield, the latter subject to Government 
approval); FDI through the automatic route is now permitted for petroleum-refining by the public 
sector enterprises of up to 49%, up to 100% in courier services, up to 49% in commodity exchanges, up to 74% (raised from 49%) for cred it information companies, and up to 49% in 
infrastructure companies in the Securities Market and in power exchanges; in air transport services 
foreign airlines have been allowed to invest in the capital of Indian companies operating scheduled and non-scheduled air transport services, up to 49% (including both FDI and Foreign Institutional 
Investment) of their paid up capital, subject to  approval by the FIPB and compliance with other 
relevant Government regulations; a lifting of FDI limits in single-brand product retail trading from 51% to 100% including up to 49% through the automatic route; and the introduction of FDI up to 51% in multi-brand trading subject to Government approval; for single- and multi-brand retailing 
other conditions also apply including local sourcing of up to 30% from Indian "small industries" 
and establishment only in cities with a population of above 1 million (Table A2.2).
35  
Table 2.4 Sectors in which FDI is prohibited, 2014 
Sector 
Agriculture other than floriculture, ho rticulture, apiculture, and cultivatio n of vegetables and mushrooms under 
controlled conditions; development and production of  seeds and planting mate rials; animal husbandry 
(including breeding of dogs), piscicul ture, aquaculture, under controlled conditions; and services related to 
agro and alli ed sectors 
Plantations other than tea plantations 
Lottery business including government/p rivate and online lotteries etc. 
Gambling and betting, including casinos etc. 
Chit funds 
Nidhi company 
Trading in transferable development rights (TDRs) 
Real-estate business or cons truction of farm houses 
Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes 
Activities/sectors not open to private sector investme nt: atomic energy and railway operations (other than 
permitted activities in railway infrastructure (see Table A2.1)) 
Source: Department of Industrial Policy and Promotion (DIPP), Consolidated FDI Policy Circular of 2014 
(effective from 17 April 2014), 17 April 2014; DIPP, Press Note No. 8 (2014 Series), 27 August 2014; and WTO (2011), Trade Policy Review: India , Geneva. 
2.41.  Most recently (on 25 September 2014) as  part of the "Make In India" campaign, the 
Government raised the FDI limit in defence from 26% to 49% and permitted portfolio investment 
in defence up to 24% through the automatic route. In addition, up to 100% FDI will be permitted 
                                               
35 Multi-brand retailing is also subject to State Gove rnment approval and a few States have decided not 
to go ahead with FDI in this sector. WT/TPR/S/313/Rev.1 • India 
 
- 33 - 
 
  in defence industries for "modern state-of-the-art technology" on a case-by-case basis. FDI of up 
to 100% through the automatic route has also b een permitted in certain railway infrastructure 
activities such as high-speed trains, dedicated freight lines, railway electrification, signalling, 
passenger and freight terminals and mass rapid transport systems.36 In the construction 
development sector, the Government has relaxed requirements for the minimum area and 
capitalization norms (which will not apply to investors which commit at least 30% of the total project cost for low-cost affordable housing) and the exit provisions for foreign investors. With the 
passage of amending legislation in March 2015, the FDI limit in an Indian insurance company has 
been raised from 26% to 49%. 
2.42.  India has bilateral investment promotion and protection agreements (BIPAs) that are in 
force with 72 countries and regions. In addition, Bilateral Investment Treaties (BITS) with 
14 countries have been signed but are not yet in force.
37  
2.4.2.2  Incentives 2.43.  A number of investment incentives are provided both by the central and State Governments 
to encourage investment in certain regions or activities (section 3.3.1). In September 2014, the 
Government launched the "Make in India" programme which encourages investment in industry and services.
38 
 
                                               
36 Make in India online: New Initiatives information. Viewed at http://www.make inindia.com/policy/new-
initiatives/ . 
37 Ministry of Finance online info rmation, Bilateral Investment Promotion and Protection Agreements 
(BIPA). Viewed at: http://finmin.nic.in/bipa_index.asp?pageid=1. 
38 Online information. Viewed at: http://dipp.nic.in/English/Investo r/make_in_india/Main_Brochure.pdf , 
highlights some of the facilities and incentives available for investors in the targeted sectors. WT/TPR/S/313/Rev.1 • India 
 
- 34 - 
 
  3  TRADE POLICIES AND PRACTICES BY MEASURE 
3.1  Measures Directly Affecting Imports  3.1.1  Customs procedures and requirements  3.1.  Since its last Trade Policy Review in 2011, the main changes in India's customs procedures 
have included the adoption in 2011 of self-a ssessment with a view to facilitating trade.
1 In 
accordance with Sections 17, 18 and 50 of the Cu stoms Act 1962 and the Bill of Entry (Electronic 
Declaration) Regulations 2011, and Shipping Bill (Electronic Declaration) Regulations 2011, 
importers/exporters are required to declare th e correct description, value, classification, 
notification number (if any), and assess the Customs duty leviable (if any) on imports/exports themselves. The declaration may be reassessed or examined by Customs officers. Non-compliant importers/exporters may face penal action on account of wrong self-assessment made with intent 
to evade duty or avoid compliance of conditions of relevant legal and administrative provisions.  
3.2.  With a few exceptions, importers- Indian or foreign nationals- must obtain an 
importer-exporter code (IEC) number by registerin g with the Directorate General of Foreign Trade 
(DGFT) in order to be able to import commerciall y (Table A3.1). Online registration is available.
2  
3.3.  Imports into India can be classified as : imports for home consumption, warehousing, 
transhipment, transit, re-importation, and imports for special economic zones (SEZs).3 All imports 
for home consumption require clearance of goods after payment of the duties and charges. 
Importers must file a bill of entry, which may be processed manually or through the electronic data interchange system. As at end October 2014, 126 customs offices out of the total of 377 offices had electronic data interchange (EDI) facilities; about 98% of declaration documents 
were processed electronically.
4 The bill of entry may be filed prior to the arrival of the goods to 
allow for faster clearance, but no earlier than 30 days before the arrival date of the vessel or aircraft carrying the goods.  
3.4.  India uses a risk management system (RMS ) as a trade facilitation measure to selectively 
screen only high and medium-risk cargo for custom s examination. As at end October 2014, about 
97.6% of India's imports was processed via RMS.
5 The authorities indicate that RMS for processing 
imports is operational at almost all customs offices.  
3.5.  Importers with a good track record and complying with qualifying criteria are entitled to be 
accredited for special clearance procedures under the Accredited Client's Programme (ACP). As at 
31 October 2014, 251 ACP importers were allowed to self-assess their consignments with no need 
for examination, with a view to meeting India's commitments to simplify and harmonize Customs' 
procedures under the revised Kyoto Convention. 
3.6.  To import specific goods, in certain instances, certificates of registration and import permits 
(e.g. certificates of origin and sanitary and phytosanitary certificates) issued by different agencies 
are required. These certificates must be submitted at the time of filing the bill of entry.  
3.7.  Regarding time required for customs clearance, the mean evacuation time for import 
consignments at Chennai Port was 8 days and 19 hours, according to a study conducted by the 
Central Board of Excise and Customs. The authoritie s consider that the introduction of EDI, RMS, 
e-Payment, the ACP as well as direct delivery of co ntainers at the port rather than clearing them 
                                               
1 Central Board of Excise & Customs, "Custo ms Manual on Self-assessment 2011". Viewed at: 
http://www.cbec.gov.in/deptt_offcr/cs-self-assesmt2011-manual.pdf. 
2 DGFT online information. Viewed at: http://dgft.gov.in/exim/2000/IECONLINEHelp.pdf  and 
http://dgft.gov.in/exim/2000/download/Appe&ANF/ANF2A.pdf . 
3 See WTO (2011) for the details of customs proced ures for import into warehousing, transhipment, 
transit, re-importation, and imports for special economic zones (SEZs). 
4 Information provided by the authorities. 
5 In 2011, RMS was available at 60 customs offices covering 99.6% of the total imports. WTO document 
WT/TPR/M/249/Add.1, 14 October 2011. WT/TPR/S/313/Rev.1 • India 
 
- 35 - 
 
  after being brought to the container freight stations, and a provision for self-assessment 
contributed to the reduction of customs clearance time.6 
3.8.  If the importer is not satisfied with the a ssessment (i.e. the classification, rate of duty or 
valuation) by the customs officer, the importer may appeal against a decision made in writing by 
an officer ("assessment order") to the Appeals Co mmissioner or the Customs, Excise, and Service 
Tax Appellate Tribunal (Customs Act 12962, Sections 128-129). In 2013-14, 11,649 and 1,992 appeals were submitted to the Commissioner and the Tribunal, respectively (compared with 
8,286 and 2,518 appeals, respectively, in 2012-13). 
3.9.  In regard to the Agreement on Trade Facilitation, India has not yet submitted its Category A 
notification to the Secretariat.  
3.1.1.1  Preshipment inspection 
3.10.  Since 2011, there has been no change in India's preshipment inspection requirements for its 
imports. Preshipment inspection is required for shredded and unshredded metallic waste and scrap, second-hand and defective steel products, and certain textile and clothing articles.
7  
3.1.2  Customs valuation  
3.11.  Since 2011, there has been no major change in customs valuation on imports adopted by 
India. Its main legislation regulating customs valuation includes the Customs Act 1962 
(Section 14), as amended, and the Customs Valuation (Determination of Price of Imported Goods) 
Rules 2007. Under the Act, it is stipulated that de termination of value of imports should be based 
on the transaction value, which is defined as the price actually paid or payable for the goods when sold for export to India, including any amount paid or payable for costs and services 
(e.g. commissions and brokerage, royalties and licence fees, transport and insurance costs, and 
handling charges)
8. A landing charge (for loading, unloading, and handling) of 1% of the 
c.i.f. value is added to the c.i.f. value.9 
3.12.  Nonetheless, the Central Board of Excise an d Customs is authorized by notification in the 
Gazette of India to fix reference prices ("tariff valu es") for any type of imported (exported) goods, 
in accordance with Section 14(2) of the Customs Act 1962. On 16 January 2012, a notification 
concerning the introduction of reference prices to imports of gold and silver was issued; the 
changes entered into force on 17 January 2012.10 On 25 June 2013, areca nuts were made subject 
to reference prices.11 The authorities state that tariff values are revised every two weeks and are 
adjusted to align with international market prices (Table 3.1).  
Table 3.1 Tariff values (ref erence prices), 2009-14 
HS code Description Tariff value (US$/tonne) 
2009 2010 2011 2012 2013 2014 
1511.10.00 Palm oil (crude) 447 447 447 447 892 669 
1511.90.10 Palm oil (RBD) 476 476 476 476 922 696 
1511.90.90 Palm oil (others) 462 462 462 462 907 683 
1511.10.00 Palmolein (crude) 481 481 481 481 925 700 
1511.90.20 Palmolein (RBD) 484 484 484 835 928 703 
1511.90.90 Palmolein (others) 483 483 483 483 927 702 
1507.10.00 Soyabean oil (crude) 580 580 580 580 958 843 
7404.00.22 Brass scrap (all grades) 3,476 4,320 3,993 4,090 3,940 3,697 
1207.91.00 Poppy seeds 3,144 3,445 1,970 4,870 3,195 3,747 
71 or 98  Gold (US$ per 10 grams) n.a. n.a. n.a. 539 392 392 
                                               
6 WTO document WT/TPR/M/249/Add.1, 14 October 2011. 
7 WTO (2011). 
8 Transport cost includes the ship demurrage charges on charted vessels and barge charges. 
9 The landing charges are applied at the same rate regardless of the mode of transport. WTO document 
WT/TPR/M/249/Add.1, 14 October 2011. 
10 Customs (non-tariff) Notification No. 3/2012, 16 January 2012. 
11 Customs (non-tariff) Notification No. 67/2013, 25 June 2013.  WT/TPR/S/313/Rev.1 • India 
 
- 36 - 
 
  HS code Description Tariff value (US$/tonne) 
2009 2010 2011 2012 2013 2014 
71 or 98 Silver (US$ per kilogram) n.a. n.a. n.a. 979 638  519 
080280 Areca nuts n.a. n.a. n.a. n.a. 1,816 2,183 
n.a. Not applicable. 
Note: "Tariff values" for poppy seeds were introd uced through Customs (non-tariff) Notification 
No. 116/2007, 3 December 2007. Reference prices are for end-year. 
Source: Customs (non-tariff) Notifications Nos. 188/2009, 31 December 2009; 03/2010, 31 December 2010; 
89/2011, 30 December 2011; 115/2012, 31 December 2012; 134/2013, 31 December 2013; and 
117/2014, 31 December 2014. 
3.13.  The transaction value is not used if "reasonable doubt" arises on the accuracy of the 
declared value, or in the event, inter alia,  where: (1) there are certain restrictions on disposition or 
use of the goods by the buyer; (2) the sale or price is subject to condition or consideration for 
which a value cannot be determined; (3) part of the proceeds of any resale, disposal or use of the 
goods by buyer will accrue directly or indirectly to seller; or (4) the buyer and seller are related.12 
If the transaction value is not used, the value is determined according to other methods, in sequential order: transaction value of identical goods; transaction value of similar goods; 
deductive value; computed value; and residual method.  
3.14.  The transaction value is also generally us ed to assess the additional duty on imports. 
Nonetheless, for imports of some packaged good s, which, if produced domestically, would be 
subject to a maximum retail price (MRP), the va lue of the goods is determined using the MRP 
declared on the package minus an "abatement" for like domestic goods.
13  
3.15.  India maintains, in the WTO, the special and differential treatment provisions invoked under 
the Tokyo Round Agreement14; it continues to maintain a reservation concerning the reversal of 
the sequential order of Articles 5 and 6, and a re servation to apply Article 5.2 whether or not the 
importer so requests.15  
3.16.  Importers may file an appeal against customs decisions on valuation matters to the Appeals 
Commissioner or the Customs, Excise, and Service Tax Appellate Tribunal (Customs Act 1962, 
Sections 128-129).16  
3.1.3  Rules of origin 
3.17.  Changes in India's rules of origin since 2011 include the adoption  of preferential rules of 
origin with regard to imports from Malaysia and Japan under bilateral FTAs, which entered into force on 1 July 2011 and 1 August 2011, respectively. India does not apply non-preferential rules 
of origin. Preferential rules of origin are app lied under regional and bilateral trade agreements 
(Table 3.2). Maximum foreign-content requirements  range from 30% to 70%; other criteria to 
determine origin are sufficient transformation and change in tariff classification.  
Table 3.2 General rules of origin under trade agreements, 2015
a 
Agreements Maximum foreign-content 
requirements Minimum cumulative local-content 
requirements 
Regional 
Asia-Pacific Trade 
Agreement (APTA) 55% of the f.o.b. value (LDCs: 65%) 60% of the f.o.b. value (LDCs: 50%) 
Global System of Trade 
Preferences (GSTP) 50% of the f.o.b. value (LDCs: 60%) 60% of the f.o.b. value (LDCs: 50%) 
South Asian Free-Trade 
Area (SAFTA)b 60% of the f.o.b. value (LDCs: 70%; 
Sri Lanka: 65%) and change in tariff 
headingc 50% of the f.o.b. value (20% of the f.o.b. 
value as domestic value content in the 
exporting country) and change in tariff 
heading 
                                               
12 Rule 3(2) of the Customs Valuation Rules 2007. 
13 See WTO (2011), Chapter III(2)(ii) for details. 
14 WTO document WT/L/38, 15 February 1995. 
15 WTO document G/VAL/W/233, 16 September 2013. 
16 WTO document G/VAL/W/173, 29 October 2008. WT/TPR/S/313/Rev.1 • India 
 
- 37 - 
 
  Agreements Maximum foreign-content 
requirements Minimum cumulative local-content 
requirements 
South Asia Preferential 
Trade Arrangement (SAPTA) 60% of the f.o.b. value (LDCs: 70%) 50% of the f.o.b. value (LDCs: 40%) 
Bilateral 
Afghanistan 50% of the f.o.b. value and change in tariff 
heading 40% of the f.o.b. value (30% of the f.o.b. 
value as domestic value content in the exporting country) and change in tariff heading 
ASEANb 65% of the f.o.b. value and change in tariff 
sub-headingd 35% of the f.o.b. value and change in 
tariff sub-heading  
Bhutan n.a.  n.a.  
Chile 60% of the f.o.b. valued and change in 
tariff heading 40% of the f.o.b. value and change in 
tariff heading 
Korea, Rep. ofb 65% of the f.o.b. value and change in tariff 
sub-heading  35% of the f.o.b. value and change in 
tariff sub-heading  
MERCOSUR 40% of the f.o.b. value 60% of the f.o.b. value 
Nepal 70% of the f.o.b. value and change in tariff 
heading  30% of the f.o.b. value and change in 
tariff heading 
Singaporeb 60% of the f.o.b. value and change in tariff 
heading 40% of the f.o.b. value and change in 
tariff heading 
Sri Lanka 65% of the f.o.b. value and change in tariff 
heading 35% of the f.o.b. value (25% of the f.o.b. 
value as domestic value content in the 
exporting country) and change in tariff heading 
Thailandd 60% of the f.o.b. value and change in tariff 
heading 40% of the f.o.b. value and change in 
tariff heading 
Japan 65% of the f.o.b. value and change in tariff 
sub-heading 35% of the f.o.b. value and change in 
tariff sub-heading 
Malaysia 65% of the f.o.b. value and change in tariff 
sub-heading 35% of the f.o.b. value and change in 
tariff sub-heading 
Other preferential areas 
Least-developed 
countries 70% of the f.o.b. value and change in tariff 
heading 30% of the f.o.b. value and change in 
tariff heading 
n.a. Not applicable. 
a Applicable to goods not wholly originating and subject to compliance with other conditions specified 
in the rules of origin chapter. 
b Product-specific rules of origin apply. c "Change in tariff heading" denotes change at the HS 4 digit level. 
d "Change in tariff sub heading" denote s change at the HS 6 digit level. 
Note: Rules of origin are not covered under th e India-Bhutan preferential trade agreement. 
Source: Department of Commerce onlin e information, "International Trade: Trade Agreements". Viewed at: 
http://www.commerce.nic.in/trade/international_ta.asp?id=2&trade=I ; Customs General Exemption 
Nos. 70 and 71. Viewed at: http://www.cbec.gov.in/customs/cst-809/cs-gen66-90.pdf; and 
information provided by the Indian authorities. 
3.1.4  Tariffs 
3.1.4.1  Applied tariffs 
3.18.  Customs duties are levied and collected under Section 12 of the Customs Act, 1962 and the 
Customs Tariff Act, 1975. The standard rate of tariff is the statutory duty prescribed in the First Schedule to the Customs Tariff Act. Changes to the statutory duty are announced with the 
annual Budget at the end of February each year (India's fiscal year runs from April to March). 
However, the "effective" tariff rate at any given ti me of the year can be considerably different from 
the statutory rate due to general and "end-user" based exemptions which lower the standard rate for certain users and adjustments made to the tariff through notifications issued in the Gazette of 
India which may lower or raise the standard rate. The effective tariff can therefore vary 
throughout the year due to these changes which add to the complexity of the tariff and uncertainty for traders.  
3.19.  In addition to the standard rate, other duties are charged at the border. These are: 
additional or "countervailing" duty (AD) which is charged in place of excise duties (the Central Value Added Tax or CENVAT charged on a like articl e produced in India) and the special additional WT/TPR/S/313/Rev.1 • India 
 
- 38 - 
 
  duty (SAD) which is to counterbalance state and local taxes. The general AD is 12.5% as of 
1 March 2015 (raised from 12%) although rates range from 6% to 30% (plus specific and compound duties for petroleum products), while the SAD is generally 4%; there are a number of exemptions that apply to these general rates. In addition, there are a number of cesses and 
charges that are applied to customs duties (section 3.1.5). 
3.20.  In 2014-15, India's applied MFN tariff in the HS 2012 nomenclature consisted of 
11,481 lines at the eight-digit level.
17 The share of the tariff subject to ad valorem  rates of duty is 
91.2%; there are 3 lines that are subject to specific  rates of duty (almonds in shell and shelled, 
and electrical energy) and 697 lines (compared to 685 lines at the time of the previous Review) 
carry alternate rates of duty with an ad valorem  and specific duty component. The alternate rates 
apply mainly for textiles and clothing but also natural rubber products (the latter were not subject 
to alternate rates at the time of the last Review). For lines with alternate rates, the Secretariat has 
only used the ad valorem  part of the rate in its duty calculations (Table 3.3). 
Ad valorem  equivalents were not available. In addition, the effective rate includes any product-
specific exemptions announced during 2013-14, up to 1 September 2014; however because India 
grants exemptions to a number of products on an end-user basis, it is not possible to include all exemptions in the tariff analysis. 
Table 3.3 India's tariff st ructure, 2010-11 and 2014-15
a 
(%, unless otherwise indicated) 
 MFN effective applied rate Final 
boundb 2010-11 2014-15 
Bound tariff lines (% of all tariff lines) 75.6 74.9 74.9 
Simple average rate 12.0 13.0 50.0 
WTO agricultural products 33.2 36.4 119.2 
WTO non-agricultural products 8.9 9.5 35.5 
Duty-free tariff lines (% of all tariff lines) 3.2 2.7 1.4 
Simple average rate of dutiable lines only 12.4 13.4 51.0 
Non-ad valorem  tariffs (% of all ta riff lines) 6.1 6.1 6.1 
Domestic tariff "peaks" (% of all tariff lines)c 2.2 2.7 0.6 
International tariff "peaks" (% of all tariff lines)d 11.9 13.6 73.0 
Overall standard deviation of tariff rates 14.2 16.5 40.0 
Coefficient of variation of  tariff rates 1.2 1.3 0.7 
Nuisance applied rates (% of all tariff lines)e 0.7 0.02 0.0 
Total number of tariff lines 11,328 11,481 8,598 
Ad valorem  rates 10,277 10,476 7,739 
Duty free 361 305 164 
Specific rates 5 3 2 
Alternate rates 685 697 693 
a As at 1 September. 
b Final bound rates are based on the 2014 tariff schedule in HS12 nomenclature.  c Domestic tariff peaks are defined as those exc eeding three times the overall average applied rate. 
d International tariff peaks are defined as those exceeding 15%. 
e Nuisance rates are those greater than zero, but less than or equal to 2%.  
Note: 2010-11 tariff is based on HS07 nomenclature, 2014-15 tariff is based on HS12 (as at 
1 September 2014). Calculations for averages are based on national tariff line level (8-digit). Calculations exclude specific rates and include the ad valorem  part of alternate rates. 
Source: WTO Secretariat calculations, based on data provided by the Indian authorities. 
3.21.  There have been no significant changes to the distribution of tariffs since the last Review. 
Tariff rates range from zero to 150%. Almost 72% of the tariff (up slightly from 71% in 2010-11) 
is subject to rates ranging from between 5% up to and including 10%. Around 14.5% (13.1% in 
2010-11) of the tariff is subject to rates above 10 %, with 0.5% of the tariff (mainly alcoholic 
beverages) having rates of 150% (Chart 3.1). Dispersion in the tariff as measured by the 
coefficient of variation has increased slightly.  
                                               
17 The tariff, as provided by the authorities, is effective as on 1 September 2014. It does not include any 
changes made through notifications since then. WT/TPR/S/313/Rev.1 • India 
 
- 39 - 
 
  Chart 3.1 Distribution of MF N applied tariff rates, 2014-15 
(Number of tariff lines) 
(2.7%)(10.7%).(71.7%)
(1.2%)(1.0%)
(0.1%)(9.7%)
(0.5%)(1.8%)
(0.5%)
02004006008001,0001,2001,4001,6001,8002,0002,200
Duty free >0 ≤5> 5 ≤10 >10 ≤15 >15 ≤20 >20 ≤25 >25 ≤30 >30 ≤60 >60 ≤100 150
Tariff rates (%)8,400
8,200
 
Note: Calculations exclude specific rates and include the ad valorem  part of alternate rates. Figures in 
parentheses denote the share of total lines. 
Source: WTO Secretariat calculations, based on data provided by the Indian authorities. 
3.22.  The simple average applied MFN tariff in 2014-15 is 13%, up from 12% at the time of the 
last Review (2010-11). The overall increase is main ly due to a rise in tariffs in agriculture (WTO 
definition), whose overall average at 36.4% rema ins considerably higher than the average for 
non-agricultural products (9.5%). The increase in the average tariff for agriculture is mainly due to 
an increase in tariffs for cereals and preparations thereof (from 30.4% in 2010-11 to 40.9% in 
2014-15), oilseeds and fats (from 18.5% to 33.2%),  and sugars and confectionary (from 33.4% to 
41%). Above average tariff protection is also found in a number of other products such as 
beverages, spirits and tobacco (77.5%), and coffee and tea (74.8%). The average MFN tariff for 
non-agricultural products also rose from 8.9% to 9.5%, primarily due to increased tariffs on transport equipment from 21.5% to 32.1%. Average tariffs also rose for minerals and metals, 
chemicals, textiles, leather and rubber and electric machinery (Table 3.4). 
Table 3.4 Summary analysis of Indian tariff, 2010-11 and 2014-15 
 2010-11 effective tariff (MFN) 2014-15 effective tariff 
(MFN) Bound 
Tariff 
No. of 
lines Average 
(%) Range 
(%) No. of 
lines Average 
(%) Range 
(%) Range 
(%) 
Total 11,328 12.0 0-150 11,481 13.0 0-150 0-300 
HS 01-24 1,433 35.1 0-150 1,609 37.7 0-150 10-300 
HS 25-97 9,895 8.6 0-70 9,872 9.0 0-100 0-150 
By WTO definition  
Agricultural products 1,431 33.2 0-150 1,496 36.4 0-150 10-300 
Animals and products thereof 106 30.8 5-100 124 30.4 5-100 35-150 
Dairy products 32 34.4 30-60 33 34.2 30-60 40-150 
Fruit, vegetables and plants 355 27.6 0-100 376 29.0 0-100 10-150 
Coffee and tea 75 74.7 17.5-100 75 74.8 30-100 55-150 
Cereals and preparations 137 30.4 0-90 142 40.9 0-150 35-150 
Oils seeds, fats, oil and their products 196 18.5 0-100 208 33.2 0-100 15-300 
Sugars and confectionary 38 33.4 10-60 41 35.4 10-60 45-150 WT/TPR/S/313/Rev.1 • India 
 
- 40 - 
 
   2010-11 effective tariff (MFN) 2014-15 effective tariff 
(MFN) Bound 
Tariff 
No. of 
lines Average 
(%) Range 
(%) No. of 
lines Average 
(%) Range 
(%) Range 
(%) 
Beverages, spirits and tobacco 123 78.7 7.5-150 126 77.5 5-150 35-150 
Cotton 11 5.5 0-30 11 2.7 0-30 100-150 
Other agricultural products, n.e.s. 358 25.1 0-70 360 25.2 0-70 25-150 
Non-agricultural products  9,897 8.9 0-70 9,985 9.5 0-100 0-150 
Fish and fishery products 176 29.5 5-30 287 29.6 0-30 35-150 
Minerals and metals 1,912 7.1 0-10 1,920 7.4 0-15 0-40 
Chemicals and photographic supplies 2,471 8.1 0-10 2,452 8.2 0-10 0-150 
Wood, pulp, paper and furniture 495 9.2 0-10 500 9.2 0-10 25-40 
Textiles 1,555 9.6 5-10 1,522 10.0 5-10 10-40 
Clothing 397 10.0 10-10 396 10.0 10-10 35-110 
Leather, rubber, footwear, travel 
goods 322 10.2 0-70a 329 10.3 0-70a 3-40 
Non-electric machinery 1,094 7.1 0-10 1,094 7.0 0-10 0-40 
Electric machinery 537 6.7 0-10 541 7.0 0-10 0-40 
Transport equipment 244 21.5 0-60b 244 32.1 0-100c 3-40 
Non-agricultural products, n.e. s. 676 8.6 0-10 681 8.8 0-10 0-40 
Petroleum 18 8.2 0-10 19 4.6 0-10 n.a. 
By sectord 
Agriculture, forestry and fisheries 621 28.8 0-100 696 29.6 0-100 10-150 
Mining 232 5.1 0-10 240 5.3 0-10 5-40 
Manufacturing 10,474 11.1 0-150 10,544 12.1 0-150 0-300 
Manufacturing excluding food 
processing 9,605 8.8 0-60 9,574 9.2 0-100 0-150 
By stage of processing  
First stage of processing 1,261 22.5 0-100 1,372 23.5 0-100 5-150 
Semi-processed products 4,339 8.6 0-60 4,337 9.0 0-60 0-150 
Fully-processed products 5,728 12.2 0-150 5,772 13.6 0-150 0-300 
n.a. Not applicable. 
a Tariff lines with applied rates at 70% are unbound. 
b Tariff lines with applied rates at 60% are unbound. c Tariff lines with applied rates at 100% are unbound. d ISIC Rev.2 classification. Electricity, gas and water is excluded (1 tariff line). 
Note: Calculations exclude specific rates and include the ad valorem  part of alternate rates. 
Source: WTO calculations, based on data provided by the Indian authorities. 
3.23.  For several years the "peak" rate of tariff for non-agricultural products has been maintained 
at 10%, with successive Budgets declaring the intention to reduce peak rates. Tariffs on agricultural and processed products continue to be higher than for semi-manufactured products, 
reflecting the overall policy to continue to protect agricultural products and to encourage 
processing of final manufactured products. The wide range of end-user exemptions for industrial use granted in successive annual tariffs also reflects this general policy of encouraging the 
manufacturing sector. Further reductions to reduce  the cost of raw materials were announced in 
the Budget for 2015-16, including chemicals, and rubber.
18 There is also concern about apparent 
"inverted" duties (tariffs for primary and intermediate products being higher than for final products) and the Tariff Commission has made a number of recommendations to rectify this 
inverted duty structure in several industries.
19 The authorities note that such corrections have 
been made for products like aluminium ingots, and back sheets in recent years. The Budget for 
                                               
18 Ministry of Finance (2015). 
19 According to the Tariff Commission , the latest studies include textiles machinery, plastic machinery, 
shipbuilding, PVC, rubber products, tubes and tyres etc. (Tariff Commission. Viewed at: 
http://tc.nic.in/sectorwise%20list%20upto%202013-14(25th%20april).pdf  on 16 January 2015). WT/TPR/S/313/Rev.1 • India 
 
- 41 - 
 
  2015-16 announces further reductions in duty on certain inputs to address the problem of duty 
inversion.20 
3.1.4.2  Bound tariffs 3.24.  India completed the implementation of its Uruguay Round tariff commitments in 2005. 
Around 75% of the tariff is bound, of which 100% for agricultural products and 71.1% for 
non-agricultural products. Bound tariffs in the main have ad valorem  rates (90%), with 
non-ad valorem  alternate rates found mainly in textiles and clothing, while two lines are subject to 
specific rates of duty. The overall average boun d rate is 50% and, like the applied tariff, 
significantly higher for agricultural products ( 119.2%, WTO definition) than for non-agricultural 
products (35.5%) (Chart 3.2). The range of bound rates is also considerably higher for agriculture (10%-300%), compared to zero-150% for non-agricultural products, with the highest averages 
found in HS Sections I-IV. 
Chart 3.2 Average effective applied MFN and bound tariff rates, by HS Section, 2014-15 
0%20%40%60%80%100%120%140%160%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 2101   Live animals & prod.        
02   Vegetable products03   Fats & oils      
04   Prepared food, etc.
05   Mineral products
06   Chemicals & products07   Plastic & rubber
08   Hides & skins09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles
12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.15   Base metals and prod.
16   Machinery
17   Transport equipment
18   Precision instrument19   Arms & ammunition
20   Miscellaneous manuf.21   Works of art, etc.MFN applied rate  
Bound rate
Average effective applied 
rate
(13.0%)Average bound rate
(50.0%)200%220%
 
Note: Calculations exclude specific rates and include the ad valorem  part of alternate rates. Only Section 2 
is fully bound; Sections 12, 19 and 21 are fully unbound. 
Source: WTO Secretariat calculations, based on data provided by the Indian authorities. 
3.25.  The considerable gap between applied and bound rates of tariff provides scope for the 
Government to raise applied tariffs within th at margin. Thus the Government reacts to 
international price changes and domestic pressures to adjust the applied tariff accordingly. 
3.26.  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 2015.21 
3.1.5  Other charges affecting imports 
3.27.  The AD and SAD continue to be applied to imports in lieu of excise (CENVAT) and local state 
taxes respectively. The AD, which was introduced in 1975 to offset domestic excise taxes, is currently charged at the general rate of 12.5%, ra ised from 10% at the time of previous Review. 
                                               
20 Ministry of Finance (2015). 
21 WTO document G/MA/307, 1 December 2014. WT/TPR/S/313/Rev.1 • India 
 
- 42 - 
 
  CENVAT rates range from zero to 14% and in th e case of petroleum products have compound 
rates of duty (with an ad valorem  rate of 16%). Like the tariff, the CENVAT rates are also changed 
from time to time through notifications issued by the Government. The SAD is applied at a general rate of 4% which applies to almost the whole tariff (around 90%). It was introduced in 2006 to 
partially compensate for a range of taxes applied by the States, including sales tax, State value 
added tax and other charges. These charges vary from State to State and from product to product, but since the SAD is charged on imports at a flat rate of 4% it may not always be equivalent to 
these charges. In 2007 the Government notified th e possibility to refund the SAD paid on imports 
subsequently sold in India and for which the importer had thus paid the relevant state sales and/or value added taxes.
22 Imports that are exempt from custom s duty, either through an exemption 
notification or by the tariff and the AD, ar e exempt from payment of the SAD as well.  
3.28.  In addition, India charges an Education Cess of 2% as well as a Higher Education Cess of 
1% on the aggregate of customs duty on all impo rts. There is also a charge for the National 
Calamity Fund for goods falling under the Seventh Schedule, which includes tobacco and its 
products (specific duties or ad valorem  duties of between 1% and 45%), petroleum oils and motor 
vehicles (1%) and a Clean Energy Cess on coal, lignite and peat of Rs 200/metric tonne as of 1 March 2015 (originally introduced at Rs 50/MT in 2010/11, and raised to Rs 100/MT in 
2013/14); the charge on these products is exempted  from the equivalent of the additional duty 
payable.  
3.29.  The addition of these duties and charges to the applied tariff raises the actual duty paid by 
the importer significantly above the effective app lied tariff rate. All imports, unless exempt, must 
pay the effective rate of customs duty, plus th e AD, plus any cess applicable, and the Education 
and Higher Education Cess; the 4% SAD is then calculated as a share of this final value. As a result, the overall average applied tariff including such charges rises from 13% to 28.3%, with the 
final duty charged for agricultural  products (WTO definition) rising from 36.4% to 46.1% and for 
non-agricultural products from 9.5% to 25.6%. The highest overall averages are found in beverages (alcohol), spirits and tobacco (99.4%),  coffee and tea (88%), and transport equipment 
(58.9%) (Table 3.5). Nevertheless, the authorities note that the final burden of duties borne by 
imported goods is considerably reduced if imported for further manufacture or provision of services. This is because the credit of these additi onal duties and charges is available to be set-off 
against domestic taxes such as Central Excise Duty and Service Tax under the CENVAT Credit 
Rules. Likewise, a full refund of the SAD can be claimed by an importer once the imported goods 
are sold in the domestic market on payment of State VAT. 
Table 3.5 Summary analysis of India's import charges, 2014-15 
   Effective applied rates 
(MFN) Total duty rate, incl. 
extra chargesa 
No. of 
lines Average 
(%) Range  
(%) Average 
(%) Range  
(%) 
Total 11,481 13.0 0-150 28.3 0-537.5 
HS 01-24 1,609 37.7 0-150 46.2 0-537.5 
HS 25-97 9,872 9.0 0-100 25.3 0-186.1 
By WTO definition      
Agricultural products 1,496 36.4 0-150 46.1 0-537.5 
Animals and products thereof 124 30.4 5-100 36.3 9.4-124 
Dairy products 33 34.2 30-60 39.6 30.9-68.3 
Fruit, vegetables and plants 376 29.0 0-100 36.8 0-111.1 
Coffee and tea 75 74.8 30-100 88.0 36.1-111.1 
Cereals and preparations 142 40.9 0-150 52.1 0-191.2 
Oils seeds, fats, oil and their 
products 208 33.2 0-100 39.3 0-115.4 
Sugars and confectionary 41 35.4 10-60 56.0 14.7-88.8 
Beverages, spirits and tobacco 126 77.5 5-150 99.4 22.9-537.5 
Cotton 11 2.7 0-30 3.3 0-36.1 
Other agricultural products, n.e.s. 360 25.2 0-70 33.9 0-79 
Non-agricultural products  9,985 9.5 0-100 25.6 0-186.1 
                                               
22 Customs notification No. 102/2007, 14 September 2007. WT/TPR/S/313/Rev.1 • India 
 
- 43 - 
 
     Effective applied rates 
(MFN) Total duty rate, incl. 
extra chargesa 
No. of 
lines Average 
(%) Range  
(%) Average 
(%) Range  
(%) 
Fish and fishery products 287 29.6 0-30 35.1 0-44.5 
Minerals and metals 1,920 7.4 0-15 23.1 0-31.2 
Chemicals and photographic 
supplies 2,452 8.2 0-10 25.6 0-28.9 
Wood, pulp, paper and furniture 500 9.2 0-10 22.7 0-28.9 
Textiles 1,522 10.0 5-10 25.7 9.4-28.9 
Clothing 396 10.0 10-10 28.6 21.8-28.9 
Leather, rubber, footwear, travel 
goods 329 10.3 0-70a 27.0 10.3-79 
Non-electric machinery 1,094 7.0 0-10 22.2 9.4-28.9 
Electric machinery 541 7.0 0-10 22.8 6-28.9 
Transport equipment 244 32.1 0-100 58.9 0-186.1 
Non-agricultural products, n.e.s. 681 8.8 0-10 24.3 0-28.9 
Petroleum 19 4.6 0-10 11.4 0-26.2 
By sectorb 
Agriculture, forest ry and fisheries 696 29.6 0-100 37.0 0-112.7 
Mining 240 5.3 0-10 11.1 0-23.9 
Manufacturing 10,544 12.1 0-150 28.1 0-537.5 
Manufacturing excluding food 
processing 9,574 9.2 0-100 25.9 0-186.1 
a Calculation for averages with extra charges in clude landing charges, effective customs duty, 
additional duty, special additional duty, and education cess. 
b ISIC Rev.2 classification. Electricity, ga s and water are excluded (1 tariff line). 
Note: Calculations exclude specific rates and include the ad valorem  part of alternate rates.  
Source: WTO calculations, based on data provided by  the Indian authorities; and Big's Easy Reference 
Customs Tariff, 2014 (35th edition). 
3.30.  Some of these taxes, such as the AD and SAD, are expected to be subsumed into a single 
levy once the Goods and Services Tax (GST), which the Government expects to begin 
implementing in 2016, is adopted by all States. 
3.1.6  Tariff concessions 3.31.  Under Section 25 of the Customs Act, 1962, the central Government may, by notification in 
the Official Gazette , exempt generally or absolutely or subject to any stated conditions, imports 
from the whole or part of the customs duty leviable. The majority of such tariff concessions are announced with the Annual Budget through a notifica tion by the Ministry of Finance (Department 
of Revenue) and are provided under the various schemes to encourage exports and investment 
(section 3.3.1). However, tariff concessions an d exemptions may also be announced throughout 
the year through notifications issued in The Gazette  of India. The concessions can be either 
product- and tariff-line-specific but many are al so based on end-or industrial-use and therefore 
difficult to include in the overall analysis of the tariff.  
3.32.  According to data provided by the author ities and available in the Budget, total customs 
revenue forgone as a result of tariff concessions is  around 25% of total revenue; it has been falling 
from 39% at the time of the previous Review in 2009-10 to 25.3% expected for 2013-14. 
3.1.7  Tariff rate quotas 3.33.  India scheduled tariff rate quotas (TRQs) on five lines at the HS six-digit level: skimmed 
milk powder and whole milk powder, granules or other solid forms (HS 0402.10 and 0402.21), 
maize (HS 1005.90), sunflower-seed or safflower seed oil and fractions thereof, crude oil (HS 1512.11), and rape, colza or mustar d oil and fractions thereof (HS 1514.90).
23 These are 
                                               
23 India's Schedule of Tariff Concessions—Schedu le XII (WTO document WT/LET/440, 4 April 2003). WT/TPR/S/313/Rev.1 • India 
 
- 44 - 
 
  equivalent to 12 tariff lines at the eight digit level (Table 3.6). The quotas are allocated by the 
DGFT and the eligible importers are state-trading companies including the National Dairy Development Board (NDDB), the National Agricultur al Cooperative Marketing Federation of India 
(NAFED), State-Trading Corporation (STC), Minerals and Metals Trading Corporation (MMTC), the 
Projects and Equipment Corporation of India (PEC), Spices Trading Corporation Limited (STCL) and 
State Cooperative Marketing Federations, dependin g on the product. Imports by these importers 
may only take place on behalf of actual users and must be cleared by customs before 31 March of 
each financial year.
24 
Table 3.6 Products subject to tariff rate quotas, 2010-14 
Description Code In 
quota 
rate Out of 
quota 
(MFN) 
rate Annual quota quantity (in-quota imports) 
(metric tonnes) 
2010-11  2011-12  2012-13 2013-14  
MFN TRQs 
Skimmed milk 
and cream in 
powder or 
granules or 
other solid 
forms 0402.10 
0402.21 15% 60% 30,000 
(raised to 
50,000) 50,000 10,000 10,000 
Maize (corn), 
other than seed quality 1005.90 zero 50% 450,000
 450,000  500,000 500,000  
Crude sunflower 
or safflower 
seed oil 1512.11 50% 2.5% for 
sunflower 
and 75% 
for 
safflower 150,000  150,000  150,000 150,000  
Rape, colza or 
mustard oil and fractions thereof 1514.90 45% 75% for 
crude and 
10% for 
refined. 150,000
 150,000  150,000 150,000  
Natural rubber 4001.21 
4001.22 
4001.29 7.5% 20% or 
Rs 30, 
whichever 
is lower 40,000  40,000  n.a. n.a. 
Butter and other 
fats 0405.10 
0405.90.10 0405.90.20 zero 30% 15,000
 15,000  15,000 
 15,000  
Preferential TRQs 
India-Sri Lanka FTA  
Textiles and 
clothing HS 61 and 
HS 62 5% 10% 8 million 
pieces  
(at least 
6 million 
from 
fabrics of 
Indian 
origin) 8 million 
pieces  
(at least 
6 million 
from 
fabrics of 
Indian 
origin)  8 million 
pieces  
(at least  
6 million 
from 
fabrics of 
Indian 
origin) 8 million 
pieces  
(at least 
6 million 
from 
fabrics of 
Indian 
origin)  
Tea 2101 15% 30% 15 million 
kg 15 million 
kg 15 million 
kg  15 
million 
kg 
Bangladesh (SAFTA) 
Textiles and 
clothing HS 61 and 
HS 62 zero 10% 8 million 
pieces 10 million 
pieces  n.a. n.a. 
Dessicated 
coconut 08011100 30% 70% 500 500 500 500 
                                               
24 WTO document G/AG/N/IND/4, 7 March 2011. WT/TPR/S/313/Rev.1 • India 
 
- 45 - 
 
  Description Code In 
quota 
rate Out of 
quota 
(MFN) 
rate Annual quota quantity (in-quota imports) 
(metric tonnes) 
2010-11  2011-12  2012-13 2013-14  
Pepper 0904 zero zero 2,500 2,500 2,500 2,500 
Vanaspati, 
bakery 
shortening and 
margarine 1516, 1517, 
or 1518 zero zero 250,000 250,000 250,000 250,000 
n.a. Not applicable. 
Source: WTO Secretariat, based on WT/LET/440, 4 April 2003; WTO document G/AG/N/IND/5, 
7 March 2011; and Notifications 59/2012 – Customs, 21 November 2012; 78/2011 – Customs, 19 August 2011; 51/2013 – Customs, 20 December 2013; 26/2000 – Customs, 1 March 2000; 2/2007 – Customs, 5 January 2007; 42/2011 – Customs. 
3.34.  In addition to these scheduled TRQs, India has had TRQs in place for rubber (HS 4001.21, 
4001.22 and 4001.29, equivalent to seven lines at the eight-digit level) since 2010; according to the authorities, the TRQs were removed on 1 March 2012. In-quota duties for these products were 
7.5% compared to the current applied MFN rate of the lower of 20% or Rs 30/kg.
25 
3.35.  India last notified its imports under TRQs to the WTO in 2011 for the marketing years 
2003-2004 to 2009-2010.  
3.36.  India also maintains bilateral TRQs under its regional trade agreements. TRQs for imports of 
clothing and tea and also dessicated coconut, pepper and vanaspati are maintained under its FTA with Sri Lanka. Imports of textiles and clothing from Bangladesh under the South Asian Free Trade Area (SAFTA) were subject to TRQs whose quantity was raised from 8 million pieces to 10 million 
in 2011; the TRQ was removed on 9 November 2011.
26 
3.1.8  Preferential tariffs 3.37.  India grants preferences under its reciproc al regional trade agreements and also under the 
duty-free quota-free programme for LDCs. In comp arison with the overall applied MFN tariff of 
13%, average preferential tariffs under its regional  trade agreement range from 0.8% for the least 
developed country members of the SAFTA – Bangla desh, Bhutan, Maldives, Nepal and Afghanistan 
to 13% for MERCOSUR. Preferences granted espe cially to Chile and MERCOSUR as well as 
Thailand, with which India has a framework agreement, are minimal. In its other agreements India provides preferences currently ranging from between 42.8% for Singapore and 88.6% for Sri Lanka and 96.4%, with the share of duty free ta riffs between 8% for The Republic of Korea and 
79.9% for Sri Lanka; LDCs under SAFTA are also given greater preferences, covering 96.4% of the 
tariff, with 99.1% of India's tariff duty free for imports from these partners (Table 3.7). 
Table 3.7 Summary analysis of In dia's preferential tariffs, 2014-15 
 Preferential 
linesa Total WTO agriculture WTO non-agriculture 
Average 
(%) Duty free 
rates (%) Average 
(%) Duty free 
rates (%) Average 
(%) Duty free 
rates (%) (% of all 
tariff lines) 
MFN  13.0 2.7 36.4 4.5 9.5 2.4 
RTAs  
SAFTA 1 73.3 6.9 2.7 15.9 4.5 5.5 2.4 
SAFTA 2 96.4 0.8 99.1 6.2 92.9 0.0 100.0 
ASEAN 85.5 5.2 65.2 23.9 41.6 2.4 68.7 
Philippines 85.2 8.5 3.3 30.0 4.5 5.3 3.1 
APTA 9.8b 12.4 4.4 36.3 4.5 8.8 4.4 
                                               
25 Notification 128/2010 – Customs, on 22 December 2010. The alternate rate (out of quota) was raised 
from the lower of 20% or Rs 20 to the lower of 20% or Rs 30 in 2013 under Notification 51/2013 – Customs, 
dated 20 December 2013. 
26 Notification 51/2008 – Customs, 42/2011 – Customs and 99/2011 – Customs. WT/TPR/S/313/Rev.1 • India 
 
- 46 - 
 
   Preferential 
linesa Total WTO agriculture WTO non-agriculture 
Average 
(%) Duty free 
rates (%) Average 
(%) Duty free 
rates (%) Average 
(%) Duty free 
rates (%) (% of all 
tariff lines) 
Mercosur 3.2 13.0 2.7 36.4 4.5 9.5 2.4 
Chile 2.0 12.9 2.7 36.3 4.5 9.4 2.4 
Japan 79.5 8.8 18.2 30.7 6.0 5.5 20.0 
Korea, Rep. of  77.8 7.7 8.0 28.8 4.5 4.5 8.6 
Malaysia 86.1 5.1 65.2 23.7 41.6 2.4 68.7 
Singapore 42.8 9.6 24.4 33.9 11.3 5.9 26.4 
Sri Lanka 88.6 2.4 79.9 5.6 94.1 1.9 77.8 
Thailand 2.4 12.8 5.1 36.1 5.6 9.3 5.0 
LDCs 94.7 1.9 94.1 13.4 77.1 0.2 96.7 
a The percentage of preferential lines includes only lines on which the rates are lower than the 
corresponding MFN applied rate and fully appl ied at the 8-digit level. The 2014-15 effective 
MFN tariff consists of 11,481tariff lines out of which 305 lines bear a duty free rate. 
b For Bangladesh, the percentage of  preferential lines equals 10.2%. 
Note: LDC: Notification Nos. 08/2014, 56/2012. Preferential Tariffs applied to 31 countries: Cambodia, 
Tanzania, Ethiopia, Mozambique, Samoa, Malawi, Lao PDR, Uganda, Rwanda, Madagascar, Benin, 
Myanmar, Burkina Faso, Eritrea, Gambia, Sudan,  Senegal, Lesotho, Mali, Somalia, Maldives, 
Bangladesh, Burundi, East Timor, Zambia, Central African Republic, Afghanis tan, Liberia, Comoros, 
Yemen and Haiti. 
 SAFTA 1: Notification No. 68/2012. Applied to Pakistan and Sri Lanka.  SAFTA 2: Notification No. 99/2011. Applied to Bangladesh, Bhutan, Maldives, Nepal, Afghanistan 
(LDCs countries). 
 APTA: Notification Nos. 134/2006, 89/2006. Applie d to Bangladesh, China, Rep. of Korea, and 
Sri Lanka. 
 Mercosur: Notification Nos. 121/2011 and 57/2009.  Chile: Notification No. 116/2011.  Japan: Notification Nos. 36/2014 and 09/2014.  Korea, Rep. of: Notification Nos. 35/2014 and 151/2009.  Malaysia: Notification No. 37/2014.  Singapore: Notification Nos. 01/2015, 35/2012, 34/2012, 33/2012, and 69/2009.  Sri Lanka: Notification Nos. 121/2011, 52/2008, 3/2007, 2/2007, 128/2006, 57/2005, 43/2003, 
126/2002, 20/2001, and 26/2000. 
 Thailand: Notification Nos. 38/201, 115/2011, 131/2006, 86/2006, and 285/2004.  ASEAN: Notification No. 38/2014. Preferentials applied to Brunei, Malaysia, Singapore, Thailand, 
Viet Nam, Myanmar, Indonesia, Lao PDR, and the Philippines. 
Source: WTO Secretariat calculations, based on inform ation provided by the Indian authorities and CBEC 
notifications. 
3.38.  In comparison, under the Duty Free Tariff Pr eference (DFTP) scheme, India grants unilateral 
preferences to 31 LDCs, with 94.7% of the tariff  subject to preferential reductions, with the 
resulting overall average tariff applied to imports from these LDCs at 1.9%. 
3.1.9  Import prohibitions, restrictions, and licensing  
3.39.  Import restrictions may be imposed under Section 3 of the Foreign Trade (Development and 
Regulation) Act 1992 and through notifications in the Official Gazette , under Section 11 of the 
Customs Act 1962, declaring the importation or exportation of any good as prohibited or 
restricted. Import restrictions may be imposed for security, self-sufficiency, balance-of-payments, health, and moral reasons. 
3.1.9.1  Import prohibitions 
3.40.  Import prohibitions are mainly for health and safety reasons and include a range of products 
such as meat and offal of most wild animals, animal fats, and ivory and ivory powder. During the WT/TPR/S/313/Rev.1 • India 
 
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  period under review, fatty liver (foie gras) (under HS02074300) was added to the list of goods 
subject to import prohibition (on 3 July 2014) in view of animal welfare (Table 3.8).27 
3.41.  Imports of some products from the Democrat ic People's Republic of Korea, Iran, Iraq, and 
Somalia are prohibited under UN resolutions.28 Imports of rough diamonds from Venezuela are 
prohibited. For sanitary reasons, India has continued to ban imports of milk and milk products 
from China.29  
Table 3.8 Import prohibitions, 2014 
Exim Code Item description 
0207 43 00 Fatty livers, fresh or chilled 
0208 90 10 Other meat and edible meat offal, fre sh, chilled or frozen of wild animals 
0209 10 00  Of pigs  
0209 90 00 Other 
0410 00 10 Edible products of animal origin, not elsewhere specified or included of wild animals 
0504 00 31 Guts of other animals for natura l food casings of wild animals 
0504 00 41 Guts other than for natura l food castings of wild animals 
0504 00 51 Bladders & stomachs  of wild animals 
0505 10 10 Feathers of a kind used for stuffing; down of wild birds 
0505 90 21 Other feather (excludi ng for stuffing purpose): of wild birds 
0505 90 31 Powder and waste of feathers or parts of feathers: 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 & 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, whether or not dried; 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 - of wildlife  
1501 10 10  Lard 
1501 20 00 Other pig fat 
1501 90 00 Other 
1502 10 10  Mutton tallow  
1502 10 90 Other 
1502 90 10  Unrendered fats  
1502 90 20 Rendered fats or solvent extraction facts 
1502 90 90 Other 
1502 00 30  Rendered or solvent extraction fats  
1502 00 90 Other fats of bovine animals, sheep or goats, other than those of Heading 1503 
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 fract ions, of fish or marine mammal s, whether or not refined, but 
not chemically modified 
1504 20 30 Sperm oil 
1504 20 90 Other fats and oils and their fractio ns of fish, other than liver oils 
1504 30 00 Fats and oils and their fractions of marine mammals 
1506 00 10 Neats foot oil and fats from bone or waste 
1506 00 90 Other animal fats and oils and their fractions, whether or not refined, but 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 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 this Chapter, not elsewhere specified or included -Other 
                                               
27 Department of Commerce, Notification No. 87 (RE-2013)/2009-2014, 3 July 2014. 
28 Department of Commerce (2012), Foreign Trade Policy with effect from 5 June 2012.  
29 DFGT Notification No. 84 (RE-2013)/2009-2014, 23 June 2014. WT/TPR/S/313/Rev.1 • India 
 
- 48 - 
 
  Exim Code Item description 
1522 00 10 Degrasa 
1522 00 20 Soap stocks 
1522 00 90 Other 
3507 10 11 Microbial rennet: animal rennet 
3507 10 19 Other enzymes; prepared enzymes no t elsewhere specified or included 
3507 10 91 Animal rennet 
3507 10 99 Other animal rennet 
4302 19 40 Tiger-cat skins 
4303 10 10 Articles of apparel and clothing accessories of wild animals covered under Wildlife Protection 
Act, 1972 
4303 90 10 Other articles of fur skin of wild animals covered under Wildlife Protection Act, 1972 
8517 Telephone sets, including telephones for cellul ar networks or for other wireless networks; 
other apparatus for the transmissi on or reception of voice, im ages or other data, including 
apparatus for communication in a wired or wire less 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 
a Residues resulting from the treatment of fatty  substances or animal or vegetable waxes. 
Source: Department of Commerce (2010), Schedule 1: Import Policy, Foreign Trade Policy 2009-2014, 
incorporating Annual Supplement, 23 August. Viewed at: http://dgft.gov.in ; and DGFT online 
information, "Notifications". Viewed at: http://dgft.gov.in , and information provided by the Indian 
authorities. 
3.1.9.2  Import licensing and restrictions 
3.42.  India applies import licensing requirements in accordance with the Foreign Trade 
(Development and Regulation) Act 1992 and Foreign Trade (Regulation) Rules 1993. Licensing 
requirements may be eliminated without legislative approval. 
3.43.  The Import Policy Schedule list items that ar e restricted and items that are restricted with a 
condition. Restricted items require a specific import licence issued by the DGFT. Restricted items 
subject to conditions require import permits (e.g. sanitary and phytosanitary permits) in addition to the specific import licence. All licence requirements are non-automatic. Under the current 
Import Policy Schedule (Foreign Trade Policy 2009-14), including supplements, some 445 tariff 
lines at the HS eight-digit level are subject to im port restrictions. They represent around 3.9% of 
total tariff lines. Some 347 tariff lines are restricted while some 98 are restricted subject to conditions (Chart 3.3). 
3.44.  All importers holding a valid IEC number may apply for a licence. Applications for import 
licences are made to the DGFT or to the regional licensing authority of the DGFT.
30 The 
requirements for filing applications for import  licences are published in the Handbook of 
Procedures.31  
3.45.  Licences are valid for 18 months and may be revalidated for six months by the licensing 
authority on merit; the imported material must be used by the importer and cannot be sold.  
3 . 4 6 .   T h e  D G F T  o r  a n  a u t h o r i z e d  o f f i c e  m a y ,  i n  w r i t i n g ,  r e f u s e  t o  g r a n t ,  r e n e w ,  o r  s u s p e n d  a  
licence to import (or export) on specific grounds.32  
3.47.  Licence application fees vary according to the c.i.f. value of imports.33 Fees are not 
refundable. The goods imported under a licence ca nnot be exported without the written permission 
of the DGFT.  
                                               
30 The licensing authority may refer the application to the EXIM Facilitation Committee, which consists of 
technical authorities, for assistance to approve a licence. 
31 Department of Commerce (2012). 
32 See Box III.1, WTO (2011), for details. 
33 As a general rule, fees are Rs 2 per shipment of a c.i.f. value of Rs 1,000, subject to a minimum fee 
of Rs 200 and a maximum of Rs 150,000; for electronically-filed applications, the fee was Rs 1 per shipment 
for a c.i.f. value of Rs 1,000 with a minimum of Rs 100 and maximum of Rs 75,000. Appendix 21 B to the Import Policy. Viewed at:  http://dgft.gov.in/exim/2000/download/Appe&ANF/21B.pdf . WT/TPR/S/313/Rev.1 • India 
 
- 49 - 
 
  3.48.  On 28 November 2014, India eliminated import restrictions on gold (implemented in June 
and July 2013), which involved a requirement that 20% of imported gold be held in a bonded 
warehouse for export purposes (20:80 scheme), and that gold imports be allowed only to meet the genuine needs of the exporters of gold jewellery.
34 
Chart 3.3 Import licensing by HS Section, 2014-15 
% of HS Section 
051015202530
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Total80
01 Live animals and prod.        
02 Vegetable products
03 Fats and oils      04 Prepared food, etc.
05 Mineral products
06 Chemicals and prod.07 Plastic and rubber
08 Hides and skins
09 Wood and articles10 Pulp, paper, etc.
11 Textiles and articles
12 Footwear, headgear13 Articles of stones
14 Precious stones, etc.
15 Base metals and prod.16 Machinery
17 Transport equipment
18 Precision instruments19 Arms and ammunition
20 Miscellaneous manuf.
21 Works of art, etc.75Licensing without condition Licensing under condition
 
Source: WTO Secretariat calculations, based on online  information taken from the Directorate of Foreign 
Trade, Ministry of Commerce and In dustry, Government of India.  
3.49.  Imports of certain goods such as cashew kernel (HS 08013210 and 08013230)35, areca nuts 
(HS 0802 80)), and marbles (HS 25151100 and 25151210 – from 20 November 2014)36 are 
subject to import restrictions depending on their import price (Table 3.9). These imports are 
restricted (i.e. subject to a licence) when the c.i.f. price is lower than the minimum import price.  
Table 3.9 Items whose import is free, subject to minimum import price, 2014-15  
HS code Description  Minimum import price 
0801.32.10 Cashew kernel, broken Rs 288/kg 
0801.32.20 Cashew kernel, whole Rs 400/kg 
0802.90.11 Betel nuts: whole Rs 110/kg 
0802.90.12 Betel nuts: split Rs 110/kg 
0802.90.13 Betel nuts: ground Rs 110/kg 
0802.90.19 Betel nuts: other than above Rs 110/kg 
2515.11.00 Crude or roughly trimmed marbles Import policy of rough marbles and 
travertine blocks for the year 2014-15 has been notified with a quota of 0.8 million tonne and a minimum import price of US$325 per tonne. 2515.12.10 Marbles - merely cut, by sawing or otherwise, into 
blocks of a rectangular (including square) shape 
4012.11.00 
 Retreaded tyres, of a ki nd used on motor cars, 
lorries, bigger size US$175/unit 
4012.12.00 Retreaded tyres: of a kind used on buses or 
lorries, vehicles and ligh t commercial vehicles US $175/unit 
4012.13.00 Retreaded tyres: of a kind used on aircraft US $175/unit  
4012.20.10 Used pneumatic tyres: fo r buses, lorries, and 
earth moving equipment US$175/unit 
                                               
34 Reserve Bank of India online information. Viewed at: 
http://rbi.org.in/scripts/NotificationUser.aspx?Id=9370&Mode=0. 
35 DGFT Notification No. 53 (RE-2013)/2009-2014. 
36 DGFT Notification No. 99 (RE-2013)/2009-2014, 20 November 2014. WT/TPR/S/313/Rev.1 • India 
 
- 50 - 
 
  HS code Description  Minimum import price 
4012.20.20 Used pneumatic tyres: for passenger automobile 
vehicles US$25/unit 
6802.10.00 
6802.21.10 
6802.21.20 
6802.21.90 
6802.91.00 
6802.92.00 Tiles, cubes, and similar articles 
Marble tiles 
Marble tiles  
Marble monumental or building stone 
Marble, travertine , and alabaster 
Other calcareous stone Import permitted freely (maximum 
thickness of slab 20mm) provided c.i.f. 
value is US$60 and above per square 
metre 
6802.23.10 
6802.23.90 6802.29.00 6802.93.00 Granite blocks or tiles 
Other Other stone Granite Import is free if c.i.f. value is US$80 and 
above per square metre 
6810.11.10 
6810.11.90 
6810.19.10 
6810.19.90 
6810.91.00 
 
6810.99.10 
6810.99.90 Cement bricks 
Other building bl ocks and bricks 
Cement tiles for mosaic 
Other articles of cement 
Articles of cement: prefabricated structural 
components for building or civil engineering 
Concrete boulder 
Other articles of cement US$50/kg 
Source : Department of Commerce (2010), Schedule 1: Import Policy, Foreign Trade Policy 2009-2014, 
incorporating Annual Supplement, 23 August. Viewed at: http://dgft.gov.in/  and information 
provided by the Indian authorities.  
3.1.9.3  Import surveillance  
3.50.  India does not maintain any mechanism to monitor imports of items that are considered to 
be sensitive; such a mechanism was discontinued by April 2012.37  
3.1.9.4  Import quotas 3.51.  India maintains import quotas for marble and similar stones (HS 25151100 and 
25151210)
38 and for sandalwood (HS 44039922). Quotas are established annually and 
administered on an MFN basis. There is no maximum limit to be allocated per applicant. 
Applications are examined upon receipt and assessed according to the criteria stated in the 
notifications and circulars issued by DGFT on a yearly basis.  
3.52.  India may impose quantitative restrictions by notification in the Gazette of India on imports 
of goods that are deemed to cause serious injury to domestic industry, as a result of a safeguard 
investigation (section 3.1.11.2).39 The authorities indicate that there were no such instances 
during 2011-14.  
3.1.9.5  Other import restrictions  3.53.  Certain items, including new motor vehicles  and second-hand cars (less than three- years 
old
40) must be imported through specified ports (C hennai, Kolkata, and Mumbai for new vehicles 
and Mumbai for second-hand cars). Imported cars must meet certain technical regulations.41  
                                               
37 At the end of March 2012, there were 415 sensitive items (based on HS eight-digit classifications). 
These included milk and milk produc ts, fruits and vegetables, pulses, poultry, tea and coffee, spices, food 
grains, edible oils, cotton and silk, marble and granite,  automobiles, parts and acce ssories of motor vehicles, 
products produced by small-scale industries, and other pr oducts (bamboos, cocoa, copra, and sugar). 
38 DGFT Notifications No. 99(RE-2013)/2009-2014, 20 November 2014. Imports of marble (classified 
under HS 25 and 68) from Bhutan are subject to a quota of 5,882 tonnes per financial year. Monitoring and allocation of the quota is done by the Government of Bhutan. (Schedule I: Import Policy, Foreign Trade Policy 
2009-2014, incorporating Annual supplement, 5 June 2012. Viewed at: http://dgft.gov.in/ ). 
39 WTO document G/SG/N/1/IND/3, 23 September 2011. 
40 Imports of second-hand cars over  three-years old are prohibited.  
41 The details are specified in Schedule 1 of Import Policy 2012. Viewed at: 
http://dgftcom.nic.in//licasp/itchs2012/87foot.pdf . WT/TPR/S/313/Rev.1 • India 
 
- 51 - 
 
  3.1.10  State trading 
3.54.   India maintains state trading for certain agricultural goods, urea, and petroleum oils under 
the provisions of the Foreign Trade Policy 2009-14 (paragraph 2.11).42  
3.55.  On 29 September 2014, exclusive rights accorded to import 11 agricultural products 
(i.e. meslin, rye, oats, maize, grain sorghum, buck wheat, millet and canary seeds, jawar, bajra, 
ragi, and other cereals) were removed from the Food Corporation of India.43 India's last 
notification to the WTO on state trading was made in November 2012.44  
3.56.  India's reason and purpose for introducing and maintaining STEs has not changed since its 
previous Review.45  
Table 3.10 Value of imports subj ect to state trading, 2011-14 
State-trading 
entreprises Product HS code Import value (US$ million) 
2011-12 2012-13 2013-14 
Food Corporation of 
India (FCI) (no longer an STE as at 29 September 2014)  Wheat 
   1001.10.90, 
1001.90.20, 1001.90.39  Nil  Nil Nil 
 Rye 1002.00.90 Nil Nil Nil 
 Oats 1004.00.90 Nil Nil Nil 
 Rice 
 1006.10.90, 
1006.20.00, 
1006.30.10, 
1006.30.20, 
1006.30.90, 
1006.40.00 Nil  Nil Nil 
 Grain sorghum 1007.00.90 Nil Nil Nil 
 Buckwheat, millet, 
canary seed, 
jawar, bajra, ragi, 
other cereals 1008.10.90, 
1008.20.19, 
1008.20.29, 
1008.20.39, 
1008.30.90, 
1008.90.90 .. .. .. 
State-Trading 
Corporation (STC)  Coconut oil (copra) and 
its fractions 1203.00.00,  
1513.11.00, 1513.19.00 7.05 0.80 0.67 
STC, Indian Potash 
Ltd., Minerals and 
Metals Trading 
Corporation Urea 3102.10.00 2,688.11 2,434.84 1,187.09 
                                               
42 Under the Foreign Trade Policy, all STEs granted special privileges to import (export) must make such 
purchases (sales) in accordance with commercial cons iderations including price, quality, availability, 
marketability, and transportation. STE must ac t in a non-discriminatory manner (WTO document 
WT/TPR/M/249/Add.1, 14 October 2011). 
43 DGFT Notification No. 93 (RE-2013)/2009-2014. 
44 WTO document G/STR/N/14/IND, 30 November 2012. 
45 State trading of imports has the stated purpose of ensuring, inter alia : a "fair" return to farmers as 
well as food security; the supply of fertilizer to fa rmers; and that the domestic  support price system for 
kerosene and LPG are properly implemented through th e importation by a single operator. The Government 
procures food-grains and certain sele ct agricultural items from farmers at a remunerative minimum support 
price with a view to ensuring India's small and marg inal farmers a fair return on their investment. The 
procured food-grains and agricultural items are then supp lied through the public distri bution system at variable 
prices, some of it at market prices  and some at subsidized rates for th ose living below the poverty line. The 
STEs domestically procur e and import, depending on the market supply situation and the demand. Such 
operations by the STEs are deemed to enable effective monitoring of the supply situation which, in turn, can 
ensure that concerns relating to food  security are appropriately addressed.  In the case of petroleum products, 
imports/exports are undertaken at market determined prices. Regarding domestic pricing, a system of 
domestic support for kerosene and LPG (u sed as domestic fuel ), is in place. In the co ntext of fertilizers, state 
trading is intended to properly implement and manage supplies to the farmers.  WT/TPR/S/313/Rev.1 • India 
 
- 52 - 
 
  State-trading 
entreprises Product HS code Import value (US$ million) 
2011-12 2012-13 2013-14 
Indian Oil Corporation 
Ltd. (IOCL); Bharat Petroleum Corporation Ltd. (BPCL); Hindustan Petroleum Corporation Ltd. (HPCL)  Motor spirit 
 2710.11.11,  
2710.12.12, 2710.12.13,  2710.12.19   407.63 170.47 287.34 
 Aviation turbine fuel 2710.19.20 51.37  Nil Nil 
 Superior kerosene oil 2710.19.10 331.25a Nil Nil 
 High speed diesel 2710.19.30 1,021.29 445.29 Nil 
Indian Oil Corporation  Natural gasoline liquid 
and others 2710.11.20,  
2710.11.90 Nil Nil Nil 
 Light diesel oil 2710.19.40 Nil Nil Nil 
.. Not available. 
a In addition, HPCL imported 249,370 tonnes of superior kerosene oil in 2011-12 (the total value of 
imports was not available). 
Source: WTO document G/STR/N/14/IND, 30 November 2012; and information provided by the Indian 
authorities. 
3.1.11  Anti-dumping, counterva iling, and safeguard measures 
3.1.11.1  Anti-dumping and countervailing measures 
3.57.  As at the time of the previous review, Indi a is one of the most active users of anti-dumping 
measures among WTO Members; between 2011 and 2014, India initiated 82 anti-dumping investigations against 23 trading partners (Chart  3.4). The authorities state that anti-dumping 
investigations are initiated and conducted in accordance with the established rules under relevant 
legislation.  
3.58.  India's anti-dumping legislation is contained in the Customs Tariff Act 1975, as amended by 
the Customs Tariff (Amendment) Act 1995, and the Customs Tariff (Identification, Assessment and 
Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995.
46  
3.59.  During the period under review, signific ant changes were made to India's anti-dumping 
legislation. These changes include: (i) adjustments to the rules governing mid-term and sunset reviews; (ii) changes to the definition of  domestic industry to bring in flexibility
47; (iii) new rules 
defining situations that are considered to represent the circumvention of anti-dumping duties, and 
providing for anti-circumvention investigations to address such circumvention; and (iv) elaboration 
of a refund procedure applicable where an importer  considers that the amount the duty paid is in 
excess of actual margin of dumping. The authorit ies state that these changes were adopted mainly 
to bring clarity and to align them with provisions of the WTO Agreement. These involved 
amendments to the Customs Tariff (Identificatio n, Assessment and Collection of Anti-Dumping 
Duty on Dumped Articles and for Determination of Injury) Rules 1995 in March 201148 and in 
January 2012.49 
3.60.  On 1 March 2011, rules regarding the principles for determination of non-injurious price as 
well as mid-term and sunset reviews were notified.50 On non-injurious price, the rules stipulate, 
inter alia,  that to work out the non-injurious price, utilisation of raw materials, utilities, and 
production capacities by the constituents of domest ic industry over a certain period of time must 
be considered, and the cost of production must not include any extra-ordinary or non-recurring expenses and salary and wages paid per employee and per month must be reconciled with the 
financial and cost records of the company. On mi d-term and sunset reviews, the rules stipulate 
that: (1) the authority must review the need for th e continued imposition of anti-dumping duty on 
                                               
46 WTO documents G/ADP/N/1/IND/1, 15 August 1995; G/ADP/N/1/IND/2/Corr.1, 9 January 1996; and 
G/ADP/N/1/IND/2/Suppl.1, 23 December 1996. 
47 Customs Notification (non-tariff) No. 86/2011, 1 December 2011. 
48 WTO document G/ADP/N/1/IND/3, 19 October 2011. 
49 WTO document G/ADP/N/1/IND/4, 1 March 2012. 
50 Customs Notification (non-tariff) No. 15/2011, 1 March 2011. WT/TPR/S/313/Rev.1 • India 
 
- 53 - 
 
  its own initiative or upon request by any interested party who submits positive information 
substantiating the need for such review, and a reasonable period of time has elapsed since the imposition of the definitive anti-dumping du ty and upon such review, the authority must 
recommend to the central Government for its withdrawal, where it comes to a conclusion that the 
injury to the domestic industry is not likely to continue or recur, if the anti-dumping duty is 
removed or varied and is therefore no longer warranted; and (2) any definitive anti-dumping duty must be effective for a period not exceeding five years from the date of its imposition, unless the 
designated authority comes to a conclusion on a revi ew initiated before the end of that period that 
the expiry of the anti-dumping duty is likely to lead to continuation or recurrence of dumping and 
injury to the domestic industry. 
Chart 3.4 Anti-dumping measures, 2011 to June 2014 
(Number of cases initiated and measures in force) 
0255075100125150175200225250
2011 2012 2013 2014 (up to June)
OtherIndonesiaIsraelJapanMexicoTurkeyUnited Arab EmiratesSaudi ArabiaRussian FederationMalaysiaUnited StatesThailandEUChinese TaipeiKorea Rep. OfChina
0 5 10 15 20 25Base metals
and  products 
thereof
8.0%
Chemicals and products thereof
49.4%Wood and articles 
thereof   4.6%Machinery and
mechanical/electrical 
appliances  14.9%Initiations by product Number of initiations by origin 
Plastics/rubber
and articles 
thereof   9.2%Textiles and their 
articles  1.1%Articles of
stones, glassware
9.2%Cases initiated Measures in force  (as at end-period)
Vehicles and parts
thereof  3.4%
 
Source: Notifications to the WTO. 
3.61.  On 19 January 2012, rules regarding the dete rmination of the amount paid in excess of the 
actual margin of dumping and circumvention of anti-dumping duty were issued.51 The rules 
stipulate inter alia  that if an importer considers that he/she has paid any anti-dumping duty 
imposed in excess of the actual margin of dumping, he/she may file an application for 
                                               
51 Customs Notification (non-tariff) No. 6/2012, 19 January 2012. WT/TPR/S/313/Rev.1 • India 
 
- 54 - 
 
  determination of the actual margin of dumping before the authority; various specific procedural 
rules and principles concerning the calculation of such margin are also stipulated. The rules also provide definitions of circumvention of anti-dumping duty. In addition, rules regarding refund of anti-dumping duties paid in excess of actual margin of dumping were issued on the same date. 
Under the rules, an importer who has paid any anti-dumping duty in excess of the actual margin of 
dumping in relation to any imported goods may submit an application to the authorities to claim refund. The application will be scrutinized by the authorities for a refund, which must be made 
within 90 days of the receipt of the application if the authorities find the application satisfactory.
52 
3.62.  Under Article 5 of the Customs Tariff Rules, anti-dumping investigations can be initiated by 
the Directorate General of Anti-Dumping and Allied Duties (DGAD), in the Department of Commerce, upon a written application by or on behalf of domestic industry, or on its own initiative 
if there is justification to launch an investigation. The authorities state that, during the review 
period, no anti-dumping investigations were initiated by the DGAD suo moto ; all investigations 
were initiated based on applications by or on behalf of domestic industries. An application is 
scrutinized by the DGAD to ensure it is adequately documented and provides sufficient evidence 
for initiation. If the evidence is not adequate, a "deficiency letter" is issued. For an investigation to be initiated the petitioners must account for at le ast 25% of total domestic production of the like 
article; and the domestic producers expressly supporting the application must account for more 
than 50% of the total production of the like arti cle by those expressly supporting and opposing the 
application. Dumping per se  is not actionable. For a petition to proceed, the DGAD must examine 
the accuracy and adequacy of the evidence pr ovided and determine that there is sufficient 
evidence of dumping, injury, and causal link between the dumped imports and alleged injury, 
before initiating an investigation. In addition, other injury causes have to be investigated so that they are not attributed to dumping.  
3.63.  The DGAD informs the government of the ex porting country, and issues a public notice with 
details of the initiation and the time-limits for interested parties to provide comments. The public notice is usually issued within 45 days of receipt of documentation, and the time limit for 
interested parties to express their views is a further 40 days. A preliminary finding regarding 
export price, normal value, and margin of dumping is normally issued in a public notice within 150 days of initiation, following which the Departme nt of Revenue in the Ministry of Finance may 
decide to impose a provisional duty not exceeding the margin of dumping. The provisional duty 
may be imposed after the expiry of 60 days from the date of initiation of the investigation. It may 
remain in force for a period not exceeding six months, extendable to nine months upon the 
request of exporters representing a significant percentage of trade. The final determination is 
normally made within 150 days of the date of th e preliminary determination, and within one year 
from the initiation of the investigation. This period may be extended by the central Government by a maximum of six months under special circumstances, which include the complexity of the case 
and judicial intervention by courts.  
3.64.  The dumping margin for each exporter or producer is determined by the DGAD. Following 
this, the Department of Revenue may, within three months of publication of the final findings, impose the anti-dumping duty by notifying it in the Official Gazette . Under the law, the 
Government is obliged to restrict the anti-dumping  duty to the lower of the margin of dumping or 
the margin of injury.  
3.65.  Indian legislation provides for levying anti-d umping duty retrospectively, where it is deemed 
that there is a history of dumping that caused the injury or when the injury is caused by massive 
dumping, in a relatively short time. The retrospective application may not go beyond 90 days of the date of imposition of a provisional duty. No retrospective application prior to the date of 
initiation of an investigation is allowed. The authorities state that no retrospective application of 
duties took place during the period under review.  
3.66.  An investigation may be terminated by the DGAD at any time if: there is a written request 
from or on behalf of the domestic industry
53; there is insufficient evidence of dumping or injury; 
                                               
52 Customs Notification (non-tariff), No. 5/2012, 19 January 2012. 
53 Rule 14 of the Customs Tariff (Identification, As sessment and Collection of Antidumping Duty on 
Dumped Articles and for Determination of Injury) Rules,  1995 contains provisions regarding termination of 
anti-dumping investigations. Department of  Commerce online information. Viewed at: 
http://commerce.nic.in/traderemedies/compendium/comp2.pdf . WT/TPR/S/313/Rev.1 • India 
 
- 55 - 
 
  the injury is negligible; the margin of dumping is less than 2% of the export price; or the volume 
of the dumped imports is less than 3% of im ports of the like product, unless the countries 
accounting for less than 3% individually account for over 7% collectively of imports of the like product. 
3.67.  Rules to initiate and conduct a sunset review (SSR) are contained in Trade Notice 
No. 1/2008 of 10 March 2008 as modified by Customs (non-tariff) Notification No. 15/2011 of 1 March 2011. An SSR may be initiated upon petition of the domestic industry or may be self-
initiated by the DGAD. Under the new rules of 1 March 2011, an SSR must be initiated within a 
"reasonable period of time" prior to the expiry of the five-year period from the date of its 
imposition. In accordance with trade notice No . 2/2011 of 6 June 2011, the domestic industry 
m u s t  s u b m i t  a n  a p p l i c a t i o n  o n  t h e  n e e d  t o  k e e p  t h e  a n t i - d u m p i n g  m e a s u r e s  i n  f o r c e ;  t h e  
application must be received by the DGAD at least 90 days before the date of expiry of the 
anti-dumping measures. The DGAD may then init iate the SSR on the basis of the domestic 
industry's application. If the DGAD decides to self-initiate the investigation, it must issue a 
questionnaire to the domestic industry; comments must be received by the DGAD within the 
following 40 days substantiating the need for the continued imposition of the anti-dumping 
measures. After receipt of the questionnaire, th e DGAD may issue a letter to other interested 
parties regarding the need to continue or otherw ise the AD measures; comments must be received 
by the DGAD within 40 days of the date of issuance  of the letter. If there is sufficient ground for 
continuation of the anti-dumping measures (with or without modification) after receipt of information from various parties, the DGAD may recommend this to the central Government. The 
investigation is closed if there is insufficient ground for continuation of the measure in force. The 
new procedures superseded all previous instructions or trade notices issued by the DGAD with regard to sunset reviews.  
3.68.  The DGAD conducts mid-term reviews in a ccordance with Section 9A of the Customs Tariff 
Act and Rule 23 of the Customs Tariff (Identific ation, Assessment and Collection of Anti-Dumping 
Duty on Dumped Articles and for Determination of Injury) Rules, 1995, as modified by Customs 
(non-tariff) Notification No. 15/2011 of 1 March 2011, to assess the need for continued imposition 
of anti-dumping duties. These reviews may be self-initiated or on request from an interested party who submits positive information substantiating the need for such review, and a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty. The review follows 
the same procedures prescribed for an investigation to the extent that they are applicable. 
An application for initiation of a mid-term review of an anti-dumping duty in force may be made to the DGAD by an interested party including exporters, importers, domestic producers, trade 
representative bodies, firms or institutions, whic h are representative of the domestic industry.
54 
The applicant must submit positive information substantiating the need for a review. The application for a mid-term review may be accepted by the DGAD provided that a reasonable period 
of time, i.e. at least one year, has elapsed since the imposition of the definitive anti-dumping duty. 
However, the DGAD may review the need for the continued im position of the duty, where 
warranted, on its own initiative. 
3.69.  The DGAD is required to carry out a revi ew for determining margins of dumping for any new 
exporter or producer from a country that is subj ect to anti-dumping, provided that exporters or 
producers are new and not related to any of the other exporters. 
3.70.  The authorities may suspend or terminate an  investigation if the exporter concerned accepts 
an undertaking to revise prices in order to remove  the dumping or the injurious effect of dumping. 
No undertaking is accepted before a preliminary determination is made. The authorities indicate that no request for price undertaking was accepted by Designated Authority during the period 
under review.  
3.71.  Anti-dumping duty is not payable on products imported by units in special economic zones 
(SEZs) or export-oriented units (EOUs), or on products imported under the Advance Authorization Scheme. The final anti-dumping duty paid on impo rted goods used in the manufacture of export 
goods may be refunded as brand rate of duty dr awback in accordance with the drawback rules.
55 
                                               
54 Department of Commerce, Trade Notice No. 1/2010, 17 May 2010. 
55 WTO (2011), Chapter III(2)(viii). WT/TPR/S/313/Rev.1 • India 
 
- 56 - 
 
  3.72.  There has been no change in India's legislation regarding countervailing measures since its 
previous Review. Countervailing measures may be imposed under the Customs Tariff Act 1975 (Part 9) and the Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules 1995. Investigations can be initiated 
only after an application is submitted before th e authority, and in the event the authority finds 
prima facie  evidence of subsidy, injury and a causal link between the subsidized imports and 
alleged injury to the domestic industry. 
3.73.  Appeals against anti-dumping and countervailing measures imposed by the central 
Government can be made under Chapter XV (Section 129) of the Customs Act 1962 to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). To date, 126 appeals have been filed against anti-dumping measures imposed by the Government. 
3.74.  As at 31 December 2014, the average length  of an anti-dumping measure applied by India 
was 73.3 months (out of 208 definitive measures in force). 
3.75.  Between 2011 and 2014, 14 mid-term review s and 55 sunset reviews were initiated. Out of 
the 14 mid-term review investigations, measures were eliminated in three cases, measures were 
re-imposed in nine cases, and measures are still under investigation in two cases. Out of the 55 sunset reviews, measures were eliminated in 5 cases, measures were re-imposed in 24 cases, 
measures are still under investigation in 23 cases, and imposition of measures recommended is 
awaited in three cases.  
3.76.  No definitive countervailing measure is currently in place (December 2014). During the 
period under review, one countervailing investigation was initiated on casting of wind operated 
electricity generators from China.
56 
3.1.11.2  Safeguards  3.77.  Since its previous Review, the main chan ges brought into India's legislation regarding 
safeguard measures included clarification concerning the application of safeguard duties when 
goods with injurious prices are brought into the domestic area from SEZs or EOUs.
57  
3.78.  Safeguard legislation is contained in Section 8B of the Customs Tariff Act 1975. The 
Customs Tariff (Identification and Assessment of Safeguard Duty) Rules 1997 and the Customs 
Tariff (Transitional Products Specific Safeguard Duty) Rules 2002 describe the procedures for the application of safeguard measures.  
3.79.  The Director General (Safeguards) in the Department of Revenue is responsible for hearing 
the petitions and conducting investigations on safeguards.
58 A request for a safeguard 
investigation must be made in writing to the Director General, by or on behalf of the domestic industry. The Director General may also self-initiate an investigation upon information received 
from any Commissioner of Customs. If the safegu ard measures are requested to be imposed for 
more than a year, details of efforts made or planned in order to adjust positively to import competition, including details of progressive liberalization, must be provided, under the Customs 
Tariff (Identification and Assessment of Safeguard Duty) Rules 1997. Thereafter, the Director 
General may initiate an investigation to determine the existence of serious injury or threat thereof to the domestic industry, caused by the import of an article in such increased quantities, absolute or relative to domestic production. A safeguard investigation must be completed and notified 
publicly within eight months of initiation of the investigation (or within the period allowed by the 
central Government). Recommendations of the Dire ctor General (Safeguards) are examined by an 
inter-ministerial body (i.e. Standing Board on Safeguards) chaired by the Commerce Secretary. 
The proceedings of the Standing Board on Safegu ards are not open to the public. Its views are 
                                               
56 WTO document G/SCM/N/274/IND, 10 September 2014. 
57 The Finance (No. 2) Bill, 2014. Viewed at: http://indiabudget.nic.in/ub2014-15/fb/bill1.pdf . The 
amendment was made with a view, inter alia,  to clarifying that safeguard duties generally do not apply to 
articles imported by a 100% EOU or a unit in a special economic zone; however, if goods imported are either brought into the domestic tariff area or used in the manufacture of goods brought into the domestic tariff, 
safeguard duties apply. 
58 The Director General is also responsible for ca rrying out recommendations under the Indo-Singapore 
Trade Agreement (Safeguard Measures) Rules 2009. WT/TPR/S/313/Rev.1 • India 
 
- 57 - 
 
  placed before the Finance Minister for approval in respect of safeguard duties and before the 
Commerce Minister for imposition of quantitative restrictions. If the central Government, after conducting a safeguard investigation, is satisfied that any article is imported into India in such increased quantities and under such conditions as to cause or threaten to cause serious injury to 
domestic industry, it may, by notification in the Official Gazette , impose a safeguard duty on that 
article. The central Government may exempt any article from payment of the whole or part of the safeguard duty upon notification in the Official Gazette . The notification must include the article 
exempted, the quantity exempted, and the article's origin. Matters related to quantitative 
restrictions are conducted by the authorized office r in the DGFT in accordance with the Safeguard 
Measures (Quantitative Restrictions) Rules 2012.
59  
3.80.  If a request is made for provisional sa feguard measures, full and detailed information 
regarding the existence of critical circumstances and how a delay in applying the measures would 
cause damage difficult to repair needs to be considered. The Director General may record preliminary findings in such cases and issue a public notice. These preliminary findings are placed 
before the central Government through the Standi ng Board on Safeguards. Provisional measures 
may be imposed by the central Government for up to 200 days. 
3.81.  The duty is levied only during the period necessary to prevent or remedy serious injury and 
to facilitate positive adjustment. It ceases to have  effect four years after the date of imposition, or 
for a lesser time-period as recommended. However, if the central Government is of the opinion that the domestic industry has taken measures to adjust to the injury or threat thereof and that the safeguard duty remains necessary, it may extend the period of imposition, up to a maximum 
of ten years from first imposition of the duty. A safeguard measure in place for more than one 
year must be liberalized progressively at regular intervals. 
3.82.  In accordance with the Foreign Trade (Development and Regulation) Amendment Act 2010 
(No. 25 of 2010), safeguard measures can take the form of duty surcharges or quantitative 
restrictions.
60 Such quantitative restrictions may not be  applied on imports of goods originating 
from a developing country if the share of imports does not exceed 3%, or on imports of goods 
originating from more than one developing country so long as the aggregate of imports from all 
countries does not exceed 9% of the total import s of such goods into India. The public notice 
recording the final findings under Rule 9(3) of the Act is published in the Official Gazette .  
3.83.  The authorities state that India notifies the WTO Committee on Safeguards as per 
Article 12.1 of the WTO Agreement on Safeguards regarding the initiation of safeguard 
investigation, making a finding of serious injury or threat thereof and of taking a decision to apply or extend a safeguard quantitative measure under the 2012 Rules.
61 
3.84.  The Director General's (Safeguards) and Di rectorate General of Foreign Trade's decisions on 
safeguards cannot be appealed under the legislation, but appeals may be made to the High Court and the Supreme Court. If the period of impositi on of a safeguard duty exceeds three years, the 
Director General must review the situation not later than the mid-term of such imposition.
62. 
3.85.  Over 2011-14, 18 safeguard investigations were initiated (Table A3.2). In nine of these 
cases, the Director General (Safeguards) recomm ended the application of measures. Of the nine 
cases, final decisions were made to impose safeguard measures consisting of an increase in tariffs 
at the same or lower rates than those recomme nded by the Director General; no safeguard 
measures were applied in the remaining one case.    
3.1.12  Standards and other technical requirements 
3.1.12.1  Standards 
3.86.  Since 2011, the legal framework for standardization in India has remained largely 
unchanged except for the full implementation of the Food Safety and Standards Act 2006 on 
5 August 2011 by way of the adoption of 6 regula tions i.e. Food Safety and Standards (Licensing 
                                               
59 WTO document G/SG/N/1/IND/3/Suppl.1, 25 September 2012. 
60 WTO document G/SG/N/1/IND/3, 23 September 2011. 
61 WTO document G/SG/Q1/IND/12, 24 April 2013. 
62 WTO (2011). WT/TPR/S/313/Rev.1 • India 
 
- 58 - 
 
  and Registration of Food Businesses) Regulation 2011, Food Safety and standards (Packaging and 
Labellin g) Regulation 2011, Food Safety and Stan dards (Food Products Standards and Food 
Additives) Regulation 2011, Food Safety and Standards (Prohibition and Restriction on Sales) Regulation 2011, Food Safety and Standards (Contaminants, Toxins and Residues) Regulation 
2011, and Food Safety and Standards (Laboratory and Sampling Analysis) Regulation 2011.  
3.87.  Standards in India are established based on the provisions of the Bureau of Indian 
Standards (BIS) Act 1986 and BIS Rules 1987. The BIS is responsible for formulating and 
enforcing standards for 14 sectors
63, and development of activities relating to certification of 
product and quality systems, testing and calibration, enforcement, international cooperation, and creating awareness among consumers; other ag encies are responsible for enforcement of 
standards (and technical regulations) in other areas (Table A3.3). Sectoral coordination 
committees have been established for food proce ssing, power, steel, automotives, textiles, and 
information technology, in order to develop harmonized standards at the national level. International standards are often adopted as In dian standards under the numbering system of 
ISO/IEC, or are harmonized with international standards in areas of India's trade interests.  
3.88.  There were around 19,313 Indian standards as at 25 December 2014 (compared with 
18,592 as at 31 March 2010). According to the authorities, for 5,862 standards that have 
corresponding international standards, 5,238 (approximately 89.4%) were harmonized 
(i.e. aligned or identical) with corresponding international standards (compared with 84% as at 31 March 2010).  
3.89.  The BIS is a member of the International Organization for Standardization (ISO) and 
participates in ISO technical and policy-making committees. It is also a member of the 
International Electrotechnical Commission (IEC) and participates in IEC technical and policy-making committees. The BIS has bilateral cooperation memoranda of understanding with 
the national standards bodies of Afghanistan, Ba ngladesh, Brazil, Egypt, France, Fiji, Germany, 
Ghana, Greece, Iran, Japan, Mauritius, Nige ria, Oman, the Russian Federation, Slovenia, 
South Africa, Suriname, the United Arab Emirates , the United States, Ukraine, and Uzbekistan. 
It also has bilateral cooperation agreements (BCAs) on conformity assessment with the national 
standards body of Israel, Pakistan and Sri Lanka.  BIS is a member of the South Asian Regional 
Standards Organization (SARSO), which was established in order to strengthen cooperation in areas of standardization and conformity assessment among the members of the South Asian 
Association for Regional Cooperation (SAARC). BIS is also a member of Pacific Area Standards 
Congress (PASC), which aims at improving the quality and capacity of standardization in economies of the pacific region and to support de velopment of the region through the promotion of 
standardization.  
3.90.  Indian standards are formulated according to the procedures stipulated in the BIS Rules 
1987 under the BIS Act 1986. A preliminary draft standard prepared by committee members is 
considered by the respective technical committee.  Once the draft is approved by the technical 
committee, it is circulated among the various stakeholders and posted on the BIS website for comments. Comments should be provided within sixty days. The technical committee finalizes the draft standard taking into account these comments. The finalized standard, its revisions, 
amendments, and cancellation are published in the Official Gazette .  
3.1.12.2  Technical regulations  3.91.  Various laws and regulations stipulate technical regulations in India (Table A3.3).  
3.92.  Responsibility for the formulation of technica l regulations is with the agency in charge of the 
respective area. The formulation of a technical regulation follows a similar process to the formulation of a standard. A draft technical regulation is sent out for comments prior to its 
adoption by the concerned ministry/department/organization and publication in the 
Official Gazette . Comments must be provided within 60 days of the publication of the notice. The 
draft technical regulations are also notified to WTO Members for comments. Comments received 
                                               
63 These are: production and general engineering; civil engineering; chemicals; electro-technical; food 
and agriculture; electronics and information technology; mechanical engineering; management and systems; 
metallurgical engineering; petroleum, coal and related products; transport engineering; textile; water resources; and medical equipment and hospital planning. WT/TPR/S/313/Rev.1 • India 
 
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  on the draft are examined by the ministry conc erned. If divergent comments are received, an 
expert group examines and considers the comments and their incorporation in the final version. 
The process of finalization of draft regulations takes 6 to 12 months, including approval of the competent authority, vetting, and translation into Hindi. The final regulation (via a notification) is 
published in the Official  Gazette  giving its date of implementation; according to the authorities, it 
is simultaneously notified to the WTO. Amendments to technical regulations are made through a similar process, from time to time, based on indu stry needs or due to new scientific developments, 
new sanitary and environmental circumstances, and harmonization with international standards. 
3.93.  Under the WTO Agreement on Technical Barriers to Trade, the International Relations and 
Technical Information Services Department of the BIS is the national WTO-TBT enquiry point for disseminating information on standards, technical regulations, and certification. The Ministry of 
Commerce and Industry is responsible for implementing the Agreement.  
3.94.  Between 2011 and 2014, India made 11 notifications to the WTO TBT Committee.
64 In the 
TBT Committee concerns were raised regarding, inter alia , food labelling requirements, toys and 
toy products, e-waste, electronics and information technology goods, and hazardous waste, and 
labelling requirements for Canola oil.65 
3.1.12.3  Certification an d conformity assessment 
3.95.  Conformity assessment procedures in India have largely remained unchanged since its 
previous Review; a major exception is the adoption of a new set of rules stipulating a compulsory registration scheme under the BIS for various electronic and information technology goods under Electronics and Information Technology Goods (Requirements for Compulsory Registration) 
Order 2012, dated 7 September 2012 (Departmen t of Electronics and Information Technology, 
Ministry of Communication and Information Technology). In addition, regulations stipulating mandatory BIS certification on various products have been introduced; these included the Steel 
and Steel Products (Quality Control) Order 2012 (Ministry of Steel), Pneumatic Tyres and Tubes for 
Automotive Vehicles (Quality Control) Order 2009
66 (Department of Industrial Policy and 
Promotion, Ministry of Commerce and Industry), and Food Safety and Standards (Licensing and 
Registration on Food Business) Regulation 2011 (D epartment of Health, Ministry of Health and 
Family Welfare).67  
3.96.  The BIS is the national certifying body. Conformity assessment procedures are regulated by 
the BIS Act 1986, the BIS Rules 1987, and BIS (C ertification) Regulations 1988. The central 
Government, on grounds of public interest, notifies which articles or processes should conform to 
an Indian standard and should bear the BIS certification mark under a licence from BIS.68 Some 
92 products are subject to the mandatory BIS certification mark.69 As at 1 January 2015, there 
were 842 products under voluntary certification.70 According to the authorities, the requirements 
for the use of the BIS certificatio n mark are the same for domestic and imported products. Besides 
the normal product certification scheme, the BIS also grants licences to environment-friendly 
products under a special scheme and awards the ECO mark to such products. 
3.97.  Foreign producers who wish to export products subject to mandatory certification must 
obtain a licence from the BIS.71 Foreign manufacturers must set up a liaison/branch office in India 
                                               
64 WTO documents G/TBT/N/IND/32/Add.2, 22 July 2011; G/TBT/N/IND/32/Add.3, 4 June 2013; and 
G/TBT/N/IND/42-46, 30 January 2012-24 October 2013. 
65 WTO documents G/TBT/M/ series since 20 September 2011.  
66 Implemented since May 2011. 
67 Electronics and Information Technology Goods (R equirements for Compulsory  Registration) Order, 
2012, S.O. 2357 (E). Viewed at: http://deity.gov.i n/content/gazattes . 
68 BIS Act, Section 14. 
69 This system is different from a new set of rules stipulating a compulsory registration scheme, 
mentioned in the previous paragraph. Compulsory regi stration scheme is  for 30 electronic and information 
technology goods whereas the mandatory BIS certificatio n is for 92 various other pr oducts. For items subject 
to mandatory certification, see BIS online information. Viewed at: http://www.bis.org.in/ . The criteria for 
determining which products should carry the mandatory certification is based on an internal assessment of the 
central Government (WTO document WT/TPR/M/249/Add.1, 14 October 2011). 
70 Information provided by the authorities. 
71 Procedures for Grant and Operation of BIS Licenc e under Foreign Manufacture rs Certification Scheme 
(FMCS). BIS online information. Viewed at: http://www.bis.org.in/cert/fm.htm . WT/TPR/S/313/Rev.1 • India 
 
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  to obtain a licence if the BIS has not signed a MOU with the country where the manufactured 
goods originate. Otherwise, foreign manufacturers may nominate an authorized representative in India responsible for checking compliance with the provisions of the BIS Act 1986, and its Rules and Regulations. The applicant needs to supply the prescribed BIS application along with the 
application fees. Fees may be charged under the Foreign Manufacturers Certification Scheme, in 
place since 1999; the authorities state that fees are fixed based on the cost of operations, and locally-manufactured products are subject to the same application fee, annual fee and unit rates as 
imports.
72 Since April 2014, the renewal application fee to be paid after one year of the grant of 
the licence has been increased to Rs 1,000 (from Rs 500). The BIS licence is granted to the factory address at which the manufacturing takes place and the final product is tested to assess compliance with the relevant Indian standards. At the time of the grant of the licence, the user 
must pay an annual fee of Rs 1,000, as well as an advance minimum marking fee for the 
production likely to be marked. The minimum mark ing fee is fixed according to the product.  
3.98.  Licences are initially valid for one year. They can be renewed for one or two years upon 
application to the BIS and payment of the required fees. Products are not required to be tested at 
the time of renewing a licence. However, re gular surveillance through random sampling is 
undertaken during the operation of the licence. The products are tested in BIS laboratories and in 
accredited laboratories, recognized by BIS, to ensure standard conformity of certified products to 
relevant Indian standards. If the product is found to be in non-compliance, a penalty is imposed, which may include stop-marking, deferment of licence or cancellation of licence. Once manufacturers (domestic or foreign) obtain a licence, they are allowed to self-mark their products. 
Products for which the BIS certification mark is mandatory may not be sold during the approval 
process for granting of the BIS licence.  
3.99.  In order to implement its certification schemes, the BIS conducts conformity testing through 
its central laboratory at Sahibabad (near Delhi), and four regional and three branch laboratories.
73 
The major areas covered at the central laboratory are electrical, mechanical, microbiological, and chemical (testing), and electrical calibration. BIS laboratories have test facilities for most products 
under the Certification Marks Scheme. In addition to the BIS laboratories, services of 145 external 
laboratories recognized under the BIS Laboratory Recognition Scheme are utilized.  
3.1.12.4  Accreditation 3.100.  There have been no major changes to Indi a's system of accreditation since its previous 
Review. The National Accreditation Board for Testing and Calibration Laboratories (NABL), an 
autonomous body under the Department of Science and Technology, is the sole accreditation body for testing and calibration laboratories in India.
74 NABL is a partner of the Asia Pacific Laboratory 
Accreditation Cooperation (APLAC) Mutual Recognition Arrangement and is signatory to the 
International Laboratory Accreditation Cooperation (ILAC). NABL's accreditation system is in accordance with ISO/IEC 17011:2004 (general requir ements for accreditation of bodies accrediting 
conformity assessment bodies). NABL accredits labo ratories that are performing tests/calibrations 
in accordance with ISO/IEC 17025:2005 (general requirements for the competence of testing and calibration laboratories), and ISO 15189:2007 (particular requirements for quality and competence of medical laboratories) in the case of medical laboratories. These services are accessible to all 
testing and calibration laboratories in India and ab road, regardless of their ownership, legal status, 
size, and degree of independence. 
3.101.  Laboratories seeking accreditation must comply with the relevant standards of 
accreditation as well as with NABL's specific requirements, such as successfully completing a 
proficiency testing programme.
75 The accreditation process consists of five stages76; and 
accreditation is valid for two years. NABL conducts annual surveillance visits of the accredited 
laboratories to verify their continued compliance with the requirements. As at December 2014, the 
NABL had granted 4,615 accreditation certificates; a different certificate is issued for each type of 
                                               
72 BIS online information. Viewed at: http://www.bis.org.in/cert/saarcfee.pdf . 
73 Except for two of the branch laboratories , all laboratories are accredited by NABL. 
74 National Accreditation Board for Testing and Calibration Laboratories online information, 
"Introduction". Viewed at: http://www.nabl-india.org/nabl/html/about-intro.asp . 
75 Information provided by the authorities. 
76 For more information, see National Accreditation Bo ard for Testing and Calibration Laboratories online 
information, "Laboratory A ccreditation". Viewed at: http://www.nabl-india.org/n abl/html/about-lab-acc.asp . WT/TPR/S/313/Rev.1 • India 
 
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  accreditation service or category. NABL accreditation covers accreditation of all branches of 
science, engineering and medical fields. Laboratories must apply for renewal of accreditation at least six months prior to the certificates' expiration date. Decision on accreditation may be appealed to the NABL, and may lead to an investigation; the NABL's decision is final.  
3.102.  The BIS runs a Laboratory Recognition Scheme for BIS product-testing needs for 
certification purposes in line with IS/ISO/IEC 17025:2005 (general requirements for the Competence of Testing and Calibration Laboratories). Once laboratories are recognized under this 
scheme, they are subject to audits to ensure  continued compliance with requirements of 
IS/ISO/IEC 17025 and other terms and conditions. Recognition is granted for three years, renewable for similar periods, and there are two surveillance visits during this period. As at 22 January 2015, 14,570 laboratories had been recognized under this scheme. In addition, 
specialized test facilities available with 46 laboratories of national eminence are also utilized as and 
when required.  
3.1.12.5  Labelling  
3.103.  The Legal Metrology Act 2009, the Legal Metrology (Packing Commodities) Rules 2011, 
and Food Safety and Standards (Packaging and Labelling) Regulations 2011 regulate labelling requirements in India.
77 There is no mandatory labelling requirement for genetically modified 
products. The Food Safety and Standards (Packaging and Labelling) Regulation 2011, notified on 
10 July 2013, stipulates that domestic manufacturers are obliged to display the licence number and the FSSI logo on the label from 1 January 2015.  The authorities state that the Regulations are 
not notified to the WTO since they are not intended to be applied to India's trading partners. If 
relevant products are imported, importers are allowed to affix labels with respect to the licence 
number and FSSI logo on the products.  
3.1.13  Sanitary and phytosanitary requirements  
3.104.  The main changes to SPS measures in Indi a since 2011 included the full implementation of 
the Food Safety and Standards Ac t 2006 on 5 August 2011 by way of, inter alia,  adoption of 
four regulations related, for example, to Food Safety and Standards (Food Product Standards and 
Food Additives) Regulation 2011, Food Safety and Standards (Prohibition and Restriction on Sales) 
Regulation 2011, Food Safety and Standards (Contaminants, Toxins and Residues) Regulation 2011, and Food Safety and Standards (Laboratory and Sampling Analysis) Regulation 2011. In 2013, new standards on titanium dioxide in chewing gum, olive oil, and 
trans-fat acids in partially-hydrogenated vegetables oils were issued.
78 
3.105.  The FSSA covers, inter alia,  food standards, general procedures for sampling, analysis of 
food, powers of authorized officers, nature of pe nalties and other parameters related to food. It 
also deals with parameters relating to food additives, preservatives, colouring matters, packing 
and labelling of foods, prohibition and regulations of sales. In addition to FSSA, SPS matters are governed and enforced through the Livestock Importation Act 1898, Destructive Insects and Pests 
Act 1914, Plant Quarantine (Regulation of Import  into India) Order 2003, and Standards on 
Weights and Measures (Packaged Commodities) Rules 1977.  
3.106.  The FSSA is intended to increase transpar ency of the scientific basis upon which India's 
SPS measures are adopted through, inter alia,  harmonization with international standards. As 
Sections 16 and 18 of the Act prescribe, draft standards compiled by the FSSAI need to be 
reviewed by scientific panels. Currently, nine such  panels are established, including panels on 
pesticide residues, contaminants, labelling, and fish and fish products, comprising experts not 
employed by the FSSAI. They review drafts and give opinions, which will then be reviewed by a 
scientific committee established under Section 8 of the Act, comprising chairs of the nine panels and other experts. The scientific committee is chai red by an eminent scientist (the current Chair is 
the ex-Director General of the Indian Council of  Medical Research). After the scientific committee 
has given recommendations on the draft, the FSSAI authority (i.e. its board) gives approval to be sent to the Ministry of Health and Family Welfare for approval by the Minist er. Then the draft will 
be sent for legal vetting by the legislative department to seek consistency with existing legislation 
                                               
77 See WTO (2011), Chapter III(2)(ix) for details. 
78 FSSAI Notifications Nos. 4/15015/30/2011, 7 June 2013; 5/15015/ 30/2012, 12 July 2013; and 
P.15014/1/2011, 27 June 2013.  WT/TPR/S/313/Rev.1 • India 
 
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  and constitutional requirements. After the legal ve tting, the draft will be sent for translation into 
English and Hindi. Then the draft will be notified for comments by the general public (and also notified to the Committee on SPS Measures of the WTO). Comments are considered by the FSSAI 
and if any changes based on scientific considerations are made, the draft will be returned to the 
panels and the scientific committee. Otherwise, the draft will go through ministerial approval and 
legislative vetting to be finalized and notified. The authorities state that, with the aim of aligning India's SPS-related standards with the Codex, the scientific review has been conducted and the 
formal adoption procedure of standards is continuing. In the Committee on SPS Measures, 
concerns were raised regarding, inter alia , import restrictions on apples, pears and citrus, import 
conditions for pork and pork products, and impo rt requirements for blueberries and avocados 
during the period under review.
79 
3.107.  The Food Safety and Standards Authority of India (FSSAI), established under FSSA, is 
mandated to establish standards for articles of food and to regulate their manufacture, storage, 
distribution, sale and import with a view to ensu ring availability of safe and wholesome food for 
human consumption, and contributing to the development of international technical standards for 
food, sanitary and phytosanitary standards. Other main institutions involved in the establishment and implementation of SPS measures are the Mi nistry of Health and Family Welfare, the 
Department of Animal Husbandry, Dairying, and Fisheries in the Ministry of Agriculture; the 
Directorate of Plant Protection, Quarantine and Storage in the Ministry of Agriculture; the BIS; and other state government agencies. India's national enquiry points under the WTO SPS Agreement are: the Department of Animal Husbandry, Dairying, and Fisheries for animal health and related 
issues; the Ministry of Health and Family We lfare for food safety related issues; and the 
Department of Agriculture and Cooperation for plant health or phytosanitary issues. Between 2011 and 2014, India made 23 notifications to the Committee on SPS Measures.
80 
3.108.  When FSSA is framing standards and procedures of an SPS nature, all regulations notified 
under FSS regulations are sent to the WTO and also  published. A total of 60 days is provided to 
the WTO Members and all stakeholders for comments on draft notifications. After having 
considered comments and after having received the a pproval of the Food Authority, the Ministry of 
Health, and the Ministry of Law, the final notification is issued to the public.  
3.109.  Imports of animal products into India requ ire sanitary import permits (SIPs) issued by the 
Department of Animal Husbandry, Dairying and Fisheries; permits must be obtained prior to 
shipping from the country of origin. The Department issues SIPs for livestock products based on an 
import risk analysis. Permits are valid for one year  or six months depending on the nature of the 
products, and may be used for multiple consignments. A SIP is not a licence, but a certificate 
verifying that India's sanitary requirements ar e fulfilled. Imports of live animals and animal 
products falling under the restricted items as per Export-Import Policy require an import licence issued by the Director General of Foreign Trade after an import risk analysis is conducted by the 
Department of Animal Husbandry, Dairying and Fisheries for such import. Imports of animal 
products are only allowed through designated ports where animal quarantine and certification services are available (Amritsar, Bangalore, Che nnai, Delhi, Hyderabad, Kolkata, and Mumbai). 
Imports of fish products are allowed through the sea port of Vishakhapatnam (in the State of 
Andhra Pradesh), the sea port and airport of Kochi, and the land customs station at Petrapole (for 
imports from Bangladesh only). 
3.110.   Imports of plants and plant materials are regulated under the Destructive Insects and 
Pests Act 1914, the Plant Quarantine (PQ) (Regulation of Import into India) Order 2003, and 
international conventions. During the period under review, Plant Quarantine (Regulations of Import into India) (Second Amendment) Order 2014 and Plant Quarantine (Regulation of Import into 
India) (Third Amendment) Order 2014 were issued. The Directorate of Plant Protection, 
Quarantine & Storage is entrusted with the implem entation of Plant Quarantine Regulations issued 
under the Act.  
3.111.  The authorities consider it imperative to conduct all plant quarantine inspections as per 
international standards/guidelines. Accordingly, the National Standards for Phytosanitary Measures 
for Important Activities have been developed and adopted to facilitate the export and import of 
agricultural commodities. To streamline plant quarantine activities, efforts have been made to fully 
                                               
79 WTO documents G/SPS/R/ series since 8 May 2013. 
80 WTO documents G/SPS/N/IND/71-93, 10 January 2011-15 December 2014. WT/TPR/S/313/Rev.1 • India 
 
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  computerize plant quarantine stations for spee dy and transparent functioning. The web-based 
Plant Quarantine Information System (PQIS) is op erational and providing online plant quarantine 
services.81 Plants and plant products may only enter Indian territory through designated ports and 
other border points, including 39 seaports, 15 airports, 11 post offices, and 14 land frontier 
stations. In addition, 63 inland container depots and container freight stations are designated for 
import of plants and plant products.  
3.112.  Inspection of agricultural commodities for exportation is carried out to meet the 
requirements of importing countries under the Inte rnational Plant Protection Convention (IPPC) of 
FAO. As per the revised text of IPPC and the model certificate prescribed thereunder, phytosanitary certificates are issued. The Director ate has been working to develop the system of 
e-certification for phytosanitary requirements. 
3.113.  Plants and seeds that require post-entry qu arantine are listed in Schedules V and VI of the 
PQ Order 2003. These plants and seeds must be  grown in post-entry quarantine facilities 
established by and at the cost of the importer , and approved and certified by the inspection 
authority. The quarantine period is determined based on the type of plant material and time taken 
by the plant material to grow to the stage where symptoms of disease appear.  
3.114.  Sampling and testing of consignments to prevent the risk of exotic pests is undertaken 
according to the International Standards for Phytosanitary Measures No. 23 and 31.
82 If 
commodities are found free from pests, they are cleared for import. If not, they must undergo fumigation with the accredited fumigation operators according to Schedules V, VI, and VII of PQ Order 2003.
83 Fumigation is done at the importer's cost.84 
3.115.  Imports of GM food, feed, and organisms,  and living modified organisms for R&D, food, 
feed, processing in bulk are governed by th e Environment Protection Act 1986 and Rules 1989, 
unchanged since India's previous Review.  
3.116.  India regularly participates in the activities of Codex Alimentarius. The authorities state 
that India intends to recognize equivalence of its trading partners' SPS measures based on Codex Guidelines, provided that it receives proposals from them; no such proposals have been received 
by India to date.  
3.2  Measures Directly Affecting Exports 3.2.1  Export procedures and requirements 3.117.  As in the case of imports, since 2011 the main changes in India's customs procedures for 
exports have concerned inter alia  the adoption in 2011 of self-assessment with a view to 
facilitating trade, and the adoption of a risk management system.
85 Under the self-assessment 
system, an exporter must assess the applicable customs duties, which may be verified by 
Customs. In addition, under a risk management system on exports introduced in 2013, the 
consignment may be examined, assessed or cleared without examination and assessment by Customs, based on associated risks. In the event the declaration by an exporter is found to be 
incorrect, it may be reassessed by Customs. The authorities indicate that currently around 80% of 
consignments are cleared without intervention by Customs.  
                                               
81 With a view to disseminating info rmation on plant quarantine regulati ons, procedures and practices, a 
website (http//www.plantquara ntineindia.nic.in) has been  set up. All plant quarantine stations dealing with 
phytosanitary issues, have been linked through the webs ite and relevant PQIS (Pla nt Quarantine Information 
System software) has been developed. 
82 Guidelines for Inspection (ISPM23)2005, and Methodologies for Sampling of Consignments 
(ISPM31)2009, International Plant Protection Conv ention. Viewed at: https://www.ippc.net/en/core-
activities/standards/ispms/#588. 
83 There are 357 registered fumigation agencies fo r methyl bromide fumigation and 157 for aluminium 
phosphide fumigation. 
84 Fumigation generally takes 24 hours with methyl bromide, and 7 to 10 days with aluminium 
phosphide. 
85 Central Board of Excise & Customs (2011). Relevant  changes have been made to Sections 17 and 50 
of the Customs Act 1962. Shipping Bill (Regulations) 2011 concerning the introduction of self-assessment in Customs were issued. WT/TPR/S/313/Rev.1 • India 
 
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  3.118.  Exporters must, in principle, register with the DGFT and obtain an importer-exporter code 
IEC number to be eligible to export.86 Electronic submission of documents is, in principle, 
mandatory; an exception to this includes circumstances where electronic submission is not technically feasible. Around 98% of export documents are processed electronically.
87  
3.119.  Regarding time required for export procedures, the mean evacuation time at Chennai Port 
for May 2014 was 4 days and 6 hours, according to a study conducted by the Central Board of Excise and Customs.  
3.120.  India's quality control and preshipment inspection measures for exports have remained 
largely unchanged since its previous Review, except that additional products have been added to the list for mandatory preshipment inspection and certification. Under the Export (Quality Control and Inspection) Act of 1963, the EIC, together with export inspection agencies (EIC's field 
organizations), carries out quality control and preshipment inspection to ensure compliance with 
minimum standards for exports of notified produc ts as per requirements of importing trading 
partners.
88 Currently, quality control and preshipment inspection are required, inter alia,  for 
exports of animal casings, basmati rice, crus hed bones, dairy products, egg products, feed 
additives and pre-mixtures, fish and fish products, honey, meat and meat products, ossein and gelatine, peanut and peanut products, and poultry and poultry meat. Since India's previous 
Review, feed additives and pre mixtures, peanut and peanut products (to the European Union and 
Malaysia), and crushed bones, and ossein and gela tine have been added to the list of exports 
requiring quality control and preshipment inspection . In the case of seeds and planting materials 
for propagation, export inspections involve sampling and laboratory tests; visual examination and 
washing test may be carried out in certain cases. 
3.121.  Export certification is conducted through consignment-wide inspection (CWI) as well as 
certification based on a food safe ty management system (FSMSC). So me of the key features of the 
FSMSC are approval of establishments (conditional and final), hazard analysis and critical control 
points (HACCP) audits, traceability mechanisms, enforcement control, three-tier monitoring systems to ensure compliance, and health certific ation as per requirements of importing trading 
partners; the authorities state that FSMSC is based on international standards and adopted by the 
EIC for export of notified products. The EIC char ges 0.4% and 0.2% of the f.o.b. value of the 
export consignment for CWI and FSMSC-based certification respectively. On 10 March 2010, the Government amended the Export of Fresh, Frozen and Processed Fish and Fish Products (Quality 
Control and Inspection and Monitoring) Rules with a view to exercising better official control on 
primary production and taking necessary action to ensure safety throughout the food chain, 
including primary production. Under the amended Rules, the scope of official control has been 
broadened by covering establishment, landing ce ntres, auction centres, factory vessels, freezer 
vessels, fishing vessels, aquaculture farms, hatcheri es and feed mills. The EIC's other certification 
activities include health certificate, authenticity certificate (basmati rice), non-GMO certificate, and 
preferential certificates of origin (CoO) under 15 schemes/agreements. Certification is also carried 
out on a voluntary basis in respect of non-notified products on request from the exporter, importer or importing trading-partner based on their specific requirements. The EIC's certification has been recognized by India's trading partners includ ing the European Union, China, Japan, the 
Russian Federation, Australia, Brazil, the Repub l i c  o f  K o r e a ,  S i n g a p o r e ,  V i e t  N a m ,  M a l a y s i a ,  
Sri Lanka, Turkey, and the United States. Since its establishment as the official certification body 
of India the EIC has been promoting trade through its quality control and inspection activities by 
ensuring compliance with the requirements of importing trading partners.  
3.2.2  Export taxes, charges, and levies 3.122.  Since 2011, several changes have been made to the list of goods subject to export taxes. 
Currently, export taxes apply to bauxite, ilmenite, certain hides, skins and leathers, iron ore 
pellets, and ferrous waste and scrap (Table 3.11). Th e rates of export duty applicable to different 
products are specified in the Second Schedule of the Customs Tariff Act. As in the case of import 
                                               
86 In addition to the IEC, exporters also need to obtain a business identification number from the DGFT 
to be allowed to file the shipping bill. The shipping bi ll may be processed manually  or through the electronic 
data interchange (EDI) system (WTO, 2011, Chapter III(3)(i)). 
87 Information provided by the authorities. 
88 The Act empowers the central Government to notify the commodities and specify the minimum 
standards related to exports of these commodities.  WT/TPR/S/313/Rev.1 • India 
 
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  tariffs, changes in these rates are either implem ented through the Finance Bill presented at the 
time of the annual budget or through notifications issued by the Government.89 Export cesses are 
collected for development of a specific industry; they apply to certain spices, shellac and lac-based products, tobacco, manganese ore, chrome ore, mica products, and iron ore (Table 3.12).
90 
3.123.  Valuation of exports is determined in accordance with Section 14 of the Customs Act 1962 
and the Customs Valuation (Determination of Value of Export Goods) Rules 2007.  
Table 3.11 Export taxes, 2014  
Product Rate (% on the f.o.b. value, unless otherwise 
specified) 
Iron ore pellets  5 
Bauxite 10 
Ilmenite  10 (unprocessed), 5 (upgraded) 
Tanned and untanned hides, skins and leathers  10-25 
Ferrous waste and scrap, and remelting scrap 
ingots of iron or steel 15  
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. 
Table 3.12 Export cess, 2014  
Product Cess rate 
Shellac and lac-based prod ucts Rs 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 Rs 4 per tonne 
Chrome ore Rs 6 per tonne 
Mica products 3.5% of the f.o.b. value 
Iron ore Rs 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 Welfare Cess Act 1976. 
Source: WTO Secretariat, based on informatio n provided by the Indian authorities.  
3.2.3  Minimum export prices 
3.124.  Under the Export Policy Schedule (Foreign Trade Policy 2009-14), India maintains 
minimum export prices (MEP) for exports of onions and edible oil with a view to ensuring adequate 
availability at reasonable prices of certain items considered essential for domestic consumption (Table 3.13).
91 The MEP and the items to be subject to it are decided by the Government after 
consultation with relevant ministries and departments, and the DGFT notifies these decisions. 
Changes since the previous Review include the elimination of minimum prices on exports of 
basmati rice on 4 July 201292, and adoption of MEPs on ed ible oil on 5 February 201393, and 
potatoes (fresh or chilled) on 26 June 2014. A no tification concerning the introduction of minimum 
export prices on potatoes (fresh or chilled) was issued on 26 June 2014.94 The minimum export 
prices on potatoes were removed on 20 February 2015.95 
                                               
89 Customs (tariff) Notifications No. 27/2011, 1 March 2011; No. 117/2011, 29 December 2011; 
No. 129/2011, 30 December 2011; No. 10/2012, 17 March 2012; No. 15/2016, 1 March 2013; No. 3/2014, 27 January 2014; No.15/2014, 11 July 2014.  
90 Central Board of Excise and Custom s online information. Viewed at: 
http://www.cbec.gov.in/customs/cst2013-14/sch2-exptariff.pdf.  
91 The latest notification concerning the minimum expo rt prices of onions was issued on 21 August 2014 
(DGFT Notification No. 91 (RE-2013)/2009-2014. The MEP of onions was removed between 4 March 2014 and 16 June 2014 (DGFT notifications No. 73, 12 March 2014 and No. 82, 17 June 2014). 
92 DGFT Notification No. 6 (RE-2012)/2009-2014, 4 July 2012. 
93 MEP at US$1,100 per tonne. 
94 DGFT Notification No. 85 (RE-2013)/2009-2014. 
95 DGFT Notification No. 112 (RE-2013)/2009-2014. WT/TPR/S/313/Rev.1 • India 
 
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  Table 3.13 Goods subject to minimum export prices, December 2014  
(US$) 
Item Minimum export price per tonne 
Edible oil in branded consumer packs of up to 5 kg 900 
General category onions 300 
Bangalore rose and Krishnapuram onions 300 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. 
3.2.4  Export prohibitions, restrictions, and licensing 
3.2.4.1  Export prohibitions  3.125.  Export prohibitions apply mainly for enviro nmental, food-security, marketing, pricing, and 
domestic supply reasons, and to comply with international treaties. Since its previous Review, the 
list of products subject to export prohibitions in India has remained largely unchanged; on 9 September 2011, export prohibition on non-basmati rice and wheat was removed (Table A3.4).  
3.126.  India bans exports of some products to the Republic of Korea, Iran and Iraq under 
UN Resolutions.
96 Export prohibition of wood charcoal to Bhutan was lifted on 
23 December 2013.97 
3.2.4.2  Export licensing and quotas 
3.127.  Some 196 lines at the HS eight-digit level are currently subject to export restrictions under 
the Export Policy Schedule. Such products may be ex ported only if a licence is issued by the DGFT. 
3.128.  On 8 December 2014, the previous requirement that exports of cotton and cotton yarn 
required an export authorization registration certificate (EARCs) issued by the DGFT was 
abolished.98  
3.129.  Exports of milk powder, wheat, edible oi l, pulses, and non-basmati rice were subject to 
quantitative restrictions between 5 December 2011 and 13 June 2014.99 Exports of sugar (by 
state-trading enterprises) are subject to quota under preferential regimes with the United States and the European Union and exports of stone aggr egates to the Maldives were made subject to 
export quotas on 1 January 2014.
100 On 4 July 2014, quantitative export restrictions on organic 
sugar were eliminated.101 Exports of brown seaweeds and sandalwood oil are subject to export 
quotas set by the DGFT.  
3.2.5  State trading enterprises 
3.130.  State-trading export privileges for some agricultural and forest produce, including sugar 
(for exports under preferential regime), onions, and gum karaya, have been accorded to STEs with a view to enabling better marketing, realization of  better prices, ensuring a steady domestic supply 
and preventing wide domestic price fluctuations.
102 Similarly, with a view to ensuring a reliable 
supply of kerosene and liquefied petroleum gas (LPG ), which are used as household fuels, exports 
are allowed only through STEs. Further, exports by STEs are deemed necessary for conservation and proper utilization of some ores of metals. 
3.131.  On 26 September 2014, exclusive rights to export iron ore pellets accorded to KIOCL 
Limited (formerly known as Kudre mukh Iron Ore Company Limited)  were modified; KIOCL Limited 
                                               
96 Department of Commerce (2010).  
97 DGFT Notification No. 60 (RE-2013)/2009-2014. 
98 DGFT Notifications Nos. 102 and 103, 8 December 2014. 
99 DGFT Notifications Nos. 87 (RE-2010)/2009-2014, 104 (RE-2010)2009-2014, and 
81 (RE-2013)/2009-2014, 5 December 2011, 5 March 2012, and 13 June 2014.  
100 DGFT Notification No. 62 (RE-2013)/2009-2014, 1 January 2014. 
101 DGFT Notification No. 88 (RE-2013)/2009-2014, 4 July 2014. 
102 WTO document G/STR/N/14/IND, 30 November 2012. WT/TPR/S/313/Rev.1 • India 
 
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  can now export its own manufactured iron ore pellets either alone or through any entity it 
authorizes.103  
3.2.6  Export support and promotion  3.132.  India's most recent notification on export subsidy commitments was made in July 2012 
and covers 2004-05 to 2009-10.
104 According to the notification, export subsidies were provided to 
sugar, tea, processed fruits and vegetables, fresh fruits and vegetables, plants and flowers, and animal products during 2009-10. 
3.133.  India's latest notification to the WTO Committee on Subsidies and Countervailing Measures 
concerned fisheries' subsidies at the state, union territories and central government levels.
105 Its 
latest notification on other subsidy programmes (at the central government level) covers the 
period 2011-12.106  
3.134.  India is an Annex VII(b) member under the SCM Agreement and as such may maintain 
export promotion schemes until its per capita gross national product (GNP) reaches US$1,000 in constant 1990 dollars for three consecutive years. In the last three years for which data are 
available (2010-12), the country's per capita gross national income (GNI)
107 has remained below 
US$1,000 in constant 1990 dollars.108  
3.2.6.1  Special economic zones (SEZs) 
3.135.  Since its previous Review, there have been no major changes to the legal framework and 
regulations concerning the operation of SEZs. They may be established by the central or state governments or by private developers (including foreigners) as joint ventures with the State or fully private. Legislation regulating SEZs at the central government level is the SEZ Act 2005 and 
Rules 2006. In addition, some States have enacted their own laws and rules to regulate SEZs. 
State SEZ legislation follows the lines of the SEZ Act 2005.
109 All SEZs are under the 
administrative control of the SEZ Development Commissioner. 
3.136.  Benefits accorded to firms established in a SEZ have remained largely unchanged since 
India's previous Review, except that the exemptio n from dividend distribution tax accorded to 
them was eliminated in 2011, and the exemption from minimum alternate tax was eliminated on 
1 April 2012. Such firms are required to generate net foreign exchange earnings within five years 
of operation (Table 3.4). SEZ units are exempt from various taxes, including income tax, central sales tax, service tax, and from a series of state taxes (i.e. sales tax, stamp duty, and electricity duty). SEZ units may import all types of goods (including new and second-hand capital goods) 
duty free both from abroad and from the domestic tariff area (DTA).
110 Imports and exports 
into/from the SEZ are not subject to routine custom s examination; for example, "let export" orders 
are granted on the basis of self-certification by the SEZ.111 Exports of products manufactured in 
SEZs are not subject to compulsory preshipment inspection. State-trading requirements do not 
apply to SEZs (except for iron ore). Other export measures may apply to exports from the SEZs; 
                                               
103 DGFT Notification No. 92 (RE-2013)/2009-2014, 26 September 2014. 
104 WTO document G/AG/N/IND/9, 30 July 2012. 
105 WTO document G/SCM/N/253/IND/Suppl.1, 21 November 2014. 
106 WTO document G/SCM/N/220/IND/Suppl.1, 14 November 2014.  
107 The World Bank data series formerly identified as GNP is now published as GN I. This change reflects 
the implementation of the System of National Accounts  1993 ("SNA 93"). Although the underlying concepts are 
different (GNP being a measure of prod uct, and GNI being a measure of income), the values calculated are the 
same. 
108 WTO document G/SCM/110/Add.11, 23 June 2014. 
109 The States that have enacted SEZ Acts are Gujara t, Himachal Pradesh, Tamil Nadu, Uttar Pradesh, 
Haryana, and Punjab.  
110 DTA means an area within India that is outside SEZs, EOUs, electronic hard ware technology parks, 
software technology parks, and bio-technology parks. 
111 Self-certification refers to certification regarding the sealing of containers or packages of goods for 
export. The certificate stipulates that the containers or packages have been sealed in the presence of a person 
authorized on behalf of the unit (SEZ  Rules 2006, as amended, Chapter IV). WT/TPR/S/313/Rev.1 • India 
 
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  for example, minimum export prices apply to expo rts from SEZs only when raw materials procured 
indigenously are exported unprocessed.112  
3.137.  There is no quantitative limit on the amount of SEZs exports into the DTA. However, sales 
into the DTA attract the same duties and charges as any other import. 
3.138.  At the end of 2014, India had 352 SEZs. During the period under review, exports from 
SEZs increased from some US$81 billion in 2011- 12 to US$82.4 billion in 2013-14, accounting for 
25.9% of total exports in 2013-14, compared with 24.9% in 2011-12.  
3.139.  Major exports from SEZs include chemicals and pharmaceuticals, computer and electronic 
software, and gems and jewellery (Table 3.14). Ta x revenue forgone as a result of the benefits 
granted to SEZs amounted (provisionally) to Rs 62 billion in 2013-14, compared with Rs 45.6 billion in 2011-12.
113 
Table 3.14 Incentives granted to SEZ units, 2014  
Incentives 
100% income tax exemption for SEZ units for the first five years, 50% for the next five years, and 50% of the 
ploughed-back export profit for the next five years 
Exemption from the central sales tax 
Exemption from the service tax 
Exemption from the state sales tax and other levies (e.g. stamp duty and electricity duty) as extended by the 
respective state governments 
External commercial borrowing by SEZ units up to US$500 million in one year without any maturity restriction 
through recognized banking channels 
100% FDI investment through automatic route 
Single-window clearance for central and state level approval procedures 
Source: WTO document G/SCM/N/220/IND/Suppl.1, 14 November 2014; and information provided by the 
Indian authorities.  
Table 3.15 Exports from SEZs, 2011-14  
(US$ billion) 
Sector 2011-12 2012-13 2013-14 
Biotech 0.29 0.36 0.23 
Computer/electronic software 18.00 25.98 30.68 
Electronics hardware 4.55 3.88 2.74 
Electronics 0.17 0.23 0.06 
Engineering 0.57 0.89 1.35 
Gems and jewellery 16.58 13.13 7.89 
Chemicals and pharmaceuticals 33.89 33.13 33.27 
Handicrafts 0.04 0.06 0.09 
Plastic and rubber 0.36 0.33 0.24 
Leather, footwear, and sports goods 0.11 0.17 0.28 
Food and agro-industry 0.16 0.15 0.15 
Non-conventional energy 0.07 0.04 0.11 
Textiles and garments 0.65 0.80 0.70 
Trading and services 4.70 8.30 3.33 
Miscellaneous 0.84 0.74 1.23 
Total 81.00 88.18 82.35 
Percentage share of SEZs exports of India's total 
exports  24.86 29.14 25.94 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. 
                                               
112 SEZ Rules 2006, as amended, Chapter IV. 
113 Information provided by the authorities. WT/TPR/S/313/Rev.1 • India 
 
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  3.2.6.2  Export-oriented units 
3.140.  The export-oriented units (EOUs) sch eme complements the SEZ scheme. EOUs are 
regulated by the Foreign Trade Policy. As in the case of the SEZs, the main objectives of the EOU scheme are to increase exports and foreign exch ange revenues, promote the transfer of latest 
technologies, stimulate foreign direct investment, and generate additional employment. EOUs are 
similar to SEZs but may be located anywhere in the country. 
3.141.  The minimum investment in an EOU is Rs 10 million. EOUs are licensed to manufacture or 
provide services for export for an initial period of five years (which may be extended). EOUs may 
benefit from tax and other incentives, subject to export performance. Since its previous Review, 
there has been no change to incentives granted to EOUs, except that Section 10B of the Income Tax Act was withdrawn on 1 April 2011. Sector-specific requirements are stipulated in the 
provisions of the EXIM policy, and vary from sector  to sector. EOUs must also generate net foreign 
exchange earnings within five years of starting operations.
114 
3.142.  EOUs are exempt from various taxes, including central excise duty, when procuring capital 
goods, raw-materials, consumable spares from the domestic market, customs duty on import of 
capital goods, raw materials, consumable spares. Central sales tax (CST) paid on domestic purchases or duty paid on furnace oil, procured from domestic oil, is reimbursed (Table 3.16). 
EOUs may import all types of goods (including new and second-hand capital goods) duty free from 
the DTA and abroad, and are exempt from routin e customs procedures both when importing and 
exporting. Manufacturing EOUs are exempt from the state-trading regime with the exception of chrome ore/chrome concentrate. 
3.143.  In principle, EOUs are established to export their entire production; however, subject to 
certain conditions, a specific percentage may be so ld in the DTA upon payment of duties (including 
anti-dumping duties) and taxes, with some exceptions. In general, EOUs may sell in the DTA 
goods and services for up to 50% of  the f.o.b. value of exports, with the exception of producers of 
gems and jewellery who may sell up to 10% of the f.o.b. value of exports. Sales into the DTA are allowed only with the approval of the Development Commissioner; if similar goods are exported; 
and if the net foreign exchange earnings (NFEE) conditions have been fulfilled. Unless 
manufactured wholly out of indigenous raw materials, sales into the DTA are subject to the payment of 50% of the applicable basic cust oms duty and the 100% additional duty; the 
exceptions are pepper and marble, which may not be exported to the DTA even upon payment of 
full duty. Goods made of indigenous raw material s are subject to the payment of excise duties. 
Table 3.16 Incentives granted to EOUs, 2014  
Incentives  
Exemption from customs and central excise duties on  import/local procurement of capital goods, raw 
materials, consumables, spares, packing material, etc. 
Reimbursement of central sales tax 
Reimbursement of duty paid on fuel s procured from domestic oil compan ies as per the rate of drawback 
No import licences are required 
Import of second-hand capital goods are allowed 
CENVAT credit on the goods and service and refund thereof 
Fast track clearance facilities 
Exemption from industrial licensing for manufacture of  items reserved for smal l-scale industry sector 
Supplies from the DTA to EOUs are deemed exports and are exempt from payment of the excise duty 
50% of production may be sold in the domestic mark et on payment of duty, generally 25%, plus a 100% 
additional customs duty 
100% FDI investment through automatic route 
Source: Central Board of Excise and Cu stoms, Customs Manual 2014. Viewed at: 
http://www.cbec.gov.in/deptt_offcr/cs-manual2014.pdf ; and information provided by the Indian 
authorities.  
                                               
114 If the unit has not generated net foreign exch ange earning, the Development Commissioner is 
required to inform the Central Excise author ities for recovery of the proportionate duty. WT/TPR/S/313/Rev.1 • India 
 
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  3.144.  A special licence granted by the Board of  Approvals is necessary to set up an EOU to 
manufacture arms and ammunition, explosives and defence equipment, atomic substances, narcotics and psychotropic substances and hazardous chemicals, distillation and brewing of alcoholic drinks, cigarettes/cigars and manufactured tobacco substitutes. Up to 100% of FDI is 
allowed in EOUs under the automatic route in areas where no FDI prohibition applies.
115 
3.145.  In 2013-14, India had around 3,000 EOUs, manufacturing goods and providing services, 
excluding trading, which is not allowed.116 During the period under review, exports from EOUs 
decreased in value from some US$20.4 billion in 2011-12 to US$14.6 billion in 2013-14, 
accounting for 4.6% of total exports in 2013-14, compared with 6.3% in 2011-12 (Table 3.17).117 
Tax revenue forgone as a result of the EOU scheme in 2013-14 was Rs 58.4 billion compared with Rs 58.8 billion in 2012-13.  
Table 3.17 Exports from EOUs, 2011-14 
 
(US$ billion) 
Sectors 2011-12 2012-13 2013-14 
Textiles and garments, yarn 0.82 0.70 0.61 
Computer software 1.08 1.20 1.06 
Electronics hardware 1.28 0.76 0.58 
Engineering goods 4.55 3.24 2.64 
Chemicals and pharmaceuticals 6.48 6.67 5.50 
Leather and sports goods 0.17 0.11 0.08 
Gems and jewellery 0.45 0.21 0.21 
Plastic, rubber, and synthetic 0.44 0.39 0.37 
Foods and agri and forest products 1.59 1.60 1.12 
Miscellaneous 3.55 2.78 2.44 
Total 20.42 17.66 14.62 
Percentage share of EO Us exports of India's 
total exports  6.27 5.83 4.60 
Source:  WTO Secretariat, based on information provided by the Indian authorities; and IMF (2014). 
3.2.6.3  Drawback schemes  
3.146.  Since its last Review, there have been no major changes to the framework of drawback 
schemes used by India; its drawback system consis ts of two types of drawback: the "all industry 
rate" and the "brand rate" for whic h the refund may be negotiated.  
3.147.  The Customs Act 1962 (Sections 74-76), and the Customs and Central Excise Duties and 
Service Tax Drawback Rules 1995 regulate the draw back system in India. Under the drawback 
system, exporters are entitled to a refund of: the customs duties (including additional duties) on 
imported goods that are exported without transformation (Section 74); or customs duties, central 
excise duties, and the service tax levied on materials imported or produced locally to manufacture export products (Section 75). In addition, Re-e xport of Imported Goods (Drawback of Customs 
Duties) Rules 1995 regulate drawback on imported goods re-exported from India.  
3.148.  All industry rates of duty draw back have been notified every year.
118 In 2013-14, the 
amount of drawback under the brand rate schem e amounted to Rs 3.2 billion, compared with 
Rs 2.2 billion in 2011-12.119 Drawbacks are not allowed on certain specific products. These include 
commodities or products that are: (i) manufactured partly or wholly in a warehouse under 
Section 65 of the Customs Act 1962; (ii) manufa ctured or exported in discharge of export 
obligations against an advance licence or advance authorization or duty free import authorization 
                                               
115 FDI is prohibited in the manufacture of arms and ammunition, explosives, atomic substances, 
narcotics and hazardous chemicals, di stillation and brewing of alcoholic drinks, and cigare ttes, cigars, and 
manufactured tobacco substitutes. 
116 Export Promotion Council for EOUs and SEZs online inform ation, "How to set-up  an Export Oriented 
Unit". Viewed at: http://www.eouindia.gov.in/eou_settingup.htm . 
117 Information provided by the authorities. 
118 Customs Notifications (non-tariff) No. 68/2011, No.75/2011, No. 92/2012, No. 4/2013, No. 98/2013, 
No. 05/2014, No. 110/2014, and No. 21/2015. 
119 Information provided by the Indian authorities. WT/TPR/S/313/Rev.1 • India 
 
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  issued under the Foreign Trade Policy; (iii) manufactured or exported by a unit licensed as 100% 
export-oriented unit in terms of the provisions of the Foreign Trade Policy; (iv) manufactured or exported by any of the units situated in, inter alia,  special economic zones; or (v) manufactured or 
exported availing of the benefit of the no tification No.32/1997 – Customs, issued on 
1 April 1997.
120  
3.149.  The amount of duty drawback is based on  likely duty imposed on the inputs and input 
services used in the manufacture of export good s. There is a cap or maximum amount for certain 
specified goods to discourage over-v aluation of the goods exported.121 The duty drawback 
refunded amounted to Rs 123.3 billion in 2011-12, Rs 174.2 billion in 2012-13, and Rs 218.0 billion in 2013-14.  
3.2.6.4  Other duty and tax concessions  
3.150.  In addition to the SEZs and EOUs regi mes and the duty drawback system, India has a 
number of export incentive schemes, some of whic h are contingent on value addition and export 
obligations (Table A3.5). During the review period, duty entitlement passbook schemes and 
status-holder incentive schemes were abolished. Income forgone as a result of these schemes 
totalled Rs 481,290 million in 2013-14 (Table A3.6). 
3.2.6.5  Export promotion and marketing assistance 
3.151.  The structure of export promotion and ma rketing assistance schemes adopted by India has 
remained largely unchanged since its previous Review. The Department of Commerce encourages exports indirectly through a number of schemes including the Marketing Development Assistance 
(MDA) Scheme
122 and Market Access Initiative (MAI) Scheme123 through export promotion councils 
(EPCs).124 Currently, there are 29 EPCs compared with 20 in 2011 and five commodity boards 
which promote exports of specific products.  
3.2.7  Export finance, insurance and guarantees 
3.152.   Export finance is provided by commercial banks (including foreign banks) and the 
Export-Import Bank of India (Exim Bank). Ex port financing programmes by commercial banks 
were first introduced in 1967 with a view to making short-term working capital finance available to 
exporters at internationally-comparable interest rates;  export credit is available in rupees as well 
as in foreign currencies. Export credit in rupees is subject to a "base rate" system, available since July 2010, under which interest rates applicable are at or above base rate. Banks grant export 
credit to eligible exporters as per their loan  policy approved by the board of directors.
125 Banks can 
grant export credit in foreign currencies at internationally-competitive rates under the programmes 
of "pre-shipment credit in foreign currency" (PCFC) and "rediscounting of export bills abroad" (EBR). Up to 4 May 2012, banks were allowed to decide the interest rate on exports within the 
ceiling rate linked to LIBOR as prescribed by th e Reserve Bank of India (RBI). With effect from 
5 May 2012, banks are free to determine the interest rate on export credit in foreign currencies. Export credit, in rupees or in foreign currencies, is available for a maximum period of 360 days. 
Export credit is under the overall regulation and supervision of the RBI. 
3.153.  With a view to promoting trade and invest ment, the Exim Bank provides Indian exporters 
with export credits on a cost-plus basis at market-related interest rates. The Exim Bank also provides finance and export support to EOUs (in the form of loans, working capital marketing 
                                               
120 Further restrictions apply in accordance with Rule s 3 and 8 of the Customs, Central Excise Duties and 
Service Tax Drawback Rules 1995. 
121 WTO document WT/TPR/M/249/Add.1, 14 October 2011. 
122 Department of Commerce online information. Viewed at: http://commerce.nic.in/trade/mda-
guidelines01-06-2013.pdf . 
123 Department of Commerce online information. Viewed at: 
http://commerce.nic.in/trade/Revised_MAI_Guidelines_W_E_F_04_08_2014.pdf . 
124 EPCs promote, for exampl e, exports of textiles; pharmaceuticals, chemicals, and cosmetics; leather; 
gems and jewellery; engineering goods and civil construction projects; plastics; cashews; shellac; and sports 
goods. Department of Commerce on line information. Viewed at: http://commerce.nic.in/epc.htm  
125 Loan policies should lay down, inter alia : exposure limits to individual/group borrowers, 
documentation standards, margin, security, sectoral ex posure limits, delegation of powers, maturity and 
pricing policies, and factors taken into co nsideration for decidi ng interest rates. WT/TPR/S/313/Rev.1 • India 
 
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  support, export product development, export fac ilitation, and import finance) and value-added 
services (e.g. advice and marketing services aime d at evaluating international risks and export 
opportunities). The Exim Bank may also provide lin es of credit to governments and to overseas 
financial institutions to enable buyers in those countries to purchase goods and services from 
India; the terms of these credits are negotiated between the Exim Bank and the overseas agency, 
based on market interest rates that are usually linked to the LIBOR. 
3.154.  The Exim Bank also provides various expo rt guarantee schemes and fee-based services to 
support international trade and investment, and conducts related research. 
3.155.  During 2013-14, the Exim Bank approved loans amounting to Rs 482.6 billion, up from 
Rs 388.4 billion in 2009-10. For the year 2013-14, the Bank registered a post-tax profit of Rs 7.1 billion and paid a return on investment capital to the Government amounting to 
Rs 3.39 billion. The Bank has been making a profit since its inception and pays a return on capital 
every year to the Government. The main industri al sectors to which the Bank has exposure are 
ferrous metal and metal-processing, EPC (engineer ing, procurement and construction) services, 
textiles and garments, oil and gas, and drugs and pharmaceuticals. 
3.156.  Under the current guidelines on lending to priority sectors, export credit extended by 
foreign banks with fewer than 20 branches will be counted towards the total priority sector lending 
target (32% of adjusted net bank credit (ANBC) or credit equivalent of off-balance sheet exposure, 
whichever is higher). For domestic banks and foreign banks with no fewer than 20 branches, export credit is counted towards the total priority sector target (40% of ANBC or credit equivalent 
of off-balance sheet exposure, whichever is higher), and export credit extended to certain specified 
categories (e.g. agriculture) will be counted towa rds the lending target for respective categories.
126  
3.157.  Insurance against export credit risk is provided by the ECGC Limited (formerly known as 
the Export Credit Guarantee Corporation of Indi a Ltd.). ECGC is a 100% state-owned company, 
under the administrative control of the Ministry of Commerce and Industry, registered as a non-life 
insurance company under the Insurance Regulatory and Development Authority (IRDA) as per the IRDA Act 1999. ECGC provides insurance against commercial or country risks; it also grants 
insurance coverage to banks or financial institutions, which allows them to offer export credit 
facilities to exporters. ECGC also provides overseas investment insurance to Indian companies investing in joint ventures abroad through equity  or loans. ECGC's short-term business covered 
6.9% of India's total exports in 2013-14 and 64% of  Indian banks total short-term export credit 
outstanding as of March 2014. ECGC's share is over  90% of the export credit insurance market in 
India. The National Export Insurance Account (NEIA) , operated by ECGC, covers export credit risk 
for large, medium- and long-term overseas proj ects that are deemed commercially viable and 
strategically important from an economic and po litical point of view, but fall beyond ECGC's 
underwriting capacity and are not backed by rein surance. Under the NEIA scheme, 22 projects 
with a value of around Rs 170.7 billion were covered. 
3.3  Measures Affecting Production and Trade 
3.3.1  Incentives 3.3.1.1  Tax incentives 3.158.  India provides various tax incentives to pr omote selected economic activities. For example, 
under the Income Tax Act 1961, tax incentives are provided to: shipping companies (Section 33AC 
of the Act); revenue and capital expenditure on scientific research (Section 35); specified business (Section 35AD), and certain industrial undertakings (Sections 80IB and 80IC). India publishes 
statements of revenue forgone in its annual central government budgets.
127 
                                               
126 RBI online information. Viewed at: http://www.rbi.org.in/scripts/FAQView.aspx?Id=87. 
127 Details of revenue forgone for, for example, 2012-13 and 2013-14, are made available at the 
Government of India online  information. Viewed at: 
http://indiabudget.nic.in/ub201415/statrevfor/annex12.pdf. WT/TPR/S/313/Rev.1 • India 
 
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  3.3.1.2  Explicit subsidies 
3.159.  Direct or explicit subsidies as reported in the Central Government's Annual Budget 
amounted to Rs 2,667.0 billion (2.1% of GDP) (Tab le 3.18). The bulk of India's explicit subsidies 
continue to be aimed at supporting agriculture, promoting food security and reducing poverty. 
Most of the outlays are allocated to food, fertiliz ers and petroleum. Food subsidies are provided by 
the Department of Food and Public Distribution to meet the difference between actual prices and the central-issue prices fixed under the Targeted Public Distribution System (TPDS) and other 
welfare schemes. The central Government also provides a subsidy to the Food Corporation of India 
to keep buffer stocks of wheat and rice as a food-security measure. 
Table 3.18 Explicit subsidies, 2012-16 
(Rs billion and %) 
 2012-13a 2013-14a 2014-15b 2015-16c 
Total 2,570.8 2,546.3 2,667.0 2,438.1 
Fertilizer subsidy 25.5 26.4 26.6 29.9 
Imported (urea) fertilizers 5.9 4.5 4.5 5.0 
Indigenous (urea) fertilizers 7.8 10.4 14.3 15.7 
Decontrolled fertilizers 12.0 11.5 7.7 9.2 
Food subsidy 33.1 36.1 46.0 51.0 
Petroleum subsidy 37.7 33.5 22.6 12.3 
Interest subsidies 2.8 3.2 4.2 6.1 
Other subsidies 0.9 0.7 0.6 0.6 
a Actual expenditures. 
b Revised budget. c Budget. 
Source: Government of India online information. Ex penditure Budget Vol.1 2013-14 and Expenditure Budget 
Vol.1 2014-15. Viewed at: http://indiabudget.nic.in/budget2013-2014/ub2013-14/eb/stat04.pdf , 
and http://www.indiabudget.nic.in/ub2015-16/eb/stat04.pdf . 
3.160.  India's latest notification on fisheries subsidies covering the information for 2010-11 to 
2013-14 was submitted to the WTO in November 2014.128 The authorities state that various 
subsidies under the centrally-sponsored scheme for development of marine fisheries are mainly 
aimed at improving socio-economic conditions of poor and traditional coastal fishermen by way of upgrading their skills with improved craft and gear and ensuring safety at sea; these subsidies are 
provided to upgrade fishing capacity for optimum utilization of available fisheries resources, rather 
than creating overcapacity, as well as ensuring the sustainable livelihood of poor and traditional 
fishermen, enabling/encouraging them to decongest coastal waters by moving from near-shore to deep sea to unexploited or underexploited fishery resources. The authorities consider that the 
amount of subsidies provided to the sector is very small compared to most other countries. 
3.161.  India submitted 35 notifications regarding subsidies to the Committee on Subsidies and 
Countervailing Measures. These include India's responses
129 to questions raised by other 
Members.130  
3.162.  India adopted the National Food Security Act 2013 in September 2013 with a view to 
providing subsidized food grains to around tw o-thirds of its population (section 4.1.1.3). 
3.3.1.3  Credit policies  
3.163.  The central Government allocates funds to subsidize interest rates, including for exporters 
(Table 3.19).131 Under these schemes, which are managed by different ministries (e.g. Ministry of 
Finance, and of Heavy Industries and Public Enterp rises), central public sector enterprises (CPSEs) 
also have access to credit at preferential rates.  
                                               
128 WTO document G/SCM/N/253/IND/Suppl.1, 21 November 2014. 
129 WTO document G/SCM/Q2/IND/40, 27 October 2014. 
130 These include WTO documents G/SCM/Q2/IND/20, 35, and 40, 10 October 2011, 31 July 2014, and 
27 October 2014. 
131 Fibre2fashion.com online information. Viewed at: http://www.fibre2fashion.com/news/textile-
news/newsdetails.aspx?news_id=119355 . WT/TPR/S/313/Rev.1 • India 
 
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  Table 3.19 Preferential intere st rates to exporters, 2014  
Period  Sector Interest rate 
Subsidy Floor 
rate 
1 December 2008 
to 31 March 2014 Textiles (including handloom), handicrafts, 
carpets, leather, gems and jewellery, marine 
products, and SMEs  2 percentage points 7% 
1 April 2010 to 
31 March 2011 Handicrafts, carpets, ha ndlooms and SMEs. From 
1 August 2010, leather and leather 
manufacturers, jute manufacturing including floor 
coverings, engineering goods and textiles 2 percentage points 7% 
1 April 2011 to 
31 March 2012 Handicrafts, handlooms, carpet an d SMEs 2 percentage points 7% 
1 April 2012 to 
31 March 2013 Handicrafts, carpets,  handlooms, SMEs, 
readymade garments, processed agriculture 
products, sports goods, toys 2 percentage points 7% 
1 April 2013 to 
31 March 2014 Handicrafts, carpets,  handlooms, SMEs, 
ready-made garments, processed agriculture 
products, sports goods, toys, certain ITC and textile goods, and 235 tariff lines on engineering goods Up to 31 July 2013, 
2 percentage points. From 1 August 2013, 3 percentage points.  7% 
Source: WTO Secretariat, based on informatio n provided by the Indian authorities.  
3.164.  India sets targets for priority-sector lending to ensure that banks provide credit to specific 
sectors.132 Domestic and foreign commercial banks are required to reserve a percentage of their 
adjusted net bank credit (ANBC) or credit eq uivalent amount of off-balance-sheet exposure 
(OBSE), whichever is higher, for priority sectors. Domestic banks and foreign banks with at least 
20 branches must reserve 40% of their ANBC/OBSE for lending to priority sectors, and foreign 
banks with less than 20 branches 32% of their AN BC/credit equivalent of OBSE (Table 3.20). In 
2013-14, 16 of the 26 public banks, 16 of the 20 pr ivate domestic banks, and 38 of the 39 foreign 
banks met the target.133  
Table 3.20 Targets for lending to priority sectors, 2014  
Priority sectors Domestic commercial banks/foreign 
banks with at least 20 branches Foreign banks with less than 
20 branches 
Total priority sectors 40% of the adjusted net bank credit 
(ANBC) or credit equivalent amount of off-balance-sheet exposure (OBSE), whichever is higher 32% of ANBC or credit equivalent amount 
of OBSE, whichever is higher 
Agriculture 18% of ANBC or credit equivalent amount 
of off-balance-sheet exposure, whichever 
is highera No specific target 
Micro- and small enterprises (MSEs) Advances to MSEs sect or will be reckoned 
in computing achievement under the overall priority sector target of 40% of ANBC or credit equivalent amount of off-balance-sheet exposure, whichever is higher No specific target  
Weaker sectionsb 10% of ANBC or credit equivalent amount 
of off-balance sheet exposure, whichever 
is higher No specific target 
a Indirect lending in excess of 4.5% of ANBC or  credit equivalent amou nt of off-balance sheet 
exposure, whichever is higher, will not be reckoned for computing achievement under the 18% target. However, all agricultural lo ans under the categories "direct" and "indirect" will be reckoned in 
computing achievement under the overall priority sect or target of 40% of ANBC or credit equivalent 
amount of off-balance-sheet ex posure, whichever is higher.  
b Weaker sections include, inter alia , small and marginal farmers; ar tisans, and village and cottage 
industries; scheduled castes/scheduled tribes; and be neficiaries of the Differential Rate of Interest 
(DRI) Scheme. 
Source: WTO Secretariat, based on informatio n provided by the Indian authorities.  
                                               
132 The general categories of priority sectors are: ag riculture, micro- and sma ll enterprises, education, 
housing, and export credit (Reserve Bank of India, Master Circular No. RBI/2014-15/95, 1 July 2014). 
133 Reserve Bank of India (2014b). WT/TPR/S/313/Rev.1 • India 
 
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  3.165.  Subsidies are also provided to regional ru ral banks, cooperative banks, and public sector 
banks to provide short-term credit to farmers at pr eferential rates. Apart from this subsidy granted 
by the central Government, farmers may benefit from other subsidized interest rates at the State level. 
3.3.1.4  Micro- and small enterprises 
3.166.  India provides support to micro- and small enterprises (MSEs) through various means, for 
example, by reserving some products for exclusive manufacturing by MSEs. Products are eligible 
for reservation if manufacturing by MSEs is economically viable and technically feasible.
134 The 
reservation/de-reservation of products is revi ewed regularly by the Advisory Committee on 
Reservation, under the Ministry of Micro, Sma ll, and Medium Enterpri ses (MSMEs). Currently, 
20 products are in the reserved category (unchanged since India's previous Review).135 
3.167.  The Government provides a number of other assistance schemes to MSEs; these schemes 
are managed by the Ministry of MSEs and suppo rting institutions (e.g. the Office of the 
Development Commissioner and the National Small Industries Corporation). They aim to assist 
MSEs in the promotion and marketing of exports, product certification, technology upgrading, and 
human resources development (Table A3.1). MSEs  are also granted preferences in government 
procurement (section 3.3.4). 
3.168.  Within the policy on lending to priority sectors, advances by domestic commercial banks or 
foreign banks with no fewer than 20 branches to  micro- and small enterprises will be counted 
towards the overall priority sector target of 40% of ANBC or credit equivalent amount of off-balance-sheet exposure, whichever is higher.  
3.169.  At the State level, other schemes also implemented to support the development of MSEs 
include: the development of industrial estate, tax incentives, and subsidies for electricity and capital.
136 Under the General Excise Exemption Scheme, MSEs with annual turnover of up to 
Rs 40 million are granted full excise exemption up to Rs 15 million137; MSEs may also benefit from 
excise duty exemptions.138 
3.3.2  Competition policy and price controls  
3.3.2.1  Competition policy 
3.170.  The Competition Commission of India (CCI), established under the CCI Act 2002, is 
responsible for preventing practices having an adverse effect on competition, promoting and sustaining competition in markets, protecting the interests of consumers and ensuring freedom of 
trade carried out by other participants in the markets in India.
139 It has powers of inquiry and 
enforcement, and may impose penalties for non-compliance with its procedures. The CCI may also take remedial actions to deal with anti-competitive agreements and abuse of dominant position, 
and impose penalties of up to 10% of the aver age turnover of an enterprise for the three 
preceding financial years. In the case of a cartel, the CCI may impose on each member a penalty of up to three times the profit or up to 10% of turnover, whichever is higher, for each year of the 
continuation of the agreement. After the inquir y, the CCI may issue a cease-and-desist order 
directing a delinquent enterprise to discontinue and not to re-enter into an anti-competitive 
                                               
134 Department of Industrial Policy and Promot ion (2009a); and Development Commissioner online 
information, "List of items reserved for exclusive ma nufacture in micro and small enterprises". Viewed at: 
http://www.dcmsme.gov.in/publications/reserveditems/resvex.htm . 
135 They are: pickles and chutneys, bread, mustard oil (except solvent extracted), groundnut oil (except 
solvent extracted), wooden furniture and fixtures, exer cise books and registers, wax candles, laundry soap, 
safety matches, fireworks, and agarbatties, glass bangles, steel almirah, rolling shutters, steel chairs (all 
types), steel tables (all other types), steel furniture (a ll other types), padlocks, stainless steel utensils, and 
domestic utensils (aluminium ). Ministry of Micro, Small and Medium En terprises online info rmation. Viewed at: 
http://www.dcmsme.gov.in/publications/reserveditems/reserved2010.pdf .  
136 Development Commissioner online inform ation, "SSI Registration". Viewed at: 
http://www.dcmsme.gov.in/howtosetup/grgxx01x.htm . 
137 Information provided by the authorities. 
138 Development Commissioner online information, "Excise and SSI". Viewed at: 
http://dcmsme.gov.in/policies/central/t-ed.htm . 
139 See WTO (2011), Chapter III(4)(iii) for details. WT/TPR/S/313/Rev.1 • India 
 
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  agreement or abuse its dominant position. The CCI may self-initiate investigations. The CCI 
provides ex ante  merger consultation free of charge. The CCI also has a role in competition 
advocacy; the authorities consider it necessity to  develop "competition culture" in the economy, 
and enhance competition compliance by stakeholders. The CCI has organized various workshops, 
conferences, seminars, used electronic media and undertaken studies in pursuance of the 
advocacy mandate. The orders, directions or decisions made by the CCI may be appealed before the Competition Appellate Tribunal (CAT). The authorities state that the CCI is an independent 
body; it has full functional autonomy as a competition regulator in India, furnishes its annual 
report which provides a full account of its activities to the Government, and is subsequently placed before the Parliament. The chairperson and members are appointed by the Government from a panel of names recommended by a selection committee headed by the Chief Justice of India or 
his/her nominee. The appointments are subject to th eir satisfying the qualifications and experience 
requirements stipulated in the Competition Act 2002.  
3.171.  Legislation dealing with competition issues in India includes the Competition Act 2002, the 
Competition (Amendment) Act 2007, the Competition (Amendment) Act 2009, and various 
regulations issued by the CCI.
140 Sector-specific regulations exist in many sectors, such as capital 
markets, insurance, telecommunications, electricit y, petroleum and natural gas, and civil aviation. 
The Competition Act does not distinguish between private and government enterprises except for 
limited exemptions relating to sovereign functions of government (including activity relating to energy, currency, defence and space). The Competition Act stipulates mandatory prior approval of combinations above the notified thresholds.
141 The CCI must decide within 210 days to finalize and 
notify the decision on a combination filing. In this context, the CCI has a self-imposed limit to clear 
cases within 180 days on best-endeavour basis. As  per provisions in "Combinations Regulations", 
the authorities consider that most filings are likel y to be approved within 30 days and only those 
with serious competition concerns are likely to go beyond this period to the second stage of 
investigation.  
3.172.  In June 2011, two new regulations concerning combinations (mergers) and recovery of 
monetary penalty, respectively, entered into force.142 The purpose of the CCI (Procedure in Regard 
to the Transaction of Business Relating to Combinations) Regulations 2011 is to provide detailed procedures to be followed in case of combination matters (e.g. merger review). The Regulations deal with, inter alia,  the form of notice to be given, timelines, filing fees, procedure for filing 
notice. Combinations require filing notices within 30 days of: (i) approval of the proposal relating 
to merger or amalgamation; or (ii) execution of any agreement or other documents of acquisition. The CCI (Manner of Recovery of Monetary Penalty) Regulations 2011 contains, inter alia,  detailed 
provisions with regard to issuance of demand no tices, modes of recovery, reference to income tax 
authorities, and interest on penalties. The purpose of the Regulation is to enforce penalty recovery in an effective and pre-determined manner.  
3.173.  The authorities state that CCI has kept the Combination Regulations aligned with 
international best practices, such as mandatory filing, clearly defining threshold for notification requirements, and timing of noti ces to be submitted. From this perspective, CCI amended the 
Combination Regulations on 23 February 2012, 4 April 2013 and 28 March 2014, respectively, with 
a view, inter alia,  to simplifying filing requirements for combinations.
143.  
                                               
140 See WTO (2011), Chapter III(4)(iii) for details. 
141 The thresholds are: (i) for an individual in India,  Rs 15 billion (assets) and Rs 45 billion (turnover); 
(ii) for a group in India, Rs 60 billion (assets) and Rs 180 billion (turnover); (iii) for individual parties in India and outside, US$750 million in which mi nimum Indian component is Rs 7.5 billion (assets) and US$2.25 billion 
in which minimum Indian component is Rs 22.5 billion (t urnover); and (iv) for a gr oup in India and outside, 
US$3 billion in which minimum Indian component is Rs 7.5 billion (assets) and US$9 billion in which minimum 
Indian component is Rs 22.5 billion (turnover). 
142 The CCI (Procedure in Regard to the Transaction of Business Relating to Combinations) Regulations 
2011, and the CCI (Manner of Recovery of Monetary Penalty) Regulations 2011. Viewed at: http://www.cci.gov.in/index.php?option=com_content&task=view&id=62 .  
143 The main changes stipulated in the February 2012 amendment included inter alia that filing of notice 
is not generally required in the event of: (i) acquisitions  that are less than 25% of th e shares or voting rights 
of a company on a cumulative basis; (ii) intra-group mergers or amalgamations involving enterprises wholly-owned by the group companies; (iii) acquisitions of shares or voti ng rights pursuant to buy-backs or 
subscription of rights issues not leading to acquisition of control. The April 2013 amendment involved inter alia: 
(i) allowing a "creeping" of acquisitions up to 5% per financial year, where the acquirer already holds 25% or more but does not hold 50% or more of the shares or vo ting rights of the enterpri se, under certain conditions; WT/TPR/S/313/Rev.1 • India 
 
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  3.174.  In addition, in accordance with clause (a) of Section 54 of the Competition Act, the 
Government exempted: (i) an enterprise, whose control, shares, voting rights or assets are being acquired has either assets of the value of not more  than Rs 2.5 billion in India or turnover of not 
more than Rs 7.5 billion in India from the provisio ns of Section 5 of the Act for a period of five 
years from 4 March 2011; (ii) a banking company, to which the Government has issued a 
notification under Section 45 of the Banking Regulation Act 1949, from the application of provisions of Section 5 and 6 of the Competition Act for five years from 8 January 2013
144; and 
(iii) the Vessel Sharing Agreements of Liner Shipping Industry from the provisions of Section 3 of 
the Competition Act (Anti-Competitive Agreements) for a period of one year as from 11 December 2013.  
3.175.  Between May 2009 and December 2014, the CCI received 557 cases (excluding 
combination filings as described in the next paragraph). As at 31 December 2014, 283 cases (out 
of 557 cases) were closed at the prima facie  stage, 144 cases decided/disposed of after the report 
of the Director General (DG) of Investigation, 55 cases under consideration before the CCI, and 
75 cases under investigation before the DG. The CCI has issued cease-and-desist orders in various 
cases as well as ordered modification of agreements; between 2011 and 2014, 77 cease-and-desist orders were issued. Penalties have been imposed in some cases (e.g. a cartel 
involving cement)
145; in the same period, there were 58 cases (including combination cases) 
where penalties were imposed, the total amount of the penalty amounting to Rs 124.7 billion.  
3.176.  On merger review, between June 2011 and March 2014, the CCI received more than 
150 combination filings, all of which being cleared by the Commission at the first phase of scrutiny 
within 30 days of filing in accordance with the provisions of the Combination Regulations.  
3.177.  The CCI identifies the Memorandum of Understanding (MOU) as a potent tool to enhance 
international cooperation in competition policies. It has signed MOUs with: the Federal 
Antimonopoly Service (Russia) in 2011; the Federal Trade Commission and the Department of 
Justice (the United States) in 2012; the Australian Competition and Consumer Commission in 2013; the DG Competition, European Commission in 2013; and Competition Bureau, Canada in 
2014. In various regional trade agreements that  India has signed (e.g. with Japan, and the 
Republic of Korea), competition chapters are included; the authorities state that all RTAs to be concluded by India are likely to have a chapter on competition.  
3.178.  The authorities are currently formulating a National Competition Policy.
146  
3.3.2.2  Price controls 
3.179.  The Government maintains various price support schemes for agricultural commodities. 
These include minimum support prices (MSPs) for major agricultural commodities, price support 
schemes (PSS) involving procurement, the market in tervention scheme (MIS) covering agricultural 
commodities that are not covered by MSPs, the fair and remunerative price (FRP) and the state advisory price (SAP) schemes for sugarcane. Ther e is also a new pricing scheme (NPS) for urea.
147 
These schemes have remained largely unchanged since 2011.148  
3.180.  Under the targeted public distribution system (TPDS), the prices of certain essential 
commodities (i.e. wheat, rice, coarse grains, sugar and kerosene) continue to be subsidized for a targeted population living below the poverty line.  
3.181.  In addition, the prices of LPG for dome stic use are controlled with the provision of 
subsidies. LPG for domestic use is made available at subsidized prices up to 12 cylinders per year 
                                                                                                                                               
and (ii) eliminating notification requ irements for combinations involving subsidiaries of a group under certain 
conditions. Further, in the March 2014 amendment, inter alia , filing fees were increased to Rs 1.5 million for 
Form I and Rs 5 million for Form II. 
144 Ministry of Corporate Affairs, Notification No.5 63/2011-CS, 8 January 2011. 
145 See, for example, CCI online information at: 
http://www.cci.gov.in/May2011/PressRelease/PressReleaseSuoMoto052013.pdf . 
146 Ministry of Corporate Affairs (2014). 
147 Department of Chemicals and Fertiliz ers online information. Viewed at: 
http://fert.nic.in/page/fertilizer-policy . 
148 See WTO (2011) for details. WT/TPR/S/313/Rev.1 • India 
 
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  per household. Price controls on petrol and diesel were abolished on 26 June 2010, and 
19 October 2014, respectively.  
3.182.  A two-price regime system continues to exist for natural gas: gas priced under the 
administered pricing mechanism (APM) and non-APM gas. The APM applies to gas produced in 
fields awarded to India's national oil companies (O NGL and OIL) prior to the implementation of the 
New Exploration Licensing Policy (NELP) in 1999. The non-APM applies to: (i) gas produced in fields awarded under the NELP for which the price is determined by the production sharing contract 
(PSC) between the Government and the private contractor; and (ii) to imports of LNG for which 
the price is determined by an agreement between  buyer and seller. The price formula used to 
determine the prices under the PSC must be approved by the Government. APM gas may only be used by priority sectors, i.e. fertilizers (urea), LPG plants (owned by GAIL and ONGC), power, city 
gas distribution, steel plants, refineries, and petrochemicals. Other consumers are not allowed to 
use subsidized gas and must buy it from private companies or LNG importers. The price of gas produced by ONGC and OIL under the APM was US$4.2/MMBTU prior to 1 November 2014, when it 
was increased to US$5.61/MMBTU (on net calorific value) to be valid until 31 March 2015, as per 
the prescribed formula reflecting international gas markets. Prices are to be revised every six months.  
3.183.  The Government closely monitors the price of certain sensitive hydrocarbons. In case of 
high price volatility in the international market, the Government will intervene to stabilize prices. 
3.184.  On 7 December 2012, the Government introduced the National Pharmaceutical Pricing 
Policy 2012, and subsequently the Drugs (Price Control) Order, reflecting the Policy, was issued on 
15 May 2013.
149 The objective of the Policy is to introd uce a pricing framework for drugs to ensure 
availability of "essential medicines" specified in the National List of Essential Medicines at reasonable prices while providing sufficient opportunity for innovation and competition. Under the 
Policy, prices of some 348 essential medicines ar e regulated on the basis of formulations through 
"market-based pricing", which takes the simple averages of retail prices of all brands having a market share of no less than 1% of total market turnover.
150 The ceiling price of scheduled 
formulations will be revised as per the annual wholesale price index (WPI) for the preceding 
calendar year on or before the first day of April every year and will be notified on the first day of April every year.  
3.3.3  State-owned enterpri ses, and privatization  
3.3.3.1  Role of state-owned enterprises (other than state-tr ading companies), and 
disinvestment 
3.185.  Central public sector enterprises (CPSEs) continue to play an active role in the economy, 
holding significant market-share in several sect ors/subsectors, e.g. petroleum and mining, power 
transmission and generation, nuclear energy, hea vy engineering, the aviation industry, storage 
and public distribution system, shipping , insurance, and telecommunications.  
3.186.  India's disinvestment policy is aimed at  encouraging people-ownership of CPSEs while 
ensuring that the Government's equity does not fall below 51%, hence maintaining control of the enterprise. The Government's disinvestment programme in listed, profit-making CPSEs is governed by the Disinvestment Policy of November 20 09, which aims to bring transparency and 
accountability in the day-to-day functioning of CPSEs and also to introduce market discipline. On 
22 August 2014, the minimum public shareholding norm of CPSEs was raised from 10% to 25% to be achieved by end August 2017. In addition, the disinvestment programme envisages listing all 
unlisted profit-making CPSEs on stock exchanges; this will be achieved with the issue of fresh 
equity by the CPSE, or by the Government offloading its share in the stock market, or a combination of both.  
3.187.  Since India's last Review, disinvestment of CPSEs has continued; a few CPSEs were 
recently approved for disinvestment (Table 3.21) . Annual plans for disinvestment are approved by 
                                               
149 Department of Pharmaceuticals online information. Viewed at: http://pharmaceuticals.gov.in .  
150 Previously, under the provisions of the Drugs (Prices Control) Order, 1995 (DPCO, 1995) prices of 
74 bulk drugs and the formulations containing any of these scheduled drugs were controlled (WTO, 2011). WT/TPR/S/313/Rev.1 • India 
 
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  the Cabinet and included in annual budgets. Details of those companies to be disinvested and by 
how much are not published.  
3.188.  At end-March 2014, 229 of India's 277 CPSEs were in operation.151  
Table 3.21 Overview of disinvestment, 2011-15  
CPSEs Scenario Year Government's 
share (%) 
CPSEs disinvested   
Power Finance Corporation 
of India Ltd. (PFC) Follow-on Public Offer (FPO). 5% along with 
15% fresh equity raised by the company 2011-12 89.78 
Oil & Natural Gas 
Corporation of India Ltd (ONGC) Offer for sale of 4.91%  of the Government's 
paid-up capital 2011-12 74.14 
National Building 
Construction Corporation 
(NBCC) Offer for sale of 10% of the Government's 
paid-up capital 2012-13 100 
Hindustan Copper Ltd. 
(HCL) Offer for sale of 5.58%  of the Government's 
paid-up capital 2012-13 99.59 
National Mineral 
Development Corporation 
(NMDC) Ltd.  Offer for sale of 10% of the Government's 
paid-up capital 2012-13 90 
Oil India Ltd. Offer for sale of 10% of the Government's 
paid-up capital 2012-13 78.43 
National Thermal Power 
Corporation (NTPC) Ltd. Offer for sale of 9.50%  of the Government's 
paid-up capital 2012-13 84.50 
Rashtriya Chemical and 
Fertilizers Ltd (RCF) Offer for sale of 12.5%  of the Government's 
paid-up capital 2012-13 92.5 
National Aluminium 
Company Ltd (NALCO) Offer for sale of 6.09%  of the Government's 
paid-up capital 2012-13 87.15 
Steel Authority of India 
Ltd (SAIL) Offer for sale of 5.82%  of the Government's 
paid-up capital 2012-13 85.82 
Hindustan Copper Ltd 
(HCL) Offer for sale of 4.01%  of the Government's 
paid-up capital 2013-14 94.01 
ITDC Ltd Offer for sale of 5% of the Government's 
paid-up capital 2013-14 92.11 
MMTC Ltd Offer for sale of 9.33%  of the Government's 
paid-up capital  2013-14 99.33 
National Fertilizer Ltd 
(NFL) Offer for sale of 7.64%  of the Government's 
paid-up capital  2013-14 97.6 
State-Trading Corporation 
Ltd (STC) Offer for sale of 1.02%  of the Government's 
paid-up capital  2013-14 91.02 
Neyveli Lignite 
Corporation Ltd (NLC) Offer for sale of 3.56%  of the Government's 
paid-up capital  2013-14 93.56 
Engineers India Ltd (EIL) Offer for sale of 10% of the Government's 
paid-up capital 2013-14 80.40 
Indian Oil Corporation Ltd 
(IOCL) Offer for sale of 10% the Government's paid-up 
capital 2013-14 78.92 
National Hydroelectric 
Power Corporation (NHPC) Buy-back of 10% by the Company 2013-14 86.36 
Power Grid Corporation of 
India Ltd (PGCIL) 4% FPO and 13% of fresh equity raised by the 
Company 2013-14 69.42 
Bharat Heavy Electric Ltd 
(BHEL) Offer for sale of 4.66%  of the Government's 
paid-up capital 2013-14 67.72 
Steel Authority of India 
Ltd (SAIL) Offer for Sale of 5% of paid-up equity capital of 
SAIL out of the Government's shareholding of 80%  2014-15 80 
Coal India Ltd. (CIL) Offer for sale of 10% of the Government's 
paid-up capital 2014-15 89.65 
                                               
151 A list of CPSEs can be obtained online. Department of Pu blic Enterprises online  information: Viewed 
at: http://dpe.nic.in/sites/upload_files/dpe/files/survey1213/survey01/APENDIX1.pdf . WT/TPR/S/313/Rev.1 • India 
 
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  CPSEs Scenario Year Government's 
share (%) 
CPSEs to be disinvested    
Oil & Natural Gas 
Corporation of India Ltd 
(ONGC) Offer for sale of 5% of the Government's 
paid-up capital 2014-15 68.94 
National Hydroelectric 
Power Corporation (NHPC) Offer for sale of 11.36% of the Government's 
paid-up capital 2014-15 85.96 
Power Finance Corporation 
(PFC) Offer for sale of 5% of the Government's 
paid-up capital 2014-15 72.80 
Rural Electrification 
Corporation (REC) Offer for sale of 5% of the Government's 
paid-up capital 2014-15 65.64 
Source: WTO Secretariat, based on informatio n provided by the Indian authorities.  
3.189.  Proceeds from disinvestment are placed in the National Investment Fund (NIF).152 In 
principle, 75% of the proceeds are allocated to th e funding of selected social programmes and the 
remainder is invested in the modernization or expansion of profitable or revivable CPSEs.153 On 
17-January 2013, the Government approved restruct uring of the NIF and decided that with effect 
from 2013-14 the disinvestment proceeds will be credited to the existing "Public Account" under 
the NIF and they would remain there until withdr awn/invested for the approved purpose. The 
allocations from the NIF will be decided in the annual Government budget. For 2013-14, the Government approved allocations from the NIF to wards spending on recapitalization of public 
sector banks and capital expenditure of Indian railways.  
3.3.4  Government procurement  3.3.4.1  Overview 
3.190.  Since 2012, the use of e-procurement has become the norm in government procurement 
in India. All ministries/departments of the cent ral government must use e-procurement to publish 
all tender enquiries (from 1 January 2012), CPSEs from 1 February 2012, and autonomous/statutory bodies from 1 April 2012.
154 On 5 October 2012, the Department of 
Telecommunications issued a notification concerning its policy for according preference to 
domestically-manufactured telecom products in procurement due to security considerations.155  
3.191.  India is an observer to the WTO Agreem ent on Government Procurement. Its procurement 
system continues to be decentralized, comprising an array of entities at various levels of 
government (central, state and local) in addition  to numerous CPSEs. There is no central agency 
responsible for regulating public procurement at a national level and no common legislation 
governing procurement at different levels of gove rnment and by CPSEs. Consolidated data are not 
available on the economic significance of govern ment procurement, including a breakdown of the 
value of contracts by the tendering method. The au thorities state that India is in the process of 
formulating a comprehensive government procurement legislation that is applicable to all parts of 
the central Government; the legislation is also intended to accommodate requirements of the 
WTO-Agreement on Government Procurement. 
3.192.  Whereas the central Government has reservations and price preferences as part of the 
procurement system, competition from foreign suppliers is ordinarily allowed in tenders advertised 
in India. If procurement is restricted to domestic manufacturers/suppliers, it is clearly indicated in the tender notification. 
3.193.  Certain control and oversight functions are carried out by central authorities, such as the 
Comptroller and Auditor General and the Central Vigilance Commission. Procurement decisions at 
                                               
152 Department of Disinvestment on line information. Viewed at: http://divest.nic.in/Nat_inves_fund.asp . 
153 Nonetheless, due to the economic slowdown ov er 2008-09 and a recent drought, the Government 
decided that, between April 2009 and March 2012, proceeds would be fully used to finance social sector programmes; this was also extended by another year (April 2012-March 2013) in view of the persistent difficult economic conditions. 
154 Department of Expenditure, Public Procuremen t Cell online information, Office Memorandum 
No. 10/1/2011, 30 November 2011. Viewed at: http://eprocure.gov.in /cppp/rulesandprocs . 
155 DOT notification, 5 October 2012. Viewed at: http://www.dot.gov.in/sites/default/files/5-10-12.PDF . WT/TPR/S/313/Rev.1 • India 
 
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  the central level are subject to audit by the Comp troller, and to legislative review and judicial 
scrutiny. There is a similar system at the state level. Public procurement carried out at state level is also subject to audit and oversight by the resp ective state vigilance departments, auditors, and 
judiciary. Some States (Karnataka, Rajasthan, and Tamil Nadu) have also passed laws to regulate 
public procurement. 
3.194.  Disputes regarding procurement should be resolved in the first instance through 
consultation. If the parties fail to resolve the dispute within 21 days, either party may give notice 
to the other of its intention to commence arbitration. For contracts with domestic suppliers, the 
applicable arbitration procedure is under the Indi an Arbitration and Conciliation Act 1996. If the 
contract is with a foreign supplier, the supplier may chose arbitration either through the Indian Arbitration and Conciliation Act 1996 or the United  Nations Commission on International Trade Law 
(UNCITRAL).
156 Remedies regarding public procurement contracts may also be sought under the 
provisions of the Indian Contract Act 1872, the Sp ecific Relief Act 1963, and the Sale of Goods Act 
1930. A public procurement process may be subject to judicial review before a High Court in India 
on grounds of, inter alia , arbitrariness, fairness in action, bad faith or violation of a fundamental or 
legal right enshrined in the Constitution of India.157 
3.195.  Under India's competition law, collusive bidding or bid-rigging in the context of 
government procurement is one of the horizontal agreements that is considered to have an 
adverse effect on competition. The CCI has the competence to determine whether collusive bidding or bid-rigging is anti-competitive. However, the CCI only makes an enquiry if there are complaints of an alleged contravention. After the enquiry the CCI might direct the parties to review the 
agreement and may impose a penalty if it deems necessary.  
3.3.4.2  Regulatory framework  3.196.  The current regulatory framework for In dia's public procurement includes the General 
Financial Rules (GFRs), 2005; the Delegation of Financial Powers Rules (DFPR); the Manual on 
Policies and Procedures for Purchase of Goods  issued by the Ministry of Finance; Government 
orders regarding price or purchase preference or ot her facilities to sellers in the handloom sector, 
cottage and small-scale industries and to CPSEs; and the guidelines issued by the Central Vigilance 
Commission to increase transparency and objectivity in public procurement. There are also sectoral laws such as the Telecom Regulatory Authority Act 2000, the Electricity Act 2003, and the Petroleum and Natural Gas Board Act 2006, which also  regulate public procurement. In addition, 
various Government instruments and agencies including ministries and departments (e.g. the 
Public Works Department and the National Highwa ys Authority of India) have their own public 
procurement system.
158 
3.197.  The various ministries or departments have full powers to make their own arrangements 
for the procurement of goods. However, if they do not have the required expertise to procure goods, procurement may be carried out through th e Directorate General of Supplies and Disposal 
(DGS&D), the central purchase organization, wi th the approval of the competent authority.
159 The 
DGS&D keeps a registry of manufacturers/suppliers  and Indian agents of foreign manufacturers, 
and arranges the clearance of imported goods purchased by central Government departments. 
3.198.  The applicable procurement method depends on the value of the contract to be awarded 
and other factors (e.g. emergency situations) as stipulated in the GFRs 2005. The splitting of 
purchases into contracts of smaller value is explicitly forbidden. The procurement methods are: invitation to tender; limited-tender enquiry; single -tender enquiry; purchase of goods by purchase 
committee; purchase of goods without quotation; and purchase of goods directly under rate 
contract.  
3.199.  The DGS&D concludes "rate contracts" for goods identified as "common use items" and 
needed on a recurring basis by various centra l Government ministries or departments. The 
ministries or departments must follow those rate contracts to the maximum extent possible. A rate contract is an agreement between the purchaser and supplier to supply stores (i.e. goods) at 
                                               
156 Global Legal Group (2010). 
157 Global Legal Group (2010). 
158 Global Legal Group (2010). 
159 General Financial Rules 2005. WT/TPR/S/313/Rev.1 • India 
 
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  specified prices during the period covered by the contract. However, no quantities or minimum 
purchase requirements are mentioned in the contract. Supply orders may be placed with any of the firms holding a "rate contract" directly by the authorized officers of the central Government ministries/departments or by the DGS&D. 
3.200.  The DGS&D prepares lists of eligible an d capable suppliers of commonly purchased goods. 
The National Small Industries Corporation (NSIC) also registers MSEs, under the single point registration scheme; this is considered equivalent to DGS&D registration. MSEs registered under 
the scheme are exempt from payment of fees rela ted to the issue of the tender and of earnest 
money and security deposit; they also bene fit from the preferences reserved for MSEs 
(section 3.3.4.3). Registration is granted for a fi xed period depending on the nature of the goods, 
and may be renewed upon application. 
3.3.4.3  Preferential policies at  the central Government level 
3.201.   India retains preferential treatmen t in government procurement from MSEs. On 
23 March 2012, the Government announced that the central Government ministries, departments 
and public sector undertakings will be obliged to procure a minimum of 20% of their annual 
procurement in value from MSEs starting as from 1 April 2015.
160 The order also earmarked a 
sub-target 4% procurement of goods and serv ices, out of the 20% from MSEs owned by 
Scheduled Caste or Scheduled Tribe entrepreneurs.161  
3.202.  Reservations exist for MSEs and for certain products. MSEs receive purchase and price 
preferences in procurement by central Government  ministries/departments and CPSEs. Under the 
purchase-preference system, 358 items have been reserved for exclusive procurement from MSEs 
(Table A3.1) and 20 items for exclusive manufacturing in the micro- and small sectors. The 
purchase-preference system offers price preferences of up to 15% to MSEs over the quotations provided by large-scale industries. MSEs are also a ssisted through the: (i) issue of tender sets free 
of cost; (ii) exemption from payment of "earne st money" (deposits) and transparent criteria. 
Under the present Government purchase and price policy for MSEs, the Government has been extending various facilities to the MSEs registered with the NSICI under its Single Point 
Registration Scheme.  
3.203.  The central Government has reserved all items of handspun and hand-woven textiles 
(khadi goods) for exclusive purchase from the Khadi and Village Industries Commission (KVIC). The central Government purchases all items of handloom textiles exclusively from the KVIC and/or 
the Association of Corporations and Apex Societies of Handloom, and coir products from the Coir 
Board. 
3.3.4.4  Procurement of services  
3.204.  When outsourcing services, a limited tender  enquiry is used if the estimated value of the 
work or service is Rs 1 million or less. Eligible bidders are on the ministry/department's list of potential contractors. This list is prepared through formal or informal enquiries with other 
ministries and organizations involved in similar activities and research in trade journals. At least 
three contractors must be identified for issuing a limited tender enquiry. If the estimated value of 
the work or service is more than Rs 1 million, an advertised tender enquiry must be published in at least one popular largely circulated national newspaper and on the ministry/department's website.  
3.3.4.5  Procurement at the state level 
3.205.   Some states (e.g. Tamil Nadu and Karnataka) have enacted a law exclusively governing 
public procurement of goods. Nonetheless, in mo st states the GFRs govern procurement and are 
based on the central Government GFRs.  
                                               
160 Ministry of Micro, Small and Medium Enterprises, Order S.O.581(E), 23 March 2012.  
161 Ministry of Micro, Small and Medium Enterprises (2012). WT/TPR/S/313/Rev.1 • India 
 
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  3.3.4.6  Procurement in the rail way and other specialized sectors 
3.206.  Since India's previous Review, there have  been no major changes to procurement in the 
railway, postal system, telegraph, and defence industries, which is subject to specialized procedures developed by the ministries responsi ble, within the overall framework of the GFRs 
2005. In general, competition from foreign suppliers is allowed in respect of high technology or 
high-value items. For procurement in railways, foreign firms are free to participate in tenders advertised in India only, but payment against such contracts must be received in Indian rupees on 
par with indigenous suppliers. Global tendering is frequently used in procurement of rolling stock, 
wheels, machinery and plant equipment, including technology transfer. Indian Railways evaluates 
all offers based on the total destination cost. Do mestic goods bids are evaluated based on freight 
up to destination including all taxes and levies. Offers from abroad are evaluated based on the 
c.i.f. value of imports and customs duties, but inland freight is not taken into account.  
3.3.5  Intellectual property rights 3.3.5.1  Introduction 
3.207.  India has an important economic interest in protecting the intellectual property rights 
(IPRs) of its creators and inventors, particularly in the creative and knowledge-based industries. It is an active stakeholder in the international intellectual property community, and party to key 
WIPO treaties.
162 Since the last Review, India has in its 2012 telecommunications policy favoured 
"Indian" IPRs163 in line with other policies favouring local manufacture. India's National 
Manufacturing Policy, while defining the functions of the Technology Acquisition and Development Fund, has stated that the Fund will have the option to approach the Government for issue of a 
Compulsory Licence for the technology which is  not being provided by the patent-holder at 
reasonable rates or is not working in India to meet the domestic demand in a satisfactory manner. It is stated that such compulsory licences will be issued only within the provisions of the TRIPS.
164 
In the Global Innovation Index 2014, India slipped ten positions to rank 76th in the world.165 
3.208.  With a view to designing an IPR policy  that would stimulate innovation across sectors 
within the country, the Government constituted an "IPR Think Tank" with the mandate to prepare 
the draft national IPR policy. The Think Tank submitted its draft National IPR Policy on 
19 December 2014.166 
3.209.  While India has laws covering different aspects of IPRs that have been amended from time 
to time, including in order to take into account its TRIPS obligations167, only the Copyright Act, 
1957 has been amended since 2011. India's WTO contact point for IPRs remains the Department 
of Commerce. The nodal department for industrial property such as patents, trademarks, industrial designs and geographical indications remains the Department of Industrial Policy and Promotion, 
which is part of the Ministry of Commerce and Industry. The nodal Ministry for copyright remains 
the Ministry of Human Resources Development, whil e that for the protection of new plant varieties 
remains the Ministry of Agriculture. 
3.210.  Appeals regarding administrative decisions relating to patents, trademarks and 
geographical indications fall to the Intellectual Property Appellate Board (IPAB) that has been in operation since 2007 with respect to patents, and since 2003 with respect to trademarks and geographical indications. It has not been decide d whether to add plant variety protection to the 
jurisdiction of the IPAB.  
                                               
162 See WT/TPR/S/249/Rev.1, p. 112, fn. 336, 20 October 2011. 
163 It is unclear whether "Indian" IPRs in the Nati onal Telecom Policy 2012 on pages 3, 10 and 17 refer 
only to IPRs granted to or generated by  Indian national entities (even if filed first elsewhere) or to IPRs granted 
to or generated by any entity  in India only. Viewed at: 
http://deity.gov.in/sites/upload_files/dit/files/Na tional%20Telecom%20Polic y%20(2012)%20(480%20KB).pdf) 
164 Department of Industrial Policy and Promotion (2011) 
165 World Intellectual Property Organization  (WIPO) online information. Viewed at: 
http://www.wipo.int/pressroom/en/articles/2014/article_0010.html . 
166 Department of Industrial Policy and Promotion (2014c). 
167 See WT/TPR/S/249/Rev.1, p. 112, Table 3.29.  WT/TPR/S/313/Rev.1 • India 
 
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  3.211.  The following sections give an overview of each IPR law and its implementation, focusing 
particularly on developments since 2011. 
3.3.5.2  Patents  3.212.  India's current patent law was amended in 1999, 2002 and 2005 since the implementation 
of the TRIPS Agreement. The rules currently a pplicable are the Patents Rules 2003, as last 
amended by the Patents (Amendment) Rules 2014, effective 28 February 2014. The description of 
filing and other procedures in the last Review are still valid.
168 
3.213.  India had over 40,000 patents in force as at end-2013. While the number of patent 
applications has been steadily increasing, the number of patents granted has decreased by one-third (Table 3.22). This may indicate that the backlog of patent applications is growing. On the resident and non-resident breakdown, Indian applicants hold less than one-fifth of the patents in 
force as at 2012-13. Moreover, while patent applications from residents and non-residents were 
about the same in 1999, in 2013 non-resident applications were three times higher than resident applications (Chart 3.5). Nevertheless, four Indian entities, including two in the public sector, 
figure among the top 20 applicants in India (Table A3.8). 
Chart 3.5 Patent applications in India, 1999-2013 
05,00010,00015,00020,00025,00030,00035,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Resident Non-resident Abroad
 
Source: WIPO Statistics database. 
3.214.  Sectors that have attracted the most patent applications in the period 1999-2013 are 
pharmaceuticals, organic fine chemistry and computer technology (Chart 3.6). A special effort was 
made between 2006-08 to speed up the granting of patents and reduce the backlog. This was 
subsequently followed by the implementation of a Plan Scheme for "Modernization & Strengthening" of IP Offices (2007-11). Under the scheme, new posts of patent examiners/controllers have been created. Procedures were also streamlined and at present the 
functioning of the IP Office is completely e-enabled. However, due to high attrition rates and the 
time-lag involved in recruitment, the situation of applications pending did not really improve. The scheme has been continued in the Twelfth Plan (2012-17). Additionally the strengthening of the 
functioning of the IP Offices will be continued through further modernization. 
3.215.  There have been several important developments in the period since the last Review in the 
implementation of India's patent law. An important provision, namely Section 3(d), was 
interpreted by the Supreme Court in April 2013 in th e context of Novartis A.G. vs. Union of India 
and Others.
169  
                                               
168 See WT/TPR/S/249/Rev.1, pp. 113-115. 
169 Section 3(d):"the mere discovery of a new form of a known substance which does not result in the 
enhancement of the known efficacy of that substance or  the mere discovery of any new property or new use 
for a known substance or of the mere use of a know n process, machine or apparatus unless such known WT/TPR/S/313/Rev.1 • India 
 
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  Table 3.22 Patents, 2009/13  
(Fiscal year) 
 2009/10 2010/11 2011/12 2012/13 
Patents  
Filed  34,287 39,400 43,197 43,674 
Examined 6,069 11,208 11,031 12,268 
Granted  6,168 7,500 4,381 4,126 
Residents 1,725 1,273 699 716 
Non-residents 4,443 6,236 3,682 3,410 
In force 37,354 39,554 39,989 43,920 
Residents 6,781 7,301 7,545 8,308 
Non-residents 30,553 32,293 32,444 35,612 
Source: Annual Report 2012-2013 . Viewed at: 
http://ipindia.nic.in/cgpdtm /AnnualReport_English_2012_2013.pdf ; and information from the 
Government of India. 
Chart 3.6 Patent applications by top fields of technology, 1999-2013 
Pharmaceuticals
20.4%
Organic fine chemistry
18.6%
Computer technology
14.3%Biotechnology
5.1%Chemical engineering  2.2%
Medical technology 2.3%
IT methods for management 2.5%
Digital communication  3.3%
Basic materials chemistry  
3.8%Other
25.4%
Materials, metallurgy  2.1%
 
Source: WIPO Statistics database. 
3.216.  The Supreme Court of India in its judgement said that there was no doubt that the 
amendment/addition made in Section 3(d) was mean t especially to deal with chemical substances, 
and more particularly pharmaceutical products. "The amended portion of Section 3(d) clearly sets 
up a second tier of qualifying standards for chem ical substances/pharmaceutical products in order 
to leave the door open for true and genuine inventions but, at the same time, to check any attempt at repetitive patenting or extension of the patent term on spurious grounds." Further it was said that "efficacy" should be understood as "therapeutic efficacy", which must be judged 
"strictly and narrowly". In paragraph 190 of the judgement, the Court held that "in whichever way 
Section 3(d) may be viewed, whether as setting up the standards of "patentability" or as an extension of the definition of "invention", it must be held that on the basis of the materials brought 
before this Court, the subject product, that is, the beta crystalline form of Imatinib Mesylate, fails 
the test of Section 3(d), too, of the Act." The Su preme Court has also clarified that the test of 
Section 3(d) of the Act does not bar patent protection for all incremental inventions of chemical 
and pharmaceutical substances.  
3.217.  It would appear that the recent rejection of  one of the patent applications filed in India on 
a breakthrough innovative product to treat Hepatitis C, a disease that is widely prevalent in India, 
was on the grounds that, while the claims may be both novel and inventive, they do not prove 
                                                                                                                                               
process results in a new product or employs at least on e new reactant. Explanation. For the purposes of this 
clause, salts, esters, ethers, polymorphs, metabolites, pu re form, particle size, isom ers, mixtures of isomers, 
complexes, combinations and other derivatives of known substance shall be considered to be the same 
substance, unless they differ si gnificantly in properties with  regard to efficacy". See: 
http://supremecourtofindia.nic.in/outtoday/patent.pdf  for full text of this judgement. WT/TPR/S/313/Rev.1 • India 
 
- 86 - 
 
  significant enhancement of "therapeutic" efficacy and hence are not in line with of Section 3(d) of 
the Indian patent law.170  
3.218.  Another important development in the area of patents since the last Review is the issuance 
in March 2012 of India's first and only compulsory licence so far. This was on a patented 
anti-cancer medicine called sorafenib Tosylate.171 The Controller General of Patents, Designs and 
Trade Marks issued a compulsory licence under Section 84 of the Patents Act deciding that the reasonable requirements have not been satisfie d with respect to the patented invention; the 
patented invention is not available to the public at a reasonable price; and that the patented 
invention has not been worked in the territory of  India as required by the law. The compulsory 
licence was issued with 6% royalty to be paid to the patent owner. Upon appeal to the IPAB, the royalty was increased to 7% without changing either the decision to grant a compulsory licence or 
any other conditions of this licence.
172 In July 2014, the Mumbai High Court upheld the earlier 
order of the IPAB. In December 2014, the Supreme Court refused to admit the appellant's special leave petition.
173 India has not issued any other compulsory licence since even though two more 
applications for such licences have been received  by the Controller General of Patents, Designs and 
Trademarks in the fiscal years 2011/12 and 2012/13.174 The Controller General of Patents, Designs 
and Trademarks received another application f iled by M/s. BDR Pharma seeking issue of a 
Compulsory Licence under Section 84 of the Patents Act; it was turned down on the grounds that 
sufficient efforts had not been made by the company to seek a voluntary licence from the patentee. 
3.219.  India has implemented the special compulsory licence regime for exports following the 
adoption of the Decision on the Implementation of Paragraph 6 of the Doha Declaration in 
August 2003. Section 92A of the Indian law states that a compulsory licence shall be available for manufacture and export of patented pharmaceutical products to any country having insufficient or 
no manufacturing capacity in the pharmaceutical se ctor that need them to address public health 
problems. One condition is that the importing country should have issued a compulsory licence or, by notification or otherwise, allowed the importation of these products from India. No special rules 
have been put into place to implement Section 92A. It is not entirely clear how India intends to 
address the issue of safeguards against diversion that are part of both the August 2003 decision 
and the subsequent Protocol Amending the TRIP S Agreement that proposes to transpose the 
decision into the text of TRIPS Agreement in a new provision, Article 31 bis. However, 
Section 92A(2) states that the compulsory licence is to be granted solely for manufacture and 
export of the concerned pharmaceutical product, as per the terms and conditions specified by the 
Controller General of Patents, Designs and Trademarks in the decision granting the compulsory 
licence, which must be published. This may be viewed as ensuring transparency and appropriate 
safeguards. 
3.220.   The Indian patent office has issued patent examination guidelines to address a number of 
specific issues. However, while these guidelines provide guidance to patent examiners, they do not 
overrule the law, which would prevail in case of  conflict between the guidelines and the Patents 
Act. 
3.221.  In December 2012, final Guidelines for the Processing of Patent Applications Relating to 
Traditional Knowledge and Biological Materials were released based on a draft version issued for 
comments a month earlier. Section 3(p) of the Patents Act states that "an invention which, in effect, is traditional knowledge or which is an aggregation or duplication of known properties of 
traditionally known component or components" is not an invention and hence, not patentable. 
Further with respect to biological materials, Section 6(1) of the Biological Diversity Act 2002 provides that "no person shall apply for any intell ectual property right, by whatever name called, 
in or outside India for any invention based on any research or information on a biological resource 
                                               
170 Some academic research has shown that overall the rate of rejection of incremental inventions in the 
pharmaceutical sector is not higher than in other emerging markets or Europe (Sampat and Shadlen, 2014; 
and also Sampat and Amin, 2013). 
171 The full text of the order of the Controller General of Patents, Designs and Tr ademarks is available 
at: http://www.ipindia.nic.in/iponew/compulsory_license_12032012.pdf . 
172 See full text of IPAB Order available at: http://www.ipab.tn.nic.in/045-2013.htm. 
173 Full text of the Order can be viewed at: 
http://courtnic.nic.in/supremecourt/temp/sc%203014514p.txt .  
174 It is stated in the Annual Reports 2012-13 and 2011-12  that one such application was received 
during the reporting period. WT/TPR/S/313/Rev.1 • India 
 
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  obtained from India without obtaining the previous approval of National Biodiversity Authority 
before making such application; provided that, if a person applies for a patent, permission of the National Biodiversity Authority may be obtained after the acceptance of the patent but before the sealing of the patent…"
175 The Biological Diversity Act 2002 provides that "whoever contravenes or 
attempts to contravene or abets the contravention of the provisions of the Section 3 or Section 4 
or Section 6 shall be punishable.176 Nondisclosure or false submission of the source or geographical 
origin of biological material used for an invention in the complete specification forms a ground for 
pre- and post-grant opposition under Clause (j) of Sections 25(1) and 25(2), respectively, of the 
Patents Act that could lead to revocation of the patent. The Guidelines state that exemption to medicinal plants from the provisions of the Biological Diversity Act, 2002 given by the notification issued by the Ministry of Environment and Forest s Notification dated 26 October 2009 is available 
only if they are traded as commodities and the prov isions are applicable if the biological resources 
are used as ingredients for medicine.
177 
3.222.  In March 2013, final Guidelines for the Examination of Biotechnology Applications for 
Patent were issued based on comments received on a draft that was released in December 2012. 
The Guidelines have clarified that products such as microorganisms, nucleic acid sequences, proteins, enzymes, compounds, which are directly isolated from nature, are not patentable 
subject-matter. However, processes of isolation of these products can be considered subject to 
requirements of Section 2(1)(j) of the Act, namely inventive step. This is an interpretation of Section 3(c) of the Act, which states that the mere discovery of a scientific principle or the formulation of an abstract theory or discovery of any living thing or non-living substance occurring 
in nature is not a patentable invention.  
3.223.  In June 2013, the Office of the Contro ller General of Patents Designs and Trademarks 
issued draft Guidelines for the Examination of Computer-Related Inventions.
178 The law in 
Section 3(k) states that computer programs per se  cannot be patented. These guidelines indicate 
that computer programs loaded on a general-pu rpose known computer or related devices cannot 
be held patentable. These guidelines go on to state that for considering the patentability of 
computer programs in combination with hardware features, the hardware portion has to be 
something more than a general-purpose machine.  
3.224.  In October 2014 Guidelines for Examination of Patent Applications in the Field of 
Pharmaceuticals were issued.179 These guidelines were issued after wide consultation on a draft 
issued in August 2014 with stakeholders both online and otherwise. Several comments made were 
accepted. For example, the disclosure of the inte rnational non-proprietary names of medicines in 
patent applications is not mandatory as was initially proposed. Guidance on the interpretation of 
Section 3(d) merely quotes large excerpts from the Supreme Court judgement referred to above 
and the IPAB decision of 2013 and provides no further guidance.180  
3.225.  In the context of intellectual property and climate change, a subject under discussion in 
the TRIPS Council since March 2013, India's National Manufacturing Policy of 2012 states in 
paragraphs 4.4.1 to 4.4.3 that: on occasion, a company may be unable to access the latest patented green technology, which can substantially  reduce its carbon footprint, because of its 
inability to obtain a voluntary licence from the patent holder. This could arise for two reasons. 
First, the cost of obtaining such voluntary licence could be a barrier for the company. Second, the 
                                               
175 India's patent law and rules make it mandatory for the applicant for a patent to submit a declaration 
under Form-1 (Application for Grant of Patent) of the Patent Rules 2003 to the effect that "the invention as 
disclosed in the specification uses the biological mate rial from India and the necessary permission from the 
Competent Authority shall be submitted by me /us before the grant of patent to me/us." 
176 The penalty may involve imprisonment  for a term up to five years, or  fine up to Rs 1 million. Where 
the damage caused exceeds Rs 1 million, such fine ma y commensurate with the damage caused, or with both. 
177 A list of traditional knowledge patents may be viewed at: 
http://ipindiaservices.gov.i n/publicfieldofinvention/ . The traditional knowledge patents have been classified into 
traditional knowledge (biotechnology), traditional knowledge (chemical), and traditional knowledge 
(mechanical). 
178 Intellectual Property India online information. Viewed at: 
http://ipindia.nic.in/iponew/draft_Guidelines_CRIs_28June2013.pdf .  
179 Full text of these guidelines available at: 
http://www.ipindia.nic.in/iponew/Guidelines_for_Exam ination_of_Patent_applicat ions_Pharmaceutical_29Oct20
14.pdf . 
180 Fresenius Kabi Oncology Limited vs. Glaxo Group Limited ORA/17/2012/PT/KOL, Order No.162 of 
2013. WT/TPR/S/313/Rev.1 • India 
 
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  patent holder could be unwilling to part with the licence, or it is not available at reasonable rates 
or it is not being worked in India (section 4.4.1); to address the first issue, the Technology Acquisition and Development Fund (TADF) will also function as an autonomous patent pool and licensing agency. It will purchase IP rights to inventions from patent holders. Any company that 
wants to use the IP to produce or develop products can seek a licence from the pool against the 
payment of royalties. This company may then produce the product for use in specified geographical areas subject to meeting agreed qua lity standards. The TADF would reserve the right 
to license more than one company for a particular patent (section 4.4.2); and to address the 
second issue, the Fund will have the option to approach the Government for issue of a compulsory licence for the technology which is not being provided by the patent holder at reasonable rates or is not being worked in India to meet the domestic demand in a satisfactory manner. Such 
compulsory licences will be issued only within the provisions of TRIPS. Reasonable royalty will be 
paid to the patent holder (section 4.4.3). 
3.3.5.3  Trademarks 
3.226.  Trademarks are protected under the Tr ade Marks Act 1999, which was last amended in 
2010, and entered into force on 8 July 2013. This  amendment was to ensure compliance with the 
Madrid Protocol of WIPO, which India acceded to in April 2013. The Trade Marks Rules 2002 were 
amended in 2010 and 2013, the latter amendment be ing to implement the Madrid Protocol. The 
Madrid System provides a mechanism for domestic trademark holders to facilitate the protection of their trademarks in countries which have also acceded to the Protocol. It also allows foreign trademark-holders to protect their trademarks in India. India has subsequently issued guidelines 
for applicants.
181 The rules were further amended in 2014 to increase application and expedited 
examination fees. These rules came into force in August 2014. 
3.227.  The procedures for the filing and examinat ion of trademarks described in the Secretariat 
report in the last Review remain valid.182 India's amended law allows trademarks for shape of 
goods and packaging as well as for holograms, combinations of colours or colours if found to be distinctive. Sound marks are permitted if these are capable of being represented graphically and 
are found to be distinctive through use.
183 
3.228.  The trends of trademarks' filing, examination and registration in India, as well as 
trademarks that remain in force show the reduction in registrations in 2011-12 and 2012-13 (Table 3.23). 
Table 3.23 Trademarks 2009/13
 
(Fiscal year) 
 2009/10 2010/11 2011/12 2012/13 
Trademarks  
Filed  141,943 179,317 183,588 194,216 
Examined 25,875 205,065 116,263 202,385 
Registered  67,490 115,472 51,735 44,361 
Residents 62,067 102,967 44,026 40,245 
Non-residents 5,423 12,505 7,709 4,116 
In force 67,490 115,472 51,735 44,361 
Residents 62,067 102,967 44,026 40,245 
Non-residents 5,423 12,505 7,709 4,116 
Source: Annual Report 2012-2013 . Viewed at: 
http://ipindia.nic.in/cgpdtm /AnnualReport_English_2012_2013.pdf ; and information from the 
government of India. 
3.229.  Unlike patents, resident trademark applications and grants represent nearly ten times 
those of non-residents. Indeed, it is only in 2010-11 and 2011-12 that there has been a spurt in 
non-resident registrations as is apparent in the graph. 
                                               
181 Intellectual Property India online information. Viewed at: 
http://www.ipindia.nic.in/Whats_New/guidelines_MadridProtocol_17December2013.pdf . 
182 See WT/TPR/S/249/Rev.1, paragraphs 262 to 270. 
183 See Section 5.2 on on-conventional trademarks in  the Manual for Trademark Practice and Procedure. 
Viewed at: http://ipindia.nic.in/tmr_new/TMR_Manual/DraftManual_TMR_23January2009.pdf . The authorities 
have clarified that India does not protect smell marks because of the difficulty in graphically representing 
them. WT/TPR/S/313/Rev.1 • India 
 
- 89 - 
 
  3.230.  With regard to the question of parallel  imports, it is clear that Section 30 of the 
Trademarks Act permits such imports of trademarked goods. Indian courts have upheld this provision several times but have clarified that the importer needs to prove that the initial purchase was legitimate and not of counterfeit goods.
184 
3.231.  India protects well-known trademarks in its law and courts have upheld 
internationally-well-known marks.185 Since 2011, India's Trademarks Registry has been publishing 
a list of well-known marks186 and prohibited trademarks, including a specific list of International 
Non-Proprietary Names as established by the WHO. The draft Manual for Trademark Practice and 
Procedure187 states that: sub-Sections (6) to (10) of Section 11 deal with  matters concerning 
protection of well-known trademarks. Sub-Section (6) lays down factors which the Registrar should take into account in determining whether the trademark is well-known. The onus is on the 
proprietor to establish by evidence that the mark is well-known. On the other hand, sub-Section 
(9) mandates that the Registrar shall not require as a condition for determining that a trademark is well-known any of the following factors: (i) that the trademark has been used in India; (ii) that 
the trademark has been registered; (iii) that the application for registration of the trademark has 
been filed in India; (iv) that the trademark is we ll-known, or has been registered, or in respect of 
which an application for registration has been filed in any jurisdiction other than India; or (v) that 
the trademark is well-known to the public at large in India. 
3.232.  Sub-Section (10) obliges the Registrar to protect a well-known mark against identical or 
similar trademark and to take into account "the bad faith of either the applicant or the opponent in respect of the rights relating to the trademark".
188 Section 2(2) clarifies that any reference: (a) to 
"trademark" shall include reference to "collective mark" or "certification trade mark"; (b) to the 
use of a mark shall be construed as a reference to the use of printed or other visual representation of the mark; (c) to the use of a mark in relation to goods shall be construed as a reference to the 
use of the mark upon, or in any physical or in any other relation whatsoever, to such goods; (d) to 
the use of a mark in relation to services shall be  construed as a reference to the use of the mark 
as or as part of any statement about the availabi lity, provision or performance of such services; 
(e) to the Registrar shall be construed as including a reference to any officer when discharging the 
functions of the Registrar in pursuance of sub-Sect ion (2) of Section 3; and (f) to the Trademarks 
Registry shall be construed as including a reference to any office of the Trademarks Registry. 
3.233.  On occasion, courts are said to have in terpreted the language narrowly to exclude use of 
well-known trademarks as trade names and industry has called for an amendment to make it clear 
that well-known trademarks are not allowed to be used as trade names, as this may dilute the trademark.
189 However, while recognizing well-known marks, the Courts may have to take into 
account other considerations to reach a decision. The requirement that each individual case should 
be judged on its own facts is also stipulated in the WIPO joint recommendation on the well-known marks in Article 2 (1) (c) of the resolution. There have been many such cases where the 
Trademarks Registry or the courts have decided that the protection would apply to any other 
product. Cases in point are the Judgments on Sony , Bajaj Electrical Limited, Enfield Bullet, and 
Whirlpool Corporation in respect of protection of product and trade names.
190 
                                               
184 Philip Morris Products S.A & Anr vs. Sameer & Ors. See full text of judgement delivered on 
10 March 2014. Viewed at: http://indiankanoon.org/doc/190034581/?type=print . 
185 See N.R. Dongre and Others vs. Whirlpool Corporation ANR of 30 August 1996: 1996 SCR (5) 
SUPP 369. Viewed at: http://judis.nic.in/supremecourt/imgst.aspx?filename=19828 .  
186 Latest list available at: http://ipindiaservices.gov.in/tm rpublicsearch/wellknownmarks.aspx  with 
details of the decisions/court orders. 
187 Department of Industrial Policy and Promotion (2009b).  
188 "Well-known trademark" means a mark that has become well known to the substantial segment of 
the public which uses goods or receives services that the use of such a mark.  
189 See the Report on Counterfeiting, Piracy and Smug gling in India: Effects and Potential Solutions, 
authored by ICC, BSCAP and FICCI CASCADE. Viewed at: www.iccwbo.org . 
190 The list of well-known marks is available at: 
http://ipindiaservices.gov.in/tmrp ublicsearch/wellknownmarks.aspx . WT/TPR/S/313/Rev.1 • India 
 
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  3.3.5.4  Industrial designs 
3.234.  Industrial design law in India has remained unchanged since the last Review.191 Draft 
amendment rules were notified in October 2013 and have not yet been approved. 
3.235.  The rate of examination and registration of industrial designs in India shows hardly any 
backlog (Table 3.24). Since January 2011, 240 cance llation petitions are said to have been filed 
under Section 19 of the Designs Act 2000 and 51 designs have been cancelled by the Controller General of Patents, Designs and Trademarks. Fourteen appeals have been filed before the High 
Court, of which two have since been decided. Around 45,000 designs are said to be in force in 
India as of March 2014. 
Table 3.24 Designs, 2009/14
 
(Fiscal year) 
 2009/10 2010/11 2011/12 2012/13 2013/14 
Designs  
Filed  6,092 7,589 8,373 8,337 8,533 
Examined 6,266 6,277 6,511 6,776 7,281 
Registered 6,025 9,206 6,590 7,252 7,178 
Residents 3,552 6,369 4,162 4,662 4,330 
Non-residents 2,473 2,837 2,428 2,590 2,848 
In force .. .. .. 42,786 44,903 
Residents .. .. .. .. .. 
Non-residents .. .. .. .. .. 
.. Not available. 
Source: Annual Report 2012-2013 . Viewed at: 
http://ipindia.nic.in/cgpdtm /AnnualReport_English_2012_2013.pdf ; and information from the 
Government of India. 
3.236.  Industrial design applications and registra tions are dominated by residents, although to a 
lesser extent than in the case of trademarks. Foreign applications have been increasing at a particularly sharp rate since the last Review bu t the 20 top holders of industrial designs among 
Indian entities engaged in different commercial sectors such as apparel, electrical products, 
engineering, jewellery, shoes and consumer goods (Charts 3.7 and 3.8). The top 20 foreign holders of industrial designs in India are from se ctors such as automobiles, electronics, consumer 
products and engineering. 
Chart 3.7 Industrial design applications, 1999-2013 
01,0002,0003,0004,0005,0006,000
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Resident Non-resident Abroad
 
Source: WIPO Statistics database. 
                                               
191 See WTO document WT/TPR/S/249/Rev.1, paragraphs 271 to 277. WT/TPR/S/313/Rev.1 • India 
 
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  Chart 3.8 Industrial desi gn registrations, 1999-2013 
05001,0001,5002,0002,5003,0003,5004,0004,500
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Resident Non-resident Abroad
 
Source: WIPO Statistics database. 
3.237.  Since the last Review, there have been a number of clarifications, including in cases 
litigated in India, that throw more light on the interface between design, patent and copyright law. 
Under India's Designs Act Section 2(d) design protection for designs that serve a particular function is excluded. Only non-functional designs are protected as patent law should be used to protect new, functional industrial designs. This  is accepted and is also made clear in the 
TRIPS Agreement.
192 
3.238.  Section 2(c) of the Designs Act also excludes designs that are artistic works as defined 
under the Copyright Act. Industrial products can be produced using artistic works protected under 
the Copyright Act; under Section 15(2), if these industrial processes are applied to a copyrighted 
work more than fifty times, copyright protection in  the design, as applied in the industrial process 
but not in the original artistic work, ceases.193 In this respect, the lines between copyright in 
three-dimensional forms of artistic works and indust rial design protection are not clear. In cases 
where designs have not been protected and yet co pyright protected works have been industrially 
reproduced more than fifty times, the IPR owner may lose copyright protection.194  
3.3.5.5  Copyright 
3.239.  India is the world's largest producer of fi lms and the total contribution of the Indian film 
and television industry to India's GDP is estima ted at 0.5% or Rs 500 billion (or approximately 
US$8 billion).195 This industry, in which copyright protection plays an important role, is projected 
to grow at a compound growth rate of 17% per annum up to 2017. The English and foreign films 
segment represents only around 6% of total revenue s from films in India, but this is set to grow 
due to increasing use of dubbing of foreign films into Indian languages. The Government is also 
trying to attract foreign film production to India. India is already being increasingly used for visual 
effects and animation by the foreign film industry, especially Hollywood.196 
                                               
192 A case which discusses different aspects of novelty and functionality was decided in 2014. See 
Whirlpool of India Ltd. Vs. Videocon Industries Ltd. on 27 May 2014. Full text available at: http://indiankanoon.org/doc/188051985/ . See also: http://spicyip.com/2012/10/novelty-of-design-tarun-
sethi-v-vikas.html  and Steelbird Hi-Tech India Ltd. vs. S.P.S.  Gambhir and Others. Full text available at: 
http://lobis.nic.in/dhc/MAN/judgement/24-02-2014/MAN24022014S24072013.pdf. 
193 This was upheld in Microf ibres Inc. vs. Girdhar & Co ., (2009 (40) PTC 519 (Del.)). Full text available 
at: http://indiankanoon.org/doc/112937069/ . 
194 This was the case in Standard Corporation India Lt d. vs. Tractors and Farm Equipment Ltd, which is 
analysed here at: http://spicyip.com/2014/04/standard-corporation -india-ltd-v-tractors-and-farm-equipment-
ltd-the-copyright-de sign-conundrum.html .  
195 Deloitte (2014). 
196 Deloitte (2014), slide 42. WT/TPR/S/313/Rev.1 • India 
 
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  3.240.  Similarly, the Indian music industry is reported to have had revenues of around 
US$150 million in 2013, of which over 50% was obtain ed through digital sales. Over 80% of music 
relates to film music in India; in some cases, over 10% of a producer's revenues could come from music. Digital sales and licensing revenues are expected to rise in the near future. 
3.241.  With regard to the publishing industry, it  is believed to be growing at a compound annual 
growth rate of 30%. India is said to be the world's seventh largest book publishing country with over 16,000 publishers, the huge majority being small players and family-owned units.
197 
3.242.  Procedures for obtaining copyright protection in India described in the last Review are still 
valid.198 While India's Copyright Act 1957 required on ly minor changes in 1999 to bring it into 
compliance with the TRIPS Agreement, it was substantially amended in 2012, and entered into force on 21 June 2012
199, to inter alia  implement the 1996 WIPO Copyright Treaty (WCT) and the 
WIPO Performers and Phonograms Treaty (WPP T). The Copyright Rules 2013 replaced the old 
Copyright Rules, 1958.200 A handbook on copyright law in India is available online.201 
3.243.  A major change has been to ensure that copyright holders are protected against 
circumvention of effective technological measures and rights management devices, while 
maintaining an appropriate balance between the inte rests of the right-holders on the one hand and 
that of technology innovators, researchers and educational institutions, on the other. Moral rights 
have been extended to performers, which is in co nformity with the WPPT. The right of reproduction 
of artistic works, cinematographic works and sound-recordings now includes storage of the 
protected work in any electronic or other media. In refining the rental right, the amended law defines commercial rental to exclude use for non-profit purposes besides protection of 
technological measures and protection of Right Management Information (RMI) in the digital 
network. 
3.244.  In the Copyright Act, exclusive rights in  reproduction, circulation, communication to the 
public and rental rights have been provided. In pa rticular, rights of performers have been clarified 
and consolidated, including in the context of cinematographic works and sound-recordings, without prejudice to the rights of authors, thus impl ementing Articles 6-10 of the WPPT. Rights of 
performers are now phrased as positive rights and have been extended, inter alia, to 
communication over the internet and to moral righ ts. The term of protection of photographs has 
been extended to 60 years after the death of th e author, as in the case of other artistic and 
literary works.  
3.245.  A compulsory licence can be issued by th e Copyright Board on any work withheld from the 
public. Special provisions have been inserted for works relevant to the disabled. In addition, access to copyright content has been improved to broadcasting organizations through non-voluntary 
licences where the terms are to be fixed by the Copyright Board.  
3.246.  Registration of copyright societies has been made mandatory and several provisions have 
been introduced to protect authors and improve tran sparency in the functioning of such societies.  
3.247.  Fair-use clauses have been extended to cinematographic works and sound-recordings. 
Importation of copies of any literary and artistic works such as labels, company logos or promotional or explanatory material that is purely incidental to other goods or products being imported lawfully has been clarified not to be an infringement. Parallel imports of copyrighted 
works are not permitted. Fair-use has been extended to the digital environment also where 
temporary storage (caching) is not an infringing act. Notice and take-down procedures have been 
introduced to make internet service providers otherwise liable (Section 52(c)). The 
WIPO Marrakesh Treaty for Visually Impaired Persons has been implemented through fair-use 
provision to access, for example, co pyrighted works in a special format. 
                                               
197 KPM Basheer (2014). 
198 See WTO document WT/TPR/S/249/Rev.1, paragraphs 278-283. 
199 Full text of the amende d law can be viewed at: 
http://www.wipo.int/edocs/lexdocs/laws/en/in/in066en.pdf.  
200 Copyright Office online information. Viewed at: http://copyright.gov.in/Documents/Copy-Right-
Rules-2013.pdf.  
201 Copyright Office online information. Viewed at: http://copyright.gov.in/Documents/handbook.html . WT/TPR/S/313/Rev.1 • India 
 
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  3.3.5.6  Geographical indications 
3.248.  India has a strong interest in the protecti on of its geographical indications (GIs). India's 
Geographical Indications of Goods (Registration and Protection) Act, 1999 came into force on 15 September 2003. Registration of GIs in Indi a began thereafter. Laws, regulations and rules 
remain unchanged since the last Review and thus procedures for the protection of GIs described 
therein remain unchanged.
202 
3.249.  Table 3.26 shows the trend in the re gistration of geographical indications.203 Darjeeling for 
tea from the Darjeeling district of India was the firs t GI registered in India. It is estimated that 10 
million kg of "Darjeeling" tea are produced in India, but 30 million are sold under the same name 
around the world.204 Among other agricultural products with export value205, it must be noted that 
basmati for rice is not a registered GI in India, nor are alphonso mangoes from Maharashtra state, 
although Dusseheri mangoes from Uttar Pradesh state are registered as a GI. 
3.250.  The nine foreign GIs registered so far are: Pisco Sour from Peru, Champagne and Cognac 
from France, Napa Valley from the United States, Scotch Whiskey from the United Kingdom, 
Prosciutto di Parma from Italy, Porto and Duoro from Portugal, and Tequila from Mexico.206 
It would appear that certain European cheese GIs are being produced and sold by Indian manufacturers in India, although these are not being claimed to have originated in Europe, thus 
not resulting in confusion as to their origin. 
Table 3.25 Geographical indications, 2009/14 
(Fiscal year) 
 2009/10 2010/11 2011/12 2012/13 2013/14 
Geographical indications 
Filed 40 27 148 24 75 
Examined 46 32 37 30 42 
Registered 14 29 23 21 22 
In force 120 149 172 193 215 
Residents 119 114 164 184 206 
Non-residents  1 5 8 9 9 
Source : Annual Report 2012-201. Viewed at: 
http://ipindia.nic.in/cgpdtm /AnnualReport_English_2012_2013.pdf ; and information from the 
Government of India. 
3.3.5.7  Protection of  new plant varieties 
3.251.  India enacted the Protection of Plant Vari eties and Farmers' Rights (PPV&FR) Act in 2001 
(53 of 2001) by opting for a sui-generis system. The PPV&FR Act provides for the establishment of 
an effective system for protection of plant variet ies, the rights of farmers and plant breeders and 
to encourage the development of new varieties of plants of economic importance. It is said to be a 
unique Act, which fulfills the spirit of the International Treaty on Plant Genetic Resources for Food & Agriculture on one hand and conforms to the International Union for the Protection of New Varieties of Plants (UPOV), 1978 Convention on the other.
207 The PPV&FR Act, 2001 follows the 
internationally recognized criteria of distinctiveness, uniformity and stability (DUS) and novelty for 
a new variety. There have been ten amendments to the PPV&FR Rules, 2003, the last four during the term of this Review having taken place between December 2012 and February 2013 to deal 
with matters such as the production and sale of registered varieties, the notification of costs to be 
imposed by the Authority, the submission of the annual statement of accounts of the Authority and 
the form for the registration of farmers' varieties. 
                                               
202 See WTO document WT/TPR/S/249/Rev.1, 20 October 2011, paragraphs 284-287. 
203 Full list of GIs registered in India is available at: http://ipindia.nic.in/girindia/.  
204 European Commission (2003).  
205 APEDA AgriExchange online information. Viewed at: 
http://agriexchange.apeda.gov.in/product_profile/exp_f_india.aspx?categorycode=0601 , and 
http://apeda.gov.in/agriexchange /market%20profile/one/mango.aspx . 
206 The information on pending GI  application is available at: 
http://ipindiaservices.gov.in/GirPublic/detailsGIR.aspx . 
207 Ministry of Agriculture (2012). WT/TPR/S/313/Rev.1 • India 
 
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  3.252.  Procedures for the protection of new plant varieties remain unchanged since the last 
Review.208 The certificate of registration is issued for a term of nine years for trees and vines and 
six years for other crops and is renewable for a maximum of 18 years for trees and vines, or a total of 15 years for extant varieties (from the da te of notification under the Seeds Act 1966) and 
other crops (from the date of registration of the variety). Registration of a variety is not allowed 
when the prevention of the commerc ial exploitation of such variety is necessary to protect public 
order or morality, following the wording of  Article 27.2 of the TRIPS Agreement.  
3.253.  A certificate of registration for a variety confers an exclusive right on the breeder or his 
successor, his agent or licensee, to produce, sell, market, distribute, import or export the variety. 
However, farmers are entitled to save, use, sow, re-sow, exchange, share or sell their farm produce, including seed (except "branded seed")
209, of a variety protected by the Act.210 
Registration cannot prevent the use of any variety to conduct experiments or research, or for the 
purpose of creating other varieties. The authorization of the breeder of a registered variety is required if the repeated use of such variety as a parental line is necessary for commercial 
production of such other newly-developed variety. Section 47(1) provides that compulsory licences 
can be granted after three years from the date of the grant of a registration certificate. To date, no application for such licences are said to  have been filed with the Authority. 
3.254.  The Act provides that a farmer means any person who (i) cultivates crops by cultivating 
the land himself; or (ii) cultivates crops by directly supervising the cultivation of land through any other person; or (iii) conserves and preserves, se verally or jointly, with any person any wild 
species or traditional varieties; or (iv) adds value to such wild species or traditional varieties 
through selection and identification of their useful properties. Farmers' variety means (i) a variety 
which has been traditionally cultivated and evolved by the farmers in their fields; or (ii) is a wild relative or land race of a variety about which the farmers possess common knowledge.  
3.255.  India has so far notified 92 crop species under the PPV&FR Act for plant-variety 
registration. During 2014-15, the PPV&FR authority notified 35 crop species. 
3.256.  Out of the 2,032 application received in 2014-15, 834 certificates of registration were 
issued during the same year (extant varieties (265), new varieties (108), and farmer's varieties 
(461)). The highest number of certificates was issued for rice (536), followed by sorghum (47), Indian mustard (40), sunflower (39), cotton (35), wheat (26), groundnut (21), and other crops (100). 
3.257.  The Government consults with the PPV&FR authority on various technical matters, 
including international issues relating to ITPGRFA, CBD, UPOV, WIPO and other international instruments/conventions. 
3.3.5.8  Trade secrets and test data protection 
3.258.  There is no specific legislation regulating the protection of trade secrets and hence no 
enforcement measures/penalties for violations of trade secrets, other than under contract law and 
common law of passing off, breach of confidence etc. It is not clear precisely how India protects 
against disclosure of trade secrets by third parties not party to any formal or informal contracts or confidence. However, Indian Courts have upheld trade secret protection on the basis of principles of equity and at times upon a common law action of breach of confidence as well as breach of 
contractual obligation. The remedies available to the owner of trade secrets are injunctions 
preventing the licensee from disclosing the trade secret, orders to return all confidential and proprietary information and compensation for an y losses suffered due to disclosure of trade 
secrets.  
3.259.  Judicial proceedings deal with these issues on a case-by-case basis. There have been cases 
where the courts in India have ordered injunctions against disclosure and use of trade secrets by 
third parties and ordered the return of such confidential and proprietary information as well as 
compensation or damages for any losses suffered due to the disclosure of trade secrets. In a 
                                               
208 See WTO document WT/TPR/S/249/Rev.1, 20 October 2011, paragraphs 284-287. 
209 "Branded seed" means any seed put in a package or any other container and labelled in a manner 
indicating that such seed is of a variety protected under this Act. 
210 Chapter VI of the Farmers'  Rights Act, Section 39. WT/TPR/S/313/Rev.1 • India 
 
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  recent case the court ordered a subsequent employer who offered to double an employee's 
remuneration and induced him to reveal confidential business secrets not to use such information until the case was disposed of within one year with the cooperation of the parties, or with automatic extension of the injunction in case of non-cooperation by the defendants in the case.
211 
This order is in contrast to a court order in another case where injunction was refused as 
customers' list details were not considered to be trade secrets.212 
3.260.  In addition to civil remedies such as injunctions or damages, India allows for criminal 
remedies under the Indian Penal Code 1860, such as for criminal misappropriation, breach of trust 
and theft of property. However, for many reasons, including prosecution by the State and the fact that the remedies available may not be what bu sinesses may seek, the criminal route is rarely 
used.
213  
3.261.  There is no specific legislation protecting test data submitted for obtaining regulatory 
approval of pharmaceuticals. The Drugs and Co smetics Act of 1940 regulates the manufacture and 
marketing approvals for drugs and traditional medicines, while the Insecticides Act of 1968 
addresses the manufacture and marketing appr ovals for agricultural chemicals (such as 
insecticides, fungicides and weedicides). However, there is no statute in place in India at this time for the protection of pharmaceutical, agrochemical and traditional medicine-related data against 
disclosure and reliance by third parties. Such test data is said to be protected under the Official 
Secrets Act. However, it is not clear how India implements the second obligation under Article 39.3 of the TRIPS Agreement, which is in addition to the obligation to provide protection against 
disclosure, namely, protection of such data against unfair commercial use.  
3.262.  In 2004, an Inter-Ministerial Committee was set up to make recommendations on test data 
protection. In its report submitted on 31 May 2007
214, the Committee recommended, inter alia,  
that the term of data protection for agricultural chemical products should be three years from the 
date of marketing approval in India; that the term of data protection for traditional medicines 
should be five years from the date of marketing approval and that there should be an indefinite 
transition period for pharmaceuticals. After the transition period, the term of data protection would 
be five years from the date of the first marketing approval anywhere in the world. These 
recommendations are reportedly being considered by the Ministry of Commerce and Industry, Ministry of Agriculture and Ministry of Health.
215 
3.3.5.9  Enforcement 
3.263.  A 2012 study by Federation of Indian Chambers of Commerce and Industry (FICCI) and 
others show that the losses to industry from counter feiting and piracy in India could be as high as 
Rs 730 billion, or more than US$10 billion per year. This study covered seven sectors most 
impacted by counterfeiting and piracy, namely auto components, alcohol, computer hardware, 
personal goods, packaged foods, mobile phones and tobacco. Nearly 30% of auto components and 
26% of computer hardware sold in India are allegedly counterfeit.216  
3.264.  Enforcement of intellectual property rights  in India (except at the borders) is under the 
purview of state Governments. A system of state no dal officers and specialized IP cells within the 
state police to tackle piracy is in place and has been important in the IPR enforcement effort.  
3.265.  Enforcement of IPR at India's borders is carried out by the Customs Department with 
respect to imports. Under the Customs Act, Cust oms may seize and hold goods for a reasonable 
                                               
211 See a judgment of the Karnataka High Court of October 2012 in favour of a German subsidiary 
company. Viewed at: http://judgmenthck.kar.nic.in/judgments/bitstream/123456789/759406/1/MFA1682-10-
10-10-2012.pdf ; and an analysis of this case is available at:  
http://spicy-ip2.blogspot.ch/2012/10/karnataka-high-court-temporarily.html . 
212 See American Express Bank Ltd. Vs. Ms Priya Puri of 24 May 2006. Full order viewed at: 
http://indiankanoon.org/doc/445135/ . 
213 See analysis of Indian trade se cret law and practice. Viewed at: 
http://nopr.niscair.res.in/bitstream /123456789/1381/1/JIPR%2013(3)%20(2008)%20208-217.pdf ; and 
https://www.aippi.org/download/commitees/215/GR215india.pdf . 
214 Department of Chemicals and Petrochemicals (2007). 
215 Embassy of the United States at New Delhi, India online information. Viewed at: 
http://newdelhi.usembassy .gov/iprdataprot.html . 
216 International Chamber of Commerce (2013). WT/TPR/S/313/Rev.1 • India 
 
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  period (e.g. six months), including for suspected violations of intellectual property rights, following 
which, the goods must be released or a cour t injunction obtained to start infringement 
proceedings. In order to further effectively implement border measures, in 2007 the Customs authorities issued a notification that prohibits imports of goods infringing intellectual property 
rights, namely the Intellectual Property Rights (Imported Goods) Enforcement Rules 2007.
217  
3.266.  These rules go beyond the minimum requir ements of the TRIPS Agreement as they cover 
border measures not solely for copyright and trademarks, but also for patents, designs and 
geographical indications.218 They lay down detailed procedures fo r right-holders or their authorized 
representatives and for Customs to seek suspensi on of release of suspect imported goods. The 
rules allow right-holders to record their registered  intellectual property with Customs. After the 
grant of the registration by the Commissione r on due examination, imports of allegedly 
IPR-infringing goods into India may be prohibited. The rules also permit suo moto  action by 
Customs when infringing goods are found through random checks, and the disposal of the confiscated goods; however, the rules do not call for any action against goods of a non-commercial 
nature contained in personal baggage, sent in small consignments intended for the personal use of 
the importer, or goods in transit. 
3.267.  Approved Registration of various IP ri ghts with the Customs authority are as follows 
(Table 3.26). 
Table 3.26 Approved registration of various IP rights, 2010 and 2014 
S.No. IP right No. of approved registrations 
as at 31.12.2010 No. of approved registrations 
as at 28.12.2014 
1. Trademarks 379 881 
2. Copyright 2 8 
3. Patent 10 11 
4. Design 5 5 
5. Geographical Indications 0 0 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. 
3.268.  During 2012, 2013 and 2014 (up to September 2014) all cases of IPR infringements 
registered by Customs relate to trademark violations. Details are as follows (Table 3.27). 
Table 3.27 IPR infringements, 2012-14 
Year Total cases booked for infringement of IPR 
No. of cases Value of goods (in Rs. Million) 
2012 47 100.37 
2013 19 20.42 
2014 (up to September) 11 14.29 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. 
3.269.  In addition to the Government's efforts to enforce IPR, industries in India have become 
more proactive. For example, the Ministry of Hu man Resource and Development recently issued an 
official notification designating the Federation  of Indian Chambers of Commerce and Industry 
(FICCI) to Chair the Subcommittee under the Copyright Enforcement Advisory Council (CEAC) responsible for coordinating relevant stakeholders to address the menace of piracy. Similarly, as 
reported in the last Review, the Ministry of Information and Broadcasting had set up a Committee 
on Piracy, and IPR-holders have created associations and IPR committees to generate awareness on issues relating to counterfeit, fake, and spurious products. The music and film industry, through the Film Federation of India, Motion Picture Asso ciation, and Indian Music Industry Association, 
cooperates and collaborates with the police in the design and implementation of anti-piracy 
programmes. To support the efforts of the indust ry, the state Governments of Andhra Pradesh, 
Kerala, Maharashtra, and Tamil Nadu, where the film and music industry is prominent, have 
                                               
217 Central Board of Excise and Customs online  information. See full text available at: 
http://www.cbec.gov.in/customs/cs-act/notifications/notfns-2k7/csnt47-2k7.htm.  
218 See Rule 2(b) "intellectual property" means a copyright as defined in the Copyright Act, 1957, trade 
mark as defined in the Trade Marks Act, 1999, patent as defined in the Patents Act, 1970, design as defined in 
the Designs Act, 2000 and geographical indications as defined in the Geographical Indications of Goods 
(Registration and Protection) Act, 1999. WT/TPR/S/313/Rev.1 • India 
 
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  introduced legislation which stipulates that video piracy is an offence. The aim is that with 
enhanced coordination of the industry, enforcement will continue to improve. 
 WT/TPR/S/313/Rev.1 • India 
 
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  4  TRADE POLICIES BY SECTOR 
4.1  Agriculture  4.1.1  General policy framework 4.1.  Agriculture accounts for around 17% of GDP in India (Table 4.1), and 56% of total 
employment (according to Census 2011). Within the central Government, agricultural policy is 
formulated and implemented mainly by the Ministry of Agriculture, with the assistance of other institutions.
1 India's current agricultural policy is outlined in the 12th Five-Year Plan (2012-17), 
which aims, inter alia,  to improve agri-investment, income product and productivity, promotion 
and extension of modern technologies, and resour ce-use efficiency for sustainable agriculture. 
With these objectives, India uses various measures in the agriculture sector, including in production, marketing, consumption and inte rnational trade. In 2012-13 and 2013-14, India 
emerged as the largest exporter of rice in the wo rld, with more than 10 MMT of exports each year. 
Total cereal exports amounted to 22 MMT in 2012-13 and 21 MMT in 2013-14. 
Table 4.1 Selected indicato rs for agriculture, 2009-13 
 2009-10  2010-11  2011-12 2012-13a 
GDP in the agriculture sectorb, at constant 2004/05 
prices (growth rate, %) 0.8 7.9 3.6 1.9 
Contribution of the agriculture sectorb to current GDP 
(%) 17.7 18.0 17.6 17.3 
Employmentb (% of total) .. .. 54.6 .. 
Agricultural production (million tonnes)     
Oilseeds 24.9 32.5 30.0 31.0 
Pulses 14.7 18.2 17.2 18.5 
Coarse cereals 33.6 43.7 42.0 40.1 
Rice 89.1 96.0 105.3 105.2 
Wheat 80.8 86.87 94.9 93.5 
Sugarcane 292.3 342.4 361.0 341.2 
Cotton (million bales of 170 kg each) 24.0 33.0 35.2 34.0 
.. Not available. 
a Estimates. 
b Including agriculture, forestry, and fishing. 
Source: Department of Agri culture and Co-operation, Agricultural Statistics at a Glance 2013 , 10 December.  
4.1.1.1  Measures affecting imports 
4.2.  India's tariff policy focuses on supporting domestic agricultural policy objectives. Hence, 
average tariff protection for agricultural products (WTO definition) in 2014-15 was 36.4%, 
(compared with 33.2% in 2010-11) considerably above that of non-agricultural products 
(WTO definition) at 9.5%. Around 55.7% of agricultural goods bear tariffs of 30%, and 17.2% 
bear tariffs above 30%. This contrasts with tariffs on non-agricultural products, where tariff rates 
exceeding 10% account for 4% of the whole non-agricultural tariff lines.  
4.3.  There are significant differences in applied tariff rates for specific agricultural products within 
product groups. For example, among vegetable fats and oils, the applied MFN tariff rate on crude 
palm oil and edible margarine is 7.5% and that on crude soybean is zero. Similarly, vegetable oils (HS 1507-HS 1515) have traditionally been protected by high applied MFN tariffs. The average applied MFN tariff rate on animals and animal products is 30.4%, with most products subject to a 
30% tariff.
2 Imported fresh and frozen chicken cuts are subject to a 100% applied MFN tariff rate. 
Applied MFN tariff rates on oats and rye are zero, wh ile rates on other cereals, such as some types 
of rice and wheat (of seed quality) are 80% and 50%, respectively.  
                                               
1 These include the Commission for Agricultural Co sts and Prices (CACP), Food Corporation of India 
(FCI), Central Warehousing Corporation, National Agricu ltural Cooperative and Mark eting Federation of India 
(NAFED), Cotton Corporation of India (CCI), Jute Corporation of India (JCI), the Ministry of Food Processing 
Industries, and the Ministry of Co nsumer Affairs, Food, and Public  Distribution. See WTO document 
WT/TPR/S/249/Rev.1, 20 October 2011, Table IV.2. 
2 Within animals and animal products, the tariff rate on four lines is 100%.  WT/TPR/S/313/Rev.1 • India 
 
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  4.4.  Bound tariff rates for agricultural products range from 10%-300%, compared with those for 
manufactured goods (0%-150%). For many agricultur al products, there is a wide spread between 
bound (10%-300%) and applied tariff rates (0%-150%), which allows the Government to modify its tariffs substantially while complying with its WTO commitments. This variability, as well as the 
complex process for the notification of tariff-rate changes, can create uncertainty and act as an 
impediment to trade.  
4.5.  Imports under tariff rate quotas (TRQs) are allowed only through eligible entities or 
designated agencies. These entities and agencies a pply to the DGFT prior to or by 1 March of each 
financial year proceeding the quota year. The Exim Facilitation Committee in DGFT receives, evaluates and allots the TRQ. Imports must be co mpleted before 31 March of the financial year for 
which the quota is allocated. During the period under review, according to India's latest 
notification to the WTO submitted in March 2011, tariff quotas continue to be allocated on a 
pro rata basis by the DGFT, on request by designated agencies.
3  
4.6.  The authorities may impose import (and export) restrictions for security, self-sufficiency, and 
balance-of-payments reasons, and on health and moral grounds.4 India links the use of import 
(and export) restrictions and licensing, and other NTMs to domestic policies. Products subject to 
import prohibitions include pig fat, edible products of wild animal origin; import restrictions apply 
to various live animals and products as well as vegetable products. 
4.7.  India maintains state trading requirements on imports of certain agricultural goods including 
wheat, rye, oats, rice, grain sorghum, buckwheat, millet, canary seed, jawar, bajra, ragi, other 
cereals, milk or cream, sunflower seed or safflow er oil, copra, coconut oil, and maize, and on 
exports of onions, gum karaya, and sugar.5  
4.8.  Imports of animal products into India require sanitary import permits issued by the 
Department of Animal Husbandry, Dairy and Fisheries; a permit must be obtained prior to 
shipment from the country of origin. Imports of plants and plant material must be accompanied by 
a phytosanitary certificate issued by the national  plant protection organization of the exporting 
country and an import permit issued by the offi cer-in-charge of the plant quarantine station.  
4.1.1.2  Measures affecting exports  
4.9.  While no export taxes are charged on agri cultural products, India imposes export cess on 
tobacco.  
4.10.  India imposes export restrictions and prohibitions mainly for environmental, food security, 
marketing, pricing, and domestic supply reasons, and to comply with international treaties. Some 
agricultural products are subject to export prohibitions, including certain pulses, and edible oils. 
4.11.  State trading is maintained on exports with the purpose of ensuring better marketing and 
prices of agricultural and minor forestry products  including sugar (for exports under preferential 
regime), onions, and gum karaya. Currently, suga r, under preferential quotas, and onions are 
exported through state trading.6  
4.12.  India's last notification of export subs idies, made to the WTO in 2012, covered 2004 to 
2010. Based on the Sugar Development Fund (Amendment) Rules 2014, on 12 February 2014 the Government approved a subsidy at the rate of Rs 3,300 per tonne towards marketing and 
                                               
3 See WTO (2011) for the list of designated agencies  and tariff fill ratio. India's latest notification 
concerning tariff quotas were submitted in 2011 (WTO documents G/AG/N/IND/5 and 6, 7 March 2011). 
4 Section 3 of the Foreign Trade (Development and Regulation) Act 1992 and through the issue of 
notifications under Section 11 of the Customs Act 1962. 
5 WTO document G/STR/N/14/IND, 30 November 2012. 
6 As regards non-agricultural goods, exports of cr ude oil and certain ores ar e also subject to state 
trading. WT/TPR/S/313/Rev.1 • India 
 
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  promotion services of raw sugar production for February-March 2014.7 The scheme is now to be 
reviewed for the current sugar season 2014-15.8 
4.13.  Sugar under the preferential regimes by  the European Union and the United States 
(exported by state-trading enterprises), milk powder, wheat, edible oil, pulses, and non-basmati 
rice and wheat products (HS 1001) was subject to export quotas during the period under review.  
4.14.  Export prohibitions and export quotas are notified annually; they are usually in place for a 
specific period, during which they may be subject to change. These changes can diminish the 
predictability of the regime.  
4.15.  Minimum export prices are also maintained to  control prices and availability in the domestic 
market. Minimum export prices currently apply to certain edible oils, onions, Bangalore roses and Krishnapuram onions and potatoes.  
4.1.1.3  Internal measures 
4.16.  Agriculture comes under the purview of the state Governments in India; the responsibility 
for development in agriculture and related sectors is vested with the States. However, the central 
Government supports the state Governments in their efforts to increase agricultural production, 
enhance productivity by providing technical suppo rt, and explore the sector's untapped potential. 
Since India's previous Review, in order to achieve the objectives of the 12
th Five-Year Plan, the 
Department of Agriculture (DAC) has reviewed its 51 existing schemes with a view to restructuring 
them into 11 missions/schemes from 1 April 2014 onwards in order to: (i) promote investment in agriculture and related sectors; (ii) improve income and productivity; and (iii) ensure extension of modern technologies and resource-use efficiency for sustainable agriculture (Table 4.2). India also 
supports the farm sector through output price support programmes, input support programmes, 
and credit and insurance schemes. Output price support programmes include minimum support prices (MSPs) for certain staple crops produced in India. Input support programmes focus primarily 
on fertilizers, rates for irrigation water, electricity rates, diesel prices, and seeds. Credit schemes 
comprise a number of government programmes to improve the flow of credit to agriculture and to lower the cost of borrowing for farmers (via below-market-rate loans or debt write-offs). 
Table 4.2 Agriculture sector  schemes/programmes, 2014
 
Programme/scheme Budget 
allocation Purpose 
National Mission for 
Sustainable Agriculture (NMSA) Rs 16.84 billion Seeks to address issues  of "sustainable agriculture" in 
the context of climate change  by devising appropriate 
strategies for ensuring food security, enhancing livelihood opportunities, and contributing to economic stability at national level. Ai ms at enhancing agricultural 
productivity in rain-fed areas focusing on integrated 
farming, water use efficien cy, soil health management 
and synergizing resource conservation 
Mission for Integrated 
Development of Agriculture 
(MIDH) Rs 22.63 billion Aims at holistic growth of horticulture sector covering 
fruits, vegetables and fl owers with a view to 
augmenting farmers' income  and nutritional security 
National Mission on Oilseed 
and Oil Palm (NMOOP) Rs 4.33 billion Aims at ensuring edib le oil security through production 
improvement of traditiona l oilseed and tree-borne 
oilseed 
National Mission on 
Agricultural Extension and 
Technology (NMEAT) Rs 13.16 billion Seeks to restructure, strengthen and promote 
agricultural extension to enable use of appropriate agro-
technology and improved agronomic practices to 
farmers 
National Food Security Mission 
(NFSM) Rs 20.3 billion Seeks to ensure food security by reducing gaps between 
potential and actual yields and by providing extension 
and promotion services to agriculture and rural community 
                                               
7 The Government has notified the subsidy at the rate of Rs 2,277 per MT, Rs 3,300 per MT, Rs 3,371 
per MT for the bi-monthly period of April-May, June-July and August-September 2014, respectively. 
8 WTO document G/AG/W/138, 5 February 2015. WT/TPR/S/313/Rev.1 • India 
 
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  Programme/scheme Budget 
allocation Purpose 
Rashtriya Krishi Vikas Yojana 
(RKVY) Rs 99.54 billion Seeks to promote public investment in agriculture and 
related sector by the states , and provide flexibility and 
autonomy to states for planning and executing 
programmes/projects. 
Modified National Agriculture 
Insurance Scheme (MNAIS) Rs 28.23 billion Aims at providing relief to the farmers from crop failure 
due to natural disasters, pests and diseases 
Integrated Scheme for 
Agricultural Marketing (ISAM) Rs 8.0 billion Seeks to promote: (i) creation and improvement of 
marketing infrastructure, (ii) capacity-building of 
stakeholders, and (iii) acce ss to market information 
Integrated Scheme on 
Agriculture Cooperation (ISAC) Rs 1.11 billion Seeks to promote cooperative action in agriculture by: 
(i) capacity-building of cooperatives to undertake value addition; (ii) providing mana gerial and technical inputs 
including training; (iii) fostering diversification of activities; and (iv) boosting creation of cooperative 
storage/cold facilities 
Integrated Scheme on 
Agriculture Census and 
Statistics (ISAC&S) Rs 2.57 billion Aims at collecting statistics relating to the agricultural 
holdings, land use, cropping patterns, irrigation status, 
tenancy, and deriving facets of agriculture in the 
country 
Secretariat Economic Services Rs 0.13 billion Ai ms at carrying out agro-economic evaluations and 
research and providing expert services to the department on various econom ic and statistical issues 
Source: WTO Secretariat, based on informatio n provided by the Indian authorities.  
4.17.  A key objective of India's domestic agricultural policy is to ensure stability of food supply 
and income support for the nearly 60% of the population that is dependent on agriculture. This 
policy is implemented through price support for farmers such as MSPs for 25 major commodities and for sugar, and the market intervention sch eme (MIS) for other crops, input subsidies for 
fertilizers, power and water, as well as food subsidies (through the targeted public distribution 
system).  
4.18.  The Government announces MSPs for major agricultural commodities each year for crop 
seasons after taking into account the recommendations of the CACP (Table 4.3). According to the 
authorities, the purpose of the MSP scheme is primarily to protect the "small and marginal" 
farmers growing "essentially staple" food crops from market volatility. The scheme is at present applicable for 25 major agricultural commodities as below.  
4.19.  Farmers are guaranteed the MSP through th e price support scheme (PSS): when prices of 
the relevant commodities fall below the MSP, government-designated agencies intervene in the market to purchase at the MSP.
9 Designated agencies under the PSS purchase specific products.10 
The FCI is also authorized occasionally to sell from its stock through open market sales, including 
for export. During 2012-13 for instance, the Govern ment authorized the export of 4.5 million 
metric tonnes of wheat and 2 million metric tonnes in 2014-15. Domestic sales are carried out at pre-determined prices, with 7 million metric tonnes and 6 million metric tonnes of grain sold 
respectively during 2012-13 and 2013-14.
11 It was not clear to the Secretariat how prices are set 
for domestic open market sales, and who the grains are sold to. 
4.20.  Purchasing prices of sugarcane are subject to the fair and remunerative price (FRP)12; a 
minimum price set at the central level, below which no sugar mill may purchase sugarcane from a 
farmer.13 State governments also set a state advisory price (SAP) for sugarcane. If the SAP is 
                                               
9 See, for example, NAFED online information. Viewed at:  
http://www.nafed-india.com/govt-operations.asp .  
10 The Food Corporation of India (FCI) and the stat e agency under the Targeted Public Distribution 
System (TPDS) are the designated agency to distribute wh eat, rice and coarse grains, the National Agricultural 
Cooperative Marketing Federation of India (NAFED), Central Warehousing Corporation (CWC) and National 
Cooperative Consumer Federation of In dia Ltd. (NCCF) for pulses and oilseed s, the Cotton Corporation of India 
and NAFED for cotton, and the Jute  Corporation of India for jute. 
11 Food Corporation of India (2015). 
12 Based on the Sugarcane Control (Amendment) Order 2009. For FRPs for the past years, see 
Department of Food and Pu blic Distribution online information. Viewed at: http://dfpd.nic.in/?q=node/10 .  
13 Other factors taken into account to fix the FRP in clude: the cost of production of sugarcane; the 
return that growers would have if planting alternativ e crops; the general trend of prices of agricultural WT/TPR/S/313/Rev.1 • India 
 
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  higher than the FRP, the State Government bears th e loss. In addition to the price intervention, a 
quota of the sugar production (at present 10%), referred to as "levy sugar", is earmarked for 
distribution under the Targeted Public Distribution System (TPDS).14 The remaining sugar may be 
sold under the monthly regulated release system. Exports of sugar are also controlled through 
bilateral quotas with the European Union and the United States.  
Table 4.3 Minimum support prices, 2010-15  
(Rs per quintal) 
Minimum support prices (MSPs) 2010-11 2014-15 
Paddy (common) 1,000 1,360 
Jowar (hybrid) 1,030 1,530 
Bajra 880 1,250 
Maize 880 1,310 
Ragi 965 1,550 
Arhar (tur) 3,000 4,350 
Moong 3,170 4,600 
Urad 2,900 4,350 
Cotton (medium staple) 2,500 3,750 
Groundnut in shell 2,300 4,000 
Sunflower seed 2,350 3,750 
Soybean (black) 1,400 2,500 
Sesame 2,900 4,600 
Niger seed 2,450 3,600 
Wheat 1,120 1,450 
Barley 780 1,150 
Gram 2,100 3,175 
Masur (lentil) 2,250 3,075 
Rapeseed (mustard) 1,850 3,100 
Safflower seed 1,800 3,050 
Toria 1,780 .. 
Copra 4,450 5,250 
De-husked coconut 1,200 1,425 
Jute 1,575 2,400 
Sugarcane 139.12 220.00 
.. Not available. 
Source: Directorate of Economics and Statistics online information. Viewed at: 
http://eands.dacnet.nic.in/msp/MSPStatement(2014.29.10).pdf ; and information provided by the 
Indian authorities. 
4.21.  Under the MIS, the NAFED and other State-designated agencies purchase perishables not 
covered under the MSPs at a market intervention price (MIP) when the prices decline because of a 
bumper crop, and distribute the products to avoid distress sales during the peak arrival period of 
the produce. The MIS is carried out by NAFED for horticultural commodities; they are sold in local 
markets. The MIS is implemented when there is at least a 10% increase in production or 10% 
decrease in prices over the previous year. Procur ement is made by the Central and State agencies. 
NAFED is also authorized to undertake procurement under the scheme as a central agency.  
4.22.  The National Food Security (NFS) Act, 2013 was passed by Parliament on 
10 September 2013.15 Its stated aim is "to provide for food and nutritional security by ensuring 
access to adequate quantity of quality food at afford able prices to people to live a life with dignity 
and for matters connected therewith or incidental thereto". It aims at providing food grains 
(wheat, rice or coarse grains) to around two-th irds of the population (around 800 million people) 
at subsidized prices. The targeted population is around three-quarters of the rural population and half of the urban population. Corresponding to th e coverage of 75% of the rural and 50% of the 
urban population at the all India level, coverage by states and union territories (States/UT) has 
been determined by the Planning Commission. With in the coverage determined for each State/UT, 
eligible households are to be identified by State/UT governments in accordance with criteria to be 
                                                                                                                                               
commodities; supply of sugar to cons umers at a "fair" price; price of re fined sugar (made with sugarcane) at 
the mill; earnings made from selling by-products (e.g. molasses, bagasse, and pressed mud); and a 
"reasonable" profit margin for sugarcan e producers to also account for risk. 
14 Department of Food and Public Distri bution online information. Viewed at: 
http://dfpd.nic.in/?q=node/101 . 
15 Ministry of Law and Justice (2013). WT/TPR/S/313/Rev.1 • India 
 
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  determined by them. Subsidized food grains under the Act will continue to be provided through the 
targeted public distribution system (TPDS) with an attempt to better streamline food delivery. While the TPDS currently provides 15 kg per month of subsidized wheat, rice, coarse grains per household (35 kg per household for below the poverty line households), the entitlement under the 
NFSA is 5 kg per person of wheat, rice or coarse grains per month at the central issue price of 
Rs 2, 3, and 1 per kg respectively.
16 Antyodaya Anna Yojana households, who are the poorest of 
the poor, will continue to receive 35 kg foodgrains per household per month. Kerosene and sugar 
are not included as entitlements under NFSA; nonetheless, their distribution at subsidized prices 
under the TPDS is continuing as separate schem es. The NFSA will also bring under its umbrella 
various other ongoing schemes intended for nutritional support to pregnant women and lactating mothers and children, such as Integrated Child Development Services and mid-day meal scheme, 
thereby enshrining them as legal rights. It also provides for maternity benefits of Rs 6,000 to 
pregnant women and lactating mothers. It is ex pected that implementation of the NFSA will 
require around 61 million metric tonnes of grain per year.
17 According to the authorities, this will 
not be a substantive change compared to the amounts distributed in recent years under the TPDS 
of 58-59 million metric tonnes per year; this is mainly because of a reduction in the share of the population below the poverty line. One estimate shows that the cost of the food subsidy will be 
about 1.1% of GDP for 2013-14.
18 According to the national budget, food subsidies for 2014-15, 
which includes subsidies under the NFSA, amounts to Rs 1.15 trillion compared with Rs 0.9 trillion for 2013-14 (before the NFSA was adopted).  
4.23.  Another key change is in the delivery of f ood grains. Procurement will continue at MSPs by 
central Government agencies such as the FCI and state agencies and maintained in the central 
pool. Procurement by state Government agencies will be continued under the NFSA as has been the case under the TPDS through the decentralized  procurement system. The grain will then be 
transported to designated points in each state accord ing to the applicable allocation. It will then be 
the responsibility of each individual state to ensure  that the food is delivered to the fair price shops 
for sale to the identified recipients. The storage and logistical infrastructure required will be 
considerable and in this regard, a High Level Committee (HLC) set up by the Government on 
reorienting the role and restructuring of the FCI has suggested that the FCI should be outsourcing 
its warehousing to the central warehousing corporation (CWC), the state warehousing corporation (SWC), and the private sector and should also largely leave procurement and stocking to the 
states that have demonstrated considerable success in doing so.
19 The HLC on restructuring of the 
FCI submitted its report to the Government in Ja nuary 2015, which is finalizing its comments and 
an action plan on the implementation of the recommendations of the HLC. 
4.24.  To date 11 States/UTs (out of 36) have implemented the NFSA.20 The TPDS has experienced 
implementation problems in the past21 and to ensure better implementation, the NFSA includes 
guidelines that provide for reforms to strengthen it and a "grievance redressal mechanism" in each 
state to address complaints.22 
                                               
16 For an average family of five this comes to 25 kg per month, compared to 15 kg per month per 
household under the current TPDS. The central issue pric e (CIP) of goods sold unde r the TPDS is currently 
Rs 4.15 and Rs 5.65 for wheat and rice  for those below the poverty line an d Rs 2 and Rs 3 respectively for 
those under the AAY (Department of Food and Public Distribution (undated)). 
17 Buffer stocks (including the stra tegic reserve) range from between 20 million and 30 million metric 
tonnes of rice and wheat together (revised recently up to 40 million metric tonnes in keeping with the requirements of the NSFA). Food  Corporation of India (2015). 
18 IMF (2014).  
19 Food Corporation of India (2015). 
20 They are: Bihar, Chandigarh, Chhattisgarh, Delhi,  Haryana, Himachal Pradesh, Karnataka, Madhya 
Pradesh, Maharashtra, Punjab, and Rajasthan.  
21 The Planning Commission in a Report in 2005 for in stance noted that around 57% of subsidized grains 
distributed through the PDS during 2003-04 did not reach below the poverty line beneficiaries; of this around 36% was siphoned off from the supply chai n (Planning Commission of India (2005)). 
22 In this regard, the report by the High Level Commi ttee on reorienting the role  and restructuring of the 
FCI on 19 January 2015 suggested that with leakages of  between 40% and 50% in the PDS and up to 70% in 
some States, implementation of the NFSA in certain St ates should be deferred un less such provisions on 
identification and grievances have been put in place; the authorities maintain that these have not yet been accepted by the Government (Food Corporation of India, 2015). The report also indicates that: (i) not more 
than 6% of the total agricultural households in India ( 90.2 million) directly benefitted from the procurement of 
wheat and rice under MSP; and (ii) st ocks have been hugely excessive, even though India has a shortage of 
storage capacity. The recommendations  in the report have not yet been  accepted by the Government.  WT/TPR/S/313/Rev.1 • India 
 
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  4.25.  India's latest notification to the WTO on domestic support commitments in 2014 covered 
2004-05 to 2010-11.23 
4.26.  The bulk of India's subsidies, as mentioned in each year's annual budget, is aimed mainly at 
promoting food security and reducing poverty. As  a result, most of the outlays are allocated to 
food and fertilizers. Food subsidies are provided by  the Department of Food and Public Distribution 
to meet the difference between actual prices and the central issue prices fixed under the TPDS and 
other welfare schemes. The central Government also provides a subsidy to the Food Corporation of 
India to keep buffer stocks of wheat and rice as a food security measure. "Other subsidies", which 
accounted for 0.4% of total subsidies in 2014-15, include market intervention and price support schemes for agricultural products. 
4.27.  India continues to subsidize indigenous and imported (urea) fertilizers through price 
controls, which remain unchanged since its previous Review.
24 This policy has resulted in an 
excessive use of chemical fertilizers that has resulted in severe depletion of micronutrients and degradation of soil in many parts of the country.
25 India's farmers also benefit from: input support 
for irrigation water, electricity, diesel, and seeds; and programmes to supply quality seeds at 
"affordable prices".26  
4.28.  India sets targets for priority-sector lending to ensure that banks provide credit to specific 
priority sectors. Domestic commercial banks are required to reserve 18% of their adjusted net 
bank credit (ANBC) or credit equivalent amount of off-balance-sheet exposure (OBSE), whichever is higher, for agriculture (section 3.3.1.3).  
4.29.  In addition to credit set-asides, India has implemented programmes to ensure access to 
credit in agriculture and allied activities, including providing subsidized direct credit to agriculture 
up to a certain limit, rehabilitation packages for distressed farmers (e.g. debt write-offs for farmers in distress and farmers in arrears), and a One Time Settlement (OTS) Scheme for small 
and marginal farmers and relief to farmers indebted to non-institutional lenders, such as 
money-lenders. The National Bank for Agriculture and Rural Development (NABARD) has been designated as the implementing agency for the Short-Term Co-operative Rural Credit (Refinance) 
Fund (STCRC (Refinance) Fund). The purpose of th e Fund is to enhance refinancing operations of 
NABARD to short-term co-operative credit institutions, i.e., state co-operative banks/district central co-operative banks. NABARD also administers funds that ensure the availability of credit to 
farmers. The Agriculture Insurance Company of In dia Ltd. (AICI) implements the Government's 
National Agriculture Insurance Scheme (NAIS).
27  
4.2  Energy 4.2.1  Oil and gas 
4.30.  India's oil and gas industry can be broadl y divided into three subsectors: exploration and 
production; refining; and marketing. In exploratio n and production, the two national oil companies 
accounted for 74% and 11.3% of total recoverable reserves (onshore and offshore) of crude oil 
and natural gas in 2014.
28 Of the 22 refineries, 17 were owned by the public sector and account 
for about 56% of total refining capacity as at 1 April 2014. India is a net importer of petroleum, 
which accounts for 75% of domestic consumption. A significant share of explicit subsidies is accounted for by petroleum. Since its previous Review, India has adopted measures to deregulate 
petrol and diesel prices (section 3.3.2.2). The pric e controls on petrol and diesel were abolished on 
26 June 2010 and 19 October 2014, respectively. 
4.31.  The oil and gas sector in India is regula ted by the Ministry of Petroleum and Natural Gas 
(MoPNG), and the Petroleum and Natural Gas Regulatory Board, which was established under the 
                                               
23 WTO document G/AG/N/IND/10 and 10/Corr.1, 10 September 2014 and 1 October 2014.  
24 Department of Fertilizers online information. Viewed at: http://fert.nic.in/page/policy-division-urea . 
25 Planning Commission (2012). 
26 See WTO (2011) for details. 
27 The Agriculture Insurance Company of India Ltd. (A ICI) is registered with the Insurance Regulatory 
and Development Authority (IRDA). 
28 Ministry of Petroleum and Natural Gas (2014). The two NOCs are the Oil and Natural Gas Corporation 
Ltd (ONGC), and Oil India Ltd (OIL). WT/TPR/S/313/Rev.1 • India 
 
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  Petroleum and Natural Gas Regulatory Board (PNG RB) Act 2006; the Act was implemented partly 
in 2007 and in 2010. The MoPNG administers explorat ion and production of oil and natural gas, 
their refining, distribution and marketing of petrol eum, petroleum products and natural gas. It also 
regulates the allocation and pricing of natural gas produced in the country through policy and 
administrative orders. Under the administrative co ntrol of the MoPNG, the Directorate General for 
Hydrocarbons (DGH), as an upstream regulator, was established in 1993, and it is responsible for 
promoting the New Exploration Licensing Policy  (NELP) for new exploration programmes, and 
managing the Production Sharing Contracts (PSCs). The PNGRB was established in 2007 to 
regulate the activities of the midstream and do wnstream oil and gas sectors. The PNGRB is the 
statutory regulatory board under the PNGRB Act 2006. The PNGRB's main responsibilities include: granting authorizations to the entities selected to develop common or contract carrier pipelines for 
transportation of petroleum, petroleum products and natural gas, or city or local natural gas 
distribution networks (CGD networks); declaring existing pipelines/CGD networks as common or contract carriers; regulating access to common or contract carrier pipelines/networks with a view 
to ensuring fair trade and competition amongst entities; determining the transportation rates 
(tariffs) for usage of common or contract carriers; and registering eligible entities for establishing liquefied natural gas (LNG) terminals.  
4.32.  Regarding exploration and production activi ties in India, the main legislation includes: 
(i) the Oil Field (Regulation and Development) Act 1948 and Petroleum and Natural Gas Rules 1959, which govern inter alia  granting of petroleum exploration licences, mining leases, and 
royalty; (ii) New Exploration Licensing Policy (NELP), which allocates exploration blocks through 
international competitive bidding; and (iii) Coal Bed Methane (CBM) Policy, which allocates coal 
blocks for extraction of methane gas from coal seams through international competitive bidding.  
4.33.  Regarding refining and marketing activities in India, the main legislation include the 
Industries (Development and Regulation) Act 1951 and its rules, and the Petroleum Act 1934, 
which regulates importation, transport, storage, production, refining and blending of petroleum. 
For gaining marketing rights for transportation fu el by private investors, including by foreign 
investment, a minimum threshold of investment (Rs 20 billion) must be made (and/or committed 
to be made). A number of specific product-wise regulations and rules framed under the Petroleum Act 1934 have been issued with a view to contro lling adulteration and ensuring quality of the 
product. 
4.34.  Over the past years, several laws, regula tions and the rules concerning India's oil and gas 
sector have been adopted.
29 They include: the Petroleum & Natural Gas (Safety in Offshore 
Operations) Rules 2008, the Petroleum & Natural Gas (Amendment) Rules 2009 specifying, 
inter alia,  granting of exploration licences; and the Petroleum Amendment Rules 2011. 
4.35.  FDI is allowed through the automatic route for a number of activities in the petroleum and 
natural gas sector. Up to 100% FDI is allowed under the automatic route for: (i) exploration 
activities of oil and natural gas fields; (ii) infrastructure related to marketing of petroleum products 
and natural gas; (iii) marketing of natural gas and petroleum products; (iv) petroleum product 
pipelines; (v) natural gas/pipelines; (vi) LNG re-gasification infrastructure, (vii) market study and formulation; and (viii) petroleum refining in the private sector. Up to 49% FDI is allowed under the 
automatic route in petroleum refining by public sector undertakings (PSUs), without any 
disinvestment or dilution of domestic equity in the existing PSUs. FDI is subject to the existing 
sectoral policy and regulatory framework.  
4.36.  Prices of LPG for domestic use and kerosene are controlled. A two-price regime exists for 
natural gas, involving gas priced under the administered pricing mechanism (APM), and non-APM gas (section 3.3.2.2). The price of gas produced by ONGC and OIL under the APM was fixed at 
US$4.2/MMBTU in 2010. This was increased to US$5.61/MMBTU (on net calorific value) since 
1 November 2014, to be valid until 31 March 2015, and decreased to US$5.18/MMBTU from 1 April 2015; the authorities indicate that the price was set by a prescribed formula related to international gas markets. The prices are to be revised every six months. 
4.37.  At present, there is no gas pipeline connected to India’s neighbouring countries. Pipeline 
transport for petroleum and gas is regulated by va rious laws, regulations and rules including: the 
Petroleum and Minerals Pipelines (Acquisition of  Right of User in Land) Amendment Act 2011; 
                                               
29 Petroleum & Natural Gas Regulatory Board online information. Viewed at: http://www.pngrb.gov.in . WT/TPR/S/313/Rev.1 • India 
 
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  Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand 
Natural Gas Pipelines) Regulations 2008; and Petroleum and Natural Gas Regulatory Board (Determination of Natural Gas Pipeline Tariff) Regulations 2008 (Table A4.1).
30  
4.2.2  Electricity 
4.38.  Electricity generation in India during 2013-14 grew by 6.0% (compared with around 4.6% 
in 2012-13).31 While production has been increasing, inefficiency due to transmission and 
distribution losses continues to hamper supply in India.32 The increased supply has also been 
unable to keep up with rapidly growing demand  which has implications for economic growth. 
Around a quarter of the population still does not have access to electricity and supply can also be intermittent in urban areas. The electricity grid is connected to India's neighboring countries including Bangladesh, Bhutan, and Nepal; cross-border supply of electricity is under bilateral 
agreements between national governments.  
4.39.  Under the Indian Constitution, electricity is regulated by both the central and State 
Governments. The Electricity Act 2003 governs gene ration, transmission, distribution, trading and 
use of electricity in India.  
4.40.  In recent years, various regulations that are mainly concerned with technical standards and 
provision of information have also been adopted.
33  
4.41.  At the central level, the Ministry of Power is responsible for the administration of the 
Electricity Act 2003 as well as issues related to the Central Electricity Regulatory Commission (CERC) and rural electricity schemes. The CERC is responsible for regulating the tariff of generating companies owned or controlled by the central Government and those that operate in 
more than one State; it is also in charge of regulating inter-state transmission, including the issue 
of licences for transmission and trading, specif ying the grid code and enforcing standards with 
regard to quality, continuity and reliability of service. The State Electricity Regulatory Commissions 
(SERCs) administer electricity firms (generation, transmission, and retail) operating in a single 
state. According to the authorities, the State Electricity Boards (SEBs), which used to be responsible for generation, transmission and retail in the States and were a significant source of 
inefficiency, have been unbundled to a large extent , with most States separating the transmission 
part from the rest; even after the unbundling, mo st of the State-owned distribution companies are 
loss making.
34 In 2012, the Government adopted a Financial Restructuring Plan (FRP) for 
turnaround of the State distribution utilities by giving incentives from the central Government if 
the state distribution companies and the State Government follow some pre-specified mandatory 
conditions, including reduction of transmission and distribution losses. India's national grid is based on five inter-connected regional grids for transmission. Other related Ministries include the 
Ministry of Coal, the Ministry of Petroleum and Natural Gas, and the Ministry of New and 
Renewable Energy. 
4.42.  Power exchanges registered under the Central Electricity Regulatory Commission (Power 
Market) Regulations 2010 are subject to 49% foreign equity limit (FDI up to 26% and FII/FPI up to 
23%). 100% foreign equity participation is allowed in all other segments of the industry (e.g. generation, transmission, distribution, and trading) under the automatic approval route. 
                                               
30 See Ministry of Petroleum and Natural Gas online in formation for the details of  relevant legislation. 
Viewed at: http://www.pngrb.gov.in . 
31 Ministry of Finance (2014). 
32 OECD (2014). 
33 These include: (i) Central Electricity Authority (Technical Standards for Connectivity to the Grid) 
Regulation 2007; (ii) Central Electricity Authority (Furnishing of Statistics, Returns and Information) Regulations 2007, which specify requirements for collec ting, recording the data co ncerning the generation, 
transmission, trading, distribution and utilization of electricity; (iii) Central Electricity Authority (Grid Standards) Regulation 2010; (iv) Central Electricity Auth ority (Measures Relating to Safety & Electric Supply) 
Regulations 2010; (v) Central Electricity Authority (Technic al Standards for Construction of Electrical Plants and 
Electric Lines) Regulations 2010; (vi) Central Electricity Authority (Safety Requirements for Construction, Operation and Maintenance of Electrical Plants and Electric Lines) Regulations 2011; and (vii) Central Electricity 
Authority (Technical Standards for Connectivity of the Distributed Generation Resources) Regulations 2013. 
34 The authorities indicate that some of the States have also privatized the distribution part, resulting in 
more efficient operation. However, sometimes the St ate Regulator is not inclined to raise the tariff. WT/TPR/S/313/Rev.1 • India 
 
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  Certain fiscal benefits, in the form of duty  concessions and tax holidays, are provided.35 In 
addition, all electricity projects have a 100% corporate tax exemption for ten consecutive years, within 15 years of commencement or from undertaking a substantial renovation or modernization of existing transmission lines. However, when not paying corporate tax, they are subject to 
minimum alternate tax (MAT). 
4.43.  Competitive bidding guidelines issued in 2005 provide for the determination of tariffs for 
purchasing electricity by distribution companies; the CERC and SERCs are required to adopt tariffs 
determined through the bidding process. Exceptio ns include the one-time expansion of existing 
projects, i.e. existing generation projects can expand 50% of their current capacity within the 
present tariff regulation regime, or where a state-controlled company is identified as the developer of the project. A cross-subsidy is applied with industrial consumers subsidizing others, particularly 
in agriculture.
36 
4.44.  Recognizing that cross-subsidies hide inef ficiencies and losses in operations, the national 
electricity policy acknowledges the urgency of reducing such subsidies. However, the policy 
stipulates that consumers below the poverty line and consuming electricity below a specified level 
may receive cross-subsidies in the form of tariff reductions, which should be at least 50% of the overall average cost of supply. As the authoritie s considered that the complete elimination of 
cross-subsidies would not be feasible in the near future, the Act was reviewed by the Government, 
and was consequently amended in 2007 to, inter alia,  necessitate reduction of cross subsidies to 
around 20%, rather than the previously required "reduction and elimination of cross-subsidies".
37 
4.45.  India's electricity generation is highly dependent on coal, which forms almost half of the 
country's source of fuel and around 74.7% (bet ween April 2014 and January 2015) of electricity 
generated.38 The Government has encouraged the develo pment of alternative sources of energy, 
with the Electricity Act of 2003 providing a preferen tial tariff for renewable-based electricity and a 
mandatory renewable purchase obligation (RPO) for State utilities. The Jawaharlal Nehru National 
Solar Mission (JNNSM) was established in 2010 and aimed to accelerate the development of solar capacity in India's energy mix by providing su bsidies and customs duty exemptions for capital 
equipment. The JNNSM further required that in order to avail of the subsidies all solar projects 
should use cells and modules manufactured in India, and 30% local content was required for plants or installations for a solar thermal projec t. The National Tariff Policy of 2011 further 
amended the RPO by adding a solar purchase obli gation (SPO) as part of the RPO of 0.25% by 
2013 and 3% by 2022. Grid-connected renewable en ergy generation constituted 5.65% of total 
energy produced between April 2014 and January 2015. 
4.3  Manufacturing 
4.46.  The share of manufacturing in gross value added at factor cost has declined from 17.7% in 
2012-13 to 17.1% in 2013-14 and 16.8% in 2014-15 (advance estimates).
39 The average applied 
MFN tariff for manufacturing increased from 11.1% in 2010-11 to 12.1% in 2014-15. Productivity 
in the sector is low partly because of the relatively small size of firms in the sector, which makes it 
difficult to gain from economies of scale.40  
4.47.  The Government notified a new manufacturing policy in 2011, which aims at increasing 
manufacturing's share in GDP to 25%.41 To implement the policy, national investment and 
manufacturing zones (NIMZs) have been created (section 2.4.1.1). In September 2014, the 
                                               
35 For example, under the Mega Power Policy, large ge neration projects can obtain capital import-duty 
concessions, and/or the waiver of local levies to reduce  costs.  All inter-state projects with a capacity of 
1,000 MW and above for thermal projects, and 500 MW and above for hydro projects, are treated as mega power projects.  
36 International Energy Agency (2012). 
37 This relates to Sections 38, 39, 40, 42, 61, 178 and 181 of the Act. In addition, Section 6 and 
Section 151 of the Act were amended. The amendment to Section 6 stipulates that the concerned state governments and the central government  must jointly endeavour to provide access to electricity to all areas 
through rural electricity infrastructure and electrification of households.  
38 The coal sector is highly regula ted, with production dominated by  two public sector enterprises. 
39 Ministry of Statistics and Prog ramme Implementation, Central Statistical Organization, Press Release 
dated 9 February 2015. Viewed at: http://mospi.nic.in/Mospi_New/upload/nad_press_release_9feb15.pdf . 
40 OECD (2014).  
41 Department of Industrial Policy and Promotion (2011). WT/TPR/S/313/Rev.1 • India 
 
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  Government launched a "Make in India" campaign to strengthen the sector and attract 
investment.42 
4.48.  In textiles and clothing, the Government provides interest rate subsidies under the 
Technology Upgradation Scheme with a view to upgrading technology in machinery.43 The 
Government has also been trying to promote industrial and textile clusters through, inter alia,  the 
Integrated Textile Parks Scheme (40% of which is funded by the Government while 60% is private), which aims to provide infrastructure facilities to the textile industry; subsidies are 
provided through a selection process based on budget limitations. In addition, there exists Hank 
Yarn Obligation, a mechanism instituted in 2013 wi th a view to protecting handloom weavers and 
ensuring sufficient availability of hank yarn for the handloom sector.
44 MSPs apply to cotton. Every 
year, before the commencement of the cotton season, the Commission for Agricultural Costs and 
Prices (CACP) fixes the MSPs for the medium staple length and long staple length cotton. For the 
cotton season 2014-15, the Government fixed the MSP for medium staple length cotton at Rs 3,750 and Rs 4,050 per quintal for the long staple length cotton. The Government has 
nominated the CCI and NAFED to purchase at the MSPs. In textiles and clothing, 100% 
foreign-ownership is allowed under the automatic route subject to all applicable regulations and laws. 
4.49.  In the iron and steel sector, 100% foreign investment is allowed. The Government has 
substantial shares in public sector enterprises, holding for example, around 75% of total shares of the Steel Authority of India. The authorities main tain that most of these companies, where the 
Government may have a substantial shareholding, are listed on the stock exchanges and their 
operations are on a purely commercial basis. To promote the industry's competitiveness and 
improve efficiency and productivity, the Nation al Steel Policy, issued in 2005, is aimed at 
increasing steel output to 110 million tonnes pe r annum by 2019-20 (from 38 million tonnes in 
2004-05); in 2013-14, steel production amounted to 87.7 million tonnes. The authorities are in the 
process of revising the Policy. In March 2014, a Steel and Steel Products (Quality Control) Second (Amendment) Order 2014 was issued to provide for mandatory BIS certification for various steel 
products covering 93 tariff lines.
45 
4.50.  The Ministry of Food Processing Industri es has various schemes to provide assistance to 
food processing industries in India, which face major infrastructure constraints. One of its main schemes is the Mega Food Park Scheme, which aims to provide an infrastructure for farmers, 
processors and retailers particularly in rural sectors.
46 The scheme is proposed to be entrepreneur 
driven and implemented on a PPP (public private pa rtnership) basis. Under the scheme, a onetime 
capital grant of 50% of the project cost can be accorded subject to a maximum of Rs 500 million in 
general areas and 75% of the project cost subject to  a ceiling of Rs 500 million in difficult and hilly 
areas.47 Other facilities being provided include cold chain infrastructure. A minimum of 50 acres of 
l a n d  i s  r e q u i r e d  t o  s e t  u p  a  m e g a  f o o d  p a r k .  2 1  m e g a  f o o d  p a r k s  h a v e  b e e n  a c c o r d e d  f i n a l  
approval; they are at various stages of implementation. There are around 370 technical 
regulations that affect food processing in India which the authorities state are aligned with Codex. 
4.51.  India's automotive industry is protected by high import duties and non-tariff measures. The 
average applied MFN tariff for motor vehicles (HS 8703) in 2006-07 was 100%; it was reduced to 
60% in 2010-11 but increased to 100% in 2014-15. Given such high tariffs and that 100% foreign 
ownership is allowed, it is likely that some portions of the FDI in the industry is for "tariff-jumping" purposes. Although there are no licensing requirements for imports of new vehicles, licences need 
to be obtained for imports of automobiles more than three-years old, once safety and 
environmental requirements are met. In addition to a tariff of 100%, imports of vehicles may enter 
                                               
42 Invest India online information. Viewed at: http://www.makeinindia.com . 
43 Ministry of Textiles onli ne information. Viewed at: http://www.texmin.nic.in/policy/Anx%20C-
Category%20wise%20Subsidy%20Approved%20as%20on%205.3.2014.pdf . 
44 Press Information Bureau onli ne information. Viewed at: 
http://pib.nic.in/newsite/PrintRelease.aspx?relid=83745 . 
45 Ministry of Steel Order S.O.979 (3), 31 March 2014. 
46 The scheme is aimed at providin g modern infrastructure facilities along the value chain from farm 
gate to the market with backward and forward linkages.  It includes creation of infrastructure for primary 
processing and storage near the farm in the form of pr imary processing centres (PPCs) and collection centres 
(CCs) and common facilities and en abling infrastructure at Cent ral Processing Centre (CPC). 
47 These are the north east regions including Sikkim, J&K, Himachal Pradesh, Uttarakhand and ITDP 
notified areas of the States. WT/TPR/S/313/Rev.1 • India 
 
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  only through specified ports (Chennai, Kolkata, and Mumbai for new vehicles and Mumbai for 
second-hand cars). In December 2006, the Depart ment of Heavy Industry issued an Automobile 
Mission Plan 2006-2016 as a road map for future  development of the industry. The Plan has 
various suggestions for policy interventions. Automobile manufacturing is subject to various 
technical regulations.  
4.52.  FDI of up to 100% through the automatic route is permitted in electronics and information 
technology hardware manufacturing, software  development, and ITES sector, except 
business-to-consumer (B2C) e-commerce.  
4.4  Services 4.4.1  Financial services  4.4.1.1  Banking  
4.4.1.1.1  Overview 
4.53.  India's banking sector comprises a small number of commercial banks compared with other 
types of financial institution (Table A4.2). The sector also consists of a wide variety of 
"non-banking financial institutions" (NBFIs). It continues to be dominated by public sector banks 
(PSBs), which account for around 72.7% of the sector's total assets.  
4.54.  The RBI regulates the banking sector (including NBFIs) in accordance, inter alia,  with the 
Reserve Bank of India Act 1934 and the Banking Re gulation Act 1949, and a number of other acts 
governing banks, banking operations, specific functions, or individual financial institutions.
48 
4.55.  Foreign participation is allowed in both public and private sector banks; in private banks 
74% for all forms of foreign investment (i.e. FDI and FII) and 20% in State Bank of India (SBI) 
and its Associate Banks or nationalised banks is permitted.  
4.56.  The main changes to India's legislation concerning banking since 2011 include the adoption 
of the Banking Laws (Amendment) Act 2012; the 2012 Act, inter alia,  confers power on the RBI to 
specify approved securities and raises restrictions on voting rights of investors in the private sector 
banks to 26% (from 10%).49 Other legislative changes include amendments to the Banking 
Companies (Acquisition and Transfer of Undertakings) Act 1970 and 198050, the Securitisation and 
Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002, the Recovery of 
Debts Due to Banks and Financial Institutions Act 1993 and the Prevention of Money-Laundering Act 2005 and the Prevention of Money-Laundering (Maintenance of Records) Rules 2005.  
                                               
48 Other acts governing the sector  include: the Banking Companies (Acquisition and Transfer of 
Undertakings) Act 1970/1980; the State Bank of India Act 1955; the State Bank of India (Subsidiary Banks) Act 1959; the State Bank of Hyderabad Act 1956; Regional Rural Banks Act 1976; the Multi State Co-operative Societies Act 2002 and the co-operative society laws of respective states; the Negotiable Instruments Act, 1881, the Companies Act 1956; the Companies Act, 2013, the Bankers' Books Evidence Act, 1891; the Public Debt Act 1944; the Government Securities Act, 2006, the Securities Contract (Regulation) Act 1956; the Foreign Exchange Management Act 1999; and the Paymen t and Settlement Systems Act 2007; the Industrial 
Development Bank (Transfer of Undertaking and Repeal) Act 2003; the Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act 1993; the Nation al Bank for Agriculture and Rural Development Act; 
the National Housing Bank Act; the Export Import Bank  of India Act, 1981, Small Industries Development Bank 
of India Act 1989; and the Deposit Insuranc e and Credit Guarantee Corporation Act. 
49 Other changes include: enabling banking companie s to issue preference shares subject to RBI's 
regulatory guidelines; providing for prior approval of th e RBI for acquisition of 5% or more shares or voting 
rights in a banking company; aligning the restriction on commission on sale of shares to issue price rather than 
to the paid-up value of shares; conferring power on the RBI to specify the cash reserve ratio for non-scheduled 
banks; establishing a depositor education and awareness fund to take over inoperative deposit accounts that 
have not been claimed or operated for ten years or more ; conferring power on the RBI to call for information 
and returns from the associat e enterprises of banking companies and to jointly inspect the bank with the 
regulators of the asso ciate enterprises.  
50 Changes include: raising the authorized capital of the nationalized banks from Rs 15 billion to 
Rs 30 billion; allowing the nationalized banks to issue "bonus shares" and "rights issue"; raising restrictions on voting rights to 10% for shareholders  other than the central Government.  WT/TPR/S/313/Rev.1 • India 
 
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  4.57.  During the review period, assets in the sector increased, while the net non-performing 
assets (NPAs) to net advances ratio of scheduled commercial banks increased from 0.93% in 2011 to 2.24% in 2014 (Table 4.4); this mainly reflects a growing NPAs in public sector banks.
51  
Table 4.4 Trends in the banking sector's  gross loans and deposits and prudential 
indicators, 2010-14 
(Rs million and %) 
 2010 2011 2012 2013 2014 
Assets 56,878,957 67,497,264 77,483,673 88,123,483 100,158,489 
Return on assets (%) 1.02 1.09 1.06 1.05 0.78 
Capital to risk weighted 
assets ratio (CRAR) (%) 14.54 14.19 14.21 13.88 13.01 
Net NPA to gross advances 
(%) 1.12 0.93 1.24 1.68 2.24 
Total loans (gross 
advances) 32,649,887 39,922,275 46,663,373 53,711,515 61,017,753 
Loans by economic sector 
(% of total loans)      
Agriculture 13.09 12.65 12.32 12.05 12.62 
Real estate 17.67 17.96 17.00 17.27 17.89 
Total deposits 45,774,926 53,919,199 61,378,626 70,228,434 79,859,229 
Source: WTO Secretariat, based on information provid ed by the Indian authorit ies (off-site returns as 
reported by banks, do mestic operations). 
4.58.  On 20 July 2012, the RBI revised its guidelines on priority sector lending. In the revised 
guidelines, foreign commercial banks with 20 or more branches must achieve overall priority 
sector target of 40% of adjusted net bank credit  (ANBC) or a credit equivalent amount of off 
balance sheet exposure (OBSE), whichever is higher, along with the sub-targets for agriculture 
and weaker sections category within a maximum period of five years ending on 31 March 2018, as 
per the action plans submitted by them as approved by RBI.52 Other foreign banks must achieve 
overall priority sector target of 32% of their ANBC/credit equivalent of OBSE,  
4.59.  Banking companies in respect of which the Government has issued a notification under 
Section 45 of the Banking Regulation Act 1949 are exempt from the application of Section 5 and 6 
of the Competition Act 2002 for a period of 5 years from 8 January 2013.53 
4.60.  The RBI has paid particular attention to fostering financial inclusion to overcome the still low 
and deepening levels of financial penetration in India. To this end, the RBI, inter alia,  requires that 
banks open at least 25% of their branches in unbanked rural centres. The RBI issued guidelines for licensing of new banks in the private sector on 22 February 2013, and two applicants (IDFC 
Limited and Bandhan Financial Services Private Limited) were granted 'in-principle' approval in 
April 2014 for the establishment of private banks.  On 27 November 2014, final guidelines with 
regard to licensing of small finance banks in the private sector and payment banks were issued by 
the RBI. 72 applications were received for small finance banks and 41 applications for payment 
banks. The Financial Stability and Development Council, established in 2010, has an exclusive mandate for financial inclusion and financial literacy.  
4.4.1.1.2  Commercial banks 
4.61.  The RBI, as regulator and supervisor, pre scribes broad parameters of banking operations 
within which India's banking system functions. The RBI also acts as banker to the Government and lender of last resort, performing merchant banking functions for the central and the State 
Governments. The RBI has three fully-owned subsid iaries: the National Housing Bank (NHB), the 
Deposit Insurance and Credit Guarantee Corporatio n of India (DICGC), and the Bharatiya Reserve 
Bank Note Mudran Private Ltd. (BRBNMPL). The RBI holds 0.4% of the total shares of the National 
Bank for Agriculture and Rural Development (NABARD); the remaining 99.6% is held by the 
Government. 
                                               
51 Ministry of Finance (2014). 
52 Reserve Bank of India online information. Viewed at: 
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=7460&Mode=0. 
53 Ministry of Corporate Affairs Notification S. O.93(E), 8 January 2013 and Notification No. 5 63/2011-
CS, 8 January 2011.  WT/TPR/S/313/Rev.1 • India 
 
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  4.62.  In recent years, a number of regulatory changes have been introduced. Recent guidelines 
issued by the RBI specify that in the case of bo th payment banks and small finance banks, foreign 
shareholding in the payments bank will be as per the FDI policy for private sector banks. As per the current FDI policy, the aggregate foreign investment in a private sector bank from all sources 
will be allowed up to 74% of the paid-up capital of the bank (automatic up to 49% and approval 
route  b e yond  4 9 %  to 74% ). At a ll  t i me s , at le as t 2 6 %  of the  p aid -up  c ap ital m us t b e  he ld  b y residents. 
4.63.  Domestic and foreign banks require a licence from the RBI to undertake banking operations 
in India. An authorization is required for the op ening of new branches by banks and for changes in 
the location of existing branches, in accordance with the Branch Authorization Policy. Domestic banks may open branches anywhere if: (i) 25% of the branches in a year are in unbanked rural 
areas in tier 5 and tier 6 centres; and (ii) the total number of branches opened in tier 1 centres in 
a year does not exceed the total number of branches opened in tier 2 to tier 6 centres in the same year. Foreign bank branches operating under the wholly owned subsidiary (WOS) route are also 
governed by the same guidelines.  
4.64.  Scheduled commercial banks are required to maintain a certain portion of their net demand 
a n d  t i m e  l i a b i l i t i e s  ( N D T L )  i n  t h e  f o rm  o f  c a s h  ( i n c l u d i n g  c a s h  r e s e r v e s  w i t h  t h e  R B I ) ,  g o l d ,  or 
investment in approved securities (statutory liquidity ratio). The RBI monitors compliance with 
these requirements in the banks' day-to-day oper ations. The cash reserve ratio (CRR) is fixed by 
the RBI and used as a tool to inject/subtract excess liquidity.  
4.65.  Interest rates on all categories of rupee deposits are deregulated and banks are free to 
determine the interest rates as per the policy approved by their board. While interest rates on 
term deposits are already deregulated, interest rates on savings deposits were also deregulated on 25 October 2011 subject to certain conditions. On 16 December 2011, interest rates on 
non-resident (External) rupee (NRE) and non-resident ordinary (NRO) deposits were deregulated 
subject to certain conditions. Interest rates on  foreign currency non-resident accounts (banks) 
(FCNR) (B) deposits, however, continued to be subject to a prescribed ceiling rate. Interest rates 
on rupee advances are deregulated. With the introd uction of the Base Rate from 1 July 2010, all 
categories of loans are priced only with reference to the Base Rate, except (i) differential rate of interest (DRI); (ii) loans to banks' own employees ; (iii) loans to banks' depositors against their 
own deposits; and (iv) short-term crop loans by  the Government. According to the authorities, 
with the introduction of the Base Rate, interest ra tes on rupee export credit have also been fully 
deregulated and are determined by the banks as pe r the policy approved by their board. Interest 
rates on export credit in foreign currencies have been deregulated since 5 May 2012; banks are 
free to determine the interest rates approved by their board. 
4.66.  The RBI requires that banks maintain a capi tal- risk weighted assets ratio (CRAR) of 9%.
54 
This includes capital for credit risk, market risk, operational risk, and other risks. Also, in order to 
maintain the quality of loans and advances, the RBI requires banks to classify their loan assets as 
performing and non-performing assets (NPAs), primarily based on the record of recovery from the borrowers. NPAs are further categorized into sub-standard, doubtful, and loss assets, depending upon the age of the NPAs, and value of availabl e securities. Banks are also required to make 
appropriate provisions against each category of NPA and to disclose their exposure to the 
20 largest depositors/borrowers, apart from disclosing information on sector-wise NPAs (percentage of NPAs to total advances in that sector) and on changes in NPAs. Banks are required 
to have exposure limits, to prevent credit concentration risk and to limit exposure to sensitive 
sectors such as capital markets and real estate. The RBI also requires banks to classify their investment portfolios into three categories: held to maturity (HTM), available for sale (AFS), and 
held for trading (HFT). There are mandates as to what securities are allowed to be kept under HTM 
category with overall limit for HTM category (25% of total investments) as well as statutory liquidity ratio (SLR) holdings in the HTM category. Further, while profit or loss on sale of investments in HFT and AFS categories will be taken to the profit and loss account, profit on sale 
of investments in the HTM category must first be taken to the profit and loss account, and 
thereafter be appropriated to the capital reserve account. 
                                               
54 RBI Master Circular – Basel III Capital Regulations (dated 1 July 2014, and updated periodically). 
Viewed at: http://www.rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=9015. WT/TPR/S/313/Rev.1 • India 
 
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  4.67.  During the period under review, the RBI furt her reformed its prudential regulations, mainly 
in the context of the adoption of the Basel III re form package. Among various changes in India's 
prudential regulations, the RBI issued: modified gu idelines concerning credit risk capital charge, 
credit default swaps, and guidelines on derivatives (2011-12); the final guidelines on the 
implementation of Basel III capital regulations (2012-13); guidelines on: (i) composition of capital 
disclosure requirements; (ii) restructuring of advances by banks and financial institutions; (iii) management of intra-group transactions and exposures; and (iv) refinancing of project loans 
and sale of NPAs by banks (2013-14); and "B asel III Framework on Liquidity Standards – 
Monitoring tools for Intraday Liquidity Management" (2014-15). 
4.68.  India's Deposit Insurance and Credit Guarantee Corporation provides insurance cover to all 
eligible bank depositors up to Rs 100,000 per depositor per bank. 
4.69.  The RBI supervises banks in order to monitor and ensure their compliance with the 
regulatory policy framework through on-site inspecti on, off-site surveillance, and periodic meetings 
with the banks' top management. Banks are allowed to undertake non-traditional banking 
activities, also known as para-banking, which in cludes asset management, mutual funds business, 
insurance business, merchant banking activities, factoring services, venture capital, card business, equity participation in venture funds, and leas ing. During the period under review, the annual 
financial inspection (AFI) process was revised to make the process more focused; the supervisory 
process and the organizational structure of Depart ment of Banking Supervision (DBS) of RBI were 
reorganized on 1 April 2011 and a new Financial Conglomerate Monitoring Division (FCMD) was established to closely supervise 12 large banking groups.
55 During the same period, India also 
signed memoranda of understanding (MoUs) or exch ange of letter (EoL) with overseas supervisors 
on supervisory cooperation56; engaged in inspection of overseas branches of Indian banks as from 
2012-13; set up fora for discussion between the host and home country regulators on major 
supervisory issues of the regulated entities (sup ervisory colleges); and shifted from a transaction-
testing-based (CAMELS)57 supervisory framework to a risk-based approach with effect from the 
2013-14 supervisory cycle.58 Thirty banks have so far been migrated under the new risk-based 
supervision approach out of a total of 94 banks and four All-India Financial Institutions. 
4.70.  On 6 November 2013, the RBI announce d the "Scheme for Setting-Up of Wholly-Owned 
Subsidiaries (WOS) by Foreign Banks in India" ba sed on the principles of reciprocity and single 
mode of presence. A WOS may open branches anywhe re in the country at par with domestic banks 
(except in certain sensitive areas where the RBI's prior approval is required). A foreign bank that 
has inter alia  complex structures, or does not provide adequate disclosure in its home jurisdiction 
may only enter India as a WOS. A foreign bank opting for the branch form of presence must 
convert into a WOS when such conditions become applicable to it, or when it becomes systemically 
important on account of its balance-sheet size in India.59 With a view to preventing domination by 
foreign banks, restrictions will be placed on furt her entry of new WOSs of foreign banks or further 
capital infusion of WOSs of foreign banks, when the capital and reserves of the WOSs and foreign 
bank branches in India exceed 20% of the capita l and reserves of the banking system. The initial 
minimum paid-up voting equity capital for a WOS is Rs 5 billion for new entrants. Existing branches of foreign banks desiring to convert to WOSs must have a minimum net worth of 
Rs 5 billion. The parent company of the WOS is required to issue a letter of comfort to the RBI for 
meeting the liabilities of the WOS.  
4.71.  In terms of corporate governance, a mi nimum of one-third of the directors must be 
independent of the management of the subsidiary in India, its parent or associates; not less than 
50% of the directors must be Indian nationals
60, and not less than one-third of the directors must 
                                               
55 State Bank of India, Punjab National Bank, Bank of Baroda, Bank of India, Canara Bank, ICICI Bank 
Ltd., HDFC Bank Ltd., Axis Bank Ltd., Kotak Mahindra  Bank Ltd., Citibank, HSBC, and Standard Chartered 
Bank. The aggregate total assets of the 12 banks accounted for 52.7% of the total assets of the banking system in India. 
56 As of 18 November 2014, RBI has signed 22 MoUs and one Letter of Supervisory Cooperation. 
57 The term "CAMELS" stands for Capital Adequa cy, Asset Classification, Management, Earnings 
Appraisal, Liquidity, Sensitivity. 
58 During 2013-14, 28 banks were supervised under the risk based model, covering 60% of assets of 
the Indian banking system. 
59 Foreign banks that commenced banking business in India before August 2010 have an option to 
continue their banking business through the branch mode. 
60 Including non-resident Indians and persons of Indian origin.  WT/TPR/S/313/Rev.1 • India 
 
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  be Indian nationals resident in India. The branch  expansion guidelines as applicable to domestic 
scheduled commercial banks will generally be applicable to WOSs, except that they will require RBI prior approval for opening branches at certain locations that are sensitive from the perspective of national security. The "priority sector lending requirement" will be 40% for a WOS, like 
domestic-scheduled commercial banks, with an adequate transition period provided for existing 
foreign bank branches converting into WOS. On an arm's length basis, WOSs will be allowed to use parental guarantee/credit rating only for the purp ose of providing custodial services and for their 
international operations. The issue of permitting WOSs to enter into mergers and acquisitions 
(M&A) transactions with any private sector bank in  India subject to the overall investment limit of 
74% is to be considered after a review is made with regard to the extent of penetration of foreign investment in Indian banks and functioning of foreign banks (branch mode and WOS). 
4.72.  New private-sector banks must maintain minimum capital, initially of Rs 5 billion, as per the 
new bank licensing guidelines dated 22 February 2013. In the case of payments banks and small 
finance banks, the minimum capital requirement is Rs 1 billion. Currently, voting rights of any 
individual is capped at 10%. However, the RBI is empowered to increase, in a phased manner, the 
ceiling on voting rights to 26%.  
4.73.  Banks operating in India (including public-sector banks, privately-owned banks, and 
foreign-invested banks) authorized to deal with foreign exchange, are eligible to set up offshore 
banking units (OBUs) in special economic zones (SEZs). Eligible banks are allowed to establish only one OBU per SEZ, essentially for wholesale banking operations. As a start-up contribution, the parent bank must provide a minimum of US$10 million to the OBU. OBUs are exempt from the 
cash reserve requirement, and on request a statutory liquidity ratio exemption may be considered 
for a specified period. OBUs are expected to provide loans at international rates to companies located in SEZs. They are also permitted to lend to corporations in the domestic tariff area, under 
external commercial borrowing guidelines and su bject to the Foreign Exchange Management Act 
regulations. This latter type of lending may not exceed 25% of total liabilities. OBUs are not allowed to accept or solicit deposits or investments from Indian residents, or open accounts for 
them. The Government has proposed to set up an In ternational Financial Services Centre (IFSC) at 
Gandhinagar, Gujarat as a part of a SEZ. The en tities to be established in the IFSC will be 
regulated by the respective sectoral regulators; the IFSC Banking Units (IBUs) are regulated by RBI. The authorities state that draft guidelines in this regard are being finalized.  
4.4.1.1.3  Urban cooperative banks (UCB s) and other financial institutions 
4.74.  UCBs are registered under the respective State Co-operative Societies Act or Multi-State 
Cooperative Societies Act 2002, and governed by the provisions of the respective acts for 
non-banking issues such as registration, management, administration, recruitment, and 
amalgamation and liquidation. On 1 March 2012,  a revised supervisory action framework was 
introduced for UCBs; this was revised on 27 November 2014. The framework envisages 
self-corrective action by the UCBs; if the financia l position of the bank does not improve, the RBI 
will take supervisory action. In August 2011, the RBI allowed certain scheduled UCBs
61 to offer 
internet banking facilities to their cust omers with the approval of the RBI.  
4.75.  There are also rural cooperative banks, state cooperative banks, so-called "financial 
institutions" that provide medium- to long-term finance to specific sectors of the economy, 
regional rural banks (RRBs) established under the Regional Rural Banks Act 1976, and Local Area Banks.
62  
4.76.  Non-banking financial companies (NBFCs), which engage in: (i) lending; (ii) acquisition 
inter alia  of shares, stocks, bonds; (iii) financial leasing or hire purchase; or (iv) acceptance of 
deposits are regulated by the RBI and are open to foreign investment up to 100% of their capital. 
On 10 October 2012, the RBI issued a circular (No. 41) to relax conditions for foreign-owned 
NBFCs to establish step-down subsidiaries.63 As per the Circular, NBFCs whose share of 
foreign-owned paid-up capital account for more than 75% and up to 100% (previously only 100%) 
                                               
61 Those having minimum net worth of Rs 1 billion, CRAR of at least 10%, NPA of less than 5%, and 
have earned net profit continuously in the past three financial years. 
62 WTO (2011). 
63 Step-down subsidiaries are subsidiary companie s of a company that are subsidiary of another 
company. WT/TPR/S/313/Rev.1 • India 
 
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  and with a minimum capitalization of US$50 million can set up step-down subsidiaries for specific 
NBFC activities without any restriction on the number of operating subsidiaries and without bringing in additional capital. 
4.4.1.2  Insurance  
4.77.  Insurance and re-insurance in India are re gulated by the Insurance Act 1938, the Insurance 
Regulatory and Development Authority Act 1999 (which amended the Insurance Act 1938), the 
Life Insurance Corporation Act 1956, and the General Insurance Business Act 1972. The 
Micro-Insurance Regulations 2005 aim to promote the use of insurance by people in the lower 
income brackets.  
4.78.  The insurance sector's regulator is the In surance Regulatory and Development Authority of 
India (IRDAI). Its functions include supervising the development of the sector, granting licences to 
insurance intermediaries, and specifying the percentage of insurance business to be undertaken in 
rural areas and the social sector.
64  
4.79.  At end-March 2014, there were 53 insurance companies in India; foreign participation was 
21.6% of total equity (Table 4.5). In additi on, there were 20,057 micro-insurance agents.65 
Table 4.5 Insurance and rein surance market, end-March 2014  
Insurer Private Public Total 
FDI 
(Rs billion) % of 
FDI to 
total 
equity No. Equity 
(Rs billion) No. Equity 
(Rs billion) No. Equity 
(Rs billion) 
Life 23 258.4 1 1.0 24 259.4 61.5 23.6 
General 17 62.3 4 6.0 21 68.3 13.4 19.6 
Special Govt 
insurance 0 0.0 2 13.0 2 13.0 0 0.0 
Health 
insurer 5 16.8 0 0.0 5 16.8 3.7 22.0 
Re-insurer 0 0.0 1 4.3 1 4.3 0.0 0.0 
Total 45 337.5 8 24.3 53 361.8 78.2 21.6 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. 
4.80.  As in the case of the banking sector, the insurance industry continues to be dominated by 
state-owned enterprises. For example, the market  share of Life Insurance Corporation (LIC) of 
India was around 75.4% in 2013-14, compared with 68.7% in 2010-11. The four non-specialized 
public non-life insurance companies (National, New India, Oriental and United) accounted for around 54.7% of gross premium income (compared with 53.2% in 2010-11). The micro-insurance 
market is also dominated by the LIC, which cont ributed 89.4% of total micro-insurance premiums 
in 2013-14.  
4.81.  In accordance with the 1938 Insurance Act, as amended, insurance services may only be 
carried out by an Indian insurance company, mean ing any insurer formed and registered in India 
under the Companies Act 2013, whose sole purpose is to carry out life insurance business or 
general insurance business or re-insurance business.  
4.82.  There is no tariff control for any cla ss of non-life insurance business, except motor 
third-party cover.
66  
4.83.  In accordance with the Insurance Regulatory and Development Authority (Obligations of 
Insurers to Rural and Social Sectors) Regulations 2002, insurers must place a certain percentage 
of their policies with the rural and social sectors. This restriction has remained unchanged since 
                                               
64 The "social sector" includes the "unorganized" sect or, informal sector, econ omically vulnerable or 
backward classes, and other categories of  persons both in rural and urban areas. 
65 As per recent guidelines , District Co-operative Ba nks, Regional Rural Banks,  individual owners of 
Kirana shops are among banking correspondents th at can be appointed as micro-insurance agents. 
66 For motor third-party cover, whic h is a statutory insurance cover required under the provisions of 
Motor Vehicles Act, the IRDA has retained the powers to determine the rates, terms and conditions. WT/TPR/S/313/Rev.1 • India 
 
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  2011.67 All 23 life insurance companies in the private sector fulfilled their rural sector obligations; 
the LIC was also compliant with its obligations, underwriting a percentage of policies in the rural sector above its prescribed 25% for 2013-14. Out of 23 private life insurance companies, 21 fulfilled their social sector obligations during 2013-14, and the IRDA initiated penal action 
against the two non-compliant insurers.
68 The LIC also complied with its social-sector requirements 
in 2013-14. All non-life private insurance companie s and one public sector insurer complied with 
their rural and social sector obligations in 2013-14. 
4.84.  There has been no change in the solv ency margin requirement of 150% since India's 
previous Review. At end-March 2014, all 24 life and 28 non-life insurers and one re-insurer were in compliance with the minimum solv ency margin requirement.  
4.85.  Tariff restrictions exist only for the premium rates for motor third-party liability cover; such 
rates must be adjusted every year in accordance with a specific formula. On 27 March 2014, the 
authorities moderated the rate increase in some of  the classes of motor insurance and notified the 
revised premium rates for 2014-15.
69  
4.86.  Insurance companies must maintain a required solvency margin, which has remained 
unchanged since 2011. 
4.87.  The insurance penetration rate as a percentage of GDP declined slightly for life insurance 
from 4.6% in 2009 to 3.1% in 2013 (the latest year for which data were made available); 
insurance density decreased for life insurance from US$47.7 in 2009 to US$41 in 2013. The penetration rate for general (non-life) insurance increased from 0.6% in 2009 to 0.8% in 2013; its density increased from US$6.7 in 2009 to US$11 in 2013.
70  
4.88.  The Micro-Insurance Regulations 2005 provid e a platform to promote insurance penetration 
among rural and urban populations. The Regulations define micro-insurance as policies of up to Rs 30,000 or Rs 50,000, depending on the type of insurance contract. The Regulations promote 
the creation of specific micro-insurance products and allow non-governmental organizations and 
self-help groups to act as agents to insurance companies in marketing these micro-insurance products. Agents may charge a commission of 10% of the premium for single-premium life 
insurance policies, and 20% for non-single-premium policies; for non-life insurance business, 
agents may charge a commission of 15% of the premium. 
4.89.  Grievances with respect to insurance issues may be addressed to the Insurance 
Ombudsman. There are 12 Ombudsmen across India. The Insurance Ombudsman may engage in 
conciliation, and award-making; the Ombudsman's powers are restricted to insurance contracts of 
a value not exceeding Rs 2 million. Insurance comp anies are required to honour awards passed by 
an Insurance Ombudsman within three months. 
4.90.  The Insurance Laws (Amendment) Ordinance 2014, issued on 26 December 2014, adopted 
a number of regulatory changes including: (a) raising the foreign equity limit in an Indian insurance company from 26% to 49%; (b) allowing foreign re-insurers to open branches only for 
re-insurance business in India; (c) making the underwriting of third-party risks of motor vehicles 
obligatory; (d) shifting the responsibility of a ppointing insurance agents from the IRDA to the 
insurers; and (e) introducing flexibility to raise capital through other forms instead of through equity alone. 
4.4.1.3  Securities 
4.91.  The securities sector in India is regulate d by the Securities and Exchange Board of India 
(SEBI), inter alia,  under the Securities and Exchange Board of India Act 1992, as amended.
71 
                                               
67 WTO (2011), Table IV.7. 
68 Insurance Regulatory and Development Authority (2014). 
69 IRDA Notification No. IRDA/NL/NFTN/MOTP/098/03/2014, 27 March 2014. Viewed at: 
http://www.irda.gov.in/ADMINCMS/cms/frmGe neral_Layout.aspx?page=PageNo2247&flag=1 . 
70 Insurance penetration is measured as the ratio of premiums (in US$) to GDP (also in US$). Insurance 
density is calculated by dividing total premiums (in US$) by total population. 
71 Other laws that regulate the securities sector include the Securities Contract (Regulations) Act 1956, 
the Depositories Act 1996, and the relevant provisions of the Companies Act 1956.  WT/TPR/S/313/Rev.1 • India 
 
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  SEBI's responsibility is to regulate and promote the development of the securities market, and 
protect the interests of investors in securities.  
4.92.  Since its previous Review, India adopted new legislation including the Securities Laws 
(Amendment) Act 201472, which amended the SEBI Act 1992, the Securities Contracts 
(Regulation) Act 1957 and the Depositories Act, 1996. Under the Securities Laws (Amendment) 
Act 2014, SEBI is empowered to: (i) call for information from any person in relation to any investigation or inquiry by SEBI in respect of any transactions in securities; (ii) obtain or furnish 
information to other securities regulators abroad; (iii) settle administrative and civil proceedings 
on terms determined by SEBI in accordance with procedures specified in the relevant regulations; (iv) review (by the SEBI Board) on its own initiati ve any order passed by an adjudicating officer if 
the order is considered to be erroneous and not in the interest of the securities market; and 
(v) strengthen enforcement.
73 The Act also enlarged the scope of the collective investment 
scheme, and stipulates the establishment of Special Courts for prosecution of offences under the Act for speedy trials. 
4.93.  As at 16 February 2015, there were 15 stock exchanges in India
74, all regulated by SEBI 
under the Securities Contract (Regulation) Act 1956 and the SEBI Act 1992.75 During the review 
period, the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) 
Regulations 201276 was adopted to provide a separate regulatory framework for regulation of stock 
exchanges and clearing corporations, and repealed  the previous SCR R (Manner of Increasing and 
Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations 2006, although some 
aspects of the latter are incorporated in the new Regulations (e.g. shareholding restriction and fit 
and proper criteria) with minor modifications (Table 4.6). 
Table 4.6 Securities market, 2012-15  
Registered market participants 2012a 2013a 2014a 2014b 
Stock exchanges 
Cash market 19 20 19 19j 
Derivatives market 2 3 3 3 
Currency derivatives 4 3 4 4k 
Foreign institutional investors 1,765 1,757 1,710 7,638c 
Custodians 19 19 19 19 
Venture capital funds 212 211 207 198 
Foreign venture capital investors 174 182 192 201 
Alternative Investment Funds 0 42 101 122 
Mutual funds 49 52 50 49 
 2011-12 2012-13 2013-14 2014-15b 
Primary securities market  
Capital raised (US$ billion)     
Equity securities      
Public and rights issues 2.5 2.8 2.2 0.6 
Qualified institutions placements (QIPs) 0.4 2.9 2.3 3.5 
Preferential allotments  5.0 8.6 7.7 3.5 
Debt securities     
Public issues 7.0 3.1 7.1 0.9 
Private placements 51.1 66.5 45.9 29.9 
Total  58.0 69.6 53.0 30.8 
Secondary securities market 
Number of listed companiesc 5,133 5,211 5,336 5,498 
Equity market capitalization (US$ billion)c 1,214.9 1,174.5 1,233.8 1,577.1 
Equity market turnover (US$ billion) (NSE + 
BSE Ltd.)d 680.0 598.8 554.1 481.9 
Number of trades (million) (NSE + BSE Ltd.) 1,832.1 1,684.0 1,806.4 1,472.7 
                                               
72 Ministry of Finance online information. Viewed at: 
http://finmin.nic.in/law/The%20Secur ities%20Laws%20Amendment%20Act%202014.pdf . 
73 SEBI has a precedence for the recove ry claim over all other claimants. 
74 The authorities state that as the process of exit of stock exchanges is under way, the numbe r of stock 
exchanges might change more frequently. Out of the tota l, the applications of 10 st ock exchanges for exit is 
under process and one stock exchange is in the process of merger as on 24 February 2015. 
75 SEBI online information. Viewed at: 
http://www.sebi.gov.in/sebiweb/userview/ detail/2/388/No%20of%20Stock%20Exchange. 
76 SEBI online information. Viewed at: 
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1340272091708.pdf. WT/TPR/S/313/Rev.1 • India 
 
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   2011-12 2012-13 2013-14 2014-15b 
Daily average turnover (US$ billion) (NSE + 
BSE Ltd.) 2.7 2.4 2.2 3.4 
Derivatives market     
Turnover (US$ billion)     
Equity derivativese 6,286.2 7,114.7 7,892.0 6,682.7 
Currency derivativesf 1,934.5 1601.5 1161.5 446.7 
Interest rate futuresg 0.0. 0.0 1.2 0.2 
Average daily turnover (US$ billion)     
Equity derivativese 25.2 28.6 31.4 47.4 
Currency derivatives 8.1 6.6 4.8 3.4 
Investment by foreign institutional investors 
(FIIs)     
Investment during the year (US$ billion) 18.9 31.0 8.9 26.8 
Cumulative net investment by the FIIs 
(US$ billion) 140.5 171.5 180.4 207.2 
Market value of assets (US$ billion)h 216.5 245.7 265.2 353.6 
% of equity market capitalization held by 
the FIIsi 15.3 18.0 19.3 19.7 
Investments by venture capital funds and 
foreign venture capital investors (cumulative investments (US$ billion))     
Venture capital funds 5.6 5.8 6.0 5.7 
Foreign venture capital investors 7.7 6.2 7.5 7.3 
a As at 31 March of each year. 
b As at 31 October 2014. c BSE only. d With the commencement of the FPI Regime from 1 June 1 2014, the FIIs, Sub-Accounts and QFIs 
w e r e  m e r g e d  i n t o  a  n e w  i n v e s t o r  c l a s s  t e r m e d  a s  " F o r e i g n  P o r t f o l i o  I n v e s t o r s  ( F P I s ) " .  A s  a t  19 November 2014, the number of FPIs was 467, and the number of deemed FPIs (previous FIIs, deemed FPIs (previous sub-accounts), and deemed FPIs (previous QFIs)) were 1,500, 5,603 and 68, 
respectively. 
e BSE and NSE. f BSE, NSE, USE and MCX-SX. g NSE only. h Equity and Debt. i AUC of FII in equity as a percentage of BSE market cap. J The corresponding data for 16 Feb 2015 is 15. k USE merged with BSE in December 2014. As of February 2015, the number of exchanges offering 
currency derivatives was 3. 
Note: All conversions in US$ billion have been based on the reference rate published by RBI. 
Source: Securities and Exchange Boar d of India; and information provid ed by the Indian authorities.  
4.94.  Other policy initiatives since India's previous Review in 2011 include: allowing registered 
mutual funds to accept subscriptions from foreign investors that meet the know-your-client (KYC) 
requirements for equity schemes since 2011-12; reviewing corporate governance norms for listed 
companies77; raising the FII limit for investment in corporate bonds to US$51 billion, including a 
sub-limit of US$25 billion each for bonds of the in frastructure and non-infrastructure sectors, and 
US$1 billion for qualified foreign investors (QFIs) in non-infrastructure sector; establishing a 
registration requirement with SEBI for alternative investment funds under SEBI (Alternative Investment Funds) Regulations 2012
78; providing a framework for registration and regulation of 
investment advisors79, research analysts80, real estate investment trusts81, and infrastructure 
investment trusts82; and streamlining the regulation of schemes by companies for the benefit of 
their employees involving dealing in shares  through the SEBI (Share Based Employee Benefits) 
                                               
77 Securities and Exchange Board of India (2014).  
78 SEBI online information. Viewed at: 
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1337601524196.pdf. 
79 SEBI online information. Viewed at: 
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1358779330956.pdf. 
80 SEBI online information. Viewed at: 
http://www.sebi.gov.in/cms/sebi_data/commo ndocs/RESEARCHANALYSTS-regulations_p.pdf. 
81 SEBI online information. Viewed at: 
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1411722678653.pdf. 
82 SEBI online information. Viewed at: 
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1411722495005.pdf. WT/TPR/S/313/Rev.1 • India 
 
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  Regulations 2014. SEBI also notified the SEBI (Pro hibition of Insider-Trading) Regulations, 2015 in 
order to put in place a framework for prohibition of insider trading in securities and to strengthen the legal framework, which replaced the regulations notified in 1992. 
4.95.  An additional regulatory step has been to converge accounting standards in India with 
International Financial Reporting Standards (IFRS). In February 2011, the Ministry of Corporate 
Affairs (MCA) notified that accounting standards in India would converge with IFRS, and a new Companies Act 2013 was adopted. The Act introduced various new provisions including 
requirement for preparation of consolidated financial statements by companies. In the Budget 
2014-15, the Minister for Finance proposed for national standards to be converged with IFRS voluntarily from 2015-16, and mandatorily from 2016-17. Subsequently, the Institute of Chartered Accountants of India (ICAI) prepared a revise d roadmap for implementation of the Indian 
Accounting Standards (Ind-AS) and submitted it to the MCA for taking up with the National 
Advisory Committee on Accounting Standards (NAC AS) to decide on its implementation. On 16 
February 2015, the Ind-AS was notified by MCA. With the implementation of Ind-AS, India will 
have two sets of accounting standards, i.e. existing accounting standards under Companies 
(Accounting Standard) Rules 2006 and Ind-AS.  
4.96.  Foreign investment is allowed, either under the FDI route or the portfolio investment 
scheme (Table 4.7). Foreign investment under the latter has been reformed since India's previous 
Review, while overall foreign-ownership restrict ions remain largely unchanged. As per SEBI 
(Foreign Portfolio Investors) Regulations 2014, existing FIIs, Sub-Accounts and QFI are merged into a new investor class called Foreign Portfolio Investors (FPIs).
83 FPIs require no direct 
registration with SEBI; instead newly-defined Designated Depository Participants (DDPs) that are 
approved by SEBI register FPIs on behalf of SEBI subject to compliance with KYC requirements.84 
FPIs require registration under any of the following categories: (i) Category I FPI, which include 
government-related foreign investors; (ii) Category II FPI, which include broad-based funds and 
other entities appropriately regulated, and unregulated broad based funds (whose investment manager is appropriately regulated), and universit y funds, pension funds, and university-related 
endowments already registered with SEBI as FII/Sub-Account; and (iii) Category III FPI, which 
includes all others such as foreign individuals and foreign corporations. Category I and Category II FPIs (except unregulated broad-based funds) are allowed to issue or deal in offshore derivative instruments (ODIs) directly or indirectly. Category I and II FPIs have been exempted from 
furnishing the financial details of the investor, pr oof of address, proof of identity and photographs 
of senior management personnel, authorised signatories and ultimate beneficial owners (UBOs). Further, Category II FPIs are exempted from furn ishing lists of UBOs, where no UBO is holding 
more than 25%. 
4.97.  Restrictions on FPIs/FIIs investment in debt have been modified since India's previous 
Review. These include: (i) allowing FPIs to invest in Government debt and corporate debt without 
purchasing debt limit until the overall investme nt reaches 90%, respectively, after which the 
auction mechanism is initiated for allocation of the remaining limits (in 2013); (ii) allowing FPIs to invest in credit-enhanced rupee denominated bonds up to an equivalent of US$5 billion within the overall corporate bond limit of US$51 billion (N ovember 2013); and (iii) creating a separate 
additional limit of US$5 billion for long-term investors allowing FPIs to invest only in dated 
Government securities having residual maturity of one year or above (April 2014). This was being 
subsequently revised in respect of the Government debt limit (other than the sub-limit of 
US$5 billion for long term investors) of US$25 billion requiring FPIs to invest in Government bonds 
with a minimum residual maturity of three years (July 2014). In addition, FPIs have recently been permitted to: (i) invest in corporate bonds with a minimum residual maturity of three years and 
prohibiting FPIs from investing in liquid and money-market mutual-fund schemes (since February 
2015); (ii) invest, on a repatriation basis, in no n-convertible/redeemable preference shares or 
debentures issued by an Indian company as pe r terms and conditions specified by RBI; and 
                                               
83 SEBI online information. Viewed at: 
http://www.sebi.gov.in/cms/sebi_data/attachdoc s/1389083605384.pdf. All existing FIIs and Sub-Accounts 
may continue to buy, sell or deal in securities under the FPI re gime. All existing QFIs may continue to buy, sell 
or deal in securities until one year after the date of notification of the Regulation; in the meantime, these QFIs 
may obtain FPI registration through DDPs. 
84 Instructions regarding risk-based KYC for FPIs was issued on 12 September 2013. DDPs are either an 
Authorized Dealer Category-1 bank au thorized by the Reserve Bank of In dia or a Depository Participant and 
Custodian of Securities registered with SEBI. WT/TPR/S/313/Rev.1 • India 
 
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  (iii) invest in Government securities. Such investments shall be kept outside the applicable limit 
(currently US$30 billion) for investments by FPIs in Government securities.  
Table 4.7 Market access and national treatmen t conditions for foreign investment in the 
securities market, 2014  
Sector/sub-sector Limitation on market access Limitation on national 
treatment 
Venture capital Domestic venture capital funds and foreign venture 
capital investors are regu lated by SEBI. A venture 
capital fund may raise moneys from any investor, Indian, foreign or NRI, by way of issue of units. Same rules apply to Indian 
and foreign investors within relevant SEBI Regulations. 
Asset management 
(mutual funds) Mutual funds in India must  register with SEBI. The 
requirement & procedure to be followed for 
registration of a mutual fund in India are provided in 
SEBI (Mutual Fund), Regulations, 1996. 
Overseas investors may invest either through offshore 
funds or can directly invest  in units of mutual fund 
schemes through FPI route. FPIs are not permitted to 
invest in liquid and money market mutual fund 
schemes. Same rules apply to Indian 
and foreign investors with 
regard to registration of 
mutual funds. 
Portfolio 
management FPIs (and previous FIIs and sub-accounts) may avail 
portfolio management service.  Same rules apply to Indian 
and foreign investors within relevant SEBI Regulations. 
Custodial services Foreign banks may carry out activities, subject to RBI 
approval and SEBI Regulations. Foreign banks are 
allowed to register as Cu stodian with SEBI. SEBI 
(Custodian of Securities) Regulations, 1996 (Custodian 
Regulations) does not impose any restrictions on 
custodians with respect to foreign ownership.  Same rules apply to Indian 
and foreign custodians 
under the Custodian 
Regulations. 
Depository A depository must be a company incorporated under 
the Companies Act and needs to obtain a Certificate of Registration and Certific ate of commencement of 
business from SEBI before op erating as a depository. 
No person other than a sp onsor, whether Indian or 
foreign, can hold more than 5% of equity share capital 
of a depository. The entities that can be a sponsor of a 
depository are provided in the SEBI (Depositories and Participant) Regulations. Th ese can be a bank referred 
in the second schedule to RBI Act, a foreign bank 
operating in India with the permission of RBI, 
or a recognised stock exch ange. A foreign corporation 
providing custodial, clearing or settlement services in the securities, and any instit ution engaged in providing 
financial services established outside India can also sponsor a depository if approved by the Government. There is a composite ceiling of 49% for foreign investment (FDI 26% and FII 23%) in Depository. Foreign institutional 
investors are allowed to acquire shares in the secondary market only. Foreign institutional investors are also precluded from having representation in the board of the 
depository. 
Participation in issues 
of all kinds of 
securities, including 
underwriting and 
placement as agent Foreign entities may subscribe to issues as FPIs. 
Foreign companies may issue IDR to raise money; 
they may act as intermediaries subject to setting up a 
company in India. Same rules apply to Indian 
and foreign entities in 
relevant SEBI Regulations. 
Investment in stock 
exchange No persons resident in Indi a and resident outside India 
directly or indirectly, either individually or together with persons acting in conc ert, must acquire or hold 
more than 5% of the paid-up equity share capital in a recognized stock exchange. The only exception to this is granted to some domestic players like a stock exchange, a depository, a banking company, an 
insurance company, and a public financial institution, which may acquire or hold, either directly or indirectly, 
either individually or together, with persons acting in 
concert, up to 15% in Indian stock exchanges. There is a composite ceiling of 49% for foreign investment in 
stock exchanges (FDI 26% and FII 23%). Foreign institutional 
investors are allowed to acquire shares in the secondary market only.  Foreign institutional investors are also precluded from having representation in the board of stock exchanges. 
Source: WTO Secretariat, based on informatio n provided by the Indian authorities.  WT/TPR/S/313/Rev.1 • India 
 
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  4.98.  A Securities Transaction Tax (STT) is applie d on the sale and purchase of various securities 
at the rates of 0.017%, 0.025%, 0.125%, and 0.25%  of the value of the transaction, depending 
on its nature. The same tax treatment that had b een applied to FIIs is extended to all FPIs.  
4.99.  Regulations on takeovers in the securities se ctor were modified by the adoption of the SEBI 
(Substantial Acquisition of Shares and Takeovers) Regulations 2011, notified on 
23 September 201185; takeovers in the securities' sector had previously been regulated by SEBI 
(Substantial Acquisition of Shares and Takeover s) Regulations 1997. Regulations with respect to 
trigger-points for making an open offer by an acquirer have been modified: under the 2011 
Regulations, acquirers who intend to acquire shar es that, along with their existing shareholding, 
would entitle them to exercise 25% (previously 15%) or more of the voting rights, may acquire 
such additional shares only after making a pub lic announcement of an open offer to acquire at 
least an additional 26% (previously 20%) of the voting capital of the target company from 
shareholders. The 2011 Regulations also introduced, inter alia : voluntary offers (subject to certain 
conditions), and a mandatory recommendation on the open offer by the committee of independent 
directors of the target company. The new Regula tions provide for disclosure obligations pursuant 
to an acquisition that leads to the acquirer owning  5% of the shares of the company. Any investor 
that owns 5% or more of the shares must disclose the purchase or sale of any further stock 
representing at least 2% of the total shares. Ev ery person that holds more than 25% of shares 
and the promotors must submit yearly declarations  stating the amount of ownership both in terms 
of number of shares and as a percentage of the to tal voting capital of the company. Acquirers that 
hold between 25% and 75% of shares must not acquire more than 5% of shares in any financial 
year without triggering an open offer. The SEBI cooperates with the CCI with respect to 
regulations of takeovers and open offers with a vi ew to ensuring smooth functioning of the capital 
market. Consultations between the two bodies are held on a needs basis for specific cases. 
4.4.2  Telecommunications 
4.100.  The telecommunications sector is regulated by the Indian Telegraph Act 1885 (as 
amended), the Indian Wireless Telegraphy Act 1933, the Indian Telegraph Rules 1951 (as 
amended), the Telecom Regulatory Authority of India Act 1997, and the directions, orders, and 
regulations issued by the Telecom Regulatory Authority of India. The Indian Telegraph Rules were amended on 28 January 2010, 28 March 2012 and 8 February 2014.
86  
4.101.  Since its previous Review, various chan ges to the regulatory environment regarding 
telecommunications in India have been adopted. These include the adoption of: (i) Standards of 
Quality of Service for Mobile Data Services Regulations 2012, which aim to protect the interests of consumers by requiring mobile-data service-providers to provide certain information about the 
quality of services, and assess the quality of services; (ii) Registration of Consumer Organisations 
Regulations 2012 as a revision to the Regulation on Guidelines for Registration of Consumer Organisations 2001; (iii) International Telecommunication Cable Landing Stations Access 
Facilitation Charges and Co-location Charges Regu lations 2012 to regulate Cable Landing Station 
Reference Interconnection Offer (CLSRIO); (iv)  Short Message Services (SMS) Termination 
Charges Regulations 2013 to apply the framework of Interconnection Usage Charges (IUC) on SMS termination charges; (v) International Calling Card Services (Access Charges) Regulations 2014 to 
introduce more competition in the long-distance communications market; (vi) Guidelines for the 
Reporting System on Accounting Separation Regulations 2012 to facilitate the availability of more detailed and disaggregated information on revenues and costs on a regular basis; and 
(vii) Telecommunication Interconnection (Port Charges) (Second Amendment) Regulations 2012.
87 
4.102.  The Department of Telecommunications (DoT) at the Ministry of Communications and 
Information Technology is in charge of formulating the telecommunications policy and granting 
licences. The DoT also controls four central public-sector undertakings, including India's main 
fixed-lines operators, Bharat Sanchar Nigam Ltd. (BSNL), and Mahanagar Telephone Nigam Ltd. 
                                               
85 SEBI online information. Viewed at: 
http://www.sebi.gov.in/cms/sebi_data/commondocs/takeovernotifi_p.pdf. 
86 Department of Telecommunications online information. Viewed at:  
http://www.dot.gov.in/act-rules/indian-telegraph-rule-2008 . 
87 The authorities consider that reports issued as  per the regulation will provide information on 
revenues, costs, returns and capital employed in major areas of a service provider's business for regulatory 
purposes.  WT/TPR/S/313/Rev.1 • India 
 
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  (MTNL).88 The Telecom Regulatory Authority of India (TRAI), created in 1997 as an independent 
body, regulates tariffs, inter-connectivity, and qu ality standards, and ensures that the universal 
service obligation is met. TRAI also makes recommendations regarding the procedures to grant licences. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) resolves disputes 
between the Government and licensees, service-pr oviders, and service-providers and consumers; 
and deals with appeals against TRAI's decisions. Over 2011-14, 2,516 disputes and 50 appeals were filed.
89 
4.103.  The National Telecom Policy 2012, among others, establishes the main guidelines for the 
development of the telecom sector in India. The policy aims, inter alia  to: simplify the licensing 
framework to further extend converged high-qualit y services across the nation, including rural and 
remote areas; increase rural teledensity to 70 by 2017 and 100 by 2020 (teledensity was around 
46 in 2014); provide affordable and reliable broadband-on-demand by 2015 and achieve 
175 million broadband connections by 2017 and 600 million by 2020 at minimum 2 Mbps download speed and make available higher speeds of at least 100 Mbps on demand; de-link spectrum in 
respect of all future licences; enhance number-portability; and put in place a simplified merger and 
acquisition regime in the telecom sector, while assuring competition. 
4.104.  During the period under review, while rural teledensity increased, major gaps remained 
between urban and rural teledensity (Table 4.8). BSNL and MTNL hold around 77% of the fixed 
telephony market as at 30 June 2014.
90 
Table 4.8 Selected telecom indicators, 2011-14 
(Calendar year) 
 2011 2012 2013 2014a 
Total telephone subscribers (million)     
Fixed lines 32.7 30.8 28.9 27.0 
Wireless 893.8 864.7 886.3 944.0 
Teledensity     
Urban 167.9 149.9 145.0 148.1 
Rural 37.5 39.9 42.7 46.1 
Internet subscribers (million) 25.3 25.3 238.7 254.4b 
Broadband subscribers (million) 13.4 15.0 55.2 85.7 
Local fixed telephony providers 7 8 8 8 
Mobile telephony providers 16 14 14 14 
National long-distance telephony providers 28 29 31 35 
International long-distance telephony providers 23 24 25 28 
Internet service providers 388 392 386 434 
Infrastructure service providers 392 404 404 485 
Fixed telephony ratesc (Rs)       
Cost of local call per 3 minutes (to other fixed network) 1.2 1.2 1.2 2.4 
Cost of national long distance call per 3 minutes (to 
other fixed network) 1.2 1.2 1.2 2.4 
Cost per minute of international long distance call to 
the United States 7.2 6.0 6.0 7.0 
Mobile telephony rated (Rs)     
Cost of local call per minute 1 1 1 1.2 
Cost of national long distance call per minute 1.5 1.5 1.5 1.2 
Cost per minute of international long distance call to 
the United States 6.4 6.4 6.4 8.0 
a As at 30 June 2014. 
b As at 30 September 2014. c Per BSNL (leading fixed-line telephony provider)  d Per Airtel (leading service provider of mobile telephony). 
Source: TRAI online information. Viewed at: 
http://www.trai.gov.in/WriteReadData/PressRealease/Document/PR-TSD-Dec-14.pdf ; and 
information provided by the Indian authorities. 
                                               
88 Department of Telecommunications (2010); and Telecom Regulatory Authority of India, Press Release 
No. 11/2011, 9 February 2011. 
89 Telecom Disputes Settlement and Appellate Tribunal online information, "Statement of institution, 
disposal and pendency of cases as on 19 December 2014." Viewed at: 
http://www.tdsat.nic.in/Statement_of_Disposal.htm.  
90 MTNL provides telecom services in Mumbai and Delhi, and BSNL covers the rest of India.  WT/TPR/S/313/Rev.1 • India 
 
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  4.105.  Under the Telecom Regulatory Authority of  India Act 1997, TRAI is in charge of setting 
tariffs for all telecom services.91 TRAI consults with all stakeholders92, including consumer 
associations, on all issues related to the development of telecom regulations including tariffs.93 The 
Telecommunications Tariff Order 1999 had been amended 59 times by November 2014 (and 
10 times between 2011 and 2014).94  
4.106.  Concerning interconnection charges, in accordance with the Telecommunication 
Interconnection (Port Charges) (Second Amendment) Regulations 2012, issued on 
18 September 2012, the TRAI set a ceiling for providing port in Tandem/TAX Switch at 
Rs 10,000 per port per year and for providing port in a mobile-switching centre (MSC), the ceiling was specified as Rs 4,000 per port per year. The TRAI also issued International Telecommunication Access to Essential Facilities at Cable Landing Stations (Amendment) Regulations 2012 (No. 21 of 
2012) on 19 October 2012. Under the International Telecommunication Cable Landing Stations 
Access-Facilitation Charges and Co-location Charges Regulations 2012 (No. 27 of 2012), issued on 21 October 2012, access facilitation charges have been specified.
95 The Short Message Services 
(SMS) Termination Charges Regulations 2013 prescribes an SMS termination charge as 
Rs 0.02 per SMS, based on cost. In addition, the Regulations on International Calling Card (Access Charges) Regulations 2014, issued on 19 August  2014, prescribe access charges payable by 
international long-distance operator (ILDO) to  the access service-provider where the access 
service-provider customer avails of the calling- card service of ILDO at Rs 0.4 per minute for 
wireless services and Rs 1.2 per minute for wireline services. 
4.107.  India is divided into 22 telecom servic e areas. For providing telecom services, the 
Government grants Unified Licences (ULs). The basic features of ULs are as follows: (i) the 
allocation of spectrum is de-linked from the licences and must be obtained separately as per prescribed procedures. At present, spectrum in 800/900/1800/2100/2300/2500 MHz band is 
allocated through a bidding process. For all other services and usages like Public Mobile Radio 
Trunking Service (PMRTS), the allocation of spec trum and charges thereof is prescribed by the 
Wireless and Planning and Co-ordination wing of Department of Telecommunications from time to 
time; (ii) authorisation under UL comprises any one or more services among: unified license (all 
services); access service (per service area); internet service (Category-A with all India jurisdiction); internet service (Category-B with jurisdiction in a service area); internet service (Category-C with jurisdiction in a secondary switching-area); national long-distance (NLD) service; 
international long-distance (ILD) service; global mobile personal communication by satellite 
(GMPCS) service; public mobile radio trunking (PMRTS) service; very small aperture terminal (VSAT) closed-user group (CUG) service; INSAT MSS-reporting (MSS-R) service; and resale of 
international private-leased circuit (IPLC) service. To deliver these services, domestic and foreign 
operators must be licensed by the DoT (Table A4.3). To apply for a licence, operators must register as an Indian company under the Indian Companies Act 1956. A maximum of 100% foreign 
equity participation is allowed. In the event of holding/obtaining access spectrum, no licensee or 
its promoter(s) directly or indirectly shall have any beneficial interest in another licensee company holding access spectrum in the same service area.  
4.108.  The Mobile Number Portability (MNP) Policy was launched on a trial basis across India in 
January 2011; full number portability was recommended by the Authority in 2013-14; this is 
planned to be implemented on 3 May 2015.
96 
4.109.  Development and maintenance of rural fixed-line and mobile telecom and broadband 
services are subsidized to allow affordable prices for customers.97 All service-providers, except 
providers of value-added services (e.g. internet, vo ice-mail, and e-mail services), are subject to a 
                                               
91 Fixed, mobile, and internet serv ices, and radio paging services, le ased circuit, integrated digital 
services network, value-added se rvices, telex and telegraph servic es, and global mobile personal 
communication by satellite. 
92 To undertake these consultations TRAI holds public meetings or invites written comments. 
93 For details, see Telecom Regulatory Authority of  India online information,  "Consultation Papers". 
Viewed at: http://www.trai.gov.in . 
94 For details, see Telecom Regulatory of India on line information, "Tari ff Orders". Viewed at: 
http://www.trai.gov.in . 
95 Access-facilitation charges per unit capacity per year were set for STM-1,  STM-4, STM-16 and STM-64 
capacities at cable-landin g stations and alternate locations, respectively. 
96 Department of Telecommunications(2014). 
97 Department of Telecommunications (2010). WT/TPR/S/313/Rev.1 • India 
 
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  universal service levy of 5% of adjusted gross revenue.98 Funds from the Universal Service 
Obligation Fund (USOF) are allocated to "eligible operators" from the public and the private sectors
99, through a bidding process, for telecom and broadband infrastructure development 
projects in rural areas (e.g. provisions of village public telephones, household telephones, and 
infrastructure for mobile and broadband services).100 In 2012, the Government amended the 
Indian Telegraph Rules 1951 to provide funds from the USOF to create a national optical fibre network (NOFN) to extend broadband connectivity to all villages.  
4.110.  In addition to the Competition Act 2002, the Department of Telecommunications issues 
guidelines for mergers and acquisitions in telecommunications. On 20 February 2014, revised guidelines were issued. Under these guidelines mergers will be allowed where the market share of the combined entity in the respective service area is up to 50% (compared with 35% 
previously).
101 
4.4.3  Transport  4.4.3.1  Maritime transport 
4.4.3.1.1  Shipping 
4.111.  Some 95% of India's merchandise trade by volume and 68% in terms of value is 
transported by sea.
102 India's fleet comprises 1,205 commercial Indian-flag vessels with a gross 
tonnage of 10.3 million tonnes; around 32% of the tonnage is held by the state-owned national 
flag-carrier, the Shipping Corporation of India (SCI) (December 2014). Foreign-flag vessels dominate maritime transport for international trade; Indian-flag vessels carried only 9.1% of India's merchandise trade in 2012-13.
103 The Ministry of Shipping controls eight shipping 
enterprises, including the SCI. A ccording to the authorities, there is no reservation policy for SCI. 
Bids are awarded to the lowest price and that match the technical requirements.  
4.112.  The shipping sector is governed by vari ous laws and regulations including the Merchant 
Shipping Act 1958. Main changes in regulations concerning maritime transport since 2011 reflect 
decisions made at the International Maritime Organization (IMO). In line with the amendments to the International Convention on Standards of Training, Certification and Watch-Keeping for 
Seafarers (STCW Convention) of the IMO in 2010, at Manila (Manila Amendments), the Merchant 
Shipping (STCW) Rules 2014 incorporated such change s into India's national legislation, as notified 
on 30 July 2014. These pertain to seafarers' training, certification and watch-keeping standards. 
4.113.  The registration of Indian vessels is governed by the Merchant Shipping Act 1958 (Part V) 
and the Merchant Shipping (Registration of Ships)  Rules 1960, as amended. Indian vessels must 
register at designated port registries. A central register is kept by the Directorate General of 
Shipping (DGS). Foreign ships may not be registered in India. Under the Act, vessels (Indian or 
foreign) must be licensed by the DGS. The DGS issues general licences (for Indian vessels and 
vessels chartered by a citizen of India or a company, or a cooperative society), licences for the whole or any part of the coastal trade, and licences for a specified period/voyage (i.e. specified 
period licence (SPL)), granted to fore ign flag vessels fo r coastal trade.  
4.114.  The Merchant Shipping Act 1958, as amended, reserves, in principle, cabotage to 
Indian-flag vessels (Part XIV). Nonetheless, the Act, in Sections 406 and 407, enables applications to be considered for relaxation from cabotage on a case-by-case basis, subject to the guidelines 
prescribed for the purpose. The latter stipulates, inter alia,  obtaining a no-objection certificate 
(NOC) from the INSA as to the availability or non- availability of Indian-flag vessels for the carriage 
of such cargo domestically along the coast of In dia. Technical specifications of the vessels are 
examined in addition to the consideration of the first right of refusal to Indian-flag vessels to 
                                               
98 Department of Telecommunications, Notification No. 20-100/2007-AS-I, 1 October 2008. 
99 Basic service-operators, cellular mobile service-providers, and unified access services licence-holders 
or any entities that may be specified by the cent ral Government from time to time (Indian Telegraph 
(Amendment) Rules 2004).  
100 Department of Telecommunications (2010); and Indian Telegraph (Amendment) Rules 2004. 
101 Department of Telecommunications(2014). 
102 Ministry of Finance (2014). 
103 Ministry of Finance (2014). WT/TPR/S/313/Rev.1 • India 
 
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  match, on price points, the offers made by foreign-flag vessels. On the receipt of the NOCs from 
the INSA, the Director General of Shipping may grant licenses to foreign flag vessels. In fiscal years 2012/13, 2013/14, and 2014/15 (up to 14 October), the Director General of Shipping granted exemption from cabotage restrictions to 740, 742, and 291 foreign-flag vessels, 
respectively. According to the authorities, applications for cabotage are rarely declined. In 
addition, foreign cruise-ships are allowed to visit more than one Indian port. At the same time, the Government aims to develop coastal shipping by e nhancing modal shift in domestic transportation.  
4.115.  A policy of controlled Indian tonnage has been introduced, recently through DGS Order 
No. 10 of 2014 on 23 July 2014. This policy enables Indian shipping companies, registered in India, to register ships abroad, subject to certain conditions stipulated in the Order.  
4.116.  There have been no changes to foreign ownership by way of any restriction in the maritime 
transport sector since 2011. The policy of 100% foreign direct investment through the automatic 
route, in the Indian shipping sector, continues to be in force.  
4.117.  On repatriation of capital and divide nds, the provisions of the Foreign Exchange 
Management Act (FEMA) 1999, as amended, and the rules framed thereunder, remain applicable.  
4.118.  On the issue of compliance with instrume nts of the International Maritime Organization 
such as its Conventions/Protocols/Agreements, India has ratified 32 such IMO instruments (out 
of 55) (Table A4.4). Currently, six others are being considered.
104  
4.119.  A service tax is charged on the transpor t of goods on inland waterways and on coastal 
shipping.105 The change in taxation introduced in 2005, through which shipping companies were 
given the option of applying a tax based on total tonnage (tonnage tax) instead of the corporate 
tax, is estimated to have reduced the tax burden on the shipping sector and encouraged 
investment.106 
4.120.  Imports of repair materials by ship-repair units registered with the DGS are exempt from 
customs duties, and domestic goods are exempt from excise duties.107 The recent budget 
extended some of the incentives, including duty-free imports of spare parts and other items used for repairs, provided for ocean-going vessels owned by ship-owners registered in India.  
4.121.  Vessel-sharing agreements of the liner-shi pping industry are exempted from Section 3 of 
the Competition Act 2002, initially for a period of one year as from 11 December 2013. The exemption has been extended several times; currently, it is valid until 4 February 2016 (section 3.3.2.1). Registration is required for such agreements; 47 such agreements have been 
registered.
108 During the first exemption period (from 11 December 2013 to 10 December 2014), 
30 vessel-sharing agreements were filed with the Directorate General of Shipping. 
4.4.3.1.2  Ports 
4.122.  India has around 200 ports including 12 ma jor ports, which handle around 57% of total 
cargo.109 The major ports are mainly administered by the central Government through the Ministry 
                                               
104 They are: AFS Convention (International Conv ention on the Control of Harmful Anti-Fouling 
Substances on Ships) 2001; Bunker Convention (Interna tional Convention on Civil Liability for Bunker Oil 
Pollution Damage) 2001; Protocol of 1996 Convention on Prevention of Marine Pollution by Dumping Waste and Other Matter (London Convention); OPRC/HNS (Protocol on Preparedness, Response and Cooperation to Pollution incidents by Hazardous and Noxious Substanc es) 2000; BWM Convention (International Convention 
for Control and Management of Ship's Ballast Water and Sediments) 2004; and Maritime Labour Convention 
2006. The authorities consider that, as for the remaining 17 conventions/protocols/agreements, not all of them 
are relevant in the Indian context and may not require immediate action domestically. 
105 An education cess (2%) and a secondary and hi gher education cess (1%) apply on the payable 
service tax. For details, see Central Board of Excise an d Customs online information, "Service Tax: Service 
Profile". Viewed at: http://www.cbec.gov.in/cae1-english.htm. 
106 The Income Tax Act 1961, as amended on 1 April 2005. 
107 Press note 1990 series No. SY-22013/7/89-SBR, 10 October 1990. 
108 Information provided by the Indian authorities. 
109 A major port is any port the central Government declar es (by notification in the Official Gazette ) or 
has declared (under any law in force), to be a major port (Indian Ports Act 1908). Currently, they WT/TPR/S/313/Rev.1 • India 
 
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  of Shipping and managed by "port trusts" under the Major Port Trust Act 1963.110 The Maritime 
Agenda 2010-20 identified various areas for capacity-building in ports and shipping. The National Maritime Development Programme (NMDP), a part of the Maritime Agenda, is aimed at modernizing infrastructure both at major and minor ports.
111 
4.123.  The Indian Ports Act and the Major Port Trusts Act 1963112 are the main laws governing 
ports. All ports are owned by the Government; specific berths and activities may be publicly or privately administered and operated. Infrastructure at major and non-major ports is developed 
through public and private partnerships. Tax holidays of 10 years are available for development of 
infrastructure in ports. Foreign direct investment of up to 100% under automatic route is permitted for port development projects. Projects involving investment of around Rs 110 billion have been awarded to foreign companies since 2012; these include the development of the 
fourth container terminal at Jawaharlal Nehru Port involving an investment of around 
Rs 79.2 billion.  
4.124.  On 20 April 2012, the Merchant Shipping (Regulation of Entry of Ships into Ports, 
Anchorages and Off-Shore Facilities) Rules 2012 were notified and promulgated with a view to 
mitigating the adverse effects of potential marine environmental pollution from the entry of sub-standard ships into India.
113 
4.125.  Tariffs for services and facilities at major ports are regulated by the Tariff Authority for 
Major Ports (TAMP)114, constituted in April 1997 as an independent authority. Tariff Regulation at 
Major Ports 1997 specifies conditions governing tariffs for major ports; under its 2005 guidelines, as revised in February 2008, a tariff cap based on  a cost-plus approach with an assured return on 
gross capital deployed has become a basic norm for the setting of port tariffs. In 2013, the 
Ministry of Shipping issued Guidelines for Determin ation of Tariffs for Projects at Major Ports 2013, 
with a view to liberalizing certain aspects of tariff regulations in order to invite more private 
investment in the port sector.
115  
4.126.  Non-major ports are regulated by States' maritime boards/departments. Non-major ports 
are allowed to fix their own tariffs, and in order to attract cargo from major ports, they often fix 
their tariffs at levels lower than the regulated tariffs. 
4.127.  The Policy for Preventing Private Sector Monopoly in Major Ports 2010 continues to 
promote competition in the award of contracts. If there is one private terminal/berth-operator in a 
major port for a specific cargo, the operator is not allowed to bid for the next terminal/berth for 
handling the same cargo in the same port.116 
4.4.3.2  Air transport  4.128.  The Ministry of Civil Aviation is in charge of policy formulation for, and regulation of civil 
aviation in India. Within the Ministry, the Directorate General of Civil Aviation (DGCA) regulates air 
transport services to/from India; enforces civil air regulations and standards, registers aircraft and licenses pilots, air engineers, and traffic controller s. The Bureau of Civil Aviation Security (BCAS), 
also within the Ministry, is in charge of formulat ing security standards. The Ministry controls: Air 
                                                                                                                                               
comprise: Kolkata, Paradip, Visakhapatnam, Ennore, Ch ennai, Tuticorin, Cochin, New Mangalore, Mormugao, 
Mumbai, Jawaharlal Nehru, and Kandla. 
110 The exception, Ennore port, is managed under a "landlord" port model,  which separates port 
ownership from port operations. Ennore port is a corp oratized port registered under the Companies Act 1956. 
111 Ministry of Shipping online information, "Parliament Related Matt er: Rajya Sabha dated 
7 December 2010". Viewed at: http://shipping.gov.in/index1.asp?linkid=175&langid=1; and Ministry of Shipping (undated). 
112 Ministry of Shipping online information. Viewed at: 
http://shipping.nic.in/writereaddata/l892s/5 3177698The%20MPT%20Act% 201963%20(38%20of%201963).pd
f.  
113 Ministry of Shipping online information. Viewed at: 
http://shipping.nic.in/writereaddata/l892s/PortEntryRules-39326416.pdf . 
114 The Major Ports Trust Act 1963 was amended by the Port Laws (Amendment) Act 1997 to constitute 
the TAMP (Tariff Authority for Major Ports online inform ation. Viewed at: http://www.tariffauthority.gov.in/). 
115 Ministry of Shipping online information. Viewed at: 
http://shipping.nic.in/index1.php?lang=1&level=1&sublinkid=114&lid=63.  
116 Ministry of Shipping online information, "Policy". Viewed at: http://shipping.nic.in . WT/TPR/S/313/Rev.1 • India 
 
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  India Ltd., which operates Air India flights; the Airports Authority of India (AAI), which manages 
and operates some of India's civil airports and surveys India's airspace; and Pawan Hans Helicopters Ltd., which operates helicopter services for the oil and tourism industries.  
4.129.  The AAI manages 126 of India's 454 airports. The remaining airports are managed by 
private operators. AAI is responsible for slot allocation at AAI-managed airports. All domestic 
airlines must file for slots with the DGCA and the respective airport operators. Slots are allocated twice a year, based on grandfathered rights or a "use it or lose it" rule.
117 After allocation of slots, 
new airlines are allotted 50% of the remaining slot s. No charge is levied for peak and non-peak 
slots. 
4.130.  Permits to operate scheduled and non-scheduled flights are granted by the DGCA upon a 
NOC from the Ministry of Civil Aviation118; permits may be renewed within 60 days of expiry.119 
Under the Aircraft Rules 1937, passenger-air-ca rriers must publish airfares for customers' 
information. In order to increase transparency, carriers must notify their airfares to the DGCA on the first day of every month and any significant changes within 24 hours.
120  
4.131.  Foreign investment is allowed in scheduled air-transport services and domestic-scheduled 
passenger airlines up to 49% (automatic route), and in non-scheduled air-transport service, non-scheduled airlines, chartered airlines, and cargo airlines up to 74% (subject to governmental 
approval beyond 49%). Foreign investment in airport projects is allowed up to 100% under the 
automatic route for Greenfield projects; and up to 100% for existing projects subject to 
governmental approval beyond 74%, to sectoral regulations notified by the Ministry of Civil 
Aviation, and security clearance. Private domestic partners in airport projects are granted full 
tax-exemption for ten years.
121 
4.132.  Civil aviation construction projects are subject to a 1% cess under the Building and Other 
Construction Workers' Welfare Cess Act 1996.  
4.133.  Tariffs on aeronautical services acco unt for 70%-80% of Indian airports revenues.122 Until 
2008, the AAI operated airports and regulated tariffs for aeronautical services, which led to a conflict of interest, and users complained about the disparity between tariffs and services 
provided.
123 To address these concerns, the Airports Economic Regulatory Authority (AERA), an 
independent body, was created in 2009.124 AERA, which began operations in September 2009, is in 
charge of regulating airports with annual traffic of  at least 1.5 million passengers; 13 airports in 
India exceed this threshold and account for 85% of passenger traffic.125 The central Government is 
in charge of regulating airports with annual traffi c of less than 1.5 million passengers. The AERA is 
also responsible, inter alia , for fixing aeronautical services charges, the passenger service tax, and 
airport and user-development fees for major airports; and monitoring the quality and reliability of 
services rendered at airports.126 Airport operators collect the aeronautical charges and the taxes 
fixed by AERA. 
4.134.  Ground-handling services are open for FDI of up to 74%, subject to sectoral regulations 
notified by the Ministry of Civil Aviation and to se curity clearance. However, FDI is only allowed up 
to 49% under the automatic route. Beyond 49%, approval from the Foreign Investment Promotion Board is required. In addition, non-resident Indians are allowed to invest up to 100% in ground-handling services.  
                                               
117 Under grandfathered rights, slots revert to air carri ers that made significant use of their allocations 
during the previous season. The "use it  or lose it" rule applies to merger s. An airline that is merging with 
another airline, takes control of the slot rights of the latter. If the sl ots are not used, the airline loses its user 
rights. 
118 For details, see DGCA Air Transport Circular No. 1 of 2009, 14 March 200 (Directorate General of 
Civil Aviation online information, "Rules: Circulars:  Air Transport". Viewed at: http://www.dgca.gov.in/). 
119 DGCA Air Transport Circular No. 2 of 2009, 23 April 2009. 
120 DGCA Air Transport Circular No. 2 of 2010, 19 November 2010. 
121 Kacker (undated). 
122 Centre for Asia Pacific Aviation (2009). 
123 Government of India (2007). 
124 Airports Economic Regulatory Authority of India Act 2008. 
125 Centre for Asia Pacific Aviation (2009). 
126 Airports Economic Regulatory Authority of India Act 2008. WT/TPR/S/313/Rev.1 • India 
 
- 127 - 
 
  4.135.  The foreign travel tax (FTT) is levied at approximately Rs 500 for international journeys 
and Rs 150 on journeys to Afghanistan, Banglade sh, Bhutan, Myanmar, Nepal, Pakistan, Sri Lanka, 
and the Maldives; the inland air travel tax (IATT), at 10% of the basic fare, is levied on domestic journeys. The IATT is levied if the airfare is paid in foreign currency. 
4.136.  A passenger service tax, charged on all air tickets, is set at 10% of the gross fare or 
Rs 100 per journey, whichever is less, for domestic flights (any class)
127; and at 10% of the gross 
fare or Rs 500 per journey, whichever is less, for international economy class flights.128 Since 
July 2010, passengers in transit in India or embarking/disembarking in the north-eastern region 
have been exempt from the service tax.129 VAT on aviation turbine fuel (ATF) varies from 4% to 
30% in different states; the average VAT is 24%. Excise tax of 8% and education cess of 3% on the value of excise duty are added to the cost of  ATF produced in India. The authorities estimate 
that due to high rates of taxes, the cost of ATF in India is 40-45% higher than international 
averages. According to the authorities, steps are being taken in association with the Ministry of Finance and State governments to rationalize relevant taxes.  
4.137.  An airport-development fee and a user-development fee are levied at some of 
India's major airports on an ad hoc  basis to finance projects for the construction and use of 
upgraded or new infrastructure (Greenfield airpor ts included). Currently, the fees are levied at 
13 major airports including Delhi. They are levied on all (international and domestic) departing 
flights and their rates vary from one airport to another.
130 
4.138.  India has signed bilateral air service agreements with 109 of its trading partners; during 
the period under review, it signed agreements with Azerbaijan (April 2012), Brazil (March 2011), 
Indonesia (January 2011), Myanmar (May 2012), Trinidad and Tobago (January 2012), 
United Arab Emirates (January 2014), Viet Nam (November 2013) and Zimbabwe (June 2014) (Table A4.5). Traffic rights accorded under these agreements may differ; for example, 
India's bilateral air service agreement with the United States contains elements of open-sky 
arrangements. The operation of charter flights to/from India is liberalized for all "inclusive tour packages".
131 
4.139.  India is party to the ICAO 2001 Cape  Town Convention and Protocol, and the 
1999 Montreal Convention.132  
4.4.3.3  Road and rail transport 4.140.  The Ministry of Road Transport and Highways (MRTH) is responsible for formulating and 
implementing road transport policies, and the construction and maintenance of national highways. 
Development of other roads is under the responsibility of the state or local authorities.
133 The 
National Highways Authority of India (NHAI) is in charge of implementing the seven-phase 
National Highways Development Project (NHDP) launched in 1998. Around 55,000 km of national 
highways are to be upgraded/built at an estimated total cost of US$60 billion.134 One of the 
NHDP's major goals is to improve access to India's major ports and thus ease freight traffic. The 
NHDP was scheduled to be completed by 2015 but there have been delays reportedly because of, 
                                               
127 Journeys to/from airports in the states of Assam,  Meghalaya, Manipur, Mizoram, Tripura, Nagaland, 
Arunachal Pradesh, Sikkim and Bagdo gra in West Bengal are exempt. 
128 An education cess (2%) and a secondary and hi gher education cess (1%) apply on the payable 
service tax. For details, see Central Board of Excise an d Customs online information, "Service Tax: Service 
Profile". Viewed at: http://www.cbec.gov.in/cae1-engli sh.htm. See also Department of Revenue, D.O.F. 
No. 334/03/2010-TRU, 1 July 2010. 
129 Service Tax Notification Nos. 25/2010, 22 June 2010; and 27/2010, 22 June 2010. For Service Tax 
Notifications, see Central Board of Excise and Customs online information. Viewed at: 
http://cbec.gov.in/cae1-english.htm. 
130 Business Line , "User development fee in Hyderabad airport hiked", 29 September 2010; and British 
Airways online information, "British Airways in India". Viewed at: http://www.britishairways.com/travel/lcinfo/public/en_in#4 . 
131 An inclusive tour package is a round trip for whic h a consolidated price is charged for airfare, hotel 
accommodation, and other ground arrangement services. 
132 The Montreal Convention is incorporated into the Carriage by Air (Amendment) Act 2009 (Ministry of 
Civil Aviation, 2009). 
133 Ministry of Road Transport and Highways online information, "Roads and highways: an overview". 
Viewed at: http://www.morth.nic.in/writereaddata/sublinkimages/overview_NH3244795788.htm . 
134 National Highways Authority of India (2010). WT/TPR/S/313/Rev.1 • India 
 
- 128 - 
 
  inter alia , difficulties in acquiring land and contractors' poor performance.135 India is also 
implementing the National Highways Interconne ctivity Improvement Programme, which seeks to 
improve the entire national highways network by upgrading it to a minimum two-lane standard by 
December 2014. FDI in road construction and maintenance is allowed up to 100% under the 
automatic route.  
4.141.  India's railway network is managed and operated by Indian Railways, an enterprise 
fully-owned by the Ministry of Railways. Although railway operations are still reserved for the 
public sector, foreign and private domestic participation has been encouraged in non-core 
activities, e.g. wagon-ownership/leasing, and infrastructure projects.136 Nonetheless, prices for 
passenger transport are cross-subsidized by higher  prices for freight transport, making freight 
transport uncompetitive compared with road transpor t. The share of freight carried by the railways 
has been declining for many years: around 30-35% of freight is transported by rail.  
4.142.  Cross-border services of railway transport between India and its neighbouring countries 
(Bangladesh, Nepal, and Pakistan) are regulated und er bilateral working agreements or rail service 
agreements signed with these countries. Regulations on cargo are issued by Customs. 
4.143.  Foreign direct investment is permitted in rail transportation. While the Government 
notification dated 22 August 2014 reserves railway operations only for the public sector, FDI in 
construction, maintenance and operation is allowed for: (i) suburban corridor projects through 
public-private partnership; (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) freight terminals; (viii) passenger 
terminals; (ix) infrastructure in industrial parks pertaining to railway lines or sidings including 
electrified railway lines and connectivity to main railway lines; and (x) mass rapid transport systems. The Ministry of Railways issued sectoral guidelines for domestic and foreign direct 
investment in the rail sector in November 2014 as guidelines providing the framework for making 
investments. 
4.144.  On 1 July 2012, a new service tax regime was introduced in railway transport. The service 
tax is levied at 12.36%; in addition, an education cess (2%) and a secondary and higher education 
cess (1%) are levied on railway transport charges. An abatement of 70% is permitted on freight for taxable commodities. Certain commodities (e.g. agricultural produce, foodstuff, chemical fertilizers and oilcakes) are exempt from the serv ice tax. The authorities state that practices of 
levying terminal charges in case of freight traffic handled at railway-owned goods sheds/terminals 
have been discontinued. A busy season surcharge is 15% on all commodities except containers and automobiles. Development charges are levied at  5% on normal tariff rates for all types of 
traffic. A congestion charge is levied at 20%  on all traffic to Bangladesh and Pakistan. 
4.4.4  Professional services 4.145.  The regulatory framework concerning the pr ovision of legal services in India has remained 
largely unchanged over the past decade. The Advocates Act, 1961 and the Bar Council of India 
Rules, 1975 regulate the legal services sector.
137 The sector is administered by the Ministry of Law 
and Justice. The legal profession is regulated by the Bar Council of India (BCI) (the final regulating body), and state bar councils. The bar councils set the standards for legal qualifications, validate 
foreign-obtained degrees, and set standards for professional conduct and etiquette. They also 
admit advocates on their rolls (thus allowing them to appear in court). FDI is not permitted in the legal services sector. Foreign law firms are not permitted to open offices in India and are 
prohibited from giving legal advice. Legal services can be provided only by natural persons who 
are citizens of India, and who are on the advoca tes roll in the State where the service is being 
provided. The service provider can either be a sole proprietorship or a partnership firm consisting 
of persons similarly qualified to practice law. To be eligible for enrolment as an advocate, a 
candidate must be a citizen of India or a country that allows Indian nationals to practice on a reciprocal basis; hold a degree in law from an institution/university recognized by the BCI; and be at least 21 years of age. 
                                               
135 Ministry of Road Transport and Highways (2009). 
136 Energy and Resources Institute (2009). 
137 Advocates Act 1961. Viewed at: http://barcouncilofindia.nic.in/disk1/196125.pdf. WT/TPR/S/313/Rev.1 • India 
 
- 129 - 
 
  4.146.  Accounting services rendered by charte red accountants in India are regulated by the 
Chartered Accountants Act 1949 and the Chartered Accountants Regulations 1988. Changes in the regulatory framework for accounting services in recent years include those associated with the adoption of the Companies Act 2013. The Institute of Chartered Accountants of India (ICAI) is 
empowered to regulate accounting services. The ICAI has entered into MOUs/MRAs with foreign 
accounting bodies of the following trading partners (without audit rights): Australia, Canada, Ireland, New Zealand, and the United Kingdom.  
4.147.  Under the Act, a chartered accountant is entitl ed to practice either as an individual or in 
partnership with chartered accountants in practice or in partnership with members of such other recognized profession as may be prescribed. No company, whether incorporated in India or elsewhere, can practice as chartered accountants.
138 A chartered accountant may practice the 
profession of chartered accountancy whether in his/her own name or as a firm of chartered 
accountants proprietory/partnership/limited liabili ty partnership. Only an individual who has 
completed such requirements as prescribed under the Act can be registered as a member of the 
Institute; only a member of the ICAI can be a chartered accountant in practice by taking a 
Certificate of Practice in accordance with the Act. Under the Act, foreign qualifications may be recognized based on mutual-recognition agreements. 
4.148.  Recent regulatory changes in the accounting sector include those associated with the 
adoption of the Companies Act 2013, which stipulated, inter alia : (i) stricter disqualification norms 
for auditors
139; (ii) that an auditor must not perform specified non-audit services; (iii) that internal 
audit is mandated for certain large companies; (iv) that substantial civil and criminal liability is 
charged to an auditor in case of non-compliance; (v) that an auditor must report fraud in the 
company to the Government if, in the course of the performance of his/her duties as auditor, he/she has reason to believe that an offence involving fraud is being/has been committed against 
the company by officers or employees of the co mpany; (vi) a whistle-blowing mechanism; and 
(vii) class action suits as recognized to enable minority shareholders to approach the tribunal for 
suitable remedy including in case of any improper or misleading statement of particulars made in 
the audit report or for any fraudulent, unlawful or wrongful act or conduct of auditor/audit firm. On 
1 April 2014, mandatory rotation of auditors for certain classes of companies was introduced. The Indian Accounting Standards (Ind-AS) is to be applicable, on a voluntary basis with effect from 1 April 2015, and mandatorily with effect from 1 April 2016 for a certain class of companies. 
4.4.5  Tourism 
4.149.  The direct and indirect contributions of  tourism to total GDP and employment during 
2012-13 were estimated at 6.9% and 12.4%, respectively. In 2013, 7 million foreign tourist 
arrivals were recorded in India, an increase ov er 2012 (6.58 million). During 2013, foreign tourist 
arrivals in India grew by 5.9% over 2012. The number of domestic tourist visits in 2013 was 
1,145 million; it grew by 9.6% over 2012. According to the UN World Tourism Organization, in 
2013 revenues in the tourism sector were estimated at US$ 18.4 billion.  
4.150.  There is no specific legislation to regulate the tourism sector and other related activities in 
India. Foreign presence is allowed in travel agencies, tour operators or tourist transport operators. The Government issued a Ministry of Touris m Strategic Action Plan on 10 February 2001
140, and 
Revised Guidelines for the Promotion of Wellne ss and Medical as Niche Tourism Products on 
21 August 2014.141  
4.151.  The Ministry of Tourism (MoT) is responsible for the development and promotion of 
tourism. The basic policy direction for the tourism sector is outlined in the National Tourism Policy, 
issued in 2002, which aims to make tourism a major engine of economic growth. The key objectives of the policy are to increase India' s competitiveness in the world tourism market; 
improve, expand and market tourism products effectively; and develop world-class tourism 
                                               
138 Under Section 25 of the Chartered Accountants Act, a company includes any limited liability 
partnership that has a company as its partner.  
139 An auditor must not be related to direct ors or associated with group companies. 
140 Incredible India online information. Viewed at: http://www.incredibleindia.org/images/docs/trade-
pdf/important-documents/other-important -documents/Strategic%20Action%20Plan.pdf . 
141 Incredible India online information. Viewed at: http://www.incredibleindia.org/images/docs/trade-
pdf/guidelines/revised-guidelines-for-W-&-M.pdf . WT/TPR/S/313/Rev.1 • India 
 
- 130 - 
 
  infrastructure. The MoT also licenses travel agents, tour operators and tourist transport operators 
on a voluntary basis; to be licensed, operators must comply with a series of eligibility criteria stipulated by the MoT. As at December 2014, there were 671 government-approved tour operators and 404 travel agents. In addition, the MoT, in cooperation with the UN  Environment Programme 
and the UN World Tourism Organization, has developed and issued 37 quality standards to be 
applied by tourism operators for the development of  tourism in India. Various schemes to support 
the development of tourism industries continue to exist (Table 4.9). 
4.152.  On 27 November 2014, the Government introduced visa-on-arrival for foreign nationals of 
43 countries. 
4.153.  A service tax (12.36%), an education cess (2%) and a secondary and higher education 
cess (1%) are levied on travel agents, tour operators, and on tourist transport operators.  
4.154.  India has signed 51 bilateral agreements on tourism cooperation.
142 
Table 4.9 Selected support schemes for tourism, 2014  
(Rs million) 
Objective Assistance 
Develop new tourism products to 
world standards Ministry of Tourism bears 100% of the project cost or a maximum of 
Rs 250 million for destination development and Rs 500 million for circuit development 
Develop rural tourisma Maximum of Rs 5 million 
Large projects with a tourism impact
b Grant to prepare the detailed project report, up to 50% of the actual cost, 
subject to a maximum of Rs 2.5 million per project; amount of subsidy for private sector/public private partnership projects determined through a competitive bidding process by the concerned State governments/union territory administrations; Subsidy capped at Rs 500 million, subject to a maximum of 25% of total project cost or 50% of equity contribution of the promoters, whichever is lower 
Promote public-private partnerships 
in infrastructure development, to 
deal with the lack of availability of 
physical infrastructure across 
different sectors, which is hindering 
economic development Government support capped at 20% of total project cost; Rs 1 billion for each 
project may be sanctioned by the empowered institution, subject to budgetary 
ceilings indicated by the Finance Ministry; proposals up to Rs 2 billion may be 
sanctioned by the empowered committee; and amounts exceeding Rs 2 billion 
may be sanctioned by the empowered committee with the approval of Finance 
Minister 
Unexploited potential for domestic tourists Approved tourism service providers would be provided financial assistance on 
travel expenses by air only, subject to a ceiling of Rs 30,000 per trip. Trips must be with Air India or alliance partner  
Create institutional infrastructure 
that may foster and facilitate 
professional education and training 
specific to tourism, travel, and 
hospitality industry Assistance varies, according to project, from Rs 5 million (minor civil works at 
universities and other colleges, and polytechnics) to a maximum of Rs 20 million 
(expenditure on civil works, equipment, furniture, and fixtures in industrial 
training institutes) 
Use of professional services from consultants/agencies for: 
tourism-related surveys, studies, 
plans, and market research for making available relevant data/information/report/inputs to the Ministry of Tourism for policy making and planning purposes; and feasibility studies and detailed project reports (DPRs) for specific tourism projects Maximum assistance of Rs 1 million provided for preparation of feasibility studies 
and DPRs for projects under the Scheme of Product/Infrastructure Development 
for Destination and Circuits  
a The following activities may be taken up under the Scheme: improvement of village surroundings 
and access roads; illumination in villages; impr ovement in solid-waste management and sewerage 
management; procurement of equipment directly re lated to tourism (e.g. water sports, adventure 
sports, and eco-friendly modes of transport for mo ving within the tourism zone); refurbishment of 
monuments; reception centres; and tourist accommodation. 
b Tourist trains, cruise vessels, cruise terminals, convention centres, golf courses open for domestic 
and international tourists, health and rejuvenation facilities, last-mile connectivity to tourist destinations (air and cruise including heli-tourism) etc., would qualify for assistance. 
Source:  WTO Secretariat, based on information provided by the Indian authorities. 
                                               
142 Eleven of them have already expired. WT/TPR/S/313/Rev.1 • India 
 
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http://planningcommission.gov.in/plans/planrel/fiveyr/welcome.html . 
 
Sampat, Bhaven and Amin T. (2013): "How do public health safeguards in Indian patent law affect 
pharmaceutical patenting in practice?", Journal of Health Politics Policy and Law , August. Abstract 
viewed at:  http://jhppl.dukejournals.org/content/38/4/ 735.abstract?sid=05351910-5097-4d0a-8a71-
a208bc9d17e0. 
 
Sampat, Bhaven and Shadlen Ken (2014): "TRIPS Implementation and Secondary Patent in Brazil and India". Abstract viewed at:  
http://spicyip.com/2014/11/nlu-delhi-colloquium-on-selected-ip-issues-iii.html . 
 WT/TPR/S/313/Rev.1 • India 
 
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  Securities and Exchange Board of India (2014), Board Meeting , Press Release PR No. 12/2014 
Viewed at: http://www.sebi.gov.in/cms/sebi_data/pdffiles/27383_t.pdf . 
 
Reserve Bank of India (2014a), "Fighting Inflat ion", Inaugural Speech by Dr. Raghuram Rajan, 
Governor, Reserve Bank of India at FIMMDA-PDAI  Annual Conference 2014, 26 February, Mumbai. 
Viewed at: http://rbidocs.rbi.org.in/rdo cs/Speeches/PDFs/SPFING26022014FL.pdf. 
 
Reserve Bank of India (2014b), Annual Report 2013-14 . Viewed at: 
http://rbidocs.rbi.org.in/rdocs/Annua lReport/PDFs/RBIARE210814_FULL.pdf. 
 Reserve Bank of India (2015), "Sixth Bi-Monthly Monetary Policy Statement", 10 February. Viewed 
at: http://rbi.org.in/Scripts/BS _ViewBulletin.aspx?Id=15387. 
 Secretariat of the International Plant Protection Convention (2005), International Standards for 
Phytosanitary Measures: Guidelines for Inspection, No. 23, FAO. Viewed at: 
https://www.ippc.int/file_uploa ded/114665943704 8_ISPM23.pdf. 
Secretariat of the International Plant Protection Convention (2008), International Standards for 
Phytosanitary Measures: Methodologies for Sampling of Consignments, No. 31, FAO. Viewed at: 
https://www.ippc.int/file_uploade d/1229532867492_ISP M31_2008_E.pdf. 
WTO (2007), Trade Policy Review: India , Geneva. 
 
WTO (2011), Trade Policy Review : India, Geneva. 
  WT/TPR/S/313/Rev.1 • India 
 
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  5  APPENDIX TABLES 
Table A1. 1 Merchandise exports by HS Section and major HS chapters, 2010-14 
HS 
Section HS Chapter/Code 2010-11 2011-12 2012-13 2013-14 
Total (US$ billion) 251.1 306.0 300.4 314.4 
  (% of total) 
01 Live animals and products 1.9 2.2 2.4 3.2 
02 Vegetable products 3.9 5.8 7.1 6.6 
 10 Cereals 1.3 2.0 3.2 3.4 
   1006 Rice 1.0 1.6 2.1 2.5 
03 Fats and oils 0.3 0.4 0.3 0.3 
04 Prepared food, beverages and tobacco 2.4 2.3 2.6 2.4 
05 Mineral products 19.6 21.1 22.1 21.9 
 27 Mineral fuels and oils, products thereof 17.0 18.8 20.7 20.6 
   2710 Petroleum oils, other than crude 16.4 18.1 20.1 19.9 
06 Chemicals and products thereof 9.2 9.4 10.3 10.4 
 29 Organic chemicals 3.6 3.8 4.0 3.8 
 30 Pharmaceuticals 2.7 2.8 3.3 3.5 
   3004 Certain medicaments for retail sale 2.2 2.4 2.9 3.1 
07 Plastics and rubber 2.3 2.6 2.6 2.6 
08 Raw hides and skins; leather 1.0 1.0 1.1 1.2 
09 Wood, cork, straw 0.1 0.1 0.1 0.1 
10 Pulp of wood; paper and paperboard 0.4 0.4 0.4 0.4 
11 Textiles and textile articles 11.5 11.2 11.1 11.9 
 52 Cotton 2.8 2.9 3.0 3.2 
 62 Clothing, not knitted or crocheted 2.7 2.6 2.5 2.7 
 61 Clothing, knitted or crocheted 2.0 1.9 1.8 2.1 
12 Footwear, headgear, etc. 0.8 0.8 0.8 0.9 
13 Articles of stone, plaster, cement 0.7 0.6 0.7 0.8 
14 Precious stones and metals, pearls 17.4 15.5 14.6 13.3 
 7102 Diamonds, not mounted or set 11.7 9.2 7.7 8.3 
 7113 Articles of jewellery, of precious metal 3.5 4.6 4.6 3.4 
15 Base metals and articles thereof 8.5 7.3 7.4 7.4 
 72 Iron and steel 2.8 2.7 2.7 2.9 
 73 Articles of iron and steel 2.7 2.3 2.5 2.2 
16 Machinery, electrical machines 7.6 7.3 7.5 7.1 
 84 Machinery and mechanical appliances 3.6 3.5 3.8 3.8 
 85 Electrical machinery 4.0 3.8 3.6 3.3 
17 Transport equipment 6.4 7.0 6.1 6.8 
 87 Motor vehicles and parts thereof 3.7 3.6 4.1 4.1 
18 Precision equipment 0.6 0.7 0.7 0.7 
19 Arms and ammunitions 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles 0.5 0.5 0.5 0.6 
21 Works of art, collecto r pieces and antiques 0.1 0.1 0.1 0.1 
Not classified 4.7 3.9 1.5 1.2 
Source: WTO calculations, based on Department of Co mmerce online information, "Export Import Data 
Bank". WT/TPR/S/313/Rev.1 • India 
 
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  Table A1. 2 Merchandise imports by HS Section and major HS chapters, 2010-14  
HS 
Section HS Chapter 2010-11 2011-12 2012-13 2013-14 
Total (US$ billion) 369.8 489.3 490.7 450.2 
  (% of total) 
01 Live animals and products 0.1 0.1 0.0 0.0 
02 Vegetable products 1.0 1.0 1.2 1.2 
03 Fats and oils 1.8 2.0 2.3 2.1 
04 Prepared food, beverages and tobacco 0.4 0.2 0.4 0.4 
05 Mineral products 33.3 37.4 39.1 42.3 
 27 Mineral fuels and oils, products thereof 31.4 35.3 37.0 40.3 
   2709 Petroleum oils, crude 25.1 27.4 29.4 31.9 
   2701 Coal; solid fuels manufactured from coal 2.5 3.4 3.3 3.4 
06 Chemicals and products thereof 7.9 7.8 7.6 8.0 
 29 Organic chemicals 3.4 3.0 3.2 3.8 
07 Plastics and rubber 2.8 2.5 2.7 3.0 
08 Raw hides and skins; leather 0.2 0.2 0.2 0.2 
09 Wood, cork, straw 0.5 0.5 0.6 0.6 
10 Pulp of wood; paper and paperboard 1.0 0.9 0.9 1.0 
11 Textiles and textile articles 1.1 1.1 1.1 1.2 
12 Footwear, headgear, etc. 0.1 0.1 0.1 0.1 
13 Articles of stone, plaster, cement 0.4 0.4 0.4 0.4 
14 Precious stones and metals, pearls 20.8 18.6 17.1 13.0 
 7108 Gold unwrought or in semi-manuf. forms 11.0 11.5 11.0 6.4 
 7102 Diamonds, not mounted or set 9.1 5.7 4.4 5.0 
15 Base metals and articles thereof 5.9 5.6 5.6 5.0 
 72 Iron and steel 3.0 2.8 2.8 2.0 
16 Machinery, electrical machines 15.2 14.4 13.3 13.3 
 84 Machinery and mechanical appliances 7.8 7.7 7.2 6.8 
 85 Electrical machinery 7.4 6.7 6.1 6.5 
17 Transport equipment 3.1 2.8 3.5 3.5 
18 Precision equipment 1.5 1.4 1.5 1.6 
19 Arms and ammunitions 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles 0.4 0.4 0.4 0.4 
21 Works of art, collecto r pieces and antiques 0.0 0.0 0.0 0.0 
Not classified 2.4 2.6 2.3 2.8 
Source: WTO calculations, based on Department of Co mmerce online information, "Export Import Data 
Bank". WT/TPR/S/313/Rev.1 • India 
 
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  Table A1. 3 Merchandise expo rts by destination, 2010-14  
  2010-11 2011-12 2012-13 2013-14 
Total exports (US$ billion) 251.1 306.0 300.4 314.4 
 (% of total) 
 America 14.7 16.5 17.8 17.3 
  United States 10.1 11.4 12.1 12.5 
  Other America 4.6 5.1 5.7 4.8 
   Brazil 1.6 1.9 2.0 1.8 
 Europe 19.9 19.0 18.6 18.6 
  EU(28) 18.4 17.3 16.8 16.5 
   United Kingdom 2.9 2.8 2.9 3.1 
   The Netherlands 3.1 3.0 3.5 2.5 
   Germany 2.7 2.6 2.4 2.4 
   Belgium 2.3 2.3 1.8 2.0 
   Italy 1.8 1.6 1.5 1.7 
   France 2.1 1.5 1.7 1.6 
  EFTA 0.4 0.5 0.5 0.7 
  Other Europe 1.1 1.2 1.4 1.5 
   Turkey 1.1 1.2 1.3 1.4 
 Commonwealth of Independent States (CIS) 1.1 1.0 1.2 1.1 
 Africa 7.9 8.1 9.8 9.9 
   South Africa 1.6 1.5 1.7 1.6 
 Middle East 20.0 17.9 20.8 19.5 
   United Arab Emirates 13.5 11.7 12.1 9.7 
   Saudi Arabia, Kingdom of  1.9 1.9 3.3 3.9 
   Iran, Islamic Republic of 1.0 0.8 1.1 1.6 
 Asia 30.7 32.1 30.0 29.9 
  China 6.2 5.9 4.5 4.7 
  Japan 2.0 2.1 2.0 2.2 
  Six East Asian Traders 12.9 14.5 13.8 12.5 
   Hong Kong, China 4.1 4.2 4.1 4.0 
   Singapore 3.9 5.5 4.5 4.0 
   Korea, Republic of 1.5 1.4 1.4 1.3 
  Other Asia 9.6 9.6 9.8 10.5 
   Bangladesh 1.3 1.2 1.7 2.0 
   Viet Nam 1.1 1.2 1.3 1.7 
   Indonesia 2.3 2.2 1.8 1.5 
   Sri Lanka 1.4 1.4 1.3 1.4 
 Other 5.7 5.4 1.8 3.7 
Memorandum      
  APEC 37.6 40.9 39.2 38.9 
  ASEAN 10.2 12.0 11.0 10.5 
Source: WTO calculations, based on Department of Co mmerce online information, "Export Import Data 
Bank". WT/TPR/S/313/Rev.1 • India 
 
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  Table A1. 4 Merchandise imports by origin, 2010-14  
  2010-11 2011-12 2012-13 2013-14 
Total imports (US$ billion) 369.8 489.3 490.7 450.2 
 (% of total) 
 America 9.8 9.2 12.1 12.8 
  United States 5.4 4.8 5.1 5.0 
  Other America 4.4 4.4 7.0 7.8 
   Venezuela 1.4 1.4 2.9 3.1 
 Europe 19.3 19.2 17.8 15.8 
  EU(28) 12.1 11.6 10.7 11.1 
   Germany 3.2 3.2 2.9 2.9 
   Belgium 2.3 2.1 2.0 2.4 
   United Kingdom 1.5 1.5 1.3 1.3 
  EFTA 7.0 7.3 6.7 4.5 
   Switzerland 6.7 7.1 6.6 4.3 
  Other Europe 0.2 0.2 0.4 0.2 
 Commonwealth of Independent States (CIS) 1.5 1.7 1.6 1.7 
 Africa 8.6 8.9 8.4 8.1 
   Nigeria 2.9 3.0 2.5 3.1 
   Angola 1.4 1.4 1.5 1.3 
   South Africa 1.9 2.2 1.8 1.3 
 Middle East 27.0 28.6 29.2 29.9 
   Saudi Arabia, Kingdom of 5.5 6.5 6.9 8.1 
   United Arab Emirates 8.9 7.5 8.0 6.4 
   Iraq 2.4 3.9 3.9 4.1 
   Kuwait, the State of 2.8 3.4 3.4 3.8 
   Qatar 1.8 2.6 3.2 3.5 
   Iran, Islamic Republic 3.0 2.8 2.4 2.3 
 Asia 32.6 32.1 30.4 30.8 
  China 11.8 11.3 10.6 11.3 
  Japan 2.3 2.5 2.5 2.1 
  Six East Asian Traders 11.3 10.5 9.7 10.0 
   Korea, Republic of 2.8 2.6 2.7 2.8 
   Malaysia 1.8 1.9 2.0 2.1 
   Hong Kong, China 2.5 2.1 1.6 1.6 
   Singapore 1.9 1.7 1.5 1.5 
  Other Asia 7.2 7.9 7.5 7.4 
   Indonesia 2.7 3.0 3.0 3.3 
   Australia 2.9 3.2 2.7 2.2 
 Other 1.2 0.2 0.4 0.9 
Memorandum      
  APEC 39.4 38.6 37.6 38.0 
  ASEAN 8.3 8.6 8.7 9.2 
Source: WTO calculations, based on Department of Co mmerce online information, "Export Import Data 
Bank". WT/TPR/S/313/Rev.1 • India 
 
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  Table A2. 1 Sectors in which FDI is permitted  
Sector Foreign equity 
limit/route Additional conditions 
Agriculture  
Floriculture, horticulture, apiculture and 
cultivation of vegeta bles and mushrooms 
under controlled conditions; development 
and production of seeds and planting 
material; animal husbandry (including dog 
breeding), piscicultu re, aquaculture, 
under controlled conditions; and services 
related to agro and allied sectors 100%/automatic Use of genetically modified materials 
subject to the Foreign Trade 
(Development and Regulation) Act, 
1992 and any other laws, 
regulations or policies applicable 
Tea, including plantations 100%/Government Compulsory divestment of 26% of 
the equity of the company in favour of an Indian partner/Indian public within five years; and prior approval of the State Government concerned required in case of any future land use change 
Mining and petroleum  
Mining and exploration of metal and 
non-metal ores (including diamond, gold, silver and precious ores but not titanium bearing minerals and ores) 100%/automatic Subject to the Mines and Minerals 
(Development and Regulation) Act, 1957 
Coal and lignite mining for captive 
consumption by power projects, iron and 
steel and cement units and other eligible 
activities 100%/automatic  
Setting up coal processing plants such as washeries subject to certain conditions 100%/automatic  
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 FDI for the separation of titanium 
bearing minerals and ores is subject 
to value addition activities being set 
up in India along with transfer of 
technology; and the disposal of 
tailings during mineral separation 
are subject to regulations framed by 
the Atomic Energy Regulatory Board 
Exploration of oil an d natural gas fields, 
infrastructure related to marketing and marketing of petroleum products and natural gas, pipelines,  LNG regasification 
infrastructure, market study and petroleum refining in the private sector  100%/automatic Subject to existing sectoral policy 
and regulatory framework in the oil marketing sector and on private participation in oil exploration and existing fields of national oil companies 
Petroleum refining by the public sector 
undertakings (PSUs) without any 
disinvestment or dilution of domestic 
equity in existing PSUs 49%/Government  
Power  
Power exchanges registered under the 
Central Electricity Regulatory Commission 
(Power Market) Regulations 2010 49% (FDI + 
FII/FPI)/automatic Non-residents jointly or together 
may not own more than 5% of the 
equity of these companies 
Manufacturing  
Manufacture of items reserved for micro 
and small enterprises 100% 
(Government approval 
required for equity above 
24%) Subject to sectoral limits, entry 
routes and other re levant sectoral 
regulations. Also subject to 
industrial licences under the 
Industries (Development and 
Regulation) Act, 1951. Specific 
conditions of the licence include a 
minimum export requirement of at 
least 50% of new or additional 
annual production of the reserved 
items within a period of 3 years from 
commencement of industrial 
production 
Pharmaceuticals   
- greenfield 100%/automatic  
- brownfield 100%/Government  WT/TPR/S/313/Rev.1 • India 
 
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  Sector Foreign equity 
limit/route Additional conditions 
Defence industry subj ect to Industrial 
licence under the Industries 
(Development and Regulation) Act 1951 49%/Government 
approval; above 49% 
through Cabinet 
Committee on Security 
on a case by case basis, 
wherever it is likely to 
result in access to 
modern and 'state of art' 
technology in the 
country. 
Portfolio investment will 
not exceed 24% of the 
total equity of the 
company/automatic Subject to licences issued by DIPP in 
consultation with the Ministry of 
Defence. Only for Indian companies 
or in partnership with an Indian 
company. The management of the 
company should be Indian with 
majority representation on the 
Board and residency requirements 
for the Chief Executives 
Services  
Communication services  
Broadcasting carriage services 
- teleports (setting up of uplinking 
hubs/teleports); direct to home (DTH); 
cable networks; mobile TV; Headend in 
the sky broadcasting  services (HITs) 74% (Government 
approval required for 
equity above 49% and 
up to 74%) Subject to compliance with the 
relevant policy and regulations 
notified by the Ministry of 
Information and Broadcasting. 
Additional security requirements 
relate to the nationality of senior 
officials of the company; as well as 
security clearance for officials 
holding more than 10% of the 
shares of the company, renewable 
every two years; and prior 
permission from the Ministry before 
any changes to the Directors 
Cable networks 49%/automatic  
Broadcasting content services 
- terrestrial broadcasting FM (FM radio) 26%/Government  
- uplinking of 'news and current affairs' TV 
channels 26%/Government  
- uplinking of non-'news and current 
affairs' TV channels; downlinking of TV 
channels 100%/Government  
Print media  
- publishing of newspaper and periodicals 
dealing with news and current affairs 26% (by NRIs, PIOs, 
FII/FPIs)/ Government 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 
- publication of Indian editions of foreign 
magazines dealing with news and current 
affairs 26% (by NRIs, PIOs, 
FII/FPIs)/ 
Government  
- publishing, printing of scientific and technical magazines, specialty journals, periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard by the Ministry of Information and Broadcasting 100%/Government FDI by owner of original foreign 
newspaper whose facsimile edition is to be published in India. Publication only by a company incorporated in India under the Companies Act 1956 and subject to the Guidelines for publication of newspapers and periodicals dealing with news and current affairs and publication of facsimile editions of foreign newspapers issued by the Ministry of 
Information and Broadcasting on 
31 March 2006 and as amended 
- publication of facsimile edition of foreign 
newspapers 100%/Government  
- courier services for carrying packages, parcels and other items which do not come within the ambit of the Indian Post Office Act 1898 and excluding activities related to the distribution of letters 100%/Government  WT/TPR/S/313/Rev.1 • India 
 
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  Sector Foreign equity 
limit/route Additional conditions 
Telecommunications services  
- telecommunications services 74%/automatic up to 
49% (including FDI and FII, NRI, FCCBs, ADRs, GDRs and convertible preference shares held by foreign entity), Government above 49%  
- ISPs with and without gateways (for 
satellite and marine cables); radio paging; 
end-to-end bandwidth 74%/automatic up to 
49%, Government above 
49%  
- infrastructure provider, providing dark 
fibre, right of way, duct space, tower (IP category I); electronic mail; voice mail 100%/automatic up to 
49%, Government above 49%  
Satellites-establishment and 
operation  74%/Government Subject to the sectoral guidelines of 
the Department of Space/ISRO 
Financial services  
- Asset reconstruction companies 100% of paid up capital 
(FDI and 
FII/FPI)/automatic up to 
49%; Government 
approval above 49%  
- Banks (private sector) 74% (including FII/FPIs) 
– automatic up to 49% 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 Banking Companies 
(Acquisition and Transfer of 
Undertakings) Act 1970 and 1980 
- Commodity exchanges 49% (FDI and FII)-FDI 
investment limit 26% and FII/FPIs registered under the Portfolio Investment Scheme to 23%/automatic Subject to the Forward Contracts 
(Regulation) Act, 1952 
- Credit information companies 74% (FDI + 
FII/FPI)/automatic Subject to Credit Information 
Companies (Regulation) Act, 2005 
- Infrastructure companies in Securities Market 49% (FDI + FII)(FDI up 
to 26% and FII up to 23%)/automatic FIIs can invest only through 
purchases in the secondary market 
- Insurance:  
(i) insurance company; (ii) insurance 
brokers; (iii) third- party administrators; 
and (iv) surveyors and loss assessors 49% (FDI + FII/FPI + 
NRI)/automatic Licence required from the Insurance 
Regulatory and Development 
Authority 
- Non-banking finance companies (NBFCs) 
(i) merchant banking; (ii) under writing; (iii) portfolio management services; (iv) investment advisory services; (v) financial consultancy; (vi) stock broking; (vii) asset management; (viii) venture capital; (ix) custodian service; (x) factoring; (xi) credit rating agencies; (xii) leasing and finance; (xiii) housing finance; (xiv) foreign exchange broking; (xv) credit card business; (xvi) money changing business;  (xvii) micro credit; and (xviii) rural credit 100%/automatic  
Transport services  
Civil aviation 
- airports (greenfield projects) 100%/automatic  
- airports (existing projects) 100%/automatic up to 
74%; Government approval for equity above 74%  
Air transport services 
- scheduled air transport 
services/domestic scheduled passenger airline 49%/automatic 
100% for NRIs/automatic Foreign airlines may invest in the 
capital of companies operating cargo airlines, helicopter and seaplane WT/TPR/S/313/Rev.1 • India 
 
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  Sector Foreign equity 
limit/route Additional conditions 
- non-scheduled air transport services 74% (100% for NRIs) 
(Government approval 
required for equity above 
49%) services; foreign airlines may also 
invest in the capital of Indian companies (but not Air India) operating scheduled and non-scheduled air transport services subject to compliance with domestic regulations 
- helicopter services/seaplane services requiring DGCA approval 100%/automatic 
Other civil aviation services  
- ground handling services subject to 
sectoral regulations and security clearance 74% (100% for NRIs) 
(Government approval required for equity above 49%)  
- Maintenance and repair organizations; 
flying training institutes; and technical 
training institutions 100%/automatic  
Railway infrastructure 
Construction, operation and maintenance 
of the following: 
(i) suburban corridor projects through 
PPP, (ii) high speed train projects, (iii) 
dedicated freight lines,  (iv) rolling stock 
including train sets, and 
locomotive/coaches manufacturing and 
maintenance facilities, (v) railway 
electrification, (vi) signaling systems, 
(vii) freight terminals, (viii) passenger 
terminals, (ix) infrastructure in industrial 
park pertaining to railway line/sidings 
including electrified railway lines and 
connectivities to main railway line and 
(x) mass rapid transport systems  100%/automatic Automatic subject to structural 
guidelines of Ministry of Railways, 
proposals for FDI above 49% in 
sensitive areas subject to 
consideration by Cabinet Co mmittee 
on Security on case-by-case basis 
Construction services  
- Townships, housing, built up 
infrastructure and construction-
development projects (including but not 
restricted to housing, commercial 
premises, hotels, resorts, hospitals, 
educational institutions, recreational 
facilities, city and regional infrastructure) 100%/automatic Subject to minimum area, 
capitalization requirements and 
repatriation limits for original 
investment for three years; FDI is 
not permitted in real estate 
Industrial parks 100%/automatic  
Private security agencies 49%/Government  
Distribution services  
Trading 
- cash and carry wholesale trading 
(including sourcing from SMEs) 100%/automatic Subject to 
licences/registration/permits as specified under relevant State government legislation 
- e-commerce activities 100%/automatic  
- test marketing 100%/Government  
- Single brand product retail trading 100%/automatic up to 
49%. Government 
approval required above 
49% FDI above 51% subject to sourcing 
of 30% of the value of goods 
purchased from India, preferably 
from medium and sm all enterprises, 
village and cottage industries, 
artisans and craftsmen 
- multi brand retail trading 51%/Government Minimum FDI of US$100 million at 
least 50% of which to be invested in backend infrastructure; 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 US$1 million 
Source: Department of Industrial Policy and Promotion (DIPP), Consolidated FDI Policy Circular of 2014 
(effective from 17 April 2014), 17 April 2014; DIPP, Press Note No. 8 (2014 Series), 27 August 2014; and WTO (2011), Trade Policy Review: India , Geneva. WT/TPR/S/313/Rev.1 • India 
 
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  Table A2. 2 India's regional trade agreements in force, end-March 2015  
Regional trade agreements 
Asia-Pacific Trade Agreement (APTA)a (goods)  
Parties Bangladesh, China, India, Korea (Rep. of), Lao 
People's Democratic Re public, and Sri Lanka 
Date of signature/entry into force 31 July 1975/17 June 1976 
Full implementation 1 November 1976  
Duty-free tariff lines 1.7% 
Other provisions Rules of origin, safeguards, balance of payments 
measures and disp ute settlement 
India's merchandise tradeb Share of total imports: 14.4% 
Share of total exports: 9.5% 
Of which preferential  
WTO document series L/4418 (GATT), WT/COMTD/N/22, WT/COMTD/62 
GSTP (goods) 
Parties (as notified) Algeria, Argent ina, Bangladesh, Benin, Bolivarian 
Republic of Venezuela, Brazil, Cameroon, Chile, Colombia, Cuba, Democratic People's Republic of Korea, Ecuador, Egypt, Ghana, Guinea, Guyana, 
India, Indonesia, Iran (Isl amic Rep. of), Iraq, Korea 
(Rep. of), Libyan Arab Jamahiriya, FYR of Macedonia, Malaysia, Mexico, Morocco, Mozambique, Myanmar, Nicaragua, Nigeria, Pakistan, Peru, Philippines, Plurinational State of Bolivia, Singapore, Sri Lanka, Sudan, Tanzania, Thailand, Trinidad and Tobago, Tunisia, Viet Nam and Zimbabwe 
Date of signature/entry into force 13 April 1988/19 April 1989 
Full implementation 19 April 1989 for 15 signatory countries  
Duty-free tariff lines .. 
Other provisions Rules of origin, safeguards including balance of 
payments measures, dispute settlement 
India's merchandise tradeb Share of total imports: 30.3% 
Share of total exports: 26.4% 
Of which preferential  
WTO document series L/6564 (GATT) 
SAPTA (goods) 
Parties Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, 
Sri Lanka 
Date of signature/entry into force 11 April 1993/07 December 1995 
Full implementation 7 December 1995  
Duty-free tariff lines Tariff concessions apply to 2,565 HS six-digit tariff 
lines, with margins of preference of 10%-90% for non-LDC members and 10%-100% for LDC members. 
 
Other provisions Rules of origin, safeguards including balance of 
payments safeguards, dispute settlement 
India's merchandise tradeb Share of total imports: 0.5% 
Share of total exports: 5.4% 
Of which preferential  
WTO document series WT/COMTD/10 
SAFTA (goods and services)  
Parties Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, 
Sri Lanka 
Date of signature/entry into force 6 January 2004/1 January 2006 
Full implementation 31 December 2012  
Duty-free tariff lines India has a sensitive list of 865 products imported 
from non-LDC members and 744 products from LDC 
members 
Other provisions Rules of origin, safeguards, including balance of 
payments safeguards, serv ices, dispute settlement 
India's merchandise tradeb Share of total imports: 0.5% 
Share of total exports: 5.4% 
Of which preferential  
WTO document series WT/COMTD/N/26 
India-Afghanistan (goods) 
Parties Afghanistan, India 
Date of signature/entry into force 6 March 2003/13 May 2003 
Full implementation 13 May 2003 
Duty free tariff lines 13 out of 38 lines  covered by the Agreement are duty 
free WT/TPR/S/313/Rev.1 • India 
 
- 144 - 
 
  Regional trade agreements 
Other provisions Rules of origin, safeguards, including balance of 
payments safeguards, state trading and dispute 
settlement 
India's merchandise tradeb Share of total imports: 0.05% 
Share of total exports: 0.2% 
Of which preferential  
WTO document series WT/COMTD/N/32 
India-Bhutan 
Parties Bhutan, India 
Date of signature/entry into force 28.07.2006/29.07.2006 
Full implementation 29 July 2006 
Duty-free tariff lines India provides a tariff exemption on all imports from 
Bhutan 
Other provisions Safeguards and cu stoms related measures, rules of 
origin 
India's merchandise tradeb Share of total imports: 0.03% 
Share of total exports: 0.1% 
Of which preferential  
WTO document series WT/COMTD/N/28 
India-Nepal (goods) 
Parties India, Nepal 
Date of signature/entry into force 27 October 2009/27 October 2009 
Transition for full implementation 27 October 2009 
Duty-free tariff lines India exempts im ports from Nepal from tariffs (except 
for alcoholic liquors and beverages, perfumes and 
cosmetics with non-Nepalese/non-Indian brand names, and cigarettes and tobacco). Imports of vegetable fats, copper produc ts, acrylic yarn and zinc 
oxide are subject to annual quotas 
Other provisions Rules of origin, safeguards 
India's merchandise tradeb Share of total imports: 0.1% 
Share of total exports: 1.1% 
Of which preferential  
WTO document series WT/COMTD/N/34 
India-Singapore (goods and services) 
Parties India, Singapore 
Date of signature/entry into force 29 June 2005/1 August 2005 
Full implementation 1 January 2015  
Duty-free tariff linesc 23.6% of the total 
Other provisions Rules of orig in, customs related measures, 
safeguards, standards and technical regulations, sanitary and phytosanitary measures, services commitments, investment, dispute settlement 
India's merchandise tradeb Share of total imports: 1.5% 
Share of total exports: 4.0% 
Of which preferential  
WTO document series WT/REG228, S/C/N/393 
India-Sri Lanka (goods) 
Parties India, Sri Lanka 
Date of signature/entry into force 28 December 1998/15 December 2001 
Full implementation 18 March 2003  
Duty-free tariff lines 4150 lines at the HS6digit level are duty free. India 
does not give tariff concessions on 429 lines that are subject to a negative list. In addition a margin of 
preference of 25% of the MFN rate is provided for textiles imports with zero duty on imports of 3 million pieces per year for import s under HS 61 and 62. Tariff 
rate quotas on tea provide a 50% margin of preference on an annual quota of 15 million kg. There are also TRQs for dessicated coconut, pepper and 
Vanaspati.  
Other provisions Rules of origin, safeguards, including balance of 
payments safeguards, stat e trading, and dispute 
settlement 
India's merchandise tradeb Share of total imports: 0.2% 
Share of total exports: 1.5% 
Of which preferential  
WTO document series WT/COMTD/N/16 
Chile-India (goods) WT/TPR/S/313/Rev.1 • India 
 
- 145 - 
 
  Regional trade agreements 
Parties Chile, India 
Date of signature/entry into force 8 March 2006/17 August 2007 
Full implementation 13 January 2009 for India 
Duty-free tariff linesc 0 
Other provisions Rules of orig in, customs related measures, 
anti-dumping and countervailing measures, safeguards, TBT and SPS measures, dispute settlement 
India's merchandise tradeb Share of total imports: 0.7% 
Share of total exports: 0.2% 
Of which preferential  
WTO document series WT/COMTD/N/30, WT/COMTD/RTA/4 
MERCOSUR-India (goods) 
Parties Argentina, Brazil, Paraguay, Uruguay, India 
Date of signature/entry into force 25January 2004/1 June 2009 
Full implementation 1 June 2009  
Duty-free tariff linesc 1 line 
Other provisions Rules of origin, customs related procedures, SPS and 
TBT measures, state trading enterprises, dispute 
settlement 
India's merchandise tradeb Share of total imports: 1.2% 
Share of total exports: 2.0% 
Of which preferential  
WTO document series WT/COMTD/N/31 
ASEAN-India (goods and services) 
Parties Brunei Darussalam, Cambodia, Indonesia, Lao PDR, 
Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam, India 
Date of signature/entry into force 13 August 2009/1 January 2010 
Full implementation 31 December 2022  
Duty-free tariff linesc 75% at end of implementation  
Other provisions Rules of origin, cu stoms related procedures, tariff rate 
quotas (by Malaysia), safeguards, SPS and TBT measures, services, dispute settlement 
India's merchandise tradeb Share of total imports: 9.2% 
Share of total exports: 10.6% 
Of which preferential  
WTO document series WT/COMTD/N/35 
Korea-India (goods and services) 
Parties Korea (Rep. of), India 
Date of signature/entry into force 7 August 2009/1 January 2010 
Full implementation 1 January 2021  
Duty-free tariff lines On 31 December 2014, 61% of the tariff was duty 
free. India exempts 1,895 HS eight-digit tariff lines from liberalization 
Other provisions Rules of origin, customs related measures, 
anti-dumping and countervailing measures, 
safeguards, SPS and TBT measures, state trading, 
non-tariff measures, services , investment and dispute 
settlement 
India's merchandise tradeb Share of total imports: 2.8% 
Share of total exports: 1.3% 
Of which preferential  
WTO document series WT/REG286, WT/COMTD/N/36, S/C/N/558, 
S/C/N/570 
India-Malaysia (goods and services) 
Parties India, Malaysia 
Date of signature/entry into force 18 February 2011/1 July 2011 
Full implementation 31 December 2019  
Duty-free tariff linesc 75.3% by end of implementation  
Other provisions Rules of origin, cu stoms related procedures, tariff rate 
quotas (by Malaysia), SPS and TBT measures, safeguards, including balance of payments safeguards, services, investment and dispute settlement 
India's merchandise tradeb Share of total imports: 2.0% 
Share of total exports: 1.3% 
Of which preferential  
WTO document series WT/COMTD/N/37, S/C/N599, WT/COMTD/RTA/5, WT/TPR/S/313/Rev.1 • India 
 
- 146 - 
 
  Regional trade agreements 
WT/REG329 
India-Japan (goods and services) 
Parties India, Japan 
Date of signature/entry into force 16 February 2011/1 August 2011 
Full implementation 1 January 2021  
Duty-free tariff linesc 17.4% as of 31 December 2014 and 86.6% by end of 
implementation  
Other provisions Rules of origin, customs related procedures, SPS and 
TBT measures, safeguards , including balance of 
payments safeguards, se rvices, investment and 
dispute settlement 
India's merchandise tradeb Share of total imports: 2.1% 
Share of total exports: 2.2% 
Of which preferential  
WTO document series WT/REG300, S/C/N/601 
.. Not available. 
a Previously known as the Bangkok Agreement; orig inal signatories were Bangladesh, India, Korea 
(Rep. of), Lao PDR and Sri Lanka. China became a party to the Agreement on 1 January 2002 and 
the amended APTA Agreement entered into force on 1 September 2006. 
b UNSD Comtrade Database. Data for 2013. c Secretariat calculations based on data provided  by the authorities and included in a factual 
presentation of the RTA. 
Source: WTO RTA Database ( http://rtais.wto.org ) and information provided by the Indian authorities.  WT/TPR/S/313/Rev.1 • India 
 
- 147 - 
 
  Table A3. 1 IEC exemptions for imports and exports, 2014  
Imports 
Goods imported by the Government and stat e-owned undertakings for defence purposes 
Goods imported by the Government, St ate governments, public entities or state-owned undertakings, through 
the Directorate General of Supplies and Disposals or th e Indian supply missions in London and Washington 
D.C. 
Goods imported by transhipment; or imported and bonded for re-export as  ships' stores to any destination 
(except Nepal and Bhutan) or released for use of  diplomatic/consular offi cers and UN officials 
Goods imported and bonded for sale to passengers in duty-free shops 
Goods in transit through India or redirected to any destination (except Nepal and Bhutan) 
Goods imported for air shipment to Afghanistan or fo r land shipment to any destination (except Nepal and 
Bhutan) under claim for du ty exemption or refund 
Goods imported as passengers' baggage 
Goods imported for personal use 
Goods imported by diplom atic/consular officers and trade commissioners 
Goods imported from countries exempt  from customs duty on re-import 
Goods previously exported but imported back for repair and re-export 
Goods imported by UN officials or the Ford Foundation 
Temporary imports of vehicles 
Goods imported for use in fairs and exhibitions 
Goods imported by the Government or State governme nts for repair and re-export to Indian embassies 
abroad 
Food grains imported by the Food Corporation of India 
Food products imported and supplied as  gifts by UN accr edited agencies 
Goods imported by ministries and department s of the Government and State governments 
Goods imported from Nepal, Myanmar (through the In do-Myanmar border), and China (through Gunji, 
Namgaya Shipkila, and Nathula ports), provided the c.i.f. value of a single consignment does not exceed Rs 25,000 (Rs 100,000 for Nathula) 
Exports 
Goods exported by the Government  
Goods (other than foodstuffs) constitu ting the stores of outgoing vessels 
Goods constituting the bona fide personal baggage of any person 
Goods exported by post or by air, under co nditions specified by the postal authorities 
Goods transhipped at Indian ports 
Goods imported and bonded for re-export to  any destination (except Nepal and Bhutan) 
Goods in transit through India by post; or goods re-d irected by post to any destination (except Nepal and 
Bhutan) 
Goods imported with no valid import licenc e and exported following a Customs' order 
Goods exported from special economic zones (SEZs) or export-oriented units (EOUs) 
Exports of blood group Oh (Bombay ph onotype) for scientific research or emergency medical treatment by 
the National Blood Group Reference Laboratory 
Exports of samples of lubricating oil additives by Lubr izols India Ltd., Hindustan Petroleum Corporation Ltd., 
and Bharat Petroleum Corporation Ltd. to Lubrizol's labo ratories in the United States and the United Kingdom 
for evaluation and testing purposes 
Goods exported for personal use 
Goods exported to Nepal, Myanmar (through the Indo-M yanmar border), and China (through Gunji, Namgaya 
Shipkila, and Nathula ports), provided the c.i.f. value of a single consignment does not exceed Rs 25,000 (Rs 100,000 for Nathula) 
Source: Foreign Trade (Exemption from application of Rules in certain cases) Order 1993 (Clauses 3(1) and 
3(2)) (CBEC online information, "Customs: Acts". Viewed at: http://www.cbec.gov.in/customs/cs-acts-botm.htm); and Department of Commerce (2010), Handbook of Procedures, Vol. 1, incorporat ing Annual Supplement, 23 August. Viewed at: 
http://dgft.gov.in ; and information provided by the Indian authorities. WT/TPR/S/313/Rev.1 • India 
 
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  Table A3. 2 Safeguard investigations, 2011-14  
Commodity: tariff 
item Date of 
initiation Date of final 
findings Main import 
partnersa Recommendation by 
the Director-General Final decision 
Cases initiated in 2011  
Aluminium FRP and 
aluminium foil (review 
proceedings): 7606 
and 7607 14.02.11 13.10.11 China specific Investigation 
terminated on 
withdrawal of 
application n.a. 
Phthalic anhydride 
2917.35.00 10.08.11 29.03.12 .. Safeguard duty at the 
rate of 10% 
ad valorem  for one 
year (17.01.12 – 16.01.13) Customs 
notification 
No. 03.12 (SG) of 29.05.12. Safeguard duty: 10% when imported between 17.01.12 and 16.01.13 inclusive 
Carbon Black  
2803.00.10 02.12.11 16.03.12 .. 30% minus anti-
dumping duty payable, 
if any (first year), 25% 
minus anti-dumping 
duty payable, if any 
(second year), and 
20% minus 
anti-dumping duty, if 
any (third year)   Customs 
notification 
No. 04.12 (SG) 
of 05.10.12. 
Safeguard duty: 
30% minus anti-
dumping duty 
payable, if any 
(first year: 
05.10.12 to 
04.10.13), and 
25% minus anti-
dumping duty 
payable, if any 
(second year: 
05.10.12 to 
31.12.13 
inclusive)  
Cases initiated in 2012  
Electrical Insulators 
8546.10 and 8546.20 30.05.12 27.09.12 .. 35% (first year) and 
25% (second year) Customs 
notification 
No.05.12 (SG) of 
20.12.12. 
Safeguard duty: 
35% (first year), 
and 25% (second 
year) 
Dioctyl phthalate 
(DOP)   2917.39.20 23.05.12 16.11.12 .. 15% (first year) and 
10% (second year) Safeguard duty 
not imposed 
Phthalic Anhydride 
(Review)  2917.35.00 26.10.12 07.06.13 .. No safeguard duty 
recommended n.a. 
Hot Rolled Flat Products of Stainless Steel 304 grade  7219.11.11, 7220.11.10, etc. 26.06.12 25.05.13 China specific 20% (From 04.01.13 
to 22.07.13 (both days inclusive))  Customs 
notification No.02.13 (SG) of 29.08.13. Safeguard duty: 20% (from 
04.01.13 to 
22.07.13 (both days inclusive)) on imports of hot rolled flat products of stainless steel 304 grade (up to a maximum width of 1,605 mm) 
Cases initiated in 2013 
Sodium nitrite  2834.10.10 17.04.13 17.09.13 .. 30% (first year) and 
28% (second year – three months only) Customs 
notification No. 01.14 (SG) of 26.02.14 Safeguard duty: WT/TPR/S/313/Rev.1 • India 
 
- 149 - 
 
  Commodity: tariff 
item Date of 
initiation Date of final 
findings Main import 
partnersa Recommendation by 
the Director-General Final decision 
30% from 
26.02.14-25.02.15 and 
28% from 
26.02.15-25.05.15 
Seamless pipes and 
Tubes  
73041910 etc. 22.04.13 11.03.14 .. 25% (first year), 15% 
(second year), and 5% 
(third year – six 
months only) Customs 
Notification 
No. 02/14 (SG) 
of 13.08.14 
Safeguard duty: 
20% (from 
13.08.14 to 
12.08.15 (both 
days inclusive)), 
10% (from 
13.08.15 to 
12.08.16 (both 
days inclusive)), 
and 5% (from 
13.08.16 to 
12.02.17 (both 
days inclusive)). 
Methyl Acetoacetate 2918.30.40 06.06.13 08.10.13 .. No safeguard duty 
recommended n.a. 
Rubber Chemical 
(Review) 3810, 3812, 
as well as under 2921, 
2925, 2934 and 2942 
(at six digit levels) of 
the Customs Act 1975 29.08.13 24.04.14 .. No safeguard duty 
recommended n.a. 
Cases initiated in 2014  
Saturated fatty 
alcohols with carbon 
chain length of C8, 
C10, C12, C14, C16 
and C18  
3823.70.10 etc. 13.02.14 09.10.14  20% (first year), 18% 
(second year), and 
12% (third year – 
six months only) Customs 
notification 
No.03.14 (SG) of 
28.08.14. 
Safeguard duty: 
20% (for 
200 days from 
28.08.14)   
Elastomeric yarn  
5402.44.00 and  5404.11.00 (Customs Tariff Act 1975) 28.02.14 29.09.14 .. No safeguard duty 
recommended n.a. 
Sodium citrate 
2918.15.20 (Customs 
Tariff Act 1975) 04.03.14 16.09.14 .. 55% (first year), 50% 
(second year), and 
40% (third year) Customs 
notification 
No. 04.14 (SG) 
of 31.12.14. 
Safeguard duty: 
30% (from 
31.12.14 to 
30.12.15 (both 
days inclusive)), 
20% (from 
31.12.15 to 
30.12.16 (both 
days inclusive)), 
and 10% (from 
31.12.16 to 
30.12.17 (both 
days inclusive)) 
Not-alloyed ingots of 
unwrought aluminium  
7601 and 7602 07.04.14 07.10.14 .. No safeguard duty 
recommended n.a. 
Flexible slabstock 
polyol of molecular 
weight 3,000 to 4,000 
3907.20.10 22.05.14 13.01.15 .. No safeguard duty 
recommended n.a. 
Sodium di-chromate 
2841.30.00 26.05.14 15.01.15 .. No safeguard duty 
recommended n.a. 
Cold rolled flat 
products of stainless 
steel of chromium 19.09.14 .. .. .. .. WT/TPR/S/313/Rev.1 • India 
 
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  Commodity: tariff 
item Date of 
initiation Date of final 
findings Main import 
partnersa Recommendation by 
the Director-General Final decision 
type, 400 series 
7219.31.12 etc. 
n.a. Not applicable.  
.. Not available. Source: WTO Secretariat; Central Board of Excise and Customs online information, "Customs: Notifications". 
Viewed at: http://www.cbec.gov.in/cae1-english. htm; and information provided by the Indian 
authorities. WT/TPR/S/313/Rev.1 • India 
 
- 151 - 
 
  Table A3. 3 Institutions responsible for fo rmulation and enforcement of standards and 
technical regulations, 2014  
Institution Field of action Legislation 
Atomic Energy Regulatory Board Nuclear energy Atomic Energy Act 1962 
Automotive Research Association 
of India Safety standards on automobiles Societies Registration Act XXI 
1860 
Bureau of Indian Standards (BIS) Standardization, Certification and 
Testing BIS Act 1986, BIS Rules 1987, BIS 
(Certification) Regulations 1988 
Central Boilers Board Boilers Indian Boilers Act 1923; Indian 
Boilers Regulations 1949 
Central Electricity Authority Supply of electricity to units 
owned by the central Government Electricity Act 2003; Central 
Electricity Authority (Measures relating to Safety and Electric Supply) Regulations 2010 
Central Silk Board Natural raw silk and products Central Silk Board (Amendment) 
Act 1982 
Chief Controller of Explosives Gas cylinders, pressure vessels 
and explosive materials, and flameproof electrical equipment for industries Indian Explosives Act 1984; Gas 
Cylinders Rules 1981; Explosive Rules 1983; Static and Mobile Pressure Vessels (Unfired) Rules 1981; Acetylene Notification No. GSR.625(E), 7 August 1983; Carbide of Calcium Rules 1937 
Coir Board Coir products Regulation Coir Industries Act 
1953 
Department of Fertilizer Fertilizers Fertilizer Control Order 1985 
Food Safety and Standards 
Authority of India (FSSAI)  Food products Food Safety and Standards Act 
2006; Food Safety and Standards 
(Licensing & Registration of Food 
Businesses) Regulations 2011; 
Food Safety and Standards (Food 
Product Standards and Food 
Additives) Regulations 2011; Food 
Safety and Standards (Packaging 
and Labelling) Regulations 2011; 
Food Safety and Standards 
(Prohibition and Restriction on 
Sales) Regulations 2011; Food 
Safety and Standards 
(Contaminants, Toxins and 
Residues) Regulations 2011; Food 
Safety and Standards (Laboratory 
and Sampling Analysis) 
Regulations 2011. 
Telecommunication Engineering Centre, Department of Telecommunication Telecom equipment Indian Telegraph Act 1885; Indian 
Wireless Act 1933; Telecom Regulatory Authority of India (TRAI) Act 1997 
Ministry of Road Transport and 
Highways Road transport Regulation of Motor Vehicles Act 
1988; Carriage by Road Act 2007; 
Road Transport Corporation Act 
1950 
Directorate General Factory Advice Service and Labour Institutes Safety in factories, and flameproof 
electrical equipment for industries Factory Act 1948; Dock Workers 
(Safety, Health, and Welfare) Act 
1986 
Directorate General of Civil 
Aviation Civil aviation Aircraft Act 1934; Carriage by Air 
Act 1972; Airport Authority of 
India Act 1994; Airports Economic 
Regulatory Authority of India Act 
2008 
Directorate General of Mines Safety Safety of mines and mining 
operations, and electric equipment for coal and oil mines Indian Mines Act and Rules 1952 
Directorate of Marketing and 
Inspection Raw and semi-processed 
agricultural commodities, and 
meat and meat products Agricultural Produce (Grading and 
Marketing) Act 1937; Meat Food 
Products Order 1973 
Directorate of Standardization Articles for defence use .. 
Directorate of Vanaspati, 
Vegetable oil, and Fats Hydrogenated vegetable oils 
(Vanaspati), vegetable oil, Vegetables Products Control Order 
1947; Vegetable Oil Products WT/TPR/S/313/Rev.1 • India 
 
- 152 - 
 
  Institution Field of action Legislation 
de-oiled meals, and edible flours (Standards of quality) Order 1975; 
Solvent Extracted oils, De-Oiled 
Meals and Edible Flour (Control 
Order) 1967 
Directorate of Weights and 
Measures Weight and measures used in 
commercial transactions Standards of Weights and 
Measures Act 1976; Standards of Weights and Measures (Packages Commodities) Rules 1977; Standards of Weights and Measures (Enforcement) Act 1985; Standards of Weights and Measures (General) Rules 1987 
Drugs Controller General of India Cosmetics, Indian pharmacopoeia, 
and drugs specification Drugs and Cosmetics Act 1940, 
and Drugs and Cosmetic Rules 
1945 
Electronics Components Standardization Organization Electronics components 
standardization .. 
Indian Roads Congress Technical specifications regarding 
roads and bridges .. 
Jute Commissioner Jute and jute products Essential Commodities Act 1955; 
Jute (Licensing and Control) Order 1961 
Ministry of Environment and 
Forest Tolerance limits for emulsion and 
effluents Environment (Protection) Act 1986 
and Environment (Protection) 
Rules 1986  
Ministry of Food Processing Industries Fruits and vegetable products, 
synthetic syrups, and aerated waters Fruit Products Order 1955 
Research and Design Standards 
Organization (RDSO) Development of standardization of 
technical specifications for items 
used in railways Indian Railway Act 
Rural Electrification Corporation 
(REC) Codes of practice and guide for 
rural electrification .. 
Technology Application and 
Standard Unit, Central Public 
Works Department Civil and electrical works .. 
Steel Authority of India Interplant standardization of 
consumable, replacement, and 
other items used in the steel industry .. 
Standardization Testing and 
Quality Certification Directorate Standardization of electronics 
technology .. 
Textile Commissioner Textil e fibres, yarn, and fabrics 
(except handloom, silk, and jute fabrics), and textiles machinery (excluding jute machinery) .. 
Ministry of Home Affairs Acquisition, possession, 
manufacture, sale, import, export 
and transport of arms and 
ammunition Arms Act 1959 
Central Insecticide Board and 
Registration Committee Import, manufacture, sale, 
transport, distribution and use of insecticides Insecticide Act 1968 
Ministry of Environment, Forest 
and Climate Change Hazardous waste Hazardous Waste (Management 
and Handling) Rules 2003 
Department of Consumer Affairs Metrology that treats units of 
measurement, methods of measurement and relevant instruments Legal Metrology Act 2009 and 
Legal Metrology (Packaged Commodities) Rules 2011 
.. Not available. 
Source: WTO Secretariat; Central Board of Excise & Customs (2011), Customs Manual on Self-Assessment 
2011; Ministry of Home Affairs online information; Central Insecticide Board and Registration Committee online information; Ministry of Environment, Fore st and Climate Change online 
information; Department  of Consumer Affairs online information. WT/TPR/S/313/Rev.1 • India 
 
- 153 - 
 
  Table A3. 4 Export prohibitions, 2014  
Reason for prohibition Description 
Protection of wildlife 
under the Wild Life (Protection) Act 1972 All wild animals, animal articles (inc luding their products  and derivatives), 
excluding those for which ownership cert ificates have been granted and those 
required for transactions for education,  scientific research, and management 
under the Wild Life (Protection) Act 1972, including their parts and products Live exotic birds, excludin g albino budgerigars, budg erigars, Bengali finches, 
white finches, and zebra finches, which may be exported subject to preshipment 
inspection; and java sparrows, whic h are subject to export licensing 
Marine species and their parts, products , and derivatives under the Wild Life 
(Protection) Act 1972  
Bêche-de-mer (sea cucumber) 
Control of poaching and 
illegal trade in wildlife and 
its products Peacock tail feathers, including handicrafts and articles of peac ock tail feathers 
Shavings of shed antlers of Chital and Sambhar, including manufactured articles 
Sea shells, including polished sea shells and handicrafts made out of those 
species mentioned in the Wild Life (Protection) Act 1972 
Social and religious 
reasons Beef of cows, oxen and calf  
Offal of cows, oxen, and calf 
Meat of buffalo (both bone-in and boneless) 
Tallow, fat and/or oils of any animal orig in, excluding fish oil, buffalo tallow and 
lanolin 
Human skeletons  
Ecological and 
environmental reasons Undersized rock lobsters and sand lobsters 
Chemicals under the Montreal Protocol when exported to a country that is not 
party to the Protocol 
Plants and plant portions of wild species specified in the Wild Life (Protection) 
Act 1972 or the CITES Appendix I or in the Export Licensing Note 1a 
Wood and wood products in forms of logs , timber, stumps, roots, barks, chips, 
powder, flakes, dust, pulp, and charcoalb, other than sawn timber made 
exclusively out of imported logs/timber 
Fuel wood in logs, billets, twigs, faggo ts or similar forms; wood in chips or 
particles; and sawdust and wood waste and scrap, whether or not agglomerated 
in logs, briquettes, pellets or similar forms 
Wood charcoal whether or not agglomeratedb 
Wood sawn or chipped lengthwise, sliced or peeled, whether or not planed, 
sanded or end jointed, of a thickness exceeding 6 mm, other than sawn timber 
made exclusively out of imported logs/timber 
Sandalwood in any form, excluding finished handicraft products of sandalwood, 
machine finished sandalwood products, and sandalwood oil 
Red sanders wood in any form, whether raw, processed or unprocessed, 
excluding value-added products of re d sanders wood (e.g. extracts, dyes, 
musical instruments, and parts of musi cal instruments, fu rniture, parts of 
various sizes of furniture (subject to DGFT notification No.54 of 3 December 
2013), toys, dolls and other handicrafts made from red sanders wood procured 
from legal sources 
Natural resources 
conservation Mechanical wood pulp 
Chemical wood pulp, dissolving grades 
Chemical wood pulp, soda or sulpha te, other than dissolving grades 
Chemical wood pulp, sulphite, other than dissolving grade  
Semi-chemical wood pulp 
Family planning scheme Condomsc 
Ensuring domestic availability/food security  Dried leguminous vegetables, shelled, whet her or not skinned or split, excluding 
kabuli chana (chickpea), and 10,000 tonnes of organic pulses during 2011-12
d 
All edible oile 
Implementing the 
Chemical Weapons 
Convention Toxic chemicals (Chemical Weapons Convention, Schedule 1) 
a For Export Licensing Note 1, see the Export Poli cy Schedule (Chapter 12). Exemptions for research, 
education, and lifesaving drugs are granted by the DGFT, upon recommendations by the Ministry of 
Environment and Forests & Climate Change. 
b Exemption from prohibition has been given fo r export of wood charcoal to Bhutan from 
23 December 2013. 
c Certain brands and those with certain markings/stamps (see the Export Policy Schedule 
(Chapter 40)). WT/TPR/S/313/Rev.1 • India 
 
- 154 - 
 
  d Pulses may be exported to Sri Lanka under spec ific permission granted by DGFT. The prohibition 
does not apply to export of pulses to Bhutan. 
e Exemptions apply to: exports of castor oil; expo rts of coconut oil from all EDI ports and all Land 
Custom Stations (LCS) on Indo-Nepal, Indo-Bangl adesh, Indo-Bhutan and Indo-Pakistan borders; 
deemed exports of edible oils (as input raw material) from the domestic tariff area (DTA) to 100% to EOUs for production of non-edible goods to be expo rted; exports of oils prod uced out of minor forest 
produce, even if edible; exports of edible oi l from DTA to special economic zones (SEZs) for 
consumption by SEZ units in manufacture of proces sed food products subject to applicable value 
addition norms and 10,000 tonnes of organic edible oils per year subject to the conditions notified in Notification No.50 of 3 June 2011. Further export of edible oils in branded consumer packs of up to 5 kg is permitted subject to minimum export price of US$1,100 per tonne (as amended from time to time). The prohibition will not apply to export of edible oil to Bhutan. 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities.  WT/TPR/S/313/Rev.1 • India 
 
- 155 - 
 
  Table A3. 5 Export incentive schemes, 2014  
Scheme Description  
Duty exemption schemes 
Advance 
Authorization 
Scheme (previously 
Advance Licence 
Scheme) 
 An Advance Authorization is issued to al low duty free import of inputs, which are 
physically incorporated in export product (making normal allowance for wastage). In 
addition, fuel, oil, catalysts which are consumed/utilized to obtain export product, may 
also be allowed. DGFT, by means of Publ ic Notice, may exclude any product(s) from 
the purview of Advance Authorization. Mand atory spares which are required to be 
exported/supplied with the re sultant product can be allowed duty free but up to 10% 
of c.i.f. value of Authorization. 
Advance Authorization can be issued either to a manufacturer exporter or a merchant 
exporter tied to supporting manufacturer(s). Advance Authorization shall be issued for 
physical exports (including exports to SEZ) and/or inte rmediate supplies; and/or 
supply of goods that are allowed in Chapter 8 of the FTP. Supply of "stores" on board 
of foreign going vessel/aircraft subject to condition that there is specific SION in 
respect of item(s) supplied. In addition, in respect of supply of goods to specified 
projects mentioned in paragraph 8.2 (d), (f ) and (j) of FTP, an Advance Authorization 
can also be availed by sub-contractor to such project provided name of sub-
contractor(s) appears in main contract.  
Advance Authorization and/or materials import ed thereunder will be with actual user 
condition. It will not be transferable even after completion of export obligation. 
However, Authorization holder will have opti on to dispose of product manufactured out 
of duty free inputs once export obligation is completed.  
Advance Authorization necessitates exports with a minimum value addition of 15%, 
except for items specified in Appendix 11B of HBP v1 and for items in gems & 
jewellery sector, for which valu e addition would be as per paragraph 4A.2.1 of HBP v1.  
Export obligation shall be fulfilled within 18 months except in case of supplies to 
projects/turnkey projects in India/abroad  under deemed exports category where EO 
must be fulfilled during  contracted duration.  
Duty-Free Import 
Authorization (DFIA) Scheme 
 DFIA is issued to allow duty free import of inputs, fuel, oil, catalyst which are required 
for production of export product. DGFT, by  means of Public Notice, may exclude any 
product(s) from purview of DFIA. It shall be issued only for products for which 
Standard Input and Output Norm s (SION) have been notified. 
A minimum 20%-value addition shall be requ ired for issuance of DFIA. However, for 
items in gems and jewellery sector value addition as prescribed under paragraph 
4A.2.1 of HBP v1. shall apply. Similarly, for items where a higher value addition has 
been prescribed under Advance Authorization Scheme, the same value addition for DFIA shall be applied.  DFIA is transferable and once transferabil ity is endorsed, authorization holder may 
transfer DFIA or duty free inputs, except fu el and any other item(s) notified by DGFT. 
However, for fuel, import en titlement may be transferred only to companies which 
have been granted authorisation to market  fuel by the Ministry of Petroleum and 
Natural Gas. Export obligation shall be fulfilled within 18 months except in case of supplies to projects/turnkey projects in India/abroad  under deemed exports category where EO 
must be fulfilled during  contracted duration.  
Duty Remission Scheme 
Duty Entitlement 
Passbook (DEPB) Scheme The scheme was eliminated on 1 November 2011; it aimed at neutralizing the 
incidence of customs duty on imports of inpu ts for the manufacture of export products. 
Reward schemes 
Served from India 
Scheme   The objective of the Scheme is to accelerate  growth in export of services so as to 
create a powerful and unique "Served From  India" brand, inst antly recognized and 
respected the world over. Indian Service Provid ers, of listed services are entitled to 
Duty Credit Scrip at 10% of the net foreig n exchange earned. However, services and 
service providers listed in Para 3.6.1 of Hand Book of Procedures Vol. 1 are not 
eligible. Import are allowed with actual user condition for import of capital goods including spares, office equipment, consumab les, vehicles which are in the nature of 
professional equipment to the service provider. 
Special Agricultural 
and Village 
Industry Scheme 
(Vishesh Krishi and 
Gram Udyog 
Yojana) 
 Objective of this scheme is to promote employment generati on in rural and semi urban 
areas. Duty Credit Scrip benefits are gr anted with an aim to compensate high 
transport costs, and to offset other disa dvantages. Vishesh Kr ishi And Gram Udyog 
Yojana has been gradually expanded to in clude export of Agricultural Produce and 
their value added products; Minor Forest Produce and their value added variants; 
Gram Udyog Products; Forest based products  and Other Products, as notified under 
Appendix 37A of HBP v1, from time to time. 
Exporters of notified products are entitled for Duty Credit Scrip equivalent to 5% of 
f.o.b. value of exports (in free foreign ex change) for export. Few products are also WT/TPR/S/313/Rev.1 • India 
 
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  Scheme Description  
eligible to additional 2% over & above 5% as admissible for specified products in 
Appendix 37A of HBP v1. 
Agri-Infrastructure 
Incentive Schemec 
 Status Holders (having status  recognition) exporting products covered under ITC HS 
Chapters 1 to 24 , shall be granted Duty Cred it Scrip equal to 10% of f.o.b. value of 
agricultural exports (including  VKGUY benefits entitled un der Policy Para 3.13.2) for 
exports made during a particular year. This shall be subject to the condition that the 
total benefits for all status holders put together does not exceed Rs 100 Cr (i.e. Rs 50 Cr for each half year) and the condit ions specified in Para 3.7.2 of HBPv1 are 
satisfied.  The following capital g oods/equipment shall be permitted for import:  
(i) Cold storage units (includi ng Controlled Atmosphere (C A) and Modified Atmosphere 
(MA) Stores); precooling units and mother storage units for onions, etc.;  (ii) Pack houses (including facilities for ha ndling, grading, sortin g and packaging etc.); 
for items notified in Appendix 37 F.  (iii) Reefer van/containers; and  
(iv) Other capital goods/equipment as may be notified in Appendix 37 F. 
Focus Market 
Scheme  
 Focus Market Scheme has been launched fo r offsetting high fre ight cost and other 
externalities to select international market s with a view to enhance India's export 
competitiveness in these countr ies. Exporters of all products  to notified countries (as 
in Table 1 & Table 2 of Appendix 37C of HBPv 1) shall be entitled for Duty Credit Scrip 
equivalent to 3% of f.o.b. value of exports.  However, additional duty credit scrip at 
1% f.o.b. value of exports is given to mark ets listed in Table 3 of Appendix 37C under 
Special Focus Market Scheme. New markets have been added to the Special Focus 
Market Scheme from time to time. 
Focus Product 
Scheme   Focus Products Scheme is aimed to incentiv ise export of such products which have 
high export intensity/employment  potential, so as to offset  infrastructure inefficiencies 
and other associated costs involved in marketing of these products. Exports of notified products (as in Appendix  37D of HBPv1) to all countries (including 
SEZ units) shall be entitled for Duty Credit  Scrip equivalent to 2% or 5% of f.o.b. 
value of exports (in free foreign exchange).  Export of Products/Sectors of high export  intensity/employment potential (which are 
not covered under present FPS List) would be incentivized at 2% of f.o.b. value of 
exports (in free foreign exch ange) under FPS when exported to the Linked Markets 
(countries), which are not covered in the pres ent FMS list. Such products will be listed 
in Table 2 or Table 3 of Appendix 37D of HBPv1.  Incentive to the products listed in Table 3 will be in addition to any benefit which the same item may be entitled to under Table 1 or Table 2 of Appendix 37D.  
Status Holder 
Incentive Scheme  
 The scheme was discontinued on 1 April 2013.  
The scheme was aimed at promoting invest ment for technology upgrading in the 
leather, textile and jute, handicrafts, en gineering, plastics, and basic chemical 
(excluding pharma) subsectors;  
Exporters were granted a duty credit equivale nt to 1% of the f.o. b. value of exports 
over 2009-10. The duty credit had also been granted to exporters of additional 
subsectors in 2010-12f;  
Exporters who had benefited from the Tech nology Upgradation Fund Scheme of the 
Ministry of Textiles, were not eligible. 
Export Promotion Capital Goods Scheme  
Zero-duty rate 
 Exporters of specific products may import  capital goods duty free to manufacture 
export products, subject to an export obliga tion of six times the amount of the duty 
saved, to be met within six years. Expo rters who have benefi ted from the Status 
Holder Incentive Scheme or the Technology Upgradation Fund Scheme (of the Ministry 
of Textiles) are not eligible;  
The scheme was in place until 31 March 2013. Subsequently w.e.f. 18.4.2013 only one 
scheme i.e. the zero duty EPCG scheme is in  force and is available to all sectors and 
irrespective of whether TUFS be nefit has been availed or not. 
Concessional rate 
 Manufacturers of exports may import capital goods at a 3% duty rate, subject to an 
export obligation of: (i) eight times the amo unt of the duty saved, to be met within 
eight years; (ii) six times the amount of the duty saved for agri units, to be met within 12 years; and (iii) six time s the amount of the duty saved for micro and small 
enterprises, to be met within eight years, and the c.i.f. value of imports should not 
exceed Rs 5 million and total investment after imports should not exceed the limits 
prescribed to maintain the micro and small en terprises status (Chapter II(4)(i)(c)). If 
the duty saved amounts to at least Rs 1 billion, the export obligation is to be met within 12 years for all manufacturers;  Service providers certified as common service provider by the DGFT may also import capital goods to export services at a 3% duty  rate. The export obligation is eight times 
the amount of the duty saved, to be met within eight years.  The 3% duty rate EPCG scheme was substitu ted by the Zero duty EPCG scheme w.e.f. 
18.04.2013 which is available to all sectors and is irrespective of whether TUFS benefit WT/TPR/S/313/Rev.1 • India 
 
- 157 - 
 
  Scheme Description  
has been availed or not. 
Schemes for gems and jewellery  
 Exporters of gold/silver/platinum jewell ery and articles thereof may import their 
essential inputs such as gold, silver, pl atinum, mountings, findings, rough gems, 
precious and semi-precious stones, syntheti c stones and unproce ssed pearls etc. in 
accordance with the procedure specified in this behalf. They can obtain gold/silver/platinum as an input for expo rt products from nominated agencies in 
advance or as replenishment after exports in accordance with specified procedure. 
Replenishment 
authorization 
 Replenishment authorizations are granted agai nst exports of gold, platinum and silver 
jewellery and articles made of gold, platin um and silver. Application shall be filed 
within six months following the month during  which the export proceeds are realized.  
Gem REP Authorizations shall also be valid for import of empty jewellery boxes up to 
5% of value of Authorization within its overall c.i.f. value. Gem REP authorizations 
issued against export of studded gold/silver/platinum jewellery articles, shall also be 
valid for import of cut and polished precio us/semi-precious stones other than emerald 
up to 10% of c.i.f. value of Authorization wi thin its overall c.i.f. value. Such Gem REP 
authorizations are freely transferable.  
Exporters can also import duty free consum ables, tools and other items namely, tags 
and labels, security censor on  card, staple wire, poly bag (as notified by Customs) for 
jewellery made out of precious metals (other than gold & platinum) equal to 2% and 
for cut and polished diamonds  and jewellery made out of gold and platinum equal to 
1% of f.o.b. value of exports of the preceding year under replenishment authorization 
However, in case of Rhodium finished silver jewellery, entitlement will be 3% of f.o.b. 
value of exports of such jewellery. This Authorization shall be non-transferable and 
subject to actual user condition. 
Advance 
Authorization Scheme for gems and jewellery   Procedure applicable to Advance Authorization under Chapter 4 of HBP shall generally 
apply to this scheme except norms for Value addition/EO period and regularisation of 
default. Value addition for Gems and Jewell ery items shall be as per para 4A.2 of 
HBPV1. Advance authorization holder may obtain gold/silver/platinum from nominated agencies in lieu of  direct imports. 
Export and 
Trading Houses 
Scheme  Merchant as well as manufacturer exporters,  service providers, Export Oriented Units 
(EOUs) and units located in Special Economic Zones (SEZs), Agri. Export Zones 
(AEZs), Electronic Hardware Technology Parks (EHTPs), Software Technology Parks 
(STPs) and Bio-Technology Parks (BTPs) shall be eligible for recognition as a status 
holder.  
Status recognition depends upon export  performance. An applicant shall be 
categorized as status holder upon achiev ing export performance indicated in para 
3.10.2 of FTP. The criterion is based on export performance. Th e export performance 
is counted on the basis of FOB value of expo rt proceeds realized during current plus 
previous three years (taken together). For Export House (E H) status, export 
performance is necessary in at least two out of four years. 
exporters in Small Scale Industry (SSI)/tiny sector/cottage sector, units registered 
with KVICs/KVIBs, units located in North Eastern States, Sikkim and Jammu & 
Kashmir, units exporting handloom/handicrafts /hand knotted or silk carpets, exporters 
exporting to countries in Latin America/CIS/ sub-Saharan Africa as listed in Appendix-
9, Units having ISO 9000 (series)/ISO 14 000 (series)/WHOGMP/HACCP/SEI CMM 
level-II and above status granted by agencies  listed in Appendix-6 of HBP v1, exports 
of services and exports of agro products shall be entitled for double weightage on 
exports made for grant of status. Double weig htage shall be admissible to merchant as 
well as manufacturer exporters.  
However, a shipment can get double weig htage only once in any one of above 
categories. 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. WT/TPR/S/313/Rev.1 • India 
 
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  Table A3. 6 Amount forgone/disbursed on imports under export promotion schemes, 
2011-14   
(Rs million)  
Scheme Amount forgone-disbursed 
2011-12 2012-13 2013-14 
Advance Authorization Scheme (previously 
Advance Licence Scheme) 183,060 189,710 209,560 
Duty-Free Import Authorization Scheme 12,440 17,350 33,650 
Duty Entitlement Passbook (DEPB) Scheme 104,090 27,090 4,340 
Served from In dia Scheme 5,560 5,900 6,390 
Special Agricultural and Village Industry Scheme 
(Vishesh Krishi and Gram Udyog Yojana) 22,630 23,820 24,420 
Focus Market/Product Scheme 39,510 61,780 101,820 
Export Promotion Capital Goods Scheme 96,720 112,180 89,900 
Duty-Free Entitlement Credit Certificate Scheme 1,900 1,420 2,350 
Duty-Free Replenishment Certification Scheme  400 210 20 
Target Plus Scheme 4,360 5,920 8,840 
Total 470,670 445,380 481,290 
Source: Government of India on line information. Viewed at: http://indiabudget.nic.in/budget2013-
2014/ub2013-14/statrevfor/annex12.pdf  and http://indiabudget.nic.in/ub2014-
15/statrevfor/annex12.pdf .  WT/TPR/S/313/Rev.1 • India 
 
- 159 - 
 
  Table A3. 7 Selected incentive schemes/programmes for MSMEs, 2014  
Scheme/programme Eligibility  Description Introduction/ 
validity 
Implemented by the Ministry of Micro, Small, and Medium Enterprises 
Entrepreneurship 
Development 
Institutions (EDIs) 
Scheme  EDIsa  Assistance is provided to create, strengthen 
or expand infrastructure (including opening of 
new branches) and to meet deficits. The 
subsidy amounts to 50% of the cost of 
building, training, and other support services, 
up to Rs 10 million.  2010/ongoing  
Rajiv Gandhi Udyami 
Mitra Yojanab New micro and 
small 
entrepreneur  Financial assistance to Udyami Mitrasc is 
provided by selected agenciesd. It amounts to 
Rs 4,000/trainee for service enterprises and Rs 6,000/trainee for manufacturing enterprises (with investment in plants and machinery up to Rs 2.5 million). Trainees contribute to Rs 1,000 to the financial 
assistance. The beneficiary's contribution of 
Rs 1,000 shall be provided as a Grant under RUGMY for the beneficiaries from special 
category.  2008/ongoing 
Implemented by the Deve lopment Commissioner 
Management 
Development 
Programme Prospective/ 
existing MSMEs  The programme is aimed at training 
prospective/existing entrepreneurs by upgrading their managerial skills. No financial incentives are provided. 1952/ongoing 
Credit Guarantee Fund 
Scheme for Micro and 
Small Enterprises  All MSEs, except 
retail trade and 
self-help groups Credit is guaranteed by financial institutionse. 
The guarantees to new and existing micro and 
small enterprises up to Rs 10 million per 
borrowing unit. The guar antee cover provided 
up to 75% of the credit facility up to 
Rs 5 million (85% for loans up to 
Rs 0.5 million provided to micro enterprises, 
80% for MSEs owned/operated by women and 
all loans to NER) with a uniform guarantee at 
50% of the credit exposure above Rs 5 million 
and up to Rs 10 million. 2000/ongoing 
Credit Linked Capital 
Subsidy Scheme for 
Technology 
Upgradation  Manufacturing 
MSEs The subsidy amounts to 15% of the capital 
acquired to upgrade technology, up to 
Rs 1.5 million. 2001/ongoing 
 
Micro and Small 
Enterprises Cluster 
Development 
Programmef  All MSEs  Grant of maximum Rs 250,000 will be 
provided for preparation of diagnostic study 
report (DSR) for one cluster. For the field 
organizations of the Ministry of MSME, this 
financial support will be Rs 100,000. For soft 
interventions, maximum limit for project cost 
would be Rs 2.5 million per cluster. The 
Government's grant for the soft interventions 
will be 75% of the sanc tioned amount of the 
project cost. For NE & Hill States, clusters 
with more than 50% (a) micro/village (b) 
women owned (c) SC/ST units, the grant will 
be 90%. For preparation of "detailed project 
report", a grant of maximum Rs 500,000 will 
be provided for preparation of a technically 
feasible and financially viable project report 
for setting up of a common facility centre for 
a cluster of MSE units and/or infrastructure 
development project for new industrial 
estate/area or for upgrading of existing 
infrastructure in existing industrial 
estate/area/cluster. For hard interventions 
(setting up of CFCs), gr ant will be restricted 
to 70% of the cost of project of maximum 
Rs 1.5 million.  
 2010/ongoing WT/TPR/S/313/Rev.1 • India 
 
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  Scheme/programme Eligibility  Description Introduction/ 
validity 
Grant will be 90% for CFCs in NE & Hill 
States, clusters with more than 50% (a) 
micro/village (b) women owned (c) SC/ST 
units. The cost of project includes cost of land 
(subject to max. of 25% of project cost), 
building, pre-operative expenses, preliminary 
expenses, machinery and equipment, 
miscellaneous fixed assets, support 
infrastructure such as water supply, electricity 
and margin money for working capital.  
ISO 9001/14001 and 
HACCP Certification 
Reimbursement 
Scheme  All MSEs  Reimbursement of 75% of the certification 
expenses up to a maximum of Rs 75,000 to 
each unit as one-time reimbursement only to 
those MSEs which have acquired Quality Management Systems (QMS)/ISO 9001 and/or Environment Management Systems (EMS)/ISO 14001 and/or Food Safety 
Systems (HACCP) Certification.  1994/ongoing 
Marketing 
Development 
Assistance Scheme 
(SSI-MDA) Exporting 
manufacturing 
MSMEs  MSMEs participating in international 
exhibitions/trade fairs, are reimbursed 75% of 
the economy air fare and 50% of the space 
rental charges (100% for special categories), 
up to Rs 125,000. 2000/ongoing 
 
Mini Tool Rooms  Individual 
MSEs/MSE 
consortium Discontinued  Discontinued 
from the period subject to the 12
th Five Year 
Plan 
Scheme for Micro 
Finance Programme Micro finance 
institutions  The Government provides a Portfolio Risk 
Fund to the Small Industries Development 
Bank Of India (SIDBI). The Fund is used to 
guarantee loans take n by micro finance 
institutions or NGOs.  2004/ongoing 
 
Implemented by the National Small Industries Corporation (NSIC)  
Government Stores 
Purchase Programme  MSEs registered 
with NSIC  The units registered under Single Point 
Registration Scheme of NSIC are eligible to 
receive benefits under "Public Procurement 
Policy for MSEs Order 2012". These include: 
issue of the Tender Sets free of cost; 
exemption from exemption from payment of 
Earnest Money Deposit (EMD); in tender 
participants, MSES quoting price within price 
band of L1+15% will be allowed to supply a 
portion up to 20% of requirement by bringing 
down their price to L1 price where L1 is non-
MSEs'; every central ministries/departments 
PSUs shall set an annual goal of minimum 
20% of the total annual purchase of the 
products or services produced or rendered by 
MSEs; out of the annual requirement of 20% 
procurement from MSEs, 4% is earmarked for 
units owned by Schedule Caste/Schedule 
Tribes; 358 items are reserved for exclusive 
purchase from SSI Sector.  1955/ongoing  
Marketing Assistance 
Scheme  All MSMEs 
(Maximum 
amount towards air fare, space rental and shipping/transportation 
charges) General category: for micro enterprises, 
Rs 240,000 in Latin America and Rs 200,000 
in other countries; fo r small enterprises, 
Rs 210,000 in Latin America and Rs 175,000 in other countries; and for medium enterprises, Rs 125,000 in Latin America and 
Rs 100,000 in other countries. 
  
 
  Ongoing WT/TPR/S/313/Rev.1 • India 
 
- 161 - 
 
  Scheme/programme Eligibility  Description Introduction/ 
validity 
Enterprises belonging to NE 
Region/Women/SC/ST Category: for micro enterprises, Rs 270,000 in Latin America and Rs 225,000 in other countries; for small enterprises, Rs 240,000 in Latin America and Rs 200,000 in other countries; and for 
medium enterprises, Rs 160,000 in Latin 
America and Rs 125,000 in other countries.  
Performance and 
Credit Rating Scheme  All MSEs MSEs may select a rating agency to obtain a 
credit rating. The subsidy amounts to 75% of 
the fee charged by the rating agency, up to 
Rs 40,000. 2005/ongoing 
Raw Materials Assistance Scheme  MSMEs Short term credit finance is available for 90 
days at concessional in terest rates. The rate 
of interest and assistan ce against the security 
of BG/SDR/FDR
g, effective 1 February 2013, 
are: 11.95% (units having valid SE !A rating under NSIC's rating scheme); 12.45% (units having valid SE 2A or SE 1B rating under NSIC's rating scheme); and 12.95% (other 
units).  2004/ongoing 
Implemented by the Khadi and Vill age Industries Commission (KVIC) 
Prime Minister's 
Employment 
Generation 
Programmeb  New micro 
entrepreneurs  The subsidy amounts to 15% of the cost of 
establishing new micro enterprises in urban 
areas (25% for special categories); and 25% of the cost of establishing new micro enterprises in rural areas (35% for special categories). Maximum cost is Rs 2.5 million for setting up new manufacturing micro enterprises and Rs 1 million for setting up 
new micro enterprises engaged in services. 2008/ongoing 
Implemented by the Coir Board  
Rejuvenation, 
Modernization, and 
Technological Upgradation of Coir 
Industry Micro and small 
coir enterprises  The financial assistance or government 
grant/subsidy will be 40% of the Project cost. 
The maximum amount of admissible cost of the project is enhanced to Rs 1 million for the purpose of government subsidy, excluding working capital which must not exceed 25% 
of the project cost. 2008/ongoing 
a National Institute for Micro, Small and Medium En terprises, National Instit ute for Entrepreneurship 
and Small Business Development, and In dian Institute of Entrepreneurship. 
b The Rajiv Gandhi Udyami Mitra Yojana scheme and the Rural Employment  Generation Programme 
were merged into the Prime Minister's Employment Generation Programme in August 2008. 
c Selected lead agencies for rendering assistance an d handholding support to po tential first generation 
entrepreneurs. 
d Entrepreneurship Development Institutions, the National Small Industries Corporation (NSIC), the 
Khadi and Village Industries Commis sion (KVIC), and the Coir Board. 
e Public and Private Sector Banks, Regional Ru ral Banks, Foreign Banks, and other Financial 
Institutions. 
f The Micro and Small Enterprises Cluster Development Programme wa s merged with the Integrated 
Infrastructure Development Scheme in February 2010.  
g BG: Bank Guarantees; SDR: Short Deposit Receipts; and FDR: Fi xed Deposit Receipts. 
Note: "Special categories" refer to MSMEs operated/own ed by women or scheduled castes/scheduled tribes 
or located in the north eastern region.  
Source: WTO Secretariat, based on informatio n provided by the Indian authorities.  WT/TPR/S/313/Rev.1 • India 
 
- 162 - 
 
  Table A3. 8 Top 20 patent applicants, 2014  
Sl.No. Patent owner Country 
1 Council for Scientific and Industrial Research India 
2 Qualcomm Incorporated United States 
3 Samsung Electronics Co. Ltd. Republic of Korea 
4 Hindustan Unilever India 
5 Ericsson Ltd. Sweden 
6 Siemens Germany 
7 Tata Group India 
8 Bharat Heavy Electricals Ltd. India 
9 BASF Aktiengesellschaft Germany 
10 Motorola United States 
11 Philips Netherlands 
12 General Motors Global United States 
13 Thomson Licensing France 
14 LG Electronics Republic of Korea 
15 Nokia Corporation Finland 
16 SONY Corporation Japan 
17 Honda Giken Kogyo Kabushiki Kaisha Japan 
18 IBM United States 
19 Research in Motion Canada 
20 Proctor and Gamble United States 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. WT/TPR/S/313/Rev.1 • India 
 
- 163 - 
 
  Table A4. 1 Legislation related to pipeline tr ansport for petroleum and natural gas, 2014  
Name of legislation 
The Petroleum & Minerals Pipelines (Acquisition of Right of User in Land) Amendment Act, 2011 
Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand Natural 
Gas Pipelines) Regulations, 2008 
Petroleum and Natural Gas Regulatory Board (Determinati on of Natural Gas Pipeline Tariff) Regulations, 2008 
Petroleum and Natural Gas Regulatory Board (Affiliate Co de of Conduct for Entities Engaged in Marketing of 
Natural Gas and Laying, Building, Operating or Ex panding Natural Gas Pipelines) Regulations, 2008 
Petroleum and Natural Gas Regulatory Board (Access Code of Conduct for Common Carrier or Contract Carrier 
Natural Gas Pipelines) Regulations, 2008 
Petroleum and Natural Gas Regulatory Board (Guiding Principles for Declaring or Authorizing Natural Gas 
Pipelines as Common Carrier or Contract Carrier) Regulations, 2009 
Petroleum and Natural Gas Regulatory Board (Technical Standards and Specifications including Safety Standards for Natural Gas Pipelines) Regulations, 2009 
Petroleum and Natural Gas Regulatory Board (Determini ng Capacity of Petroleum,  Petroleum Products and 
Natural Gas Pipelines) Regulations, 2010 
Petroleum and Natural Gas Regulatory Board (Integri ty Management System fo r Natural gas Pipelines) 
Regulations, 2012 
Petroleum and Natural Gas Regulatory Board (Imb alance Management Services) Regulations, 2014 
Petroleum and Natural Gas Regulatory Board (Development of Model GTA) Guidelines, 2012 
Petroleum and Natural Gas Regulatory Board (Capacity Release for Natural Gas Pipeline) Guidelines, 2012 
Petroleum and Natural Gas Regulatory Board (Public consultation for Determination of Final Natural Gas 
Pipeline Tariff) Guidelines, 2012 
Modalities of maintaining and operation of Escrow A ccount under the Petroleum and Natural Gas Regulatory 
Board (Access Code for Common or Contract Carrier Natural Gas Pipelines)Regulations, 2008 
Petroleum and Natural Gas Regulatory Board (Protectio n of Consumer Interest in respect of Dedicated 
Pipelines for Natural Gas) Guidelines, 2010 
Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand Petroleum 
and Petroleum Products Pipelines) Regulations, 2010 
Petroleum and Natural Gas Regulatory Board (Determina tion of Petroleum and Petroleum Products Pipelines 
Transportation Tariff) Regulations, 2010 
Petroleum and Natural Gas Regulatory Board (Determini ng Capacity of Petroleum,  Petroleum Products and 
Natural Gas Pipeline) Regulations, 2010  
Petroleum and Natural Gas Regulatory Board (Guiding Principles for Declaring or Authorizing Petroleum and 
Petroleum Products Pipelines as Common Ca rrier or Contract Carrier) Regulations 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. WT/TPR/S/313/Rev.1 • India 
 
- 164 - 
 
  Table A4. 2 India's banking system, 2011 and 2014  
Financial 
institutions Number Definition, function, and 
laws by which they are 
governed Requirements for establishment  
(if applicable) 
2011 2014 Nationals Foreigners 
Scheduled 
commercial banks
a 81 89 Banks included in the 
Second Schedule of the Reserve Bank of India 1934 - - 
State bank of 
India (SBI) 
and 
associates  6 6 Governed by the State Bank 
of India Act 1955. The 
associates are governed by 
the State Bank of India 
(Subsidiary Banks) 
Act 1959b; SBI and 
associates also governed by 
the Reserve Bank of India 
(RBI) Act 1934 and the 
Banking Regulation Act 1949 Parliamentary 
approval 
required; central 
Government 
shareholding 
cannot be less 
than 51% FDI and portfolio 
subject to overall 
statutory limits of 
20%  
Nationalized 
banks  19 19 Governed by the Banking 
Companies (Acquisition and Transfer of Undertakings) Act 1970 (14 banks) and the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980 (five banks); also regulated by 
the RBI Act 1934 and the 
Banking Regulation Act 1949 Parliamentary 
approval required; central Government shareholding cannot be less than 51%  FDI and portfolio 
subject to overall statutory limits of 20% 
Foreign banks  32 43 Governed by the RBI Act 
1934, the Banking 
Regulation Act 1949, and the 
Companies Act 1956. The 
Companies Act 2013 also 
applies to the extent it is not 
inconsistent with the 
Banking Regulation Act 1949 Set up by foreign 
parent banks  Bank branches of 
parent banks  
Private sector 
banks  22 20 Companies incorporated 
under the Companies Act 1956 and licensed under the Banking Regulation Act 1949 (Section 22), to carry on banking business
c; engaged 
in activities stipulated in the Banking Regulation Act 1949 (Section 6); governed by the RBI Act 1934, the Banking Regulation Act 1949, and the Companies Act 1956. The 
Companies Act 2013 also 
applies to the extent it is not inconsistent with the Banking Regulation Act 1949 Guidelines for 
licensing issued in 1993 (ten banks licensed); revised guidelines issued in 2001 (two banks licensed); and guidelines for licensing of new banks issued in 2013 
("in-principle" 
approvals to two applicants) 74% is the 
maximum aggregate of foreign investment from all sources
d; 26% 
of paid-up capital must be held by resident Indians  
State 
cooperative 
banks 31 32 Principal cooperative society 
in a State; main objective is 
to finance other cooperative 
societies in the state as 
defined in the National Bank 
for Agriculture and Rural 
Development (NABARD) 
Act 1981 (Section 2(u)); also 
governed by the RBI Act 
1934, the Banking 
Regulation Act 1949 (as 
applicable to cooperative 
societies) and the relevant 
State's Cooperative Societies 
Act Established as per 
the relevant 
State's 
Cooperative 
Societies Act; 
licensed by the 
RBI under the 
Banking 
Regulation Act 
1949, as 
applicable to 
cooperative 
societies 
(Section 22) FDI not allowed WT/TPR/S/313/Rev.1 • India 
 
- 165 - 
 
  Financial 
institutions Number Definition, function, and 
laws by which they are 
governed Requirements for establishment  
(if applicable) 
2011 2014 Nationals Foreigners 
Urban 
cooperative banks  1,674 1,606 Cooperative societies 
established and registered under the respective States' Cooperative Societies Act; they are present in 
29 States/union territories; 
under the RBI regulation and supervision since 1 March 1966 when the Banking Regulation Act 1949 applied to them for banking-related functions; other aspects governed by the respective State's Cooperative Societies Act. Co-operati ve societies 
having operation in more than one state are governed by the Multi State Co-operative Societies Act 2002 Set up by their 
members who are Indian nationals FDI not allowed 
Central 
cooperative 
banks 371 371 Principal cooperative bank in 
a district in a State. Main 
objective is to finance other 
cooperative societies in that 
district as defined in the 
National Bank for Agriculture 
and rural Development 
(NABARD) Act 1981 (Section 
2(d)). They are also 
governed by the RBI Act 
1934, the Banking 
Regulation Act 1949 (as 
applicable to cooperative 
societies), and the relevant 
State's Co-operative 
Societies Act, under which 
the bank is established Established as per 
the relevant 
State's 
Cooperative 
Societies Act; 
licensed by the 
RBI under the 
Banking 
Regulation Act 
1949, as 
applicable to 
cooperative 
societies 
(Section 22) FDI not allowed 
Regional rural 
banks  82 57 Governed by the Regional 
Rural Banks (RRBs) Act 1976, the RBI Act 1934, and the Banking Regulation Act 1949; established to develop the rural economy by providing credit and other facilities, in particular to small and marginal farmers, agricultural labourers, artisans, and small entrepreneurs  Under RRBs Act 
1976, central Government may, if requested by a sponsor bank, by notification in the Official Gazette , 
establish one or more RRBs in a State or union territory, and specify the local limits for 
operation FDI not allowed  
Other institutions  
Development 
finance institutions 5 .. Promoted or assisted by the 
Government to provide development finance to one or more sectors or subsectors of the economy; classified as term-lending institutions, refinancing institutions, and sector specific institutions;  governed by the RBI Act 1934 and the respective acts enacted by Parliament (the National Housing Bank Act, the Exim Bank Act, the NABARD Act, and the Small Only nationals 
(Parliamentary approval required). Shareholding is by banks, financial institutions, the Government, or RBI FDI not allowed  WT/TPR/S/313/Rev.1 • India 
 
- 166 - 
 
  Financial 
institutions Number Definition, function, and 
laws by which they are 
governed Requirements for establishment  
(if applicable) 
2011 2014 Nationals Foreigners 
Industries Development 
Bank of India Act) 
Non-banking 
financial 
companies 
(NBFCs) 12,409q 11,922r Registered under the 
Companies Act 1956 to 
provide loans and advances, 
acquisition of 
shares/stock/bonds/debentu
res/securities issued by the 
Government or local 
authorities or other 
securities of like marketable 
nature, leasing, 
hire-purchase, insurance 
business, and chit businesse; 
non-banking institutions 
whose main business is to 
receive deposits defined as 
NBFCs (residuary 
non-banking company); 
NBFCs are governed by the 
RBI Act 1934 (with the RBI 
as regulator); NBFCs 
classified as assent finance 
companies (AFCs)f, 
investment companies, loan 
companies, and 
infrastructure finance 
companies (IFCs)g; 
Systematically Important 
Core Investment Company 
(CIC-ND-SI)k; NBFCs-
Factorsl; NBFC-MFI (Micro 
Finance Institution)m; 
Infrastructure Debt Fund 
(IDF)n;  
Mortgage Guarantee 
Companies (MGC)o; and 
Non-operative Financial 
Holding Company (NOFHC)p. Under RBI Act 
1934 (Section 
45-IA), must 
register with the 
RBI to start or 
carry on any 
business of NBFC 
as defined in the 
RBI Act 1934 
(Section 45-I, 
clause (a)), and 
must have 
minimum net 
owned fund of 
Rs 20 million; to 
prevent dual 
regulation, certain 
NBFCs categories, 
regulated by 
other regulators, 
are exempt from 
the registration 
requirementh FDI allowed up to 
100% of the 
paid-up capital, 
subject to 
minimum 
capitalization 
norms: (i) foreign 
equity ≤ 51%, 
US$0.5 million 
minimum 
capitalization 
requirement; 
(ii) foreign equity 
> 51% but ≤ 
75%, it is US$5 
million; 
(iii) foreign equity 
> 75%, it is 
US$50 million; 
can set up step 
down subsidiaries 
for specific NBFC 
activities, without 
any restriction on 
the number of 
operating 
subsidiaries and 
without bringing 
in additional 
capital.  
Primary 
dealers (PDs)  17i  18j System of PDs in 
Government securities (G-Sec) market, comprising independent entities undertaking PD activity; expected to play an active role in the G-Sec market (primary and secondary market segments); required to support auctions for issue of Government dated 
securities and treasury bills 
as per the minimum norms prescribed by the RBI from time to time; stand-alone PDs registered as NBFCs under the RBI Act 1934 (Section 45-IA); their operations regulated by RBI guidelines issued from time to time; banks' PD activities governed by guidelines issued by the RBI  Non-bank 
applicant must have net owned funds (NOFs) of at least Rs 1.5 billion; a PD undertaking other permissible activities must have NOFs of at least Rs 2.5 
billion; banks may 
undertake PD business departmentally subject to: (i) minimum NOF of Rs 10 billion; (ii) minimum CRAR of 9%; and (iii) net NPAs of less than 3% and a profit-making record for the last three years  Subsidiaries or 
joint-ventures set up by entities incorporated abroad need approval of the Foreign Investment Promotion Board for PD activities  
.. Not available. WT/TPR/S/313/Rev.1 • India 
 
- 167 - 
 
  a Includes the State bank of India and associates, nationalized banks, foreign banks, and private sector 
banks. 
b The State Bank of Hyderabad is governed by the State Bank of Hyderabad Act 1956. c Accepting for the purpose of lending or investment of deposits of money from  the public, repayable on 
demand or otherwise and withdrawable by cheque, draft or order or otherwise.  
d FDI, foreign institutional investors, and non-resident Indians. e NBFCs do not include institutions wh ose principal business is that of ag riculture or industrial activities, 
and sale/purchase/construction of immovable property. 
f AFCs are financial institutions. Their principal busi ness is the financing of ph ysical assets supporting 
productive/economic activity (e.g. automobiles, tractors, later machines, generator sets, earth-moving, and material handling equipment)  moving on own power and general purpose is 
defined as aggregate of financing re al/physical assets supporting economic activity and income arising 
therefrom is not less than 60% of total assets and total income, respectively. 
g IFCs are non-deposit-taking NBFCs that fulfil the following criteria: (i) at least 75% of the total assets 
should be deployed in infrastructure loans, as stipulated in the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007 (Para 2(viii)); (ii) minimum net owned funds of Rs 3 billion; (iii) minimum credit rati ng "A" or equivalent of CRISIL, 
FITCH, CARE, ICRA or equivalent rating by other accrediting rating agencies ; and (iv) CRAR of 15% 
(with minimum tier I capital of 10%). 
h Venture capital fund, merchant banking companie s, stock-broking companies registered with the 
Securities and Exchange Board of India, insurance companies holding a valid certificate of registration issued by IRDA, Nidhi companies as notified un der the Companies Act 1956 (Section 60A), chit 
companies as defined under the Chit Funds Act 1982 (Section 2, clause (b)) or housing finance 
companies regulated by the National Housing Bank.  
i Of which, 8 stand-alone PDs and 9 bank PDs. j Of which, 7 stand-alone PDs and 11 bank PDs. k CIC-ND-SI is an NBFC carrying on the business of acquisition of shares and securities which satisfies 
the following conditions: (a) it holds not less than 90% of its total assets in the form of investment in equity shares, preference shares, debt or loans in group companies; (b) its investments in the equity 
shares (including instruments compulsorily conver tible into equity shares within a period not 
exceeding 10 years from the date of issue) in grou p companies constitutes not less than 60% of its 
total assets; (c) it does not trade in its investments in shares, debt or loans in group companies except through block sale for the purpose of diluti on or disinvestment; (d) it does not carry on any 
other financial activity referred to in Section 45I (c) and 45I(f) of the RBI act 1934 except investment 
in bank deposits, money market in struments, government securities, loans to and investments in debt 
issuances of group companies or guarantees issued on  behalf of group companies; (e) its asset size is 
Rs 1 billion or above; and (f) it accepts public funds. 
l NBFC-Factor is a non-deposit taking  NBFC engaged in the principal business of factoring. The financial 
assets in the factoring business should constitute at least 50% of its total assets and its income derived from factoring business should not be less than 50% of its gross income. 
m NBFC-MFI is a non-deposit taking NBFC having no t less than 85% of its assets in the nature of 
qualifying assets which satisfy the following criteria : (a) loan disbursed by an NBFC-MFI to a borrower 
with a rural household annual income not exceed ing Rs 60,000 or urban and semi-urban household 
income not exceeding Rs 120,000; loan amount does not exceed Rs 35,000 in the first cycle and Rs 50,000 in subsequent cycles; total indebtedness of the borrower does not exceed Rs 50,000; tenure of the loan not to be less than 24 months for loan amount in excess of Rs 15,000 with 
prepayment without penalty; loan to be extended without collateral;  aggregate amount of loans, 
given for income generation, is not less than 70% of the total loans given by the MFIs; and loan is repayable on weekly, fortnightly or monthly instalments at the choice of the borrower. 
n IDF-NBFC is a company registered as NBFC to facilitate the flow of long term debt into infrastructure 
projects. An IDF-NBFC raises resources through issu e of rupee or U.S. dollar denominated bonds of 
minimum 5-year maturity. Only Infrastructure Finance Companies (IFC) can sponsor IDF-NBFCs.  
o MGC are financial institutions for which at least 90% of the business turnover is mortgage guarantee 
business or at least 90% of the gross income is  from mortgage guarantee business and net owned 
fund is Rs 1 billion. 
p Non-Operative Financial Holding Company (NOFHC) is financial institution through which a promoter 
or promoter groups will be permitted to set up a new bank. It is a wholly-owned Non-Operative Financial Holding Company (NOFHC), which will hold the bank as well as all other financial services companies regulated by RBI or other financial sector regulators, to the extent permissible under the applicable regulatory prescriptions. 
q As on June 2011. r As on November 2014. 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. WT/TPR/S/313/Rev.1 • India 
 
- 168 - 
 
  Table A4. 3 Telecom licensing regimes, 2014  
Financial requirement Obligation Fee 
Unified access service (UAS) for fixed and mobile telephony  
Financial bank guarantee 
(Rs 20-440 million) and 
performance bank guarantee 
(Rs 100-2,200 million)  Minimum 10% District Head 
Quarter/Towns coverage during 
the first year and 50% within 
three years in urban areasa; and 
up to 30% Block head Quarters in 
5 year Application processing fee 
(Rs 50,000), one-time entry fee 
(Rs 5 million-Rs 150 billion), and 
annual fee (8% of adjusted gross 
revenue)b  
National long-distance  
Financial bank guarantee 
(Rs 50 million); and minimum 
net worth and paid-up equity 
capital (Rs 25 million)  Interconnection to international 
long-distance service providers Application processing fee 
(Rs 50,000), one-time entry fee 
(Rs 25 million), and annual fee (8% 
of the adjusted gross revenue) 
International long-distance  
Financial bank guarantee 
(Rs 50 million); and minimum 
net worth and paid-up equity 
capital (Rs 25 million)  Interconnection to national 
long-distance service provider Application processing fee 
(Rs 50,000), one-time entry fee 
(Rs 25 million), and annual fee (8% 
of adjusted gross revenue) 
Internet service providersc 
Category A  
Financial bank guarantee 
(Rs 1 million) and performance bank guarantee (Rs 20 million) n.a. Application processing fee 
(Rs 50,000), one-time entry fee (Rs 3 million), and annual fee (8% of adjusted gross revenue 
Category B 
Financial bank guarantee (Rs 100,000) and performance bank guarantee (Rs 1 million) n.a. Application processing fee 
(Rs 15,000), one-time entry fee
c 
(Rs 2 million), and annual fee (8% of adjusted gross revenue 
Category C   
Financial bank guarantee 
(Rs 10,000) and performance 
bank guarantee (Rs 50,000) n.a. Application processing fee 
(Rs 10,000), one-time entry feec 
(Rs 20,000), and annual fee (8% of adjusted gross revenue 
Infrastructure providers 
Category Id 
n.a. n.a. Application processing fee (Rs 5,000) 
n.a. Not applicable.  
a No coverage requirement in rural areas.  
b Since 1 October 2008, operators providing fixed telecom services in rural areas are exempt from the 
annual fee. 
c Internet service providers with net worth of Rs 1 billion are allowed to provide internet protocol 
television service (at present, two providers).  
d Lease/rent out/sell dark fibre, right of way, duct space, and tower to telecom service providers.  
Note: The financial bank guarantee ensures the payment of charges/fees  by the Government, 
e.g. spectrum charges and licens ing fees. The performance bank gu arantee ensures that providers 
meet their roll-out obligations. Th e validity of all licences above is 20 years, renewable for 10 years.  
Source: Department of Telecommunications online information. Viewed at: 
http://www.dot.gov.in/sites/default/files/amended%20%20UL%20guidelines.pdf ; and information 
provided by the Indian authorities.  WT/TPR/S/313/Rev.1 • India 
 
- 169 - 
 
  Table A4. 4 IMO Conventions and pr otocols ratified by India, 2014  
IMO Conventions ratified by India 
Name of convention 
Convention on the International Mariti me Organization (IMO Convention) 1948 
International Convention for the Safety of Life at Sea (SOLAS Convention) 1974 
International Convention of Load line (Load Lines Convention) 1966 
International Convention on Tonnage Measurement of ships (Tonnage Convention) 1969 
Convention of the International Regulations for Pr eventing Collisions at Sea (COLREG Convention) 1972 
International Convention for Safe containers (CSC Convention) 1972 
International Convention on Standards of Training Certification and Watch-keeping for seafarers (STCW 
Convention) 1978 
International Convention on Maritime Search and Rescue (SAR Convention) 1979 
Convention on the International Maritime Satellite Organization (IMSO Convention) 1976 
Convention on Facilitation of International Maritime Traffic (Facilitation convention) 1965 
International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties 
(Intervention Convention) 1969 
Convention on limitation of liability for Maritime Claims (LLMC Convention) 1976 
Convention for suppression of Unlawful Acts against the Safety of Maritime Navigation (SUA Convention) 
1988 
International Convention on Salvage (Salvage Convention) 1989 
International Convention on Oil Pollution Preparedne ss response and cooperation (OPRC Convention) 1990  
Nairobi International Convention on the Removal of Wrecks (Nairobi Convention) 2007  
International Convention for the Prevention of Pollution From Ships (MARPOL) 1973, 1978 
Protocol to the International Convention on Civil Liability for Oil Pollution Damage (CLC Convention) 1969 
(now denounced) 
International Convention on the Establishment of an International Fund for Comp ensation for Oil Pollution 
Damage (Fund Convention) 1971 
Protocols ratified by India 
Name of the Protocol 
Protocol of 1978 relating to the International Convention for Safety of Life at Sea of 1 November 1974 
(SOLAS Protocol) 1978 
Protocol of 1988 relating to the Inte rnational Convention for Safety of Life at Sea (SOLAS Protocol) 1988 
Protocol of 1988 Relating to the International Convention of Load Lines 1966 (Load Lines Protocol 1988) 
Protocol on Space Requirements for Special Trade Passenger Ships (STP Protocol) 1973 
MARPOL Protocol 1997 (Annex VI) 
CLC Protocol 1976 
CLC Protocol 1992 
Fund Protocol 1976 
Fund Protocol 1992 
LLMC Protocol 1996 
SUA Protocol 1988 
Agreement ratified by India 
Name of agreement 
Special Trade Passenger Ships Agreement (STP) 1971 
Operating agreement ratified by India 
Name of operating agreement 
Operating Agreement on the International Mobile Sa tellite Organization (IMMA RSAT) 1976 (as amended) 
Source: WTO Secretariat, based on informat ion provided by the Indian authorities. WT/TPR/S/313/Rev.1 • India 
 
- 170 - 
 
  Table A4. 5 Air service agreements concluded by India, 2014  
Name of trading partner Date of signing of agreements 
Afghanistan 26 January 1952 
Algeria 26 June 2000 
Armenia 5 December 2000 
Australia 6 March 2006 
Austria 26 October 1989 
Azerbaijan 16 April 2012 
Bahrain 5 April 2000 
Bangladesh 5 May 1978 
Barbadosa 1 July 2010 
Belarus 28 September 1997 
Belgium 6 April 1967 
Bhutan 22 December 2009 
Bosnia and Herzegovina 21 May 2010 
Brazil 8 March 2011 
Brunei 6 November 1995 
Bulgaria 16 June 1992 
Cambodia 9 April 2002 
Canada 20 July 1982 
Chile 21 April 2008 
China 22 December 1988 
Croatia 12 September 2000 
Cyprus 18 December 2000 
Czech Republic 16 October 1997 
Denmark 19 December 1995 
Djibouti 19 May 2003 
Egypt 9 April 1997 
Ethiopia 3 August 1967 
Fiji 28 January 1974 
Finland 18 July 1995 
France 16 July 1947 
Georgia 4 November 1997 
Germany 31 May 1963 
Ghana 25 January 1978 
Hong Kong, China 10 October 1996 
Hungary 23 February 1966 
Iceland 14 January 2010 
Indonesia 25 January 2011 
Iran 9 July 2010 
Iraq 27 July 1955 
Ireland 20 February 1991 
Israel 4 April 1994 
Italy 16 July 1959 
Japan 26 November 1955 
Jordan 16 October 1989 
Kazakhstan 10 September 1993 
Kenyaa 30 September 2009 
Kuwait 4 January 1989 
Kyrgyzstan 8 September 1993 
Latvia 20 October 1997 
Lebanon 19 September 1964 
Lesotho 16 September 1992 
Lithuania 20 February 2001 
Luxembourg 8 January 2001 
Macao, China 11 February 1998 
Madagascar 6 October 2010 
Malaysia 22 May 1974 
Maldives 24 December 2008 
Malta 5 October 1998 
Mauritius 28 January 1972 
Mongolia 30 November 1998 
Mexico 17 April 2008 
Moroccoa 11 December 1996 
Myanmar 28 May 2012 
Nepal 16 February 2010 
Netherlands 24 May 1951 
New Zealand 26 August 1997 
Nigeria 31 January 1978 WT/TPR/S/313/Rev.1 • India 
 
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  Name of trading partner Date of signing of agreements 
Norway 19 December 1995 
Oman 31 May 1995 
Pakistan 16 July 1976 
Philippines 20 October 1949 
Poland 25 January 1977 
Portugal 6 February 1997 
Qatar 14 April 2005 
Rwandaa 1 July 2010 
Republic of Korea 16 March 1992 
Russian Federation 21 December 1998 
Romania 4 December 1993 
Saudi Arabia 26 April 1973 
Senegala 2 July 2010 
Seychelles 30 October 1978 
Singapore 23 January 1968 
Slovakia 9 October 1996 
Slovenia 16 February 2004 
South Africa 4 June 2010 
Spain 10 April 1987 
Sri Lanka 21 December 1948 
Sweden 19 December 1995 
Switzerland 2 May 2001 
Chinese Taipei .. 
Tajikistan 10 May 2001 
Tanzania 29 September 1982 
Thailand 19 December 1969 
Trinidad and Tobago 6 January 2012 
Tunisia 8 February 2007 
Turkey 10 April 1986 
Turkmenistan 14 September 1993 
United Arab Emirates 7 January 2014 
United Kingdom 8 September 2005 
Uganda 5 October 1997 
Ukraine 7 July 1995 
United States 14 April 2005 
Uzbekistan 24 May 1993 
Viet Nam November 2013 
Yemen 20 July 1999 
Yugoslaviaa 31 January 2001 
Zambia 15 November 1993 
Zimbabwe 19 June 2014 
.. Not available. 
a Initialled. Source: WTO Secretariat, based on informat ion provided by the Indian authorities. 
__________