WORLD TRADE  
ORGANIZATION   
G/STR/Q1/IND/4 
18 July 2011 
 (11-3576) 
Working Party on 
State Trading Enterprises Original:   English 
 
 
 
STATE TRADING 
 
Replies to Questions Posed by AUSTRALIA1 Concerning  
the New and Full Article XVII Notification of INDIA2 
   The following communication, dated 5 July 2011, is being circulated at the request of the delegation of India.    
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Overdue notifications 
 
Question 1 
 
 Australia welcomes India's notifications covering the period 2001/02-2005/06.  Australia 
notes that the notifications for the period 2006/ 07 to date are still outstanding.  Could India 
please indicate when it intends to submit these ou tstanding notifications?  We would be grateful 
if India could observe "best practice" and provide its response in writing.   
 Reply 
 
 India thanks Australia for the question on its no tification obligation.  We would like to inform 
that the process of validation and compilation of th e information required for the notifications is 
ongoing.  Efforts are being made to file the notification at the earliest possible juncture.   Review of new and full notifications submitted by Members 
 India G/STR/N/8, G/STR/N/9, G/STR/N/10, G/STR/N/11 
 
Question 2  
 Australia welcomes India's notification covering the period 2001/02-2005/06.   
  Section 3 of India's notification describes the functioning of its state trading enterprises.  
Subsection E, covering imports, states that Indi a's STEs sell agricultural goods at prices lower 
than their purchase prices.  
Could India provide further details to explain how agricultural goods imported by the 
STEs are resold on the domestic market  "based on commercial considerations"? 
                                                      
1 G/STR/Q1/IND/3. 
2 G/STR/N/8/IND-G/STR/N/9/IDN-G/ STR/N/10/IND-G/STR/N/11/IND. G/STR/Q1/IND/4 
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India's notification states that bulk importer s "are able to negotiate fairly competitive 
rates".  Could India explain how?  
Reply 
 
 As mentioned in the notification, imported goods are sold on the domestic market at prices determined by the market forces of demand and supply.  
Question 3 
 
 Australia notes that Food Corporation of India (FCI) administers the purchase and 
distribution of certain agricultural products for the purposes such as food security.  
How does India determine the price offered  for the purchase of agricultural goods 
intended for such purposes? 
  In India's notification Australia notes that the Food Corporation of India also administers the imports of certain agricultural products.  
 Could India provide more specific informat ion regarding how the Food Corporation of 
India administers the imports of goods, including any role in the administration of its 
agricultural tariff quotas? 
 
Reply  
 
 The Government decides on the support pri ces for various agricultural commodities taking 
into account the recommendations of the Commissi on of Agricultural Cost and Prices (CACP), the 
views of state governments and central Ministries as well as other relevant factors.  The Minimum Support Prices are available on the website of th e Department of Agriculture and Cooperation 
(www.agricoop.nic.in). 
 
 The administration of agricultural tariff quotas is done as per procedures in the Handbook of Procedures of the Directorate General of Foreign Trad e, Department of Commerce.  This is available 
on the website of the Directorate Genera l of Foreign Trade (www.dgft.gov.in). 
 
Question 4 
 
 Notification usually indicate those entities authorized to, amongst other things, control 
imports (or exports).  It is not clear, ho wever, which entities are responsible for the 
administration of India's agricultural tariff quota s.  Australia also recalls that India has not 
notified the WTO's Committee on Agriculture to describe the administration of its agricultural 
tariff quotas, nor provided fill rates of tariff quotas for a range of agricultural products. 
 
Could India advise which entities administer India's agricultural imports covered by 
tariff quotas? 
 
 How do these entities administer the imports of such goods, e.g. through first come-first 
served basis, or on historical usage? 
  G/STR/Q1/IND/4 
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   In particular, could India explain which enti ty administers the tariff quotas for products 
set out in WT/Let/440 (including, for example, skim milk powder, corn, crude sunflower and safflower oil, and refined rape, colza, canola and mustard oil)?  
 
 Could India provide further details regarding  the fill rates of the items covered by its 
agricultural tariff quotas?   
Reply 
  The administration of agricultural tariff quotas is done as per procedures in the Handbook of 
Procedures of the Directorate General of Foreign Tr ade, Department of Commerce. This is available 
on the website of the Directorate Genera l of Foreign Trade (www.dgft.gov.in). 
 
 As the subject matter is within the purvie w of the Committee on Agriculture, these details 
will be provided in India's notifications unde r the Agreement on Agriculture.  However, the 
procedures for administration of tariff rate quotas are notified in the aforementioned Handbook of 
Procedures available on www.dgft.gov.in. 
 
Question 5 
 
 In section 1 of India's notification, Australia observes that the State Trading 
Corporation (STC) of India is listed as having import privileges for copra, crude oil and other 
oils derived from coconut and its fractions.  Australia understands that the STC has a role in 
importing a variety of other bulk agricultural goods not listed in this notification, including pulses, wheat, oilseeds and sugar.  
 Could India clarify what the STC's role is in regards to importing other agricultural 
goods beyond those listed under section 1 of its notification? 
 
 Could India clarify whether the special priv ileges granted to the STC also apply to the 
import of these other agricultural goods?  
 Could India clarify the roles of the National Agricultural Cooperative and Marketing 
Federation of India (Ltd), the Minerals a nd Metals Trading Corporation and the Project 
Equipment Commodities Ltd in the im ports of wheat, pulses and oilseeds? 
 
 Could India clarify the role of National  Agricultural Cooperative and Marketing 
Federation of India (Ltd) in the export of cotton?  
Reply 
  From time to time, the Government of I ndia asks the STC to undertake imports of bulk 
commodities like wheat, edible oils, pulses, sugar, fertilizers, etc. to meet domestic shortages. 
 
 The quantum of imports of these items is often decided by the Government.  STC's role in such imports is to ensure easy and timely ava ilability of essential mass consumption items to the 
people of India.  STC tries to arrange these imports at the most competitive ra tes in a transparent and 
efficient manner.  Quantities of the imported goods  are delivered to the nominated agencies of the 
Government of India or State governments for furthe r distribution.  In some cases, imported quantities 
are disposed of in the open market by following transparent procedures.   G/STR/Q1/IND/4 
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   It may be mentioned that all the above menti oned items are freely importable into the country 
by other traders/users also.   STC is also one of about 25 agencies nominated by the Government of India for arranging imports of bullion into the country.  Imports of bu llion are arranged by the STC on a commercial basis 
against firm prior indents received from its clients. 
  As stated above, the main purpose of authorizing STC to undertake imports of bulk agricultural items by the Govt. of India is to ensu re easy and timely availability of these items into the 
country.  STC does not enjoy any special privileges w ith regard to imports of these items since all the 
agricultural items mentioned above are also freely importable into the country.  
  India has had to import about 3-4 million tonnes of pulses in recent years to meet the gap between domestic production and consumption.  Pul ses are the basic source of protein in India and 
hence the Government of India have nomina ted MMTC along with NAFED, PEC, STC and NCCF 
for importing pulses to be given to the State Govern ments for supply through the Public Distribution 
system, mainly for the poor.  Government of I ndia has also allowed MMTC and other companies to 
sell limited quantities of imported pulses in the domestic market to arrest unusual rise in prices which affects the poor population.  In the past three years, the imported quantity has been only about 300,000 tonnes.  
 Import of wheat is not a regular phenomenon and currently import of wheat is not required for 
PDS/subsidized sale through any State Trading Enterprises.   MMTC has not been importing any oil seeds. 
 
 National Agricultural Cooperative and Marketing Federation of India (Ltd) is a cooperative, 
the details of which are available on the website www.nafed-india.com. 
 
 
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