INDIA – EXPORT RELATED MEASURES NOTIFICATION OF AN APPEAL BY INDIA UNDER ARTICLE 16.4 AND ARTICLE 17 OF THE UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES (DSU), AND UNDER RULE 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW
Document: THE WORKING PROCEDURES FOR APPELLATE REVIEW
Date: 22 November 2019
Document codes: WT/DS541/7
Complainant: U.S.
Respondent: India
Third parties: Brazil, Canada, China, Egypt, EU, Japan, Kazakhstan, South Korea, Russia, Sri Lanka, Taiwan, Thailand
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. 3.1(a), 3.2  Subsidies and Countervailing Measures (SCM)

INDIA – EXPORT RELATED MEASURES
NOTIFICATION OF AN APPEAL BY INDIA UNDER ARTICLE 16.4 AND ARTICLE 17 OF
THE UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE
SETTLEMENT OF DISPUTES (DSU), AND UNDER RULE 20(1) OF
THE WORKING PROCEDURES FOR APPELLATE REVIEW
The following communication, dated 1 9 November 2019, from the delegation of India, is being
circulated to Members.

Report:1
a. The Panel has irrevocably violated India 's due process rights in the facts and
 circumstances of this case and has failed to fulfill its mandate under the DSU
3. India considers that the Panel has violated India 's due process right and violated its duty to
conduct an objective assessment of the matter under Article 11 of the DSU by refusing to hold a
second substantive meeting.2 In not holding a second substantive meeting, the Panel ha s erred in:
(a) its provision of special and differential treatment to India in the context of Article 12.10 of the
DSU: (b) disregarding India 's due process rights guaranteed by the DSU based on resource
constraints on the part of the Secretariat; (c) fai ling to provide any rationale for its decision to not
hold a Second Substantive Meeting, and alternatively even if rationale was provided, failing to
provide a rationale relevant to the applicable legal standard. India submits that (d) that the resulting
violation of due process goes to the heart of the procedure implemented by the Panel and critically
affects the credibility of the Report.
4. India notes that the Panel's failure to perform its duties at different stages of the proceeding
have irrevocably compromised the credibility of the Panel Report. Consequently, India requests for
the Appellate Body to declare the entire Report moot and of no legal effect.

1 Pursuant to Rule 20(2)(d)(iii) of the Working Procedures for Appellate Review, this Notice of Appeal
includes an indicative list of the paragraphs of the Panel Report containing the alleged errors, without prejudice
to India's right to refer to other paragraphs of the Panel Report in the context of its appeal.
2 Panel Report, Annex D-1, paras. 2.19-2.21. Panel Report, para. 1.14-1.15.

b. The Panel has erred in finding that the Panel Request made by the
United States has met the stand ard provided in Article 6.2 of the DSU, and
erred in finding that the list of legal instruments met the standard of available
evidence under Article 4.2 of the SCM Agreement
5. India appeals the finding of the Panel that the request for the establishment of a panel made
by the United States in WT/DS541/4 identified the 'specific' measures at issue in this dispute. India
states that the Panel did not make an objective assessment of the matter, and did not apply the
correct legal standard in determining whether the United States ' Panel Request was specific. The
Panel has also erred in considering that the identical list of legal instruments was sufficient to identify
the specific measures at issue under Article 6.2 of the DSU and met the requisite standard of
available evidence as per Article 4.2 of the SCM Agreement.
6. India requests the Appellate Body to reverse the Panel 's findings that the Request for
Establishment of a Panel by the United States in WT/DS541/4 met the standards of Article 6.2 of
the DSU.3
c. The Panel has erred in its interpretation of Article 27.2(b) of the
SCM Agreement as applicable to developing country members graduating from
Annex VII(b) of the SCM Agreement
7. India challenges the interpretation of Article 27.2(b) and Annex VII of the SCM Agreement, as
developed by the Panel. India submits that the Panel has erred in finding that Article 27.2(b) of the
SCM Agreement does not apply to developing country members graduating from Annex VII(b). 4
India also submits that the interpretation developed by the Panel is contrary to the general principles
of treaty interpretation and that the interpretation developed by the Panel results in ambiguity and
inconsistency between the provisions of Article 27 of the SCM Agreement. 5 The interpretation
developed by the Panel renders express words of Annex VII(b) ineffective6 and runs contrary to the
object and purpose of the SCM Agreement; 7 and denies the rights granted to developing country
members by Annex VII(b) of the SCM Agreement.8
8. Consequently, India requests the Appellate Body to reverse the Panel 's findings that
Article 27.2(b) of the SCM Agreement does not apply to developing count ry members graduating
from Annex VII(b),9 and find that developing country members graduating from Annex VII(b) are
entitled to an eight-year phase-out period for eliminating their export subsidies.
d. India appeals the legal standard for footnote 1, as d eveloped and applied by
the Panel
9. India appeals the legal standard developed by the Panel under footnote 1 of the
SCM Agreement, and submits that the Panel erred in (a) not evaluating all conditions of footnote 1
while evaluating its applicability, and (b ) finding that the application of Part II of Annex II is not
irrelevant outside countervailing duty investigations.10
10. India requests the Appellate Body to find that the legal standard as developed by the Panel
for footnote 1 of the SCM Agreement is incorrect and that Part II of Annex II can be applied only in
countervailing duty investigations.

3 Panel Report, Annex D-2, inter alia paras. 2.44, 2.54, 2.67, 2.81, 2.99 and 2.126. Panel Report, paras
7.122, 7.123, and 7.130.
4 Panel Report, paras. 7.40, 7.45, 7.53.
5 Panel Report, paras. 7.60, 7.61, 7.62, 7.63, 7.64.
6 Panel Report, paras. 7.46, 7.47, 7.48.
7 Panel Report, paras. 7.65, 7.66, 7.67, 7.68.
8 Panel Report, paras. 7.49, 7.50, 7.51, 7.52.
9 Panel Report, paras. 7.69, 7.72, 7.73, 7.74.
10 Panel Report, para. 7.182.

e. The panel has erred in finding that the exemption from Customs Duties on
Importation under the EOU/EHTP/BTP Schemes are subsidies contingent on
export performanc e, inconsistent with Articles 3.1(a) and 3.2 of the
SCM Agreement
11. India appeals the said findings and conclusions arrived at by the Panel, that the EOU Scheme
did not meet the requirements of footnote 1 of the SCM Agreement, and that the "Excessive
Remission Principle " is not applicable in the case of the exemption from customs duties on
importation under the EOU/EHTP/BTP Schemes. The Panel failed to carry out an objective
assessment of the scheme. India also appeals the Panel 's finding on the following grounds: (a) the
Panel erred in finding the exemption from customs duties under the EOU/EHTP/BTP Schemes does
not fall within the ambit of footnote 1 of the SCM Agreement;11 (b) the Panel has erred by applying
incorrect legal standards to find that the exempt ion from customs duty under the EOU/EHTP/BTP
Schemes is a subsidy; (c) the Panel has applied incorrect legal test, namely, the 'three-step test'
and 'better off' test,12 and (d) the Panel has incorrectly found that the exemption from custom duties
on importation under EOU/EHTP/BTP Schemes is contingent on export performance.13
12. India requests the Appellate Body to reverse the Panel 's findings that the exemption from
customs duties on importation under the EOU/EHTP/BTP Schemes are subsidies contingent upon
export performance, inconsistent with Articles 3.1(a) and 3.2 of the SCM Agreement, and find that
EOU Scheme falls within the ambit of footnote 1, and if any additional duty is exempted under the
scheme, needs to be evaluated in accordance to the excess remission principle.14
f. The Panel has erred in finding that the exemption from customs duties on the
importation of capital goods under the EPCG Scheme are subsidies contingent
on export performance, inconsistent with Articles 3.1(a) and 3.2 of the
SCM Agreement
13. India appeals the Panel 's findings that the EPCG Scheme provides subsidies contingent on
export performance. India states that the Panel has erred in (a) finding that footnote 61 provides
an exhaustive list of inputs; 15 (b) in finding that Capital Go ods are not "consumed" while
manufacturing exported products;16 and (c) in disregarding India's argument that Capital Goods can
be allowed as inputs as per Destination Principle embedded in Article VI:4 of GATT, Annex I to III of
SCM Agreement and Ad Article XVI of GATT 96. The Panel erred in finding that "Capital Goods"
cannot be considered as inputs consumed in the manufacture of exported product, and consequently,
erred in holding that the exemption from customs duties on the importation of capital goods under
the EPCG Scheme does not meet the requirements of footnote 1 of the SCM Agreement.17
14. India requests the Appellate Body to reverse the Panel 's findings that the exemption from
customs duties on importation under the EPCG Scheme is a subsidy contingent upon export
performance, inconsistent with Articles 3.1(a) and 3.2 of the SCM Agreement, as the Panel erred in
not accepting India 's arguments that capital goods are inputs consumed, and hold that the
exemption from custom duties on importation under the EPCG Scheme meets the requirements of
footnote 1 of the SCM Agreement.18
g. The Panel erred by finding that the MEIS Scheme grants subsidies contingent
upon export performance, inconsistent with Articles 3.1(a) and 3.2 of the
SCM Agreement
15. India states that the Panel erred in finding that MEIS grants subsidies contingent upon export
performance, inconsistent with Articles 3.1(a) and 3.2 of the SCM Agreement :(a) in finding that
MEIS scrips do not meet the conditions of footnote 1; 19 and (b) in concluding that MEIS involves a

11 Panel Report, para. 7.216.
12 Panel Report, para. 7.310.
13 Panel Report, para. 7.498.
14 Panel Report, paras. 7.215, 7.216, 7.236 (first sentence), 7.326-7.327, 7.498, and 8.1(a).
15 Panel Report, para. 7.200.
16 Panel Report, para. 7.243.
17 Panel Report, para. 7.247.
18 Panel Report, paras. 7.247, 7.341, 7.458, 7.512 and 8(b).
19 Panel Report, paras. 7.289, 7.294,

direct transfer of funds. 20 India also appeals the Panels ' finding that the ME IS scrips result in
conferral of a benefit as per Article 1 of the SCM Agreement.
16. India requests the Appellate Body to reverse the findings of the Panel on the grounds stated
above and find that the MEIS falls within the ambit of footnote 1 and therefore is not a prohibited
export subsidy under Article 3.1(a) and 3.2 of the SCM Agreement.21
h. The Panel has erred in finding that the SEZ Scheme is a prohibited export
subsidy under Articles 3.1(a) and 3.2 of the SCM Agreement
17. India appeals the findings of the Panel that the SEZ Scheme is a subsidy contingent on export
performance. India states that the Panel failed to carry out an objective assessment of the scope of
the term "exports" under the SEZ Scheme. 22 India also states that the Panel failed to make an
objective assessment of the positive NFE requirement under the SEZ Scheme 23 to find the positive
NFE requirement under the SEZ Scheme imposes a condition of de jure export contingency on
SEZ Units. Further, India submits that the Panel erred in applying the test of de jure export
contingency to the SEZ Scheme. 24
18. India requests the Appellate Body to reverse the findings of the Panel on the grounds stated
above and find that the SEZ Scheme is not a prohibited export subsidy under Article 3.1 and 3.2 of
the SCM Agreement.25
i. The Panel has erred in finding that Conditions 10, 21, 36, 60(II) & 61 in
Customs Notification 50/2017 are subsidies contingent on export
performance, inconsistent with Articles 3.1(a) and 3.2 of the SCM Agreement
19. India considers that the Panel has not objectively assessed Conditions 10, 21, 36, 60(ii) and
61 of DFIE Scheme. India appeals the finding of the Panel on the following grounds: (a) the Panel
has not objectively assessed the applicability of evidence submitted by the United State s for
one product under Condition 10 (US Exhibit 90);26 (b) the Panel has erred in considering that items
imported duty free under Condition 60(ii) and 6 items imported under Condition 21 are goods not
used in the production of exported products; 27 (c) The P anel has erred in applying the
three-step test, specifically for Condition 36 28 (d) the Panel erred in finding export contingency for
importation of research equipment under condition 61 of the DFIE Scheme.29
20. In this appeal, India requests the Appellate Body to reverse the Panel 's findings that
Conditions 10, 21, 36, 60(ii) & 61 in the DFIE Scheme are subsidies contingent on export
performance, inconsistent with Articles 3.1(a) and 3.2 of the SCM Agreement.30
21. India notes that the above grounds of appeal are wi thout prejudice to the arguments
developed in India's Appellant's Submission.