Trade policies and practices by measure introduction


Other charges affecting imports



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Other charges affecting imports


      1. India applies a number of duties and charges on imports, other than tariffs. These include: the additional customs duty, the special additional duty, the education cess and the secondary, higher education cess. Some charges and cesses are also applied on specific products (see below).

      2. The additional customs duty (AD) is aimed at removing or reducing what the Government considers a pro‑import bias resulting from the application of central excise duties to domestically manufactured goods, in accordance with India's trade legislation.53 To this end, the AD rate should be equivalent to the central excise duty, also referred to as Central Value Added Tax (CENVAT), on domestically produced goods of the same tariff classification.54 The general AD rate was 10% in 2010. However, some goods may have lower rates of 4% and 0% and specific or compound rates.55 The rate and its exceptions are defined in each Budget or through subordinate legislation (notifications). The 4% special additional customs duty (SAD) continues to be imposed on imports, with few exceptions (14.8% of all tariff lines)56, to partially compensate for the sales tax, state value‑added tax, local tax or any other charges leviable on a like article on its sale, purchase or transportation in India.57 However, as the SAD is an across‑the‑board tax applied at a flat rate on most goods, it may not always be equivalent to local sales taxes on similar domestically produced goods, which may be higher or lower. The SAD paid on imports subsequently sold within India and for which the importer has paid state‑level value‑added taxes, may be refunded.58 The application of the AD and SAD was the subject of a dispute in the WTO in 2007.59

      3. Since 2004, an education cess has been charged on imports at the rate of 2% on all aggregate customs duties (excluding safeguard, countervailing or anti‑dumping duties if applicable).60 The secondary and higher education cess of 1%, which entered into force through the Finance Bill of 2007, is also levied on all imports. This cess is calculated on the aggregate value of all excise duties (including the additional and the special duties or any other duty or excise), but excluding the education cess and safeguard, countervailing or an anti‑dumping duty if applicable.

      4. Calculation of all charges applied imports including landing charges, the effective customs duty, the additional customs duty, the special additional customs duty, and the education cess show an average protection of 25.6% compared to 12% (Table III.8). The authorities noted that some of these charges are "in lieu" of domestic taxes.

Table III.8

Summary analysis of India's imports charges, 2010/11




No. of
lines


Effective applied rates
(MFN)


Total duty rate, incl. extra chargesa

Average (%)

Range (%)

Average (%)

Range (%)

Total

11,328

12.0

0‑150

25.6

0‑527.4

HS 01‑24

1,433

35.1

0‑150

42.6

0‑527.4

HS 05‑97

9,895

8.6

0‑70

23.1

0‑107.1

By WTO definition
















Agricultural products

1,431

33.2

0‑150

41.8

0‑527.4

Animals and products thereof

106

30.8

5‑100

36.4

9.4‑111.1

Dairy products

32

34.4

30‑60

39.7

30.9‑68.3

Fruit, vegetables, and plants

355

27.6

0‑100

33.9

0‑111.1

Coffee and tea

75

74.7

26.9‑100

87.8

36.1‑111.1

Cereals and preparations

137

30.4

0‑90

39.1

0‑192.6

Oils seeds, fats, oil, and their products

196

18.5

0‑100

23.0

0‑103

Sugars and confectionary

38

33.4

10‑60

51.8

10.3‑85.9

Beverages, spirits, and tobacco

123

78.7

7.5‑150

98.0

23.9‑527.4

Cotton

11

5.5

0‑30

7.3

0‑36.1

Other agricultural products, n.e.s.

358

25.1

0‑70

33.5

0‑79

Non‑agricultural products (incl. petroleum)

9,897

8.9

0‑70

23.2

0‑107.1

Non‑agricultural products (excl. petroleum)

9,879

8.9

0‑70

23.3

0‑107.1

Fish and fishery products

176

29.5

5‑30

34.1

5.2‑36.1

Minerals and metals

1,912

7.1

0‑10

21.0

0‑31.7

Chemicals and photographic supplies

2,471

8.1

0‑10

23.6

0‑26.8

Wood, pulp, paper, and furniture

495

9.2

0‑10

21.1

0‑26.8

Textiles

1,555

9.6

5‑10

23.5

9.4‑26.8

Clothing

397

10.0

10‑10

22.0

15‑26.8

Leather, rubber, footwear, travel goods

322

10.2

0‑70

25.2

0‑79

Non‑electric machinery

1,094

7.1

0‑10

22.4

0‑26.8

Table III.8 (cont'd)

Electric machinery

537

6.7

0‑10

22.7

0‑26.8

Transport equipment

244

21.5

0‑60

40.4

0‑107.1

Non‑agricultural products, n.e.s.

676

8.6

0‑10

22.1

0‑26.8

Petroleum

18

8.2

0‑10

9.0

5‑10.3

By sectorb
















Agriculture, forestry and fisheries

621

28.8

0‑100

36.4

0‑111.1

Mining

232

5.1

0‑10

9.1

0‑25.6

Manufacturing

10,474

11.1

0‑150

25.3

0‑527.4

Manufacturing excluding food processing

9,605

8.8

0‑60

23.6

0‑107.1

a Calculation for averages with extra charges include landing charges, effective custom duty, additional duty, special additional duty, and education cess.

b 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 Secretariat calculations, based on data provided by the Indian authorities.

            1. Additional cesses are levied on imports and domestic products for the development of specific industries and are not part of the fiscal revenue (Table AIII.2). The authorities noted that these cesses are charged as part of the excise duty, thus in the case of imports they are part of the additional duty (AD). The stated objective of the authorities is to eliminate the cesses once the Goods and Services Tax is implemented.

            2. Some imports are also subject to specific duties. For instance, imports of high‑speed diesel oil and petrol (i.e. motor spirits) are subject to a fuel cess (previously the additional excise duty or road cess) at a rate of Rs 2 per litre61, to finance the Central Road Fund. (Chapter IV(3)(iv)).62 According to the authorities, this cess is charged as part of the additional duty (AD).

            3. The national calamity contingent duty (NCCD) is levied on pan masala (HS 2106.90.20); some cigarettes and tobacco products (HS 24.02 and 24.03); petroleum oils (HS 2709.00.00); telephones for cellular network or for other wireless networks; and vehicles and motor cycles (HS 8703, 8704, 8706, and 8711).63 The NCCD is both specific and ad valorem, ranges from 1% to 45%, and is also levied on similar domestic products.64

            4. The 2010/11 Budget introduced the "clean energy cess" (Rs 50/tonne) to be levied on coal, lignite, and peat produced in India and imported.65 This cess is to finance the establishment of a National Clean Energy Fund to fund research and innovative projects in clean energy technologies. It is levied on raw coal (HS 2701), raw lignite (HS 2702), and raw peat (HS 2703) at a rate of Rs 50/tonne in addition to any other cess or duties levied on these goods.

            5. The State of Maharashtra levies an entry tax (octroi) on entry of domestic and imported goods to the jurisdiction. The tax is regulated by the Maharashtra Tax on the Entry of Goods into Local Areas Act 2002, and applies currently to various petroleum products, tiles, and air conditioners. Rates range from 10% to 34% according to product. For petroleum products, the rate is mixed (a specific component (Rs 1/litre) is added to the ad valorem rate). Entry taxes are applied in several states.66
      1. Import prohibitions, restrictions, and licensing


            1. Import restrictions may be imposed under Section 3 of the Foreign Trade (Development and Regulation) Act 1992 and through notifications, 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.

            2. In practice, India links the use of import restrictions and licensing, and other non‑tariff measures (NTMs) to domestic policies, for example, by relaxing NTMs when imports are required to alleviate inflation or shortages. The use of NTMs raises the cost of exporting to India and, in some cases, may be equivalent to an import prohibition.
        1. Import prohibitions


            1. Import prohibitions are generally for health and safety reasons and include a range of products from meat and offal of most wild animals, to animal fats, and ivory and ivory powder. During the period under review, certain mobile handsets and mobile phones have been included in the list of prohibited goods (Table III.9). For sanitary reasons, India has continued to ban imports of certain avian livestock and livestock products67; and has prohibited imports of milk and milk products from China since 2008.68 In addition, imports of rough diamonds from Côte d'Ivoire, as well as some products from the Democratic People's Republic of Korea, Iran, and Iraq are prohibited under UN resolutions, as well as imports of rough diamonds (HS 7102.10, 7102.21 or 7102.31) from the Bolivarian Republic of Venezuela under the Kimberly Process Certification Scheme.69 Imports of beef and products containing beef in any form remain prohibited.70

Table III.9

Import prohibitions, 2011

HS No.

Description

Status since 2007

0208.90.10

Other meat and edible meat offal of wild animals, excluding rabbits or hares, primates, whales and dolphins, and reptiles

Unchanged

0209.00.00

Pig fat, free or lean meat, and poultry fat, not rendered or otherwise extracted

Unchanged

0410.00.10

Edible products of wild animal origin

Unchanged

0504.00.31, 0504.00.41
0504.00.51

Gusts, bladders, and stomachs of wild animals

Unchanged

Table III.9 (cont'd)

0505.10.10, 0505.90.21
0505.90.31, 0505.90.91

Feathers, powder, waste, and other parts of feathers, and skins and other parts of wild birds

Unchanged

0511.99.99

Natural sponges

Unchanged

0506.10.11, 0506.10.21
0506.10.31, 0506.10.41
0506.90.11, 0506.90.91

Bones and horn‑cores (crushed and non‑crushed), bone grist, ossein, and bone meal of wild animals

Unchanged

0507.10.10, 0507.10.20

Ivory, and ivory powder and waste

Unchanged

0510.00.91

Wild animal products used in pharmaceutical products, excluding bezoar, ox gallstone, and placenta

Unchanged

0511.91.10, 0511.91.20
0511.91.30, 0511.99.21
0511.99.92

Fish nails and tail, and other fish waste; sinews and tendons of wild animals; and frozen semen (other than bovine embryo) of wild animals

Unchanged

1501.00.00

Pig fats (including lard) and poultry fat, other than that of Headings Nos. 0209 or 1503

Unchanged

1502.00.10, 1502.00.20
1502.00.30, 1502.00. 90

Fats of bovine animals, sheep, or goats, other than those of Heading No. 1503, including mutton tallow and fasts (unrendered, rendered or solvent extraction)

Unchanged

1503.00.00

Lard stearin, lard oil, oleostearin, oleo‑oil, and tallow oil not emulsified or mixed or otherwise prepared

Unchanged

1504.10.99, 1504.20.30, 1504.20.90, 1504.30.00

Fats and oils of fish or marine mammals, excluding cold and squid liver oils; fish lipid oil; sperm oil; and other fats and oils of fish or marine mammals

Unchanged

1506.00.10, 1506.00.90

Neat‑foot oil and fats from bone or waste, and other animal fats and oils

Unchanged

1516.10.00

Animal fat

Unchanged

1517.10.10, 1517.90.30

Margarine (excluding liquid margarine) and imitation of lard of animal origin

Unchanged

1518.00.40

Other vegetable oil and fats, excluding castor oil dehydrated and line seed oil

Unchanged

1522.00.10, 1522.00.20
1522.00.90

Degrasa and soap stocks

Unchanged

3507.10.11, 3507.10.19
3507.10.91, 3507.10.99

Animal rennet

Unchanged

4302.19.20

Tiger‑cat skins

Unchanged

4303.10.10, 4303.90.10

Articles of apparel and clothing accessories of wild animals covered under the Wild Life Protection Act 1972

Unchanged

8517

Mobile handsets without international mobile equipment identity (IMEI) number or with all zeroes IMEI, and CDMAb mobile phones without electrical serial number (ESN)/mobile equipment identifier (MEID) or with all zeroes ESN/MEID

Added

9601.10.00

Worked ivory and articles of ivory

Unchanged

a Residues resulting from the treatment of fatty substances or animal or vegetable waxes.

b CDMA stands for code division multiple access.



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.
        1. Import licensing71


            1. India applies an import licensing system to administer the importation of restricted items. Import licences are administered according to the Foreign Trade (Development and Regulation) Act 1992 and Foreign Trade (Regulation) Rules 1993. Licensing requirements may be eliminated without legislative approval.

            2. The Import Policy Schedule lists the items that are restricted and items that are restricted with a condition.72 Restricted items require a specific import licence issued by the Directorate General of Foreign Trade (DGFT). Restricted items subject to conditions, require import permits (e.g. sanitary and phytosanitary permits), in addition to the specific import licence. It is not clear to the Secretariat which products require an automatic licence and which require a non‑automatic licence.

            3. Under India's current Import Policy Schedule (Foreign Trade Policy 2009‑14), some 422 tariff lines at the HS eight‑digit level are subject to import restrictions (up from some 415 tariff lines in 2007).73 They represent around 3.7% of total tariff lines. Some 275 tariff lines are restricted while some 147 are restricted subject to conditions. Restrictions imposed in 2007 under HS sections 1, 2, 5, 19 (arms and ammunition), and 21 (works of art), remain unchanged (Chart III.3).



            1. All importers holding a valid code number (IEC) may apply for a licence. Applications for import licences are made to the DGFT or to the regional licensing authority of the DGFT. The licensing authority may refer the application to the EXIM Facilitation Committee, which consists of technical authorities, for assistance to approve a licence. The practice of routing licence applications through sponsoring authorities has been dispensed with. The requirements for filing applications for imports licences are published in the Handbook of Procedures.74

            2. Licences are granted on an MFN basis. They are valid for 24 months and may be revalidated for six months by the licensing authority, on merit. Licences are issued with an "actual user condition"75 and are in general non‑transferable.76

            3. Licences are subject to a licence application fee, which varies according to the c.i.f. value of imports.77 At the time of the last Review, fees were 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 100,000. 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 200 and maximum of Rs 50,000.78 Imports by the Central Government, state government or any department/office of the Government are exempt from the application fees, as are imports to be used by educational, charitable or missionary institutions, or for personal use (except vehicles). Fees are not refunded.79

            4. The DGFT or an authorized officer may, in writing, refuse to grant, renew, or suspend a licence to import (or export) on specific grounds (Box III.1). Any of these decisions may be appealed. However, in accordance with Indian legislation, a licence should not be denied if denial is likely to adversely affect trade.80

              Box III.1: Grounds to refuse to grant or to cancel a licence, 2011

              Grounds to refuse to grant a licence:



              • the applicant has contravened any law relating to customs or foreign exchange;

              • the application for the licence does not substantially conform to any provision of the Foreign Trade (Regulation) Rules;

              • the application or any document used to support it contains false, fraudulent or misleading statement;

              • an action against the applicant is pending under the Foreign Trade (Development and Regulation) Act 1992 or rules and orders made there under;

              • the applicant fails to pay any penalty imposed on him under the Act;

              • the applicant has tampered with a licence;

              • the applicant or any agent or employee of the applicant with his consent has been a party to a corrupt or fraudulent practice for the purposes of obtaining any other licence;

              • the applicant is not eligible for a licence if the applicant does not comply with the registration and documentation stipulated in the Export and Import Policy;

              • the applicant fails to produce documents called for by the Director General or the licensing authority;

              • in the case of a licence for import, no foreign exchange is available to import;

              • if it has been decided by the Central Government to import through state trading enterprises and distribution thereof through special or specialized agencies

              Grounds to cancel a licence:

              • the licence has been obtained by fraud, suppression of facts or misrepresentation; or

              • the licensee has committed a breach of any of the conditions of the licence; or

              • the licensee has tampered with the licence in any manner; or

              • the licensee has contravened any law relating to customs or foreign exchange or the rules and regulations relating thereto.

              Source: Foreign Trade (Development and Regulation) Act 1992; Foreign Trade (Regulation) Rules 1993; and WTO documents G/LIC/N/3/IND/9‑11, 3 September 2007‑27 July 2010.

            5. The goods imported under a licence cannot be exported without the written permission of the DGFT.81

            6. Imports of certain goods (24 tariff lines) are subject to import restrictions depending upon their import price (Table III.10). These imports are restricted (i.e. subject to a licence) when the c.i.f. price is lower than the minimum price. Minimum import prices are set taking into account domestic and international prices and quality.82

Table III.10

Items whose import is free, subject to minimum import price, 2010/11

HS code

Description

Minimum import price

0802.90.11
0802.90.12
0802.90.13
0802.90.19

Betel nuts: whole
Betel nuts: split
Betel nuts: ground
Betel nuts: other than above

Rs 35/kg

4012.11.00
4012.12.00
4012.13.00
4012.19.10
4012.19.90

Retreaded tyres, of a kind used on motor cars,
Retreaded tyres: of a kind used buses or lorries
Retreaded tyres: of a kind used on aircraft
Other tyres: for two wheelers
Other tyres

US$175/unit for buses, lorries, bigger size vehicles, and light commercial vehicles
US$25/unit for passenger vehicles

4012.20.10

Used pneumatic tyres: for buses, lorries, and earth moving equipment

US$175/unit

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 monumental stone
Other monumental or building stone
Marble, travertine, and alabaster
Other calcareous stone

US$50/kg

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 blocks 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.
        1. Import quotas


            1. India maintains import quotas for marble and similar stones (HS 2515.11.00, 2515.12.10, 2515.12.20, and 2515.12.90) and for sandalwood (HS 4403.99.22). 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 the criteria stated in the notifications and circulars issued by DGTP on a yearly basis.83 India does not maintain bilateral quotas.

            2. Since the removal of most quantitative restrictions on imports in 2001, a mechanism has been set up to monitor imports of items considered to be sensitive. There are currently some 415 sensitive items, compared with 300 in 2007. Monitored sensitive items include milk and milk products, fruits and vegetables, pulses, poultry, tea and coffee, spices, food grains, edible oils, cotton and silk, marble and granite, automobiles, parts and accessories of motor vehicles, products produced by small‑scale industries, and other products (bamboos, cocoa, copra, and sugar).84

            3. As of 2010, India may impose quantitative restrictions by notification in the Gazette of India, on imports of goods that cause serious injury to domestic industry, as a result of a safeguard investigation (section (viii)).85
        2. Other import restrictions


            1. Imports of certain items, including motor vehicles86, and second‑hand cars (less than three‑year old)87 must be imported through specified ports (Chennai, Kolkata, and Mumbai for new vehicles; and Mumbai for second‑hand cars). Until 2008, imports from Sri Lanka that were subject to preferential tariffs (such as tea and garments) had to be imported through specific ports (Kochi and Kolkata for tea, and Chennai and Mumbai for garments).88
      1. State trading89


            1. State trading is used as a policy tool, to ensure, inter alia: a "fair" return to farmers as well as food security; the supply of fertilizer to farmers; and that the domestic support price system for kerosene and LPG are properly implemented through the importation by a single operator (section (4)(iv)).

            2. India maintains state trading for certain agricultural goods (i.e. some cereals, copra, and coconut oil), urea, and petroleum oils (Table III.11). Seven state‑trading companies (STEs) are authorized by the DGFT to trade in these goods. However, under the Foreign Trade Policy 2009‑14, the DGFT may authorize other companies to import any goods subject to state trading, when STEs are not able to supply the market. The Indian Oil Corporation continues to have the monopoly on imports of natural gasoline liquid (HS 2710.11.20), other natural gasoline liquid (HS 2710.11.90), and light diesel oil (HS 2710.19.40); other STEs and private companies may market other hydrocarbons (Table III.11).

            3. The exclusive right to import (or export) is granted to a state enterprise under the provisions of the Foreign Trade Policy 2009‑14 (Paragraph 2.11). Also, under the Foreign Trade Policy, all STEs granted special privileges to import (export) must make such purchases (sales) in accordance with commercial considerations including price, quality, availability, marketability, and transportation. STEs should act in a non‑discriminatory manner.

            4. The value of imports by STEs during the period under review is shown in Table III.11. India last filed its STE notification in 2010; however, the statistics were on STEs imports up to 2006.

            5. STEs also assist India in its goal of "balancing" Indian imports and exports through the use of countertrade, which involves an agreement for one country to sell goods to another in exchange for goods (perhaps also involving some cash or services) of an equal value from the second country. The practice is most prevalent between countries that have foreign exchange constraints or balance‑of‑payments issues.90 India has stated that it has no countertrade requirements, although private companies are reportedly "encouraged to use countertrade" and MMTC Ltd. promotes countertrade operations on its website.91 Most recent uses of countertrade by India involved capital goods.92 Private companies are encouraged to use countertrade. Global tenders usually include a clause stating that, all other factors being equal, preference is given to companies willing to agree to countertrade.93

Table III.11

Value of imports subject to state trading, 2007‑11

State‑trading enterprises

Product

HS code

Import value (Rs million)

2007/08

2008/09

2009/10

2010/11a

Food Corporation of India

Wheat

1001.10.90, 1001.90.20, 1001.90.39

26,575.1

0.2

2,317.6

595.6

Rye

1002.00.90

0.0

0.0

0.0

0.0

Oats

1004.00.90

82.5

144.7

133.9

28.4

Maize

1005.90.00

79.6

234.9

574.3

14.0

Rice

1006.10.90, 1006.20.00, 1006.30.10, 1006.30.20, 1006.30.90, 1006.40.00

4.2

5.4

3.7

1.6

Grain sorghum

1007.00.90

0.0

0.0

0.0

0.0

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

8.2

29.0

33.0

7.1

State Trading Corporation

Copra

120300.00

0.0

0.0

0.0

0.0

Crude oil (coconut oil and its fractions)

1513.11.00

0.0

138.9

392.6

0.0

Other (coconut oil and its fractions)

1513.19.00

352.6

675.3

137.7

0.0

Indian Oil Corporation; Bharat Petroleum Corporation Ltd.; Hindustan Petroleum Corporation Ltd.; Oil and Natural Gas Corporation Ltd.; Mangalore Refinery and Petrochemicals Ltd.; Numaligarh Refinery Ltd.; Reliance Industries Ltd.; Essar Oil Ltd.; and Shell India Pvt. Ltd.

Special boiling point spirits (other than Benzene Toulol) with nominal boiling point range 55‑115°Cb

2710.11.11

787.6

6,063.0

6,296.6

2,846.8

Special boiling point spirits (other than Benzene, Benzol, Toluene, and Toulol) with nominal boiling point range 63‑70°Cb

2710.11.12

0.0

0.0

0.0

0.0

Other special boiling point spirits (other than Benzene, Benzol, Toluene, and Toulol)b

2710.11.13

0.0

0.1

355.7

540.4

Other motor spiritb

2710.11.19

5,280.1

12,110.6

11,890.1

8,174.2

Aviation turbine fuelb

2710.19.20

124.1

326.6

3,939.3

540.5

High speed dieselb

2710.19.30

86,256.4

103,837.4

67,387.1

24,390.6

Table III.11 (cont'd)

Indian Oil Corporation

Natural gasoline liquid

2710.11.20

31.2

2.3

0.3

0.0

Other natural gasoline liquid

2710.11.90

161,683.2

155,321.2

34,938.7

13,184.9

Light diesel oil

2710.19.40

28.6

10.3

8.3

2.5

Indian Oil Corporation; Bharat Petroleum Corporation Ltd.; Hindustan Petroleum Corporation Ltd.; IBP; and State Trading Corporation

Superior kerosene oil

2710.19.10

55,830.4

71,914.3

25,688.6

11,545.2

State Trading Corporation; Minerals and Metals Trading Corporation; and Indian Potash Ltd.

Urea whether or not in aqueous solution

3102.10.00

79,445.9

95,876.5

5,549.7

9,464.0

a April to June.

b Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd., and IBP have been granted rights to market these products (Ministry of Petroleum and Natural Gas, Resolution No. P‑23015/1/2001‑MKT, 8 March 2002).



Source: WTO document G/STR/N/8/IND, G/STR/N/9/IND, G/STR/N/10/IND, and G/STR/N/11/IND, 6 May 2010; 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.
      1. Contingency measures

        1. Anti‑dumping and countervailing measures

          1. Overview

            1. India's anti‑dumping and countervailing 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. This legislation was notified to the WTO in 1996.94 The authorities noted that India considers anti‑dumping duties, in particular, and trade remedial measures in general, as necessary protection instruments to eliminate injury caused to the domestic industry by unfair trade practices. Interventions are aimed at re‑establishing a situation of open and fair competition in the Indian market.

            2. Anti‑dumping investigations may 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. 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, normally within 20 days of the receipt of the application. For an investigation to be initiated, the investigation petitioners must account for at least 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 article by those expressly supporting and opposing the application. In accordance with the Indian legislation, dumping per se is not actionable. For a petition to proceed, the DGAD must verify the accuracy and adequacy of the evidence provided and determine that there is sufficient evidence of dumping or injury (where applicable), and a causal link between the dumped imports and the alleged injury, before initiating an investigation. In addition, other injury causes have to be investigated so that they are not attributed to dumping.95

            3. The DGAD informs the government of the exporting country, and issues a public notice with details of the initiation and the time‑limits for interested parties to provide comments. The public notification is usually issued within 45 days of receipt of documentation, and the time‑limit for interested parties to express their views is a further 30 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 of the investigation. Following this finding, the Department of Revenue may decide to impose a provisional duty not exceeding the margin of dumping. The provisional duty may be imposed only 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 the 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 interventions by courts.

            4. The margin of dumping for each exporter or producer is determined by the DGAD, following which the Department of Revenue may, within three months of publication of the final findings, impose the anti‑dumping duty by notification in the Official Gazette. Under Indian law, the Government is obliged to restrict the anti‑dumping duty to the lower of the margin of dumping or the margin of injury. Anti‑dumping duties may remain in place for five years unless revoked earlier or extended by the DGAD.96

            5. Indian legislation provides for levying anti‑dumping duty retrospectively, where there is a history of dumping that caused the injury or when the injury is caused by massive dumping, in a relatively short time, so as to seriously undermine the remedial effect of an anti‑dumping duty. 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 indicated that there has been no retrospective application of duties during the period under review.

            6. 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 at whose instance the investigation was initiated; there is insufficient evidence of dumping or injury; 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 imports of the like product, unless the countries accounting for 3% individually account for over 7% collectively of imports of the like product.

            7. Rules to initiate and conduct a sunset review (SSR) are contained in Trade Notice No. 1/2008 of 10 March 2008.97 An SSR may be initiated upon petition of the domestic industry or may be self‑initiated by the DGAD. In accordance with the rules, the DGAD must issue an alert letter to the domestic industry soon after the fourth year in which the anti‑dumping measures are in place. The domestic industry must inform the DGAD, within 40 days of the dispatch of the letter, whether it intends to file an application to extend the anti‑dumping measures. If so, an application on the need to keep the anti‑dumping measures in force, must be received by the DGAD at least six months before the date of expiry of the anti‑dumping measures. The DGAD may then initiate 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, the DGAD may issue a letter to other interested parties regarding the need to continue or otherwise 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.

            8. The DGAD conducts mid‑term reviews to assess the need for continued imposition of anti‑dumping duties. These reviews may be self‑initiated or on request from an interested party and in view of changed circumstances. The review follows the same procedures prescribed for an investigation to the extent that they are applicable. In 2010, a trade notice was issued to clarify the initiation of mid‑term reviews.98 The notice indicates that 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, which are representative of the domestic industry. The applicant must submit positive information substantiating the need for a review. The notice also indicates that the application for an interim/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 by the Central Government. However, the DGAD may review the need for the continued imposition of the duty, where warranted, on its own initiative.

            9. The DGAD is required to carry out a review for determining margins of dumping for any new exporter or producer from a country that is subject to anti‑dumping, provided that exporters or producers are new and not related to any of the other exporters.

            10. 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. During the period under review, a price undertaking was accepted from Sri Lanka in August 2009, as a result of the anti‑dumping investigation concerning "Imports of Plain Medium Density fibre Board from China, Malaysia, New Zealand, Thailand, and Sri Lanka".

            11. Anti‑dumping duty is not payable on products imported by units in export‑processing zones (EPZs) or export‑oriented units (EOUs), or on products imported by Advance Licence holders (now Advance Authorization Scheme, Table AIII.6).99 The final anti‑dumping duty paid on imported goods used in the manufacture of export goods may be refunded as brand rate of duty drawback in accordance with the drawback rules.100

            12. 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. The decision to initiate an investigation must be notified through a public notice, with relevant information to be provided by interested parties within 30 days of the notice. Provisional duties may be imposed six months after the date of initiation of the investigation, and may remain in force for a maximum of four months. Final findings must be published by the DGAD within one year of the date of initiation; the period may be extended by the Central Government in exceptional circumstances, by a further six months. Definitive countervailing measures must be imposed by the Central Government on DGAD recommendation within three months of the final findings being published. Final measures may remain in force up to five years.

            13. Anti‑dumping and countervailing measures may be appealed to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), in accordance with Chapter XV (Section 129) of the Customs Act 1962. The appeal must be filed within 90 days of the final duty being notified by the Central Government.101 Between 2006 and October 2010, 40 appeals were made to the CESTAT, of which 7 cases were settled. In five of the seven cases, the measures imposed were upheld and the appeals rejected; the appeal was successful in one case; and the other case was referred back to the DGAD. The CESTAT decision may be appealed to the Supreme Court. During 2006‑10, two CESTAT decisions were appealed to the Supreme Court of India: in one case the decision was upheld.
          2. Measures

            1. India is one of the most active users of anti‑dumping measures among WTO Members. From the inception of the WTO until 30 June 2010, India accounted for 436 of the 2,433 anti‑dumping measures adopted by Members, that is 17.9% of the total. During the same period, India initiated 613 investigations, out of a total of 3,752. The initiations affected mainly China (137), Korea, Rep. of (47), Chinese Taipei (45), the EU (42), Thailand (36), Japan (30), the United States (29), Indonesia (24), Singapore (23), Malaysia (22), and the Russian Federation (19).102

            2. Between January 2006 and 31 December 2010, India initiated 209 anti‑dumping investigations against 34 trading partners, compared with 176 reported in its last Review (Chart III.4).103 The products involved included chemicals and products thereof, plastics and rubber and products thereof, base metals, and textiles and clothing. As at 31 December 2010, 207 anti‑dumping measures were in force, compared with 177 on 30 June 2006.104 India did not take any countervailing actions during this period. Measures were applied on 30 trading partners.105 The majority were applied on China (67 or 32.4% of the total), Korea, Rep. of (19 or 9.2%), Chinese Taipei (19 or 9.2%), Thailand (14 or 6.8%), the EU or its members states (12 or 5.8%), and Japan, Malaysia, and the United States (9 or 4.3% each).



            1. As of 30 June 2010, the average length of an anti‑dumping measure applied by India was 56.7 months. The longest lasting measure was 161 months (acrylonitrile butadiene rubber from Korea); 18 duties had been in place for over 10 years, and 81 measures for at least 5 years.

            2. During 2006‑10, 113 sunset reviews were initiated. They resulted in the elimination of the measure in 38 cases, and in re‑imposition in 57 cases; the remaining cases were pending as of late 2010.

            3. No definitive countervailing measure is currently in place (June 2011). An investigation, with respect to imports of sodium nitrite from China, was initiated in January 2008, but was terminated without the imposition of countervailing duties.106

            4. Three of the anti‑dumping measures applied by India have been challenged in the DSB; two cases are still pending, and one was settled between the parties.107
        1. Safeguards

          1. Legislative and administrative framework

            1. Indian safeguard legislation has been enacted under Sections 8B and 8C of the Customs Tariff Act 1975, with Section 8C relating specifically to imports from China. 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. The authorities have noted that domestic legislation and its implementation follow Article XIX of the GATT 1994 and the WTO Agreement on Safeguards.

            2. The Director General (Safeguards), in the Department of Revenue has responsibility for hearing the petitions and conduct investigations on safeguards. The Director General is also responsible for carrying out recommendations under the Indo‑Singapore Trade Agreement (Safeguard Measures) Rules 2009. 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 safeguard 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 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). The proceedings of the Standing Board on Safeguards are not open to the public. Its views are placed before the Finance Minister for approval in respect of safeguard duties and before the Commerce Minister for imposition of quantitative restrictions.108 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.

            3. If a request is made for provisional safeguard 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 thorough the Board on Safeguards.109 Provisional measures may be imposed by the Central Government for up to 200 days.

            4. 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. 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 in place for more than one year must be liberalized progressively at regular intervals.

            5. Until 2010, safeguard measures could only take the form of duty surcharges. The Foreign Trade (Development and Regulation) Amendment Act 2010 (No. 25 of 2010) amended India's safeguard legislation to allow for the use of quantitative restrictions as remedy measures.110 The amendment allows "the Central Government, after conducting such enquiry as it deems fit, is satisfied that any goods are 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 such quantitative restrictions on the import of such goods as it may deem fit." The 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 imports of such goods into India.111

            6. The Director General's (Safeguards) decisions on safeguards cannot be appealed under the legislation112, but appeals may be made to the High Court and the Supreme Court. If the period of imposition of a safeguard duty exceeds three years, the Director General must review the situation not later than the mid‑term of such imposition and, if appropriate, recommend the withdrawal or the increase of the liberalization of duty.
          2. Measures

            1. Initiations of safeguard investigations increased substantially during the period under review. Although no investigations were initiated in 2006 and 2007, and only two were initiated in 2008, 13 investigations were initiated during 2009. A review investigation was initiated in the first quarter of 2010 and a new safeguard investigation (N1, 3‑dimethyl butyl‑N Phenyl paraphenylenediamine), in December 2010.113 Another new investigation was initiated in the first quarter of 2011.

            2. Over 2007‑10, 18 investigations were initiated, some involving more than one of case. In eight of these cases (seven investigations), the Director General (Safeguards) recommended the application of measures: in one case (oxo alcohol), the Board on Safeguards rejected the recommendation; in one case, the Director General recommended the application of the safeguard measures for three months; in another case, for a year; in another, for two years; in two cases, for three years; and in one case, and the Director General recommended the application of safeguards for four years (aluminium products). In some cases, the Board decided to apply the measure for a shorter than that suggested by the Director General. The Board decided to apply the safeguard measure for one year in the case of phtalic anhydride instead of three, and for two years in the cases regarding dimethoate, aluminium flat rolled products, and aluminium foil (Table AIII.3). All safeguard measures consisted of an increase in tariffs at the same or lower rates than those recommended by the Director General. No safeguard measures were applied in the remaining 11 investigations; the investigation ended due to a withdrawal of the petition in seven cases (four investigations); the Director General recommended that no safeguard measures be applied in seven cases (six investigations), and the case initiated in December 2010 is still under investigation.
      1. Technical regulations and standards

        1. Standards


            1. According to the authorities, there were no major changes related to the process of standardization in India during the review period. Indian standards 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.114 Its role also includes the development of activities relating to certification of product and quality systems, testing and calibration, enforcement, international cooperation, and creating awareness among consumers. Other agencies are responsible for enforcement of standards in other areas (Table AIII.4). Sectoral coordination committees have been established for food processing, power, steel, automotives, textiles, and information technology, in order to develop harmonized standards at the national level. The BIS has been placing emphasis on harmonizing national standards with international and regional standards; thus international standards are often adopted as Indian standards under the numbering system of ISO/IEC, or are harmonized with international standards in areas of India's trade interests.

            2. The BIS is a member of the International Organization for Standardization (ISO) and participates in ISO technical and policy‑making committees.115 The BIS is also a member of the International Electrotechnical Commission (IEC); it participates in 73 IEC technical committees and it is an observer in 83. The BIS has bilateral cooperation memoranda of understanding with the national standards bodies of Afghanistan, Bhutan, Brazil, France, Germany, Israel, Mauritius, Nigeria, South Africa, the UAE, and the United States.116 It also has an MRA with the national standards body of Sri Lanka.

            3. There were around 18,623 Indian standards as at 31 March 2010 and about 84% were harmonized with international standards (Table III.12). This is a result of the emphasis placed on making Indian standards identical to or compatible with international standards to keep pace with India's increasing integration into the global economy.

Table III.12

Standards, 2007‑10




2007/08

2008/09

2009/10a

Total number of standards in force

..

..

..

Total number of Indian standards in force

18,470

18,592

18,592

Per cent equivalent to international standards

..

..

84

.. Not available.

a 31 March 2010.



Source: Information provided by the Indian authorities.

            1. Indian standards are formulated according to the procedures stipulated in the BIS Rules 1987. A preliminary draft standard prepared by expert bodies (generally committee members) is considered by the respective technical committee.117 Once the draft is approved by the technical committee, it is circulated amongst the various stakeholders and posted on BIS website for comments. Comments should be provided within two months. 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. Most standards in India are voluntary, although health and safety regulations are mandatory for several products and have evolved into technical regulations.
        1. Technical regulations


            1. Under the WTO Agreement on Technical Barriers to Trade, the Ministry of Commerce has nominated the BIS as the national WTO‑TBT enquiry point for disseminating information on standards, technical regulations, and certification. The Ministry remains responsible for implementing the Agreement. India accepted the WTO TBT Code of Good Practice in 1995.118 Between 2002 (India's first notification) and February 2011, India made 41 notifications to the TBT Committee, 20 were made during the review period.

            2. Responsibility for the formulation of technical 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 on the draft are examined by the ministry concerned. 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; it is simultaneously notified to the WTO. Amendments to technical regulations are made through a similar process, from time to time, based on industry needs or due to new scientific developments, new sanitary and environmental circumstances, and harmonization with international standards.
        2. Certification and conformity assessment


            1. The BIS is the national certifying body. Conformity assessment procedures are regulated by the BIS Act 1986 and the BIS Rules and 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.119 Some 81 products are subject to the mandatory BIS certification mark.120 As at May 2011 there were more than 1,000 products under voluntary certification.121 According to the authorities, the requirements for the use of the BIS certification 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.

            2. Foreign producers who wish to export products subject to mandatory certification must obtain a licence from the BIS. Foreign manufacturers must set up a liaison/branch office in India to obtain a licence if the BIS has not signed a MOU with the country where the manufactured goods originate.122 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 under the Foreign Manufacturers Certification Scheme, in place since 1999, are: Rs 1,000 for the application, US$300 for processing, US$2,000 for marking, and a unit rate fee, which varies according to the product. 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. After receiving a licence the user must pay an annual fee of Rs 1,000, as well as a quarterly fee for units of production marked. The latter is fixed according to product.

            3. 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.123 Products are not required to be tested at the time of renewing a licence. However, regular surveillance through random sampling is undertaken during the operation of the licence, by BIS laboratories and in accredited laboratories, to ensure standard conformity of certified products. 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. India recognizes foreign laboratories under the provisions of the BIS Act 1986. 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 without it during the approval process.

            4. 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.124 The major areas covered at the central laboratory are electrical, mechanical, and chemical (testing), and electrical and mechanical (calibration). BIS laboratories have test facilities for most products under the Certification Marks Scheme. In addition to the BIS laboratories, services are provided by 115 national laboratories recognized under the BIS Laboratory Recognition Scheme.
        3. Accreditation


            1. 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.125 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 requirements for accreditation of bodies accrediting conformity assessment bodies). NABL accredits laboratories 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 abroad, regardless of their ownership, legal status, size, and degree of independence.

            2. 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.126 The accreditation process consists of five stages127; 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 February 2011, the NABL had granted 2,267 accreditation certificates; a different certificate is issued for each type of accreditation service or category. 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. 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 suitability. Recognition is granted for three years, renewable for similar periods, and there are two surveillance visits during this period. As at February 2011, 115 laboratories had been recognized under this scheme.
        4. Labelling


            1. The Legal Metrology Act 2009 and the Legal Metrology (Packaged Commodities) Rules 2011 implemented as of 1 April 2011, replaced the Standards of Weights and Measures Act 1976, the Standards of Weights and Measures (Enforcement) Act 1985, and the Standards of Weights and Measures (Packaged Commodities) Rules 1977, which regulated labelling requirements in India. According to the authorities, labelling requirements are uniform across all states and for all foreign suppliers.

            2. Packaged commodities must bear a label securely affixed. These labels should include the: name, trade name or description of food contained in the package; ingredients used; name and address of manufacturer or importer; net weight or measure of volume (in accordance with the metric system based on the international system of units) of contents; item/package sale price (MRP Rs __) (inclusive of all taxes); month and year of manufacture or packaging; date of expiry128; licence number where relevant; and name, address or e‑mail if available of person or office to be contacted in case of a complaint.129 For products containing natural flavouring substances, the common name of the flavours should be mentioned on the label. The label should also indicate the animal origin of gelatine in products that contain it. The Ministry of Health and Family Welfare has recently notified the quantitative ingredient declaration requirement as an additional labelling requirement for food. More specific labelling requirements exist for specified products, such as infant milk substitutes and infant foods, bottled mineral water, and milk products.

            3. Labels must be in Hindi (Devnagiri script) and in English. In certain instances, they must be written in the language of the locality where the product is ultimately sold. This increases distribution costs, since India has 16 official languages, and food‑processing companies often do not know which pallet of food products will be transported to a specific State. The requirement that packaging must specify the maximum retail price of the product, including taxes, is a further complication, since sales taxes are levied at the state level.

            4. Currently there is no mandatory labelling requirement for genetically modified (GM) products. However, legislation is in the pipeline: the Ministry of Health and Family Welfare has proposed comprehensive labelling requirements for GM foods, requiring all packages of food/food ingredients of GM origin, that are subject to the approval of the Genetic Engineering Approval Committee (GEAC), to bear a label indicating that they are of GM origin, and that the product has been cleared for sale in the exporting country.
      1. Sanitary and phytosanitary measures (SPS)


            1. SPS matters continue to be governed and enforced through a number of laws and agencies (Table III.13). The main institutions involved in the establishment and implementation of SPS measures for food items are the Ministry of Health and Family Welfare, the Department of Animal Husbandry, Dairying, and Fisheries; the Directorate of Plant Protection, Quarantine and Storage; the Bureau of Indian Standards; and other state government agencies.

            2. India has nominated three institutions as national enquiry points under the WTO SPS Agreement: the Department of Animal Husbandry, Dairying, and Fisheries for animal health and related issues; the Department of Health for food‑safety related issues and plant protection; and the Department of Agriculture and Cooperation for plant health or phytosanitary issues. Between 1996, when its first SPS notification was submitted, and February 2011, India made 71 notifications to the Committee on SPS Measures, 22 of which during the review period, including measures on: food items including processed food; pet food products of animal origin; plants and plant materials; food packaging materials; horns/hooves of animals; meat and meat products; milk and milk products; food additives; maximum residues limits (MRLs) of different pesticides in carbonated water; MRLs of pesticides on different food commodities; pre‑packaged food; and food safety and standards rules.

Table III.13

Sanitary and phytosanitary legislation, 2011

Legislation

Description

Implementing institution

Prevention of Food Adulteration Act 1954

Aims to protect consumers against the supply of adulterated food. It specifies minimum quality level standards for various food products. The Act is mandatory; infringement may lead to fines and imprisonment

Central Committee for Food Standards under the Directorate General of Health Services (Ministry of Health and Family Welfare)

Essential Commodities Act 1954

Regulates the manufacture, commerce, and distribution of essential commodities, including food. A number of control orders have been formulated under the provisions of this Act

Central and state government agencies

Fruit Products Order 1955

Regulates the manufacture and distribution of all fruit and vegetable products, sweetened aerated waters, and vinegar and synthetic syrups. The manufacture or re‑labelling of products require a licence from the Ministry for Food Processing Industries, which is granted when the quality of products, sanitation, personnel, machinery, and equipment and work area standards are satisfactory

Ministry for Food Processing Industries

Solvent Extracted Oils, De‑oiled Meal, and Edible Four Control Order 1967;
Vegetable Products Control Order 1976

These orders control the production and distribution of solvent extracted oils, de‑oiled meal, edible flours, and hydrogenated vegetable oils (vanaspati). Production and distribution of the above‑mentioned products require a licence, which is granted when products conform to the specifications laid down in the schedules. The Directorate also regulates the price of vanaspati

Directorate of Vanaspati, Vegetable Oils, and Fats under the Department of Food and Public Distribution (Ministry of Consumer Affairs, Food, and Public Distribution)

Meat Products Control Order 1973

Regulates the manufacture, quality, and sales of all meat products

Directorate of Marketing and Inspection under the Department of Agriculture and Cooperation (Ministry of Agriculture)

Milk and Milk Product Order 1992

Provides for setting up an advisory board to advise the Government on the production, sale, purchase, and distribution of milk powder. Units with installed capacity for handling milk of over 10,000 litres per day, or milk products containing milk solids in excess of 500 tonnes per year, are required to register with the Department of Animal Husbandry and Dairying

Department of Animal Husbandry Dairying, and Fisheries (Ministry of Agriculture)

Livestock Importation Act 1898 (amended in 2001)

Allows the Central Government to regulate, restricts, or prohibits import of animal and animal products into India

Department of Animal Husbandry, Dairying, and Fisheries (Ministry of Agriculture)

Destructive Insects and Pests Act 1914

Regulates import of plants to prevent introduction into and the transport from one State to another in India of any insects, fungus or other pest that is or may be destructive to crops

Directorate of Plant Protection, Quarantine and Storage (Ministry of Agriculture)

Plant Quarantine (Regulation of Import into India) Order 2003

It regulates the import of plants and plant materials

Plant Quarantine Division in the Ministry of Agriculture

Standards on Weights and Measures (Packaged Commodities) Rules 1977

They lay down certain obligatory conditions for all commodities in packed form, with respect to declarations on quantities contained

Directorate of Weights and Measures under Department of Consumer Affairs (Ministry of Consumer Affairs, Food, and Public Distribution)

Source: Information provided by the Indian authorities.

            1. India has not notified the WTO regarding the recognition of equivalence of other countries' SPS measures.

            2. In August 2006, the Central Government passed the Food Safety and Standards (FSS) Act of 2006 to consolidate separate laws130, and to establish the Food Safety and Standards Authority of India (FSSAI). According to the authorities, this law has been notified (Chapter II(2)(i)). However, the rules and regulations to operationalize this Act have not been notified yet. Once the Food Safety and Standards Regulations, 2010 and Rules 2011 are notified, the Food Safety and Standards Act 2006 will be fully implemented and will repeal some of the separate laws.

            3. The FSSAI also aims to establish a single reference point for all matters relating to food safety and standards, by moving from a multi‑agency to a centralized system. To this end, the Act establishes an independent statutory authority, the Food Safety and Standards Authority of India (FSSAI), which began operating in July 2008. The mandate of the FSSAI is to ensure the availability of safe and wholesome food for human consumption, through establishing and enforcing science‑based food‑safety standards for domestically produced and imported foods, licensing and registering businesses selling food for human consumption, and regulating food manufacturing practices and labelling. The various agencies implementing food laws will be brought under the FSSAI.

            4. Imports of animal products into India require sanitary import permits issued by the Department of Animal Husbandry, Dairy and Fisheries; permits must be obtained prior to shipping from the country of origin. The Department approves or rejects the application after an import risk analysis on a case‑by‑case basis. Permits are valid for six months and may be used for multiple consignments. A sanitary import permit is not a licence, but a certificate verifying that India's sanitary requirements are fulfilled. Some imports of animal products also require an import licence issued by Director General of Foreign Trade (section (2)(vi)). Imports of animal products are only allowed through designated ports where animal quarantine and certification services are available (Amritsar, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, and Mumbai). Imports of fish products are allowed through the port of Vishakhapatnam (in the State of Andhra Pradesh) and the land custom station at Petrapole (for imports from Bangladesh only).

            5. 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 2003131, and international conventions. All plant and plant material consignments 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 officer in charge of the plant quarantine station. Products listed in Schedule VII of the PQ Order 2003 may be imported without import permit but may be required to fulfil other conditions, such as fumigation.132 Other phytosanitary requirements covering some 980 products are listed in Schedules V, VI, and VII of PQ Order 2003 (Table III.14). Schedule IV lists all the plant species that are prohibited for import. As in the case of imports of animal products, imports of plant and plant products may only enter the Indian territory through designated ports.133

            6. Plants and seeds that require post‑entry quarantine are listed in Schedules V and VI of the PQ Order 2003. These plants and seeds have to 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 materials and time taken by the plant material to grow to the stage where symptoms of diseases appear.

Table III.14

Plant quarantine, 2011

Schedule No.

Description

No. of products covered

IV

List of plants/planting materials and countries from where imports are prohibited along with justifications

14

V

List of plants and plant materials restricted: imports are permissible only with the recommendation of authorized institutions with additional declarations and special conditions

17

VI

List of plants/plant materials permitted to be imported with additional declarations and special conditions

628

VII

List of plants/planting materials where imports are permissible on the basis of phytosanitary certificates issued by the exporting country, the inspection conducted by inspection authority, and fumigation, if required, including all other general conditions

288

VIII

List of quarantine weed species

31

IX

Inspection fees

n.a.

X

List of permit issuing authorities for imports of seeds, plants and plant products, and other articles

n.a.

n.a. Not applicable.

Source: Plant Quarantine (Regulation of Import into India) Order 2003.

            1. Sampling and testing of consignments to prevent the risk of exotic pests is undertaken according to the International Standards for Phytosanitary Measures Guidelines No. 23 and 31.134 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 the Schedules V, VI, and VII of PQ Order 2003.135 Fumigation is done at the importer's cost.136

            2. Imports of GM food, feed, and organisms, and living modified organisms for R&D, food, feed, processing in bulk, and environment release is governed by the Environment Protection Act 1986 and Rules 1989. Imports of products containing GM material for industrial production or environmental release are allowed only with the approval of the Genetic Engineering Approval Committee (GEAC). Importers of GM materials for R&D must submit a proposal to the Review Committee for Genetic Modification under the Department of Bio‑Technology. If these GM materials are used for commercial purposes, GEAC approval is also required. All consignments containing products subject to genetic modification must carry a declaration stating that the product is genetically modified. If it does not, the importer is liable to penal action under the Foreign Trade (Development and Regulation) Act 1992. The GEAC has accorded one‑time approval for imports of GM soybean oil derived from round‑up‑ready soybean for the purpose of consumption after refining.137



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