As India was maintaining quantitative restrictions due to balance of payments reasons (which is a GATT consistent measure), it did not have to undertake any commitments in regard to market access. The only commitment India has undertaken is to bind its primary agricultural products at 100% processed foods at 150% and edible oils at 300%. Of course, for some agricultural products like skimmed milk powder, maize, rice, spelt wheat millets etc., which had been bound at zero or at low bound rates, negotiations under Article XXVIII f GATT were successfully completed in December 1999, and the bound rates have been raised substantially.
India does not provide any product specific support other than market price support. During the reference period (1986 – 1988), India had market price support programs for 22 products, out of which 19 are included in our list of commitments filed under GATT. The products are – rice, wheat, bajra, jawar, maize, barley, gram, groundnut, rapeseed, toria, cotton, Soyabean (yellow), Soyabean (black), urad, moong, tur, tobacco jute, and sugarcane. The total product specific AMS Rs 24, 442 crores during the base period. The negative figure arises from the fact that during the base period, except for tobacco and sugarcane, the international prices of all products was higher than their domestic prices and the product specific AMS is to be calculated by subtracting the domestic price from the international price and then multiplying the resultant figure by the quantity of production.
Non-product specific subsidy is calculated by taking into account subsides given for fertilizers, water, seeds, credit and electricity. Indian aggregate remains AMS below the de minimis level of 10%. India’s notifications on AMS are available at web site address.
In India exporters of agriculture commodities do not get any direct subsidy. The only subsidies available to them are in the form of (1) exemption of export profit from income tax under section 80-HHC of the Income Tax Act and even this is not one of the listed subsidies as the entire income from agriculture is exempt from income Tax per se, (2) subsidies on cost of freight on export shipments of certain products like fruits, vegetables and floricultural products. We have in fact indicated in our schedule of commitments that India reserves the right to take recourse to subsidies (such as cash compensatory support) during the implementation period.
Trade in Service – Financial Services:
The commitments in financial services are made in accordance with the General Agreement on Trade in Services and the Annexure on financial Services. All the commitments are subject to entry requirements, domestic laws, rules and regulations and the terms and conditions of the Reserve bank of India, Securities and Exchange Board of India and any other competent authority in India.
Insurance and insurance related services:
Non-life limited to insurance of freight Ex 5 (a) (i) (B) (1): Limitation on market access India is unbound except in the case of insurance of freight, where there is no requirement that goods in transit to and from India should be insured with Indian companies only. Insurance is taken by the buyer or seller in accordance with the terms of the contract. This position will be maintained. Once under a contract the Indian importer or exporter agrees to assume the responsibility for insurance such as in the case of f.o.b contracts for imports into India or c.i.f contracts for exports from India, insurance has to taken only with an Indian insurance company.
Reinsurance and retrocession 5 (a) (ii):
Reinsurance can be taken with foreign reinsurers to the extent of the residual uncovered risk after obligatory or statutory placements domestically with Indian insurance companies.
Insurance intermediation, limited to reinsurance Ex 5 (a) ( iii)
(1), (2) Reinsurance of domestic risks can be placed with foreign reinsurers trough overseas brokers, to the extent mentioned under reinsurance and retrocession (3) (i) Overseas are allowed to have resident representatives and representative offices who can procure reinsurance business from Indian insurance companies to the extent mentioned above. They can also place reinsurance business from abroad with Indian insurance companies. (ii) Except for the business indicated above, the resident representatives and representative offices cannot undertake any other activity in India. (iii) All expenses of the resident representatives and representatives have to be met by remittances from abroad and no income can be received in India from Indian residents.