RECENT INDIA-US INTERNATIONAL TRADE DISPUTES

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Of late, India and USA have been having disputes relating to trade barriers that they alleged to have imposed on each other, thereby hampering their trade and commerce business.

As per the USA Generalized System of Preferences (GSP), USA would grant trading opportunities, preferential market access, tariff advantages, and preferential duty free export of around 4800 products into the country from designated beneficiary countries.

India has been the largest beneficiary of the GSP among developing countries with around 3,500 products getting access to the USA market at low or no duty.

But in 2017, the Office of United States Trade Representative (USTR) announced a new process to assess beneficiary country eligibility based on revised criteria. For instance, to qualify for GSP, a beneficiary country must meet 15 eligibility criteria established by Congress, including respecting arbitral awards in favor of U.S. citizens or corporations, combating child labor, respecting internationally recognized worker rights, providing adequate and effective intellectual property protection, reducing barriers to services trade and investment, and providing the United States with equitable and reasonable market access. 

Thereafter, in 2018, the USTR announced that it is reviewing the eligibility of India in the GSP based on concerns related to its compliance with the GSP market access criterion and that it has also accepted two petitions filed by the U.S. dairy industry and the U.S. medical device industry requesting a review of India’s GSP benefits on the grounds of Indian trade barriers affecting U.S. exports in those sectors. According to them, India has implemented certain trade barriers that create serious negative effects on U.S. commerce. For instance, India requires that import of dairy products can only be done if they have been derived from animals which have never consumed any feeds containing internal organs, or blood meal, etc.

USA had earlier dragged India to World Trade Organization (WTO) challenging the various export subsidy programmes of India that are creating an uneven playing field and are adversely affecting the US businesses at the global level. The export subsidy programmes provide financial help to the domestic businesses in India. As a result of which prices of the products are lowered and the domestic businesses offer tough competition to foreign businesses.

Further, India claims that USA has hiked the import duties on steel and aluminium, thereby hampering the exports of these goods by India and other countries to USA.

Thus, various experts from India have commented on the trade disputes between India and USA stating that India should approach the WTO in case USA denies it preferential benefits in retaliation for the allegations of trade barriers that USA claims its exports face in India.

Harini Daliparthy

Senior Legal Associate

NEW TECH PARTNERSHIP BETWEEN INDIA AND UK

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During Prime Minister Narendra Modi’s five day visit to the United Kingdom (UK) to for Commonwealth Heads of Government Meeting, 2018, Prime Minister Narendra Modi and Prime Minister of the UK, Theresa May, in their bilateral meeting, agreed to establish UK-India Tech Alliance to provide access routes to markets for British and Indian entrepreneurs and small and medium enterprises.

On 18th April 2018 the leading trade organisations- National Association of Software & Services Companies (NASSCOM), India and TechUK of the United Kingdom agreed on a memorandum of understanding (MoU) which will pave the way for hi-tech companies to create investment and export opportunities and to further enhance the skills of the technology workforce in both the countries.

The two trade associations have come together for the creation of UK-India Tech Alliance with a vision to promote the growth of skills required for technology innovation in the areas such as artificial intelligence (Al), machine learning, big data analytics and cyber-security.

Ms. Baroness Fairhead, Minister in the UK Department for International Trade (DIT) said that “Tech is at the heart of this new relationship between our two countries and we welcome TechUK and NASSCOM’s (National Association of Software & Services Companies) commitment to working together to strengthen the skills base in both countries that will be key to driving economic growth, development and prosperity,”.

Mr. Debjani Ghosh, President, NASSCOM said, “This landmark MoU between NASSCOM and TechUK will equip people with cutting-edge skills in emerging technology fields such as AI and robotics. We are delighted that NASSCOM’s FutureSkills initiative will be the basis for improved collaboration between our IT industries.”

This new partnership will ensure to encourage innovation and productivity by helping businesses in the UK and India collaborate on emerging technologies and develop digital skills in both countries.

Taruna Verma

Senior Associate

SUPREME COURT HOLDS THAT A LAWYER CANNOT BE OBSTRUCTED TO APPEAR IN SUPPORT OF HIS CLIENT

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On Friday, 13th April 2018 the Supreme Court of India took suo motu cognizance of a horrendous case of abduction, brutal rape and murder of an eight year old girl child in Rasana Village in District Kathua, Jammu and Kashmir in January 2018.

When the charges were filed in April some groups including lawyers staged protests against the arrests of the eight accused. Though the charge sheet was submitted the support for eight accused continues and this has led to widespread social outrage.

The three Judge Bench comprising of Chief Justice Dipak Misra, Justices A. M. Khanwilkar and D. Y. Chandrachud held in the Order that no lawyer can be prevented from appearing on behalf of the victim’s family and such a prevention amounts to obstruction of justice.

The Supreme Court further held that It is settled in law that a lawyer who appears for a victim or accused cannot be prevented by any Bar Association or group of lawyers, for it is the duty of a lawyer to appear in support of his client, once he accepts the brief. If a lawyer who is engaged, is obstructed from appearing in the court or if his client is deprived of being represented in the court when he is entitled to do so in a lawful manner, that affects the dispensation of justice and would amount to obstruction of access to justice and interference with the administration of justice.”

The Bench has issued notice to Bar Council of India, State Bar Council of Jammu and Kashmir, High Court Bar Association at Jammu and the Kathua District Court Bar Association noting that “obstruction of delivery of justice and process of law, and that too by lawyers cannot be condoned”.

It also held in the Order that it is a settled law that a lawyer who appears for a victim or accused cannot be prevented by any Bar Association or group of lawyers, “for it is the duty of a lawyer to appear in support of his client, once he accepts the brief”.

The Order was concluded by the Bench with hope and trust that “members of the Bar Associations shall conduct themselves and would not obstruct the smooth functioning of the justice delivery system which includes the presence of the persons aggrieved or accused in court or for that matter the presence of investigating agency and the witnesses.”

Taruna Verma

Senior Associate

 

SALMAN KHAN CONVICTION: AN INSTANCE OF EQUAL TREATMENT IN THE EYES OF LAW

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There are always speculations in high profile and celebrity cases that the justice delivery system may be conducted in an unfair and unjust manner and to the prejudice of the common man. Furthermore, it is assumed that the judicial system may be partial towards celebrities and may, also, prioritize powerful and influential litigants over the common man. It is, therefore, widely assumed that in such cases the courts may give biased judgments resulting in injustice to the common man.

Time and again, the courts have, in various instances, proved that such assumptions and speculations are groundless and unfounded.

For instance, the Supreme Court in State of Karnataka vs. Selvi J Jayalalitha and others (2017) 6 SCC 263 had convicted Late Ms. Jayalalitha, the then Chief Minister of the State of Tamil Nadu, for committing criminal misconduct, and criminal conspiracy with the object of acquiring and possessing pecuniary resources and assets beyond the known sources of her income under the Indian Penal Code 1860 and the Prevention of Corruption Act 1988.

In the light of the recent events, the Jodhpur Magistrate Court has recently convicted one of the most popular Indian personalities and celebrity film star, Salman Khan. On 05.04.2018, the Chief Judicial Magistrate, Jodhpur had passed a judgment in State of Rajasthan vs. Salman Khan and others whereby it convicted and held Salman Khan guilty of poaching two blackbucks, which are categorized as protected species under the Wildlife (Protection) Act 1972. The Court further held that while fixing the quantum of punishment, it would not take into consideration the social and charity work undertaken by the Actor, as he is a habitual offender. The Actor was, therefore, sentenced to five years of imprisonment and a fine of Rs. 10,000/-.

Salman Khan was earlier convicted by the Trial Court in Rajasthan for poaching three chinkaras, nearly extinct breed, in Jodhpur but later was acquitted by the Rajasthan High Court. The appeal by the State against the High Court judgment has been made and is pending before the Supreme Court.

The Bishnoi Community, who had filed a case against Salman Khan and others sometime in 1998 in Jodhpur, welcomed this decision of the Jodhpur Magistrate Court with a sense of justice having being delivered.

In the present case, the District and Sessions Judge has granted bail to Salman Khan on 07.04.2018 and has directed him to appear before its Court on 07.05.2018.

As a matter of fact, although it took the Court almost twenty years to convict Salman Khan, it has been proved yet again that no human being, celebrity or otherwise, is over and above the law. Every person is treated equally in the eyes of law and based on facts, evidences and circumstances of the case, the courts convict the guilty, irrespective of whether he/she is an iconic personality or a common man. This is because the paramount endeavor and lookout of the judicial system is to render fair and reasonable justice to the innocent and aggrieved who have been adversely affected by the reckless, irresponsible and unlawful acts or omissions of others.

 

Harini Daliparthy

Senior Legal Associate

NEW SYSTEM FOR MONITORING FOREIGN INVESTMENT LIMITS IN LISTED INDIAN COMPANIES

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As per Foreign Exchange Management Act, 1999 (FEMA), the onus of compliance with the various foreign investment limits rests on the Indian company. In order to facilitate the listed Indian companies to ensure compliance with the various foreign investment limits, Securities and Exchange Board of India (SEBI) in consultation with Reserve Bank of India (RBI) has decided to put in place the framework to help companies to ensure compliance with various foreign investment limits.

As per the SEBI circular issued, the guidelines for monitoring foreign investment limits in listed Indian companies shall be effective from 1st May 2018.

The monitoring of the foreign investment limits shall be based on the paid-up equity capital of the company on a fully diluted basis which means the total number of shares that would be outstanding if all possible sources of conversion are exercised, to ensure that all foreign investments are in compliance with the foreign investment limit.

The new guidelines for monitoring the foreign investment limits in listed Indian companies shall be implemented and housed at the depositories- National Securities Depository Limited (NSDL) and Central Depository Securities Limited (CDSL). NSDL and CDSL are both Government registered depositories which are used to hold various securities like stocks, shares, money, property etc. in an electronic form. NSDL works for National Stock Exchange (NSE), whereas CDSL works for Bombay Stock Exchange (BSE).

A company will have to appoint any one depository as its Designated Depository for monitoring the foreign investment limits.

The stock exchanges [BSE, NSE and Metropolitan Stock Exchange of India Ltd.  (MSEI)] shall provide the data on the paid-up equity capital of an Indian company to its Designated Depository.

The depositories need to provide an interface wherein a firm will have to give information including Company Identification Number (CIN), applicable sector, applicable sectoral cap, permissible aggregate limit for investment by Foreign Portfolio Investors (FPIs), Non-Resident Indians (NRIs) and other foreign investors, details of shares held by FPIs, NRIs and other foreign investors, on repatriable basis, in demat as well as in physical form, details of indirect foreign investment which are held in both demat and physical form, details of demat accounts of Indian companies making indirect foreign investment in the capital of the company and details of the downstream investment in other Indian companies

In the event of any change in any of the details pertaining to the company, such as increase/decrease of the aggregate FPI/NRI limits or the sectoral cap or a change of the sector of the company, etc. the company shall inform such changes along with the supporting documentation to its Designated Depository.

A red flag shall be activated whenever the foreign investment within 3% or less than 3% of the aggregate FPI/NRI limits or the sectoral cap.

The depositories shall inform the exchanges about the activation of the red flag for the identified scrip. The exchanges shall issue the necessary circulars/public notifications on their respective websites. Once a red flag has been activated for a given scrip, the foreign investors shall take a conscious decision to trade in the shares of the scrip, with a clear understanding that in the event of a breach of the aggregate FPI/NRI limits or the sectoral cap, the foreign investors shall be liable to disinvest the excess holding within five trading days from the date of settlement of the trades and if the FPIs have failed to disinvest within five trading days, then necessary action shall be taken by SEBI against the FPIs.

Thus, the depositories shall issue the necessary circulars and guidelines for collecting data on foreign investment from listed companies. The companies shall provide the necessary data to the depositories latest by 30th April, 2018.

Taruna Verma

Senior Associate