Poultry Imports case

The verdict has finally come on the "India — Agricultural Products" case with US as complainant and India as the defendent.
Third Parties to the case are: China; Colombia; Ecuador; European Union; Guatemala; Japan; Vietnam; Argentina; Australia; Brazil 

Brief history of case:   

• India had banned imports of various agricultural products from the US in 2007, as a precautionary measure to prevent outbreaks of avian influenza in the country. 
• This dispute concerns India's import prohibition affecting certain agricultural products from countries reporting Notifiable Avian Influenza (NAI) to the World Organisation for Animal Health (OIE). 
•  This import prohibition is maintained through India's Avian Influenza (AI) measures, namely:
• the Livestock Importation Act 1898 as amended by the Livestock Importation (Amendment) Act 2001  
• Statutory Order (S.O.) 1663(E) issued by India's Department of Animal Husbandry, Dairying, and Fisheries on 19 July 2011.

 India's stand:-

• India's main argument in response was that its AI measures “conform to” an international standard (OIE Terrestrial Code), pursuant to Article 3.2 of the SPS Agreement, and that consequently, compliance with other provisions of the SPS Agreement (including those requiring that SPS measures have a scientific foundation) and the GATT 1994 must be presumed. 
• India maintained that it was not under an obligation to provide to the Panel the scientific risk assessment conducted pursuant to Articles 5.1 and 5.2 for its AI measures
• India's AI measures were based on scientific principles and evidence in accordance with Article 2.2 of the SPS Agreement.

Judgment:-
India had claimed its import restrictions were justified by international rules on animal health, but the panel agreed with the United States and found that India's measures were not based on international standards and were discriminatory. Specifically the judgment said:-

• India's AI measures are inconsistent with Article 3.1 of the SPS Agreement because they are not “based on” the relevant international standard. Furthermore, India's AI measures do not “conform to” the relevant international standard within the meaning of Article 3.2 of the SPS Agreement;
   
• India's AI measures are inconsistent with Articles 5.1, 5.2 and 2.2 of the SPS Agreement because they are not based on a risk assessment;
   
• India's AI measures are inconsistent with Article 2.3 of the SPS Agreement because they arbitrarily and unjustifiably discriminate between Members where identical or similar conditions prevail and are applied in a manner which constitutes a disguised restriction on international trade;
   
• India's AI measures are inconsistent with Articles 5.6 and 2.2 of the SPS Agreement because they are significantly more trade-restrictive than required to achieve India's appropriate level of protection (ALOP) with respect to the products covered by Chapter 10.4 of the OIE Terrestrial Code, and therefore are also applied beyond the extent necessary to protect human and animal life or health;
   
• India's AI measures are inconsistent with Articles 6.2 and 6.1 of the SPS Agreement because they do not recognize the concept of disease-free areas and areas of low disease prevalence, and because they are not adapted to the SPS characteristics of these areas;
   
• India acted inconsistently with Article 7, Annex B(2) and Annex B(5)(a), (b) and (d) of the SPS Agreement because it failed to comply with a number of notification and publication requirements therein.

 
 After-effects:-
a) India can appeal the ruling within 60 days
b) The ruling could increase imports of poultry and eggs from the US

Diesel vs Petrol Car – Economics of buying one over the other

This is a question which every car buyer faces and the calculation is a bit cumbersome for some. This is a small guide to do the same. 

The table below shows the difference in EMI payments for an additional loan you take to finance your diesel car. For eg: Assume that Petrol version costs 5 lakhs and Diesel version costs 6.2 lakhs. If you pay the same upfront amount for both cars, you need to finance the additional 1.2 lakhs using car loan. For a 3 year loan, the extra EMI you need to pay is Rs. 3866 while for a 5 year tenure you pay Rs. 2557 extra. 

Assumptions:- Car Loan interest rate has been taken as 10.5% p.a. ( SBI rate)

TABLE  1

Price difference/Loan Tenure	36	48	60
40000	(1,288.82)	(1,015.25)	(852.30)
80000	(2,577.64)	(2,030.50)	(1,704.60)
100000	(3,222.05)	(2,538.13)	(2,130.75)
120000	(3,866.46)	(3,045.76)	(2,556.90)
150000	(4,833.08)	(3,807.19)	(3,196.12)

Now the question you face is whether your fuel savings due to the higher mileage of diesel cars and lower price of diesel offsets the above EMI.

For calculations below, it has been assumed that there is a 5 km/litre difference in mileage i.e. 20 km/l for diesel car and 15 km/l for a petrol car. Calculations would change if mileage is 12 and 17 though the difference is still 5. These convexity effects have been ignored.

Now that diesel price has been deregulated and hence both Petrol and Diesel prices would move in tandem, the difference in price would remain almost constant assuming the states do not change the tax structure on these. The current difference in price is Rs. 11 in Delhi and Rs. 13 in UP. But some states like Punjab have a higher difference around Rs. 18.

The table below shows the Rupee Savings for different usage patterns of cars. If your daily usage is around 50 kms and hence monthly run around 1500 kms, then your savings are Rs. 2490 if price difference is 11 and so on.

TABLE 2

Daily run	Monthly run	11	12	13	14	15	18
20	600	996	1036	1076	1116	1156	1276
30	900	1494	1554	1614	1674	1734	1914
50	1500	2490	2590	2690	2790	2890	3190
80	2400	3984	4144	4304	4464	4624	5104
100	3000	4980	5180	5380	5580	5780	6380
150	4500	7470	7770	8070	8370	8670	9570
200	6000	9960	10360	10760	11160	11560	12760
250	7500	12450	12950	13450	13950	14450	15950
300	9000	14940	15540	16140	16740	17340	19140

You can do 2 kinds of calculations here:-

a)      Conservative scenario:- Take price difference as lowest in the table i.e Rs 11 as all states might converge to that in the future. Also in case this happens, your savings would change

b)      Current scenario:- Take the figure based on difference in prices in your state.

Now using above 2 tables, you can clearly choose which car you want to buy on the basis of economics of fuel savings and additional car cost.

Based on Table 1, if price difference between diesel and petrol version of the car you have shortlisted is 1 lakh, your EMIs difference is Rs. 3222 for 3 years and Rs 2538 for 5 years.

Based on Table 2, take the petrol-diesel price difference in your state and see how much you need to use your car monthly to offset the extra EMI. If price difference is Rs. 12, then   Rs 2590 is saved if your car runs 1500 kms in month. For 3222 Rs, it has to run approx 1900 kms in a month. 

So, if your usage is less than this, then you should prefer the petrol version. Else the diesel version is better.

India — Certain Measures Relating to Solar Cells and Solar Modules (Complainant: United States) at DSB

On January 11, 2010, India launched its national solar policy, the Jawaharlal Nehru National Solar Mission (JNNSM). 
Phase I of that national policy is composed of two parts: Batch 1 and Batch 2. 
Under Batch 1, India required developers of solar photovoltaic (“PV”) projects employing crystalline silicon technology to use solar modules manufactured in India. 
Subsequently, under Batch 2, India expanded this domestic sourcing requirement to crystalline silicon solar cells as well. 
In its draft policy for Phase II of the JNNSM, India has stated that it is considering expanding the scope of the domestic content requirements further to include solar thin film technologies, which currently comprise the majority of U.S. solar exports to India. 

India also offers solar energy developers participating in the JNNSM a guarantee that the government will purchase a certain amount of solar power at a highly subsidized tariff rate, provided that they use domestically manufactured solar equipment instead of imports.

Contentions of US's complaint against India

India's measures appear to be inconsistent with:

• Article III:4 of the GATT 1994 because the measures appear to provide less favorable
treatment to imported solar cells and solar modules than that accorded to like products
originating in India;

• Article 2.1 of the TRIMs Agreement because the measures appear to be trade-related
investment measures inconsistent with Article III of the GATT 1994;

• Articles 3.1(b) and 3.2 of the SCM Agreement because the measures appear to provide a
subsidy contingent upon the use of domestic over imported goods; and

• Articles 5(c), 6.3(a), and 6.3(c) of the SCM Agreement because the measures appear to
cause serious prejudice to the interests of the United States through displacement or
impedance of imports of U.S. solar cells and solar modules into India and through lost
sales of U.S. solar cells and solar modules in India.

 As India has not appropriately notified these measures, India appears to have failed to
comply with Article 25 of the SCM Agreement.

 India's measures also appear to nullify or impair the benefits accruing to the United States
directly or indirectly under the cited agreements.