WORLD TRADE
ORGANIZATIONWT/DS175/1
G/L/310G/TRIMS/D/15
7 June 1999
(99-2279)
Original:  English
INDIA – MEASURES AFFECTING TRADE AND INVESTMENT
IN THE MOTOR VEHICLE SECTOR
Request for Consultations by the United States
The following communication, dated 2 June 1999, from the Permanent Mission of the United
States to the Permanent Mission of India and to the Chairman of the Dispute Settlement Body, is
circulated in accordance with Article 4.4 of the DSU.
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My authorities have instructed me to reques t consultations with the Government of India
pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes (DSU), Article XXII:1 of the General Agreement on Tariffs and Trade 1994
(GATT 1994) and Article 8 of the Agreement on Trad e-Related Investment Measures (to the extent it
incorporates by reference Article XXII of the GATT 1994) regarding certain measures affecting trade
and investment in the motor vehicle sector.  These measures have been implemented by India through
Public Notice No. 60 ((PN)/97-02) of the Indian Ministry of Commerce, published in the Gazette of
India Extraordinary, effective 12 December 1997;  the Foreign Trade (Development & Regulation)
Act 1992;  the Export and Import Policy, 1997-2002;  memoranda of understanding signed by the
Government of India pursuant to Public Notice No. 60;  as well as any amendments thereto, any otherlegislative or administrative provisions implemented or consolidated therein, and any implementing
measures or associated administrative actions taken thereunder.
The measures in question require manufacturing firms in the motor vehicle sector to achieve
specified levels of local content; to achieve a neutralization of foreign exchange by balancing thevalue of certain imports with the value of exports of cars and components over a stated period;  and to
limit imports to a value based on the previous year's exports.  These measures are enforceable under
Indian law and rulings (including under the Foreign Trade (Development & Regulation) Act 1992).
In addition, manufacturing firms in the motor vehicl e sector must comply with these requirements in
order to obtain Indian import licenses for certain motor vehicle parts and components.
The United States considers that these measures violate the obligations of India under
Articles III and XI of the GATT 1994, and Articl e 2 of the Agreement on Trade-Related Investment
Measures.
We look forward to receiving your reply to this request and to fixing a mutually acceptable
date for consultations.
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