India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

<strong>India</strong>n Legal Structure for Agricultural Matters
<strong>India</strong> is a democratic republic governed at the national level by a bicameral parliament.
Members <strong>of</strong> the lower house, known as the House <strong>of</strong> the People (Lok Sahba), are directly
elected, while members <strong>of</strong> the upper chamber, the Council <strong>of</strong> the States (Rajya Sahba),
are elected by the state <strong>and</strong> territorial legislatures, with a few exceptions. <strong>India</strong>’s
president, elected by an electoral college for a five-year term, acts as the head <strong>of</strong> state,
<strong>and</strong> the prime minister <strong>of</strong> the Lok Sahba is the head <strong>of</strong> government.
Governmental responsibilities are divided between the central (“union”) government <strong>and</strong>
state governments. The seventh <strong>of</strong> the 12 schedules 1 in the <strong>India</strong>n constitution comprises
three lists. List I, the union List, sets out the departments, activities, <strong>and</strong> subjects under
the control <strong>of</strong> the union government. List II, the State List, does the same for the states.
List III, the Concurrent List, specifies the areas where states <strong>and</strong> the union government
share powers <strong>and</strong> responsibilities. 2 Included on the State List is agriculture, meaning that
unlike such sectors as defense, banking <strong>and</strong> finance, transportation, <strong>and</strong> communications,
agriculture falls within the legal domain <strong>of</strong> <strong>India</strong>’s states <strong>and</strong> not the union government. 3
Thus, the agricultural sector is largely, though not completely, controlled at the state level.
This authority covers agricultural education <strong>and</strong> research, protection against pests,
prevention <strong>of</strong> plant <strong>and</strong> animal diseases, water supplies <strong>and</strong> irrigation, <strong>and</strong> l<strong>and</strong> use rights
for agricultural l<strong>and</strong>. It also encompasses agricultural tax policy, such as income <strong>and</strong>
excise taxes on agricultural products <strong>and</strong> estate <strong>and</strong> succession duties (taxes) on
agricultural l<strong>and</strong>. For alcoholic beverages, state-level authority extends even further to
embrace nearly all aspects <strong>of</strong> the “production, manufacture, possession, transport,
purchase, <strong>and</strong> sale” <strong>of</strong> those items. 4
The allocation <strong>of</strong> power to the states on agricultural matters is less absolute than it might
appear. In reality, other provisions <strong>of</strong> the <strong>India</strong>n constitution give the union government
the legal means to influence or intervene in agricultural policies throughout <strong>India</strong>. 5 Very
broadly, Article 248 <strong>of</strong> the constitution grants the union government residual powers <strong>of</strong>
legislation for policy areas not specified under the three lists. In addition, under Article
249, the union government has authority to legislate on any subject, even those on the
State List, if the union government believes it to be “in the national interest.” Subsequent
cases brought before <strong>India</strong>’s Supreme Court (e.g., State <strong>of</strong> Bengal versus Union <strong>of</strong> <strong>India</strong>,
1962) have confirmed the union government’s authority to legislate on issues from the
State <strong>and</strong> Concurrent Lists if the national interest is at stake. 6
Similarly, under paragraph 33 <strong>of</strong> the Concurrent List, both the union <strong>and</strong> state
governments have legislative authority over trade in foodstuffs, including edible oilseeds
<strong>and</strong> oils, cattle fodder, raw cotton, <strong>and</strong> cottonseed, as well as over their production,
supply, <strong>and</strong> distribution. The union List gives the central government certain direct
powers over agriculture: under paragraph 51, the union government can legislate
st<strong>and</strong>ards <strong>of</strong> quality for agricultural exports or goods transported from one state to
another. Under paragraph 52, the parliament is authorized to control the production <strong>of</strong>
1 A schedule is a statement <strong>of</strong> supplementary details in a legislative document.
2 Government <strong>of</strong> <strong>India</strong>, Ministry <strong>of</strong> Law <strong>and</strong> Justice, The Constitution <strong>of</strong> <strong>India</strong>, July 2008, 315–329.
3 Singh, Federalism, Nationalism <strong>and</strong> Development, 104.
4 Government <strong>of</strong> <strong>India</strong>, Ministry <strong>of</strong> Law <strong>and</strong> Justice, The Constitution <strong>of</strong> <strong>India</strong>, July 2008, 323–325.
5 Singh, Federalism, Nationalism <strong>and</strong> Development, 105.
6 Ibid., 106.
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