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INDIA AND THE OECD: a mutually beneficial partnership

The OECD is proud to have India as a Key Partner. As a dynamic global player, India has become the world’s fastest-growing major economy and a hub for knowledge-based industries. The Government of India has set an ambitious reform agenda to strengthen human, physical and administrative capacity and further develop its manufacturing sector and strengthen innovation. Implementing these reforms will be essential if India is to address a number of its current challenges. In spite of progress, India still faces major challenges in terms of poverty and inequality. Nearly 60% of India’s population is dependent on agriculture and related activities; the livelihoods of these people are increasingly under threat from the effects of climate change, and existing land and labour laws limit economies of scale and productivity. Addressing environmental degradation, resource depletion and persistent social inequalities will be crucial to sustain and further build on the considerable economic and social progress India has achieved. Our partnership with India encompasses a wide range of policy areas to advance sustainable development and well-being, including labour market development, gender equality, tax reform, corporate governance and the fight against corruption. India’s valuable policy experience has enriched the work of the OECD, increasing the relevance of its analyses and legal standards in today’s increasingly globalised world. In turn, the Organisation’s ability to bring together expertise and evidence-based analysis from a wide range of policy networks benefits India by informing its policy choices and supporting its reform agenda.

Our co-operation also extends to the broader context of major international fora, such as the G20. The OECD actively supports India´s role as co-chair in the G20 Framework Working Group to harness new sources of growth and advance the structural reform agenda. We also work together in the G20 to foster more inclusive global development, in line with the 2030 Agenda for Sustainable Development.

This brochure provides a glimpse of the scope, depth and detail of our joint work. It illustrates the broad range of policy challenges on which the OECD and India collaborate. We look forward to further deepening our engagement in the years to come, and to joining forces to design, develop and implement “better policies for better lives” in India and around the world.

ANGEL GURRÍA, Secretary-General OECD

CONTENTS . 1

EMPLOYMENT AND SOCIAL DEVELOPMENT 38

Creating more and better jobs 39

Promoting social inclusion and

health system performance 40

Fostering skills through education and training 42

INDUSTRY AND INNOVATION 43

Building a knowledge economy 44

Promoting a first-class steel industry 46

Meeting transport infrastructure needs 47

ENVIRONMENT AND ENERGY 49

Combating climate change 50

Fighting biodiversity loss 52

Towards a cleaner and healthier environment 53

Improving water management 54

Strengthening chemicals and biotechnology safety 55

Providing affordable and clean energy 57

Developing clean and safe nuclear power 59

ANNEXES 61

OECD legal instruments 61

OECD legal instruments to which India has adhered 61

Partnerships in OECD Bodies 61

India’s participation in OECD Bodies 62

News and publications 62

THE OECD AND INDIA 2

Building up to two decades of partnership and beyond 3

Finding global solutions at the G20 6

The OECD Development Centre and India 9

Engaging with stakeholders 11

SUSTAINABLE, BALANCED AND INCLUSIVE GROWTH 12

Maintaining economic growth and resilience 13

Engaging in dialogue on macroeconomic policy 15

Fostering inclusive growth 16

Greening growth 17

Fostering better data for better policies 19

Enhancing agricultural productivity and ensuring

food security 20

Promoting effective development co-operation 21

EFFICIENT FUNCTIONING OF MARKETS 22

Enhancing co-operation on international investment 23

Improving financial inclusion, education

and consumer protection 25

Facilitating trade and upgrading global value chains 27

Promoting sound competition 28

Strengthening consumer protection 29

PUBLIC AND CORPORATE GOVERNANCE 30

Improving corporate governance 31

Raising the bar on state-owned enterprises 33

Fighting corruption and enhancing integrity 34

Improving international tax transparency

and compliance 35

Ensuring sustainable and transparent public finances 37

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Contents

THE OECD AND INDIA

L Angel Gurría, Secretary-General of the OECD and Nirmala Sitharaman, Minister of State (independent charge) at the Ministry of Commerce & Industry of India meet at OECD Headquarters in Paris in June 2016. © OECD/Julien Daniel

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Building up to two decades of partnership and beyondIndia’s relationship with the OECD has developed steadily since 1998, when it joined the Steel Committee. Since 2007, India has been a Key Partner of the OECD and its active participation in the Organisation’s bodies is encouraged and welcomed by Member Countries. India’s increasing engagement in OECD work over the years provides a valuable contribution to a number of significant projects and bodies, described throughout this brochure.

India participates as an Associate or Participant in 13 OECD bodies and adheres to 9 OECD legal instruments, making it an important contributor to work on corporate governance, competition, consumer policy, digital economy, fiscal affairs, fiscal relations across all levels of government, insurance and private pensions, chemicals, nuclear energy and steel. India has shown a pronounced commitment to OECD work on tackling tax evasion and improving tax transparency, and its engagement has progressively expanded to a broader array of policy areas.

The number of Indian delegates participating in OECD activities has more than doubled in the past ten years. In 2015, 142 Indian officials from 36 different ministries and government institutions registered to attend the meetings of 21 OECD bodies, with the Ministry of External Affairs playing an important co-ordinating role. Furthermore, India plays an active role in OECD’s regional activities in Asia by organising and hosting forums and workshops. In turn, there have been an increasing number of high-level OECD visits to India.

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“The global relevance of India as member of the G20 with a vibrant economy is ever increasing. Foreign investment, trade and participation in global value chains are the most significant signals of a mutually beneficial relationship. The country is defining its own development path in an inclusive way by investing in manufacturing and services whilst still working to boost the productivity of its agricultural sector. The government has launched a program of bold reforms. Providing skills, jobs and opportunities to its rapidly growing young population will help the government to reap the full benefits of its efforts. That is what OECD is about: shaping together better policies for better lives. The Organisation provides a forum for sharing good practices between its members and over 100 emerging economies to develop policies to promote sustainable and inclusive growth worldwide. India’s own perspective and experience make a unique contribution to these discussions and enrich the global development agenda.

The OECD Informal Reflection Group on India is a tool to help the OECD and India to better appreciate each other, understand how we can learn from each other, reinforce cooperation and tackle together the global challenges ahead.”

Jean-Joël Schittecatte, Ambassador of Belgium to the OECD, Leader of the Informal Reflection Group on India

“India has had fruitful, sectoral engagement with the OECD for a number of years now. Examples of excellent cooperation between India and the OECD may be found in the OECD’s Development Centre and the Centre for Tax Policy & Administration. India looks forward to playing an active role in the future at the OECD”.

Mohan Kumar, Ambassador of India to France

“Last year India and the OECD worked jointly and intensively to further advance its co-operation on issues related to tax policy, investment, development and many other specific areas of mutual interest. One of the Asian countries with more dynamic economic growth, India pursues a far-reaching reform agenda, partnering with the OECD in important initiatives such as the OECD Global Development Forum. I believe Make in India offers an interesting platform to further enhance our partnership.”

Paulo Vizeu Pinheiro, Ambassador of Portugal to the OECD, Chair of the External Relations Committee

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“The OECD works bilaterally with India on several aspects of SDG implementation, including in policy areas such as domestic resource mobilisation, infrastructure, energy and environment. Indian experiences and policy perspectives enrich the global policy debate and are very relevant internationally. We look forward to enhancing our co-operation with India at the different UN fora, to provide peer learning opportunities and to support SDG implementation around the world.”

Marcos Bonturi, OECD Special Representative to the United Nations

“The OECD’s Global Relations Strategy seeks to make the Organisation an effective and inclusive global policy network. Reflecting its growing relevance and weight as a powerhouse for the global economy, close co-operation with India – along with the four other Key Partners (Brazil, China, Indonesia and South Africa) – is a crucial element of this Strategy. The OECD values India’s active partnership to tackle global tax evasion and improve tax transparency as well as its important contributions to other policy areas including G20-related initiatives to boost investment, improve labour markets conditions and combat corruption. The global policy debate at the OECD benefits greatly from Indian perspectives. The OECD stands ready to support the Government of India in its policy priorities to achieve sustainable and equitable growth.”

Andreas Schaal, Director, OECD Global Relations

Finding global solutions at the G20

The OECD and India are working together in the context of the G20 with the aim to promote strong, sustainable, balanced and inclusive growth on a global scale benefitting millions of people worldwide.

Since 2008, the OECD has actively partnered with the G20 and is today a “strategic advisor” involved in virtually all G20 work-streams across all levels of engagement, from high-level leadership by the Secretary-General and G20 Sherpa, to the continuous sharing of OECD expertise at the technical, working group level. Through its multi-faceted contribution to the G20, the OECD shares its evidence-based analysis and policy recommendations to help shape the global economic

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L Family photo of the G20 Summit, 4 September 2016 in Hangzhou.

India’s economy is projected to remain strong, mainly driven by an increase in FDI inflows, expanding infrastructural investment, and the successful government schemes such as Make in India and Start-Up India. However, the global economy is stuck in a low growth trap. To keep India on the sustainable and inclusive growth path, and to put the global economy back on

track, collective actions across economies are required. To that end, the G20 continues to provide a valuable platform to address global challenges. The OECD is honoured to work closely with its key partner, India, in the context of the G20 covering varieties of policy areas.

Gabriela Ramos, OECD Chief of Staff and Sherpa to the G20

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agenda. The G20 deliberation started in 2008 to deal with the economic crisis – acting as a global economic and financial global firefighter, it has worked to co-ordinate fiscal, monetary and structural policies to put the global economy on the path to recovery. The G20 is uniquely positioned to both take a long-term approach to sustainable growth and address the global challenges we face now.

In this context, the OECD supports the G20 in the many priorities identified by its members, including India. Last year, this included contributions to fostering new sources of growth through innovation, digital economy and the new industrial revolution; promoting inclusive trade and

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investment, in particular inclusive GVCs; implementing the 2030 Agenda for Sustainable Development; and supporting food security and agriculture productivity. As India continues to pursue its Make in India initiative, engagement with fellow G20 members in the area of international investment will become increasingly important.

India is strongly engaged with OECD efforts to support the G20 in enhancing the equity and fairness of the international tax architecture by fighting tax evasion and tax havens and addressing tax avoidance by large corporations and loopholes in the international tax system. India has played a leading role in key OECD/G20 initiatives, including the

G2

Base Erosion and Profit Shifting (BEPS) project, where the newly approved inclusive framework allows for all interested countries and jurisdictions to participate on an equal footing, with over 100 countries now participating.

Under the Development Working Group, the OECD has been working closely with India and other G20 countries on the G20 Action Plan to define how work across G20 tracks can be made more supportive of and aligned with the 2030 Agenda for Sustainable Development. This is an area of particular interest to India as it begins to focus its attention on the implementation of the Sustainable Development Goals at a national and subnational level.

In the area of trade and investment, the OECD is supporting G20 efforts to reduce trade costs, explore the inter-relationship between trade and investment, unlock

the potential of e-commerce, design a G20 strategy for promoting inclusive global value chains (GVCs), and define Guiding Principles for Global Investment Policymaking. India has played an important role in these areas, and continues to share a strong mutual interest with the OECD in GVCs, services trade, and SMEs. As India continues to pursue its Make in India initiative, engagement with fellow G20 members in the area of international investment will become increasingly important.

As co-chair of the Framework Working Group, India is working actively with the OECD on a G20 structural reform agenda designed to ensure strong, sustainable and balanced growth and to achieve the Brisbane objective of an additional 2% growth by 2018.

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Finding global solutions at the G20

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L Narendra Modi, Prime Minister of the Republic of India, and Angel Gurría, Secretary-General of the OECD, at the G20 Leaders Summit on 15 November 2015 in Antalya, Turkey.

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The OECD Development Centre contributes expert analysis to help decision makers in developing and emerging economies find policy solutions to stimulate growth and improve living conditions.

The Development Centre occupies a unique place within the OECD, where countries can share their experience of economic and social development policies. It co-operates closely with other parts of the OECD, particularly those working on development issues. Membership to the Development Centre is open to both OECD and non-OECD, and today over 50 countries are members, of which 26 are OECD members and 24 are developing and emerging economies. India has been a member of the Development Centre’s Governing Board since 2001, and is involved in setting the programme of work and budget, and in financing the Centre.

The OECD Development Centre and India

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The Development Centre has been engaging with India through its Emerging Market Network (EMnet), a platform that brings together high-level officials, top executives from multinational corporations and OECD experts to discuss and analyse policy challenges, economic trends and the business environment in emerging markets. Two Indian companies, Tata and Mahindra, frequently participate in the meetings of EMnet. Furthermore, in co-operation with the Confederation of Indian Industry, EMnet organised a regional meeting on “Linking India with Global Production Networks” in New Delhi in August 2015. The meeting brought together Indian companies, foreign investors, government officials and international organisations. Secretary Amitabh Kant and Joint Secretary Atul Chaturvedi from the Department of Industrial Policy and Promotion (DIPP) of the Ministry of Commerce and Industry held keynote addresses providing important insights into the Make in India initiative of the Government of India.

I Amitabh Kant, Secretary of DIPP (second from left), attends the EMnet meeting on Linking India with Global Production Networks in August 2015 in New Delhi, India.

The OECD Development Centre and India

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The OECD Development Centre is also carrying out a study in co-operation with Dasra, India’s leading strategic philanthropy foundation; the British Council; and the State of Maharashtra, to assess the engagement between foundations and government in India following the OECD Guidelines for Effective Philanthropic Engagement. An OECD-Dasra Conference on “Promoting Effective Foundation-Government Partnerships in India” was held in July 2016 in Mumbai as a part of this work.

Biennially, the Development Centre also produces the Economic Outlook for Southeast Asia, China and India in collaboration with several regional organisations, which analyses the short and medium-term economic trends in the region. The 2016 edition draws on contributions from the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the Asian Development Bank Institute. For India, the 2016 report highlights the importance of financial education programmes in ensuring financial inclusion, especially as financial markets become more sophisticated and complex. It also shows that the accessibility

of education remains a challenge, particularly at the secondary and tertiary levels. Improvements in educational quality will be important to equip workers with the skills needed for employment in innovative fields in India. The 2017 edition of the Outlook, released in December 2016, emphasises the region’s energy challenges. A particular focus on initiatives to promote foreign direct investment and entrepreneurship in India is also included.

The OECD Development Centre is working on a publication with the Economic Research Institute for ASEAN and East Asia (ERIA) on policies for promoting quality infrastructure investment in emerging Asia, including India. The publication focuses on railroad infrastructure and addresses the challenges related to limited public sector financing, and a lack of methodological and technical know-how.

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The OECD collaborates with India’s business communities and trade unions.

The Business and Industry Advisory Committee to the OECD (BIAC) serves as the voice of major industrial and employer organisations in OECD work. The Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) are observer associations in the Committee and contribute their perspectives and expertise to BIAC and OECD policy discussions on a broad range of issues. The OECD regularly collaborates with CII to conduct seminars and workshops, most recently in the areas of education, innovation and inclusive growth, anti-corruption, and integration into global value chains. The OECD has engaged with FICCI on water security, foreign bribery and tax policy. To strengthen their relations, the OECD and CII, and the OECD and FICCI have negotiated memorandums of understanding to set out conditions for co-operation in a number of economic, social, governance and environmental policy areas.

The Trade Union Advisory Committee to the OECD (TUAC), an international trade union organisation, also has a longstanding consultative status with the OECD and its various committees. The TUAC works closely with the Indian labour movement both directly and through the International Trade Union Confederation (ITUC) to ensure that the perspectives of Indian workers are taken into account in OECD policy recommendations. The Indian National Trade Union Congress actively participates in the L20 forum organised by TUAC and the ITUC to convey key messages of the global labour movement at the G20.

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“As a $2 trillion economy with rising disposable incomes, India represents a bright spot in the global economy. As a result, it is attracting strong interest from overseas investors. As India continues to expand and grow, the international community needs to keep abreast of the

rapid changes that are taking place. It is here that the OECD plays a crucial role. As a Key Partner of the OECD, India’s active role in several OECD committees and bodies in spanning several policy areas has allowed it to discuss the reforms that are being undertaken in the country as well as the opportunities it presents with OECD member countries.”

Chandrajit Banerjee, Director General of the Confederation of Indian Industry (CII)

“The Organisation for Economic Co-operation and Development (OECD) has been instrumental in promoting policies for economic and social development. The OECD has been a valuable source of policy analysis and international statistics that has aided research and policy making for the

governments across countries. FICCI has been an observer member of the Business and Industry Advisory Committee to the OECD and is delighted to further strengthen this relationship through our strategic engagement with OECD on multiple areas of co-operation including social, economic, governance and environmental policy areas. This partnership will also help Indian industry to learn from the wide repository of best practices and policy work of OECD.”

A. Didar Singh, Secretary General of the Federation of Indian Chambers of Commerce and Industry (FICCI)

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According to the latest OECD Economic Outlook, economic growth in India is projected to remain strong at around 7.5% in 2016 and 2017. Private consumption will be boosted by expected large increases in public wages and declining inflation. Investment will pick up gradually as excess capacity fades, deleveraging for corporations and banks continues, and infrastructure projects mature.

Through different publication series, the OECD examines macroeconomic and structural policies and developments as well as their interaction. Twice a year, the OECD Economic Outlook analyses the major trends and forces that shape the short-term economic prospects of OECD Member and Partner countries, including India. The September 2016 Economic Outlook noted that solid growth is expected to continue in India, boosted by the large increase in public sector wages – showing the impact of domestic markets on India’s growth – and the recent passing of key structural reforms, particularly the centralised Goods and Services Tax. The June 2016 forecast welcomed the Government of India’s renewed commitment to fiscal consolidation but also advocated increasing spending on physical and social infrastructure. It also underlines that creating more and better quality jobs and increasing access to quality health care and education are key to unlocking inclusive growth in India.

Maintaining economic growth and resilience

Going for Growth provides an annual comparative overview of structural policy developments and reform priorities for maintaining long-term growth, improving competitiveness and productivity and creating jobs. Based on a broad set of internationally comparable indicators, it identifies structural reform priorities for each country and, as such, feeds into the G20 Framework for Strong, Sustainable and Balanced Growth. The 2015 edition outlines five priorities for India:

l Reducing administrative and regulatory burdens on companies

l Simplifying and modernising labour laws

l Enhancing access to the education system and its quality

l Promoting more effective infrastructure-related regulations

l Undertaking wide-ranging financial sector reforms

L Catherine L. Mann, OECD Chief Economist and Head of the Economics Department, presents the findings of the Indian Economic Survey at the Indian Institute of Management, Centre for Public Policy in February 2015 in Bengaluru, India.

The Economic Surveys, published biannually for each OECD Member and Key Partner economy, asses the main economic challenges and propose reform options drawing on international practices. The third Economic Survey of India, prepared in co-operation with the Indian Ministry of Finance, was released in November 2014. It showed that bringing more women into the labour force would boost economic growth by two percentage points annually and make it more inclusive. In February 2015, the OECD Chief Economist presented the main findings of the OECD Economic Survey in Bengaluru, Mumbai, Ahmedabad and New Delhi, with the government, the media, and universities in attendance.

The next Survey for India will be released in the beginning of 2017. In addition to the recurring analyses of macroeconomic developments and of progress made on structural reforms, this edition contains special chapters on reforming direct taxes and on achieving strong and balanced regional development in India.

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The Government of India has targeted a reduction of the fiscal deficit from 3.9% of GDP in FY 2016 to 3.5% GDP in FY 2017. The challenge is to ensure sustainable and equitable public finances in an increasingly uncertain economic environment.

The OECD actively engages with India to develop sound macroeconomic and fiscal policies. Officials from the Ministry of Finance and the Reserve Bank of India regularly participate in the OECD Economic Policy Committee and its Working Party on Short-Term Economic Prospects, which review the economic and financial developments and policies of OECD Member and Partner countries. The Committee pays special attention to the effects of national policies in the light of the increasing interdependence of economies, whereas the Working Party focuses on providing a systematic exchange of high-quality short-term forecasts of economic developments. Furthermore, the OECD Economic Survey of India includes an assessment of India’s fiscal stance and public finance policies and is discussed at the Economic and Development Review Committee (EDRC) by representatives from OECD and Partner country governments. High-level government officials represent India at the EDRC discussions.

Upon invitation, the OECD presented its work on international good practices on fiscal rules and frameworks to the Fiscal Responsibility and Budget Management (FRBM) Review Committee in July 2016 in New Delhi. The FRBM Review Committee, which was appointed by the Government of India, has the remit to provide a comprehensive assessment of the medium-term fiscal framework for India and give recommendations. The OECD discussed with the Members of the Committee how countries can establish fiscal rules and frameworks that ensure sustainable public finances, safeguard intergenerational equity, and at the same time cushion adverse shocks.

OECD analyses on moving towards prudent debt targets using fiscal rules are provided in the paper Prudent Debt Targets and Fiscal Frameworks, published in July 2015. The paper examines long-run prudent debt targets for OECD countries and country-specific fiscal rules.

Engaging in dialogue on macroeconomic policy

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“The technical support of OECD based on our requests has been invariably positive, prompt and meeting high benchmarks. In this context, as Chairman of the Fiscal Responsibility and Budget Management Review Committee constituted by the Government of India to reconfigure India’s fiscal road map, their support has been thorough and valuable. The

technical papers presented, brought out the prevalent international practices, the transition to second generation fiscal reforms and institutional mechanisms like a Fiscal Council. This demonstrated the expected high analytical skills of OECD with policy prescriptions adapted to country specific needs. The Committee found their contribution valuable and is grateful for the unstinted cooperation they have received in its deliberations.”

N.K. Singh, Chairman of the Fiscal Responsibility and Budget Management Review Committee

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While rapid economic growth is transforming India, the country remains home to a third of the world’s poor. The OECD provides evidence-based analysis, shares international best practices and identifies policy options in support of India’s efforts to foster inclusive growth so that the benefits of growing prosperity are shared evenly.

The OECD works with governments to identify policy solutions to break down barriers to inclusive growth. All on Board: Making Inclusive Growth Happen, published in May 2015, takes a comprehensive approach to examining growth, looking beyond traditional monetary indicators to multiple dimensions that reflect the quality of life of all participants in an economy. The report notes India’s commitment to the provision of universal health care and an inclusive growth strategy that will improve access to basic services and formal jobs in rural and urban areas.

In It Together: Why Less Inequality Benefits All highlights the key areas where inequalities are created and where new policies are required to diminish non-standard work and job polarisation, tackle persisting gender gaps, minimise high wealth concentration, and expand the impact of redistribution policies. The report highlights recent efforts by

Fostering inclusive growth

the Government of India to incentivise formal employment, improve job quality and expand the redistributive capacity of the tax system.

The OECD has been looking not only at the functioning of the economic system but also at the diverse experiences and living conditions of people and households. Measuring well-being and progress is a key priority that the OECD is pursuing as part of the Better Life Initiative. The OECD flagship publication How’s Life?, published in October 2015, describes the essential ingredients that shape people’s well-being in OECD and partner countries and includes some data on India.

Given the importance of cities and metropolitan areas in making inclusive growth happen, the OECD launched the Inclusive Growth Cities Campaign in March 2016 to increase the awareness of rising inequalities, refocus the debate on concrete solutions and empower local governments as leaders in the transition towards more inclusive growth. Central to this campaign is the creation of a network of local leaders to promote Inclusive Growth. The first meeting of the Network was held in March 2016, and a roadmap for action was launched.

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the changes needed in sectors such as agriculture and infrastructure to promote sustainable development. Aligning Policies for a Low-Carbon Economy, published in July 2015, identifies where existing policy and regulatory frameworks are at odds with climate policy. Examples from India and other emerging economies have enriched this work. India also contributed to the 2015 OECD report Going Green: Best Practices for Sustainable Procurement by sharing the efforts of the Ministry of Railways to use public procurement as a tool to conserve energy.

The OECD is committed to collaborating on the generation, management and sharing of knowledge about green growth through policy dialogue. The Organisation is one of the four founding organisations of the Green Growth Knowledge Platform (GGKP) to which The Energy and Resources Institute (TERI) of India is an important knowledge partner. The GGKP Fourth Annual Conference in September 2016 focused on the theme of transforming development through inclusive green growth and brought together leading practitioners and experts on green growth from India and other countries.

The Green Growth and Sustainable Development Forum is an OECD initiative aimed at providing a dedicated space for

Like many other countries, India faces the challenge of managing the trade-off between economic growth and environmental pressures. Green growth is the only way to sustain economic growth and development over the long term, in India as for other countries.

The OECD provides targeted advice to its Members and Partner countries as they design and implement economic, environmental, investment, regional and innovation policies through the OECD Green Growth Strategy and its three landmark reports – Towards Green Growth, Towards Green Growth- Monitoring Progress – OECD Indicators and Tools for Delivering on Green Growth. In addition, a report titled Towards Green Growth? Tracking Progress, published in June 2015, assesses the advancements countries have made in aligning economic and environmental priorities since 2011. The report shows that mismanaging and undervaluing natural resources such as land and ecosystems can impose substantial human and economic costs in India, as in other Member and Partner countries.

When tailoring green growth strategies to developing countries, the OECD examines in particular the links between green growth and poverty reduction, and identifies

Greening growth

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Forest and Climate Change, the Confederation of Indian Industry (CII) and the Gesellschaft für Internationale Zusammenarbeit (GIZ) held a joint workshop in May 2016 in New Delhi to assess the opportunities and challenges for the implementation of EPR in India. India recently updated its EPR regulations on e-waste and plastics and is considering the use of such schemes in other areas (such as end-of-life vehicles). OECD experience is providing useful insights into how such systems can be successfully designed and implemented, and what pitfalls to avoid.

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multi-disciplinary dialogue on green growth and sustainable development. Dr. Anushree Sinha, Senior Fellow at the National Council of Applied Economic Research spoke at the annual Forum held in 2014, and the following event in November 2016 focused on the theme of spatial planning, land use and urban green growth. 

The OECD also works on analysing the effectiveness and efficiency of economic instruments to support the transition towards sustainable materials management. Focus is put on extended producer responsibility (EPR), an environmental policy that extends the responsibility of producers into the post-consumer stage of products, including appropriate disposal and recycling. The Indian Ministry of Environment,

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L Ajay Narayan Jha, Secretary at the Ministry of Forest, Environment and Climate Change (third from right) attends the International Workshop on Extended Producer Responsibility in May 2016 in New Delhi, India.

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The OECD-hosted Partnership in Statistics for Development in the 21st Century (PARIS21) aims to help countries develop their national statistical system, including to monitor the Sustainable Development Goals. In September 2016, PARIS21 demonstrated the Advanced Data Planning Tool (ADAPT) to representatives from South-Asia at a sub-regional Workshop on Data and Statistics for the SDGs, organised by UNESCAP in New Delhi. ADAPT logs data availability, cost of undertaking data collection; and data and financing gaps to help countries develop a road map for achieving a data revolution.

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The OECD develops and maintains comprehensive databases with comparable statistics on a wide range of policy areas, and works with countries to help them produce and manage statistics. Ensuring that India is included in the full scope of its statistical databases is a priority for the Organisation and will be a crucial element in deepening engagement between the OECD and India.

Economic data on India are regularly collected and disseminated, including via a number of OECD Statistical News Releases. India has been included in some of the most high profile and important OECD databases, including a range of short term economic statistics, for international trade, monthly financial statistics such as monetary aggregates and interest rates, production indices and prices. These frequently consulted statistics provide an overview and comparison of recent international economic developments and are used in the modelling of business cycles. The OECD Factbook, an extensive, annual compilation of economic, environmental and social statistics, features a growing range of Indian statistics covering a widening selection of statistical topics.

Engaging in technical dialogue is key to achieving the development of the full range of standardised, comprehensive statistical indicators which allow for meaningful international comparisons between India and OECD partner countries. Indian experts participated in the OECD 5th World Forum on Statistics, Knowledge and Policy, held in Mexico in October 2015. The conference addressed issues from the perspective of how better evidence and measurement can lead to concrete changes in policy and behaviour to improve people’s lives. Indian expert, Ms. Shailaja Chandra, former Executive Director of the National Population Stabilisation Fund and former Chief Secretary of Delhi, spoke on issues related to gender equality. The 4th World Forum was organised in New Delhi in 2012 and focused on measuring well-being.

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L Shailaja Chandra the Executive Director of the National Population Stabilisation Fund, former Chief Secretary of Delhi, (second from right) attends the OECD 5th World Forum on Statistics, Knowledge and Policy in October 2015 in Guadalajara Mexico. ©INEGI

India’s production of agricultural commodities, particularly wheat, rice and cotton, has increased in 2016, a trend that is expected to be sustained in the next ten years. Increasing agricultural productivity is vital for lifting the country’s primarily rural population out of poverty.

OECD’s work on agricultural policies spans different topics from risk management to addressing long-term needs for improving the sector’s productivity and sustainability. The OECD is now working with the Indian Council for Research on International Economic Relations (ICRIER) to develop an Agricultural Policy Review of India, scheduled for release in 2017. The review will explore India’s agricultural policy settings with reference to developments since 1990, and will calculate Producer Support Estimates that are comparable to those produced for OECD and a number of non-OECD members through the annual Agricultural Policy Monitoring and Evaluation report. The overarching focus will be on India’s food security situation.

The OECD-FAO Agricultural Outlook analyses world commodity market trends for key agricultural products and projects how global agriculture will develop over the next ten years. The 2015 edition notes that considerable potential exists for India to reduce food insecurity in the next decade, assuming strong economic growth and increases in productivity. The latest edition, published in July 2016, indicates that today, India is the largest producer of cotton and pulses in the world. It also expects that India will become the largest producer of milk by 2020 in response to increases in demand induced by population and income growth.

The OECD has also worked with India in the context of the G20 to identify and promote policies that enhance food security and increase agricultural productivity. In 2014, the OECD and the United Nations’ Food and Agriculture Organisation (FAO) co-ordinated a report for the G20 summit on Opportunities for Economic Growth and Job Creation in

Relation to Food Security and Nutrition which highlights the vital role food security plays in the G20’s growth, jobs and finance agenda. The OECD also contributes to the development and implementation of the Agricultural Market Information System (AMIS) developed at the request of G20 Agriculture Ministers in 2011, which aims to improve the availability of commodity market information and enable timely dialogue and co-ordination amongst governments in the event of an abnormal market situation. The focus of AMIS includes maize and soybean as well as wheat and rice, two crops that are particularly important in Indian food markets. The OECD is a key reference for the certification and standardisation of certain agricultural and forestry inputs and commodities, which aim to facilitate international trade. India is a member of both the OECD Standard Codes for the Official Testing of Agricultural and Forestry Tractors and the OECD Schemes for the Varietal Certification or the Control of Seed Moving in International Trade.

www.agri-outlook.orgwww.oecd.org/agriculture www.oecd.org/tad/codewww.amis-outlook.org/amis-about

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Enhancing agricultural productivity and ensuring food security

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Co-operation Report provides statistics on and analysis of foreign aid programmes (official development assistance) as well as an overview of trends and issues currently being discussed in the development community. The 2015 edition looked at the potential of networks and partnerships to create incentives for responsible action, highlighting that the main sectors of India’s development co-operation are health, education, energy (hydropower) and information technology, which have primarily been channelled through the United Nations in 2012 and 2013. The 2016 edition explored how to unlock the potential of the private sector as a partner for delivering on the Sustainable Development Goals (SDGs). It provided examples from India such as the Aavishkaar India MicroVenture Capital Fund which makes investments in the low-income market segment, including in agriculture, education, energy, health, water and sanitation.

www.oecd.org/dac www.oecd.org/dac/effectiveness/busanpartnership

India has a long tradition of providing South-South co-operation, especially with its neighbouring countries, and is expanding its ties with Africa. Through inclusive partnerships for development, the OECD’s Development Assistance Committee (DAC) helps ensure better lives for people in the developing world by strengthening aid delivery and effectiveness.

The OECD engages with India on development co-operation through the DAC, which is the leading international forum for bilateral providers of development cooperation. Indian officials have attended DAC High-Level and Senior-Level meetings, as well as the OECD Global Forum on Development in 2014 and 2015. To further strengthen high-level dialogue with India the DAC Chair, Mr. Erik Solheim, was invited to speak in the Conference on South-South Cooperation organised by the Research and Information System for Developing Countries (RIS), a think-tank under the Ministry of External Affairs, in New Delhi in March 2016. India has shown its commitment to more effective development co-operation by endorsing in 2011 the Busan Partnership for Effective Development Co-operation, which sets out shared principles, common goals and differential commitments among adherent countries. It also recognised the Paris Declaration for Aid Effectiveness in 2004, which is a practical, action-oriented roadmap to improve the quality of aid and its impact on development. India also contributes to the OECD-WTO’s tracking of aid for trade work.

The OECD Strategy on Development aims to strengthen OECD’s contributions to stronger and more inclusive growth in the widest array of countries. As countries start to implement the 2030 Agenda for Sustainable Development, closer collaboration between India and the OECD – including through the Global Partnership for Sustainable Development – will be important in supporting the achievement of sustainable development goals, particularly in developing countries. The OECD Development

Promoting effective development co-operation

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According to OECD data, foreign direct investment (FDI) inflows to India increased by 30% during 2015. This trend has been facilitated by the Make in India initiative which focuses on investment promotion, reforms to improve the ease of doing business in India and further loosening of investment restrictions.

The OECD and the Government of India have been collaborating on investment-related issues for many years, and Indian officials regularly participate in the OECD’s Investment Committee meetings, engaging, in particular, in the Committee’s work related to investment treaties. High-level Indian government officials participated in the OECD Conference on Investment Treaties and the OECD Dialogue on Treaties which took place in March 2015. India regularly participates in the Freedom of Investment Roundtables, which in collaboration with the United Nations Conference on Trade and Development (UNCTAD) and the WTO facilitate dialogue on international investment agreements, including the investor-state dispute settlement system. India also attends the meetings of the Advisory Group on Investment and Development, an OECD platform aimed at optimising private investment and the private sector in support of sustainable development.

The OECD has developed standards that aim to promote efficient co-operation on international investment. The Policy Framework for Investment (PFI) is the most comprehensive and systematic approach for improving investment conditions, covering investment policy, investment promotion and facilitation, competition, trade, taxation, corporate governance, finance, infrastructure, developing human resources, policies to promote responsible business conduct and investment in support of green growth, and broader issues of public governance. The PFI has been updated to reflect new global economic fundamentals and to incorporate feedback from the international investment

Enhancing co-operation on international investment

“India and OECD relationship continues to grow and strengthen with each passing year. In partnership with leading institutions in India, OECD has been organizing events around different topics of sustainability. OECD partnered with Centre for Responsible Business (CRB) in 2015 and co-hosted workshops at India and Sustainability Standards Conference 2015 on sustainability issues in the Apparel

and Textile and Gold sectors. These workshops were instrumental in bringing together the concerned stakeholders from the two sectors to dialogue and give inputs on the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and the Footwear Sector, and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. The high quality workshops helped the stakeholders align the local context and challenges with global guidelines and appreciate the need for boosting efforts towards improving sustainability in the two sectors. I look forward to OECD and CRB’s joint initiatives across various sectors in India.”   

Bimal Arora, Chairperson at the Indian Centre for Responsible Business Conduct

policy community. The twin Codes of Liberalisation of Capital Movements and Current Invisible Operations promote the liberalisation of international trade in goods and services and the progressive freedom of capital movements and contribute to G20 discussions on how to help countries make the most of capital flows.

The OECD actively supports India´s alignment to international standards in business responsibility through dialogue and standard setting activities. The OECD Guidelines for Multinational Enterprises and the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas were presented at Roundtables on responsible

Enhancing co-operation on international investment

business conduct in the textile and apparel sectors and on responsible gold organised by the Centre for Responsible Business Conduct, an affiliate of the Indian Institute for Corporate Affairs (IICA) in New Delhi in November 2015.

The OECD also published a report in June 2015, Overcoming Barriers to International Investment in Clean Energy, analysing the use of local-content requirements in India’s Jawaharlal Nehru National Solar Mission and the impact of those requirements on international investment in solar and wind energy.

www.oecd.org/investment

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L Somasundaram PR Managing Director for the Indian World Gold Council (left) discusses sustainability standards in the gold sector with Sakhila Mirza, General Counsel of the London Bullion Market Association (right) and Tyler Gillard, Manager of Sector Projects and Legal Advisor, Responsible Business Conduct Unit, OECD Investment Division (centre) at the Roundtable on International Gold, in November 2015 in New Delhi, India.

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The Government of India is implementing ambitious policies on financial education and inclusion, and has opened over 200 million bank accounts for the most financially vulnerable. The National Strategy for Financial Education is central to ensuring the successful implementation of its national financial inclusion policies.

The OECD provides a unique policy forum for governments to exchange views and experiences on financial education as an important means to financial inclusion. India’s National Strategy for Financial Education is consistent with the OECD’s High-level Principles on National Strategies for Financial Education. The key priorities of the Strategy have been informed by the OECD-led International Network on Financial Education (INFE), which is composed of more than 110 countries and 250 public institutions. The network currently focuses on a wide range of topics including the development of financial education for micro, small and medium-sized enterprises, and support for current and future users of digital financial services. The OECD/INFE Policy Handbook, published in November 2015, describes the experiences of 59 countries, including India, in addressing challenges that they have faced in implementing the Principles.

India participates regularly in the INFE’s activities, and four of India’s financial regulators – the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority, and the Pension Fund Regulatory and Development Authority – are members, as is the National Institute of Securities Market. The RBI acts as the Network’s Vice-Chair and the Deputy Governor participates in the Network’s Advisory Board. Furthermore, SEBI has been co-leader of the Project on Financial Education and Women, and is an important member of the Investor Education Expert Sub-Group and of the G20/OECD Task Force on Financial Consumer Protection. In the latter, SEBI was the Vice-Chair for the development

Improving financial inclusion, education and consumer protection

“I am very glad that SEBI OECD Asian Seminar evoked so much response and resulted in fruitful discussions on various topics on financial consumer protection since such seminars are the link in the never ending chain of co-operative and collaborative efforts towards establishing transparent, resilient and strong financial markets.

I am sure this conference will prove a landmark in the topic of financial

consumer protection as was the previous seminar held by SEBI in association with OECD in Goa. This seminar is another milestone in strengthening the relationship between OECD and SEBI.’’

Prashant Saran, Whole-time Member of SEBI at the SEBI-OECD Asian Seminar on Emerging Trends in Financial Consumer Protection Across Asia in February 2016 in Mumbai, India.

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of effective approaches to support the implementation of Principle 9: Complaints Handling and Redress.

Within the framework of their co-operation, the OECD and the Indian administration have co-organised a series of events on financial education and financial consumer protection over the past decade. In 2016, SEBI and the OECD organised the Asian Seminar on Emerging Trends in Financial Consumer Protection Across Asia and the 2nd Asian Financial Consumer Protection Roundtable on Challenges in Developing and Implementing Financial Consumer Protection Polices in Asia in Mumbai. These events brought together high-level government officials and experts from public authorities, including central banks and regulatory and supervisory authorities, ministries of finance and consumer and investor education bodies, as well as senior representatives from the private sector and academics from across Asia.

www.oecd.org/finance

Improving financial inclusion, education and consumer protection

L Prashant Saran, Whole-time Member at SEBI (right), and Rintaro Tamaki, OECD Deputy Secretary-General (left), launch the SEBI-OECD Seminar on Emerging Trends in Financial Consumer Protection Across Asia on 4 February 2016 in Mumbai by the traditional lighting of a lamp of knowledge.

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Trade liberalisation has played a key role in the economic transformation of India and enhancing its integration in Global Value Chains. The OECD carries out extensive analytical work on trade, providing support for a strong, rules-based multilateral trading system.

India is included in OECD’s work to develop a better understanding of global value chains (GVCs) and their policy implications. The OECD-WTO Trade in Value Added (TiVA) database was recently developed to measure trade in value added terms and to generate new insights about the commercial relations among economies. The 2015 release measures the value of goods and services traded in 61 economies, across 34 industries. Key findings for India show that there has been an acceleration in the country´s integration into global value chains over the last two decades with the foreign content of its exports more than doubling, from less than 10% in 1995 to nearly one quarter in 2011. The OECD also released a trade policy paper in April 2015, Developing Country Participation in Global Value Chains, which focuses on how developing countries engage with and benefit from GVCs. The analysis shows that India attracted about 80% of the foreign direct investment (FDI) in the South Asian region and 1% of global FDI in 2013. The paper identified the quality of India’s infrastructure and its institutional bottlenecks as hurdles to its full integration into GVCs.

In 2014, the OECD also launched a regulatory database of services regulations, encompassing 19 services sectors and sub-sectors in 42 countries, including India. This qualitative database is complemented by quantified indices of services trade restrictiveness, the Services Trade Restrictiveness Index (STRI), which provide the information needed for policymakers to scope out reform options, benchmark them and assess their likely effects; for trade negotiators to clarify the restrictions that most impede trade, growth and employment; and for businesses to shed light on the

Facilitating trade and upgrading global value chains

requirements that traders must comply with when entering foreign markets. India’s services account for more than 30% of gross exports and more than half of value added exports, amongst the highest of the countries for which data are available and mainly driven by business services and other modern tradable services. The OECD and the Centre for Policy Research held a workshop in New Delhi in April 2016 to present the STRI and highlight the role services play in the overall competitiveness of India’s manufacturing sector.

Data on India is also included in the OECD Trade Facilitation Indicators (TFIs), along with 160 other countries. These indicators identify priority areas for reform to improve border procedures, reduce trade costs, boost trade flows and reap greater benefits from international trade at different stages of development. This tool can help the Government of India prioritise trade facilitation actions and guide policy makers on resource allocation. OECD analysis shows that lower middle income countries, such as India, could potentially reduce trade costs by as much as 17.5% by fully implementing measures agreed to in the WTO Trade Facilitation Agreement.

India is a Participant to the Arrangement on Officially Supported Export Credits, and Representatives from India have attended meetings of the Working Party on Export Credits and Credit Guarantees, showing particular interest in discussions on coal fired power plants

www.oecd.org/tradewww.oecd.org/tad/services-trade/services-trade-restrictiveness-index.htm

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New Delhi. The CCI has requested further technical assistance and capacity building on competition assessments, and a training course on this was held in December 2016. CCI officials also frequently participate in the OECD-Korea Regional Policy Centre’s training programme to develop and implement effective competition law and policies across South-East Asia and the Asia-Pacific region.

India is included in the OECD Product Market Regulation Indicator Database along with other OECD and G20 countries. The indicator measures the degree to which policies promote or inhibit competition in product markets. It measures regulatory barriers to competition through state control of business operations, legal and administrative barriers to start-ups, the protection of incumbents, and obstacles to foreign trade and investment. The Product Market Regulation Indicator for India is available for 2008 and 2013 and the next complete update will be in 2018.

www.oecd.org/daf/competition

India enacted its Competition Act in 2002 to support the successful transition from a state-planned to a market-based economy. Indian policy makers recognise the importance of strengthening the implementation and enforcement of the existing legal framework in order to benefit consumers and provide for more efficient and effective markets.

To promote sound competition principles and build mutual understanding and cross-border convergence, the OECD has developed international best practices in co-operation between competition enforcers, on hard core cartels, and on assessment of government policies for anti-competitive effects. The OECD Recommendation on Fighting Bid Rigging in Public Procurement calls for governments to assess their public procurement laws and practices at all levels of government in order to promote more effective procurement and reduce the risk of bid rigging in public tenders. The Competition Assessment Toolkit and the Operational Manual to the Toolkit, published in June 2015, provide a step-by-step guide to performing competition assessments to remove barriers to competition in regulations.

India and the Competition Commission of India (CCI) are actively involved in the OECD’s work to develop and implement international standards on competition enforcement and co-operation, including the recent revision to the OECD Recommendation concerning International Co-operation on Competition Investigations and Proceedings in 2014. The Recommendation promotes international co-operation among competition authorities to reduce the harm arising from anti-competitive practices. India is a Participant in OECD’s Competition Committee and a regular attendee at the OECD’s annual Global Forum on Competition.

The OECD works closely with the CCI to address the challenges facing the country’s competition regime, in particular to strengthen enforcement capabilities through capacity building exercises. The OECD held a training course for CCI officials on leniency in June 2015 and one on cartels in November 2015 in

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In recent years, India has seen a growing consumer base and a massive surge in e-commerce, making it vital to ensure consumers´ rights and interests are protected. The OECD helps governments design effective consumer policies to support the development of efficient, transparent and fair global markets.

In 2014, the OECD adopted a Recommendation of the Council on Consumer Policy Decision Making, which provides a framework for assessing consumer problems and developing effective policy responses. The recommendation draws on governments’ experiences in using the OECD Consumer Policy Toolkit, developed in 2010. The OECD has also issued policy guidance to address the implementation of effective consumer policy in the fields of mobile and online payments and digital content products. Efforts are also underway to update the basic Guidelines for Consumer Protection in the Context of Electronic Commerce, developed in 1999.

India engages in OECD committee work as a Participant in the OECD Committee on Consumer Policy and Indian officials actively take part in the work of its Working Party on Consumer Product Safety. Web-based global databases were launched by the Working Party in October 2012 to gather information on global product recalls, to help track policy and regulatory developments, and to share information on injuries.

www.oecd.org/sti/consumer-policy

Strengthening consumer protection

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With the passing of the Companies Act in 2013, India has increased the efficiency of its corporate governance frameworks by advocating the independence of directors and audit committees, providing more stringent rules on the approval of related-party transactions, mandating corporate social responsibility and raising the bar for transparency and gender diversity on boards. Enforcement and actual practices at the company level are key to ensuring real progress.

The OECD and India have closely collaborated to develop better global standards of corporate governance, with India participating as an Associate – on equal footing with OECD Member countries – in the 2015 review of the G20/OECD Principles of Corporate Governance. These are one of the key standards for sound financial systems used by the Financial Stability Board and form the basis of the corporate governance component of the World Bank Report on the Observance of Standards and Codes. The 2015 edition of The OECD Corporate Governance Factbook tracks how countries are actually implementing the Principles and highlights several of India’s corporate governance laws and practices.

Improving corporate governance

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“OECD provides a forum which nurtures and fosters the development of world economy through its unprecedented efforts in building impeccable value system, ethics and integrity in the corporate world. The revised G/20 OECD Principles of corporate governance are a benchmark for assessing and improving corporate governance around the globe. Institute of Company Secretaries of India being a front runner of good corporate

governance in India has been collaborating with OECD to foster mutual learning and discuss issues and implementation challenges in seamless jurisdictions. This mutual relationship will help us all better understand the global challenges and its impact.”  

Mamta Binani, President of the Institute of Company Secretaries of India (ICSI) 

J Mamta Binani, President of the ICSI, attends the OECD Conference on improving women’s access to leadership in March 2016 in Paris.

India regularly attends the meetings of the OECD Corporate Governance Committee, and Indian officials have actively participated in OECD Peer Reviews of other countries in the Committee. Indian corporate governance regulations were also formally assessed by the Committee in 2012.

The State of Public Finances 2015 in November 2015, which looks at strategies for budgetary governance reform in OECD countries following the crisis. The OECD Recommendation on Budgetary Governance provides a concise overview of good practices across the full spectrum of budget activities and provides practical guidance for designing, implementing and improving budget systems to achieve a better national economic performance.

The OECD and India launched the India-OECD Corporate Governance Policy Dialogue in 2011 to support policy makers in India by assessing market practices and offering recommendations based on a comparative analysis. Under the auspices of this programme a policy dialogue was co-organised with the Securities and Exchange Board of India (SEBI) in New Delhi in 2013 and a report on Improving Corporate Governance in India – Related Party Transactions and Minority Shareholder Protection was published in August 2014. The meeting of the India-OECD Corporate Governance Policy Dialogue in December 2016, also hosted by SEBI in Mumbai, focused on issues relating to board evaluation of listed companies.

Improving corporate governance

The OECD also engages with Indian policy makers and regulators through other national institutions and regional activities. The Chairman of the Institute of Company Secretaries of India (ICSI), Ms Mamta Binani, participated in the OECD Conference on improving women’s access to leadership, held in Paris in March 2016. The OECD presented the OECD Principles at the Roundtable Conference on Corporate Governance organised by the ICSI in New Delhi in April 2016. Furthermore, SEBI co-hosted the OECD-Asian Roundtable on Corporate Governance in Mumbai in 2014, which led to the adoption of a guide to strengthen corporate governance through effective public enforcement in Asia, the first of its kind elaborated at a regional level.

www.oecd.org/daf/cawww.oecd.org/daf/ca/oecd-indiaworkoncorporategovernance.htm

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State-owned enterprises (SOEs) have played an important role in providing essential services to the population in India. The OECD works with countries to help make SOEs more transparent and accountable to the general public.

The OECD engages closely with India to support the country’s efforts to effectively manage its SOEs. Indian officials regularly attend and actively participate in the meetings and work of the Working Party on State Ownership and Privatisation Practices. India’s experience in listing SOEs in comparison with other countries’ approaches is analysed in the OECD report Broadening the Ownership of State-Owned Enterprises: A Comparison of Governance Practice, published in February 2016. The report shows that mixed ownership can improve enterprise governance and performance. The 2015 OECD publication State-Owned Enterprises in the Development Process features a chapter on the role of SOEs in Indian economic development. The report highlights the need to assign clear roles to SOEs in the beginning of the development process, to appropriately establish institutions and formulate and promote industrial policy.

The OECD Guidelines on Corporate Governance of State-Owned Enterprises serve as an important reference for this work. The Guidelines help governments organise their ownership and regulatory roles as well as the governance of individual SOEs. The Guidelines were revised in 2015 to better reflect the experiences of the growing number of countries that have taken steps to implement them and developments since their adoption in 2005.

www.oecd.org/corporate/guidelines-corporate-governance-soes.htm

Raising the bar on state-owned enterprises

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Recent initiatives in India aim to tackle corruption and bribery through improved transparency measures, such as setting up online platforms for transactions. Effectively combating transnational bribery could enhance India’s fast-growing outbound investment.

OECD-India joint work on combating corruption and bribery and setting standards on the issue has progressively expanded over the past decade, including under the auspices of the G20. Pursuant to the G20 Anti-Corruption Action Plan for 2015-2016, India participates in the meetings of the G20 Anti-Corruption Working Group to explore its possible adherence to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Anti-Bribery Convention). India was also included in the G20 Self-Assessment Report on Combating the Bribery of Foreign Public Officials. Accession to the Convention would help enhance India’s enforcement of transnational bribery and facilitate stronger international co-operation.

Fighting corruption and enhancing integrity

More recently, Secretary Sanjay Kothari from the Department of Personnel and Training participated in the OECD Anti-Bribery Ministerial Meeting in March 2016 in Paris, France. As part of the Ministerial Meeting, India joined 50 other countries in adopting a Ministerial Declaration of the OECD Anti-Bribery Ministerial Meeting, which reaffirms states’ commitments to fight foreign bribery and corruption.

India and the OECD engage together through active dialogue and regional activities on anti-corruption. Since 2009, Indian officials attend the meetings of the OECD Working Group on Bribery, which monitors the implementation of the Anti-Bribery Convention. The OECD has conducted numerous visits to India to discuss the Anti-Bribery Convention and India’s engagement with the OECD Working Group on Bribery. The Organisation has also successfully co-organised several foreign bribery awareness-raising events in India with the FICCI in 2011 and 2012 and with the CII in 2013 and 2015 to encourage Indian companies to support the passage of a foreign bribery bill in India, and help put in place effective internal controls, ethics and compliance measures for preventing and detecting the bribery of foreign public officials. India has also been a member of the OECD Anti-Corruption Initiative for Asia and the Pacific since 2001, and has endorsed the ADB/OECD Anti-Corruption Action Plan for Asia and the Pacific. This is a three pillar plan for fostering integrity in the public service, private sector, and through civil society involvement and is implemented through policy dialogue, analysis, and capacity building.

www.oecd.org/site/adboecdanti-corruptioninitiativewww.oecd.org/gov/ethics

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The Government of India has implemented reforms in order to improve tax transparency and compliance, and strengthen domestic resource mobilisation. OECD bilateral and multilateral co-operation with India in this area has expanded rapidly.

OECD work on taxation has focused on developing unique international tax standards and guidelines, including the OECD Model Tax Convention on Income and on Capital, new standards to counter Base Erosion and Profit Shifting (BEPS), the Transfer Pricing Guidelines for Multinational Enterprises, the International VAT/GST Guidelines, the International Standards for Exchange of Information “on request”, and Automatic Exchange of Information.

India has a leading role in the OECD standard-setting work on enhancing international tax co-operation. It is an

Improving international tax transparency and compliance

Associate to the BEPS project which is aimed at preventing unintended double non-taxation, less than single taxation, and ensuring that profits can be taxed where economic activities occur and value is created. As a member of the OECD’s Committee on Fiscal Affairs (CFA) Bureau Plus, India is directly involved in setting the direction of the BEPS project and its implementation. The project published its final reports in October 2015, which were endorsed in the G20. The next stage is now BEPS Implementation, and India will be a key member of the new Inclusive Framework developed to engage all interested countries on an equal footing in the remaining standard setting, monitoring and implementation process. In June 2015, India signed the Multilateral Competent Authority Agreement to implement the common reporting standards on the Automatic Exchange of Financial Account Information in Tax Matters.

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India has been actively engaged since 2006 in the work of the OECD Committee on Fiscal Affairs (CFA) as a Participant and is a member of the Steering Group of the Global Forum on Transfer Pricing. It also takes an active part in the Committee’s Global Relations Programme by hosting global events, providing expertise and participating in events held at the OECD Multilateral Tax Centres.

India has also been an Associate in the Global Forum on Transparency and Exchange of Information for Tax Purposes Steering Group (hosted and supported by the OECD) since 2009 and has acted as Vice-Chair of the Peer Review Group. The Forum brings together 131 member jurisdictions, including over 60 developing countries, and monitors commitments to the international

exchange of tax information “on request” standard. India hosted a Global Forum Group Meeting on Automatic exchange of information in New Delhi in December 2015.

The OECD Tax Centre jointly organised workshops with the Indian Revenue Service at India’s National Academy of Direct Taxes in Nagpur in 2016. The first workshop held in July focused on transfer pricing and the second workshop held in August examined the application of tax treaties also considering the guidance provided in the OECD Model Tax Convention.

www.oecd.org/taxwww.oecd.org/tax/bepswww.oecd.org/tax/transparency

L Malathi Sridharan, Commissioner of Income Tax, Mumbai (front-centre left), Michael Kobetsky, Professor at the University of Melbourne, (front-centre) and Anthony Clark, Advisor at the Transfer Pricing Unit, Centre for Tax Policy, OECD (front-centre right) attend the OECD-IRS Transfer Pricing Workshop at the India’s National Academy of Direct Taxes in July 2016 in Nagpur, India.

Improving international tax transparency and compliance

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The Government of India is undertaking a review of the Fiscal Responsibility and Budget Management (FRBM) Act in withholding fiscal prudence in an increasingly volatile global economy. As a large federation, fiscal relations across governmental levels are particularly important in India.

The OECD works with countries, including India, to ensure the efficient governance and implementation of fiscal rules and frameworks. Indian officials regularly attend the meetings of the Public Governance Committee. The Working Party of Senior Budget Officials of the Committee assesses countries’ budgeting systems and the underpinning institutional frameworks, in view of ensuring that fiscal rules work well and are adhered to. The OECD Recommendation on Budgetary Governance provides a concise overview of good practices across the full spectrum of budget activities and provides practical guidance for designing, implementing and improving budget systems to achieve a better national economic performance. In support of the recently appointed FRBM Review Committee, the OECD has shared its analyses of strategies for budgetary governance reform in OECD countries following the crisis (cf. The State of Public Finances 2015 published in November 2015).

In view of the importance of a well-functioning multi-tier governance framework at the central, state and local levels,

Ensuring sustainable and transparent public finances

India was the first Partner country to join the OECD Network on Fiscal Relations across Levels of Government in 2013. Since then, senior officials from the Indian Ministry of Finance have regularly attended Network meetings and actively contribute to its discussions.

India is included in OECD analyses on intergovernmental fiscal relations. Fiscal Federalism 2016, published in June 2016, draws on the work of the OECD Fiscal Network in presenting salient policy issues on fiscal federalism. The OECD also analysed the functioning of intergovernmental fiscal institutions and their role in shaping fiscal policy and outcomes (see Institutions of Intergovernmental Fiscal Relations, published in November 2015). These publications show that fiscal arrangements and responsibility in India are coherently distributed, and that the country has strong and transparent fiscal rules and frameworks. Furthermore, they note that the sub-national governments have a low level of autonomy. The OECD also published a working paper in November 2015, Fiscal Rules for Sub-Central Governments, which highlights the significant role that sub-national governments play in general government fiscal consolidation.

www.oecd.org/gov/budgetingwww.oecd.org/tax/federalism

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Creating more and better jobs

Increasing job opportunities, particularly outside agriculture, simplifying labour laws, promoting formalisation and encouraging participation of women in the labour market are key to inclusive growth in India.

The OECD publishes a wealth of data analysing employment trends to help the Indian policymakers create more and better quality jobs. The OECD Employment Outlook analyses labour market trends annually. It monitors reforms and provides country-specific recommendations to help governments create jobs, particularly for vulnerable groups such as younger, older and disabled workers. The 2015 edition provides a comprehensive analysis of job quality in India and other emerging economies, giving a detailed picture across socio-demographic groups and placing particular attention on the gap between formal and informal occupations. While India enjoys low levels of overall unemployment, the report finds that job quality is an issue, as a large proportion of workers are employed in poorly paid or subsistence level-jobs with long working hours. The 2016 edition of the Employment Outlook, published in July, notes that the gender pay gap in India has fallen by a quarter over the last decade but remains high at 37%. The report identifies wage gaps and job insecurity as key drivers of disparities between women and men in the labour market. The publication also makes recommendations on reducing the difference in enrolment rates among girls and boys at secondary and tertiary levels of education; ending violence against women; and curbing informal employment.

The OECD also released three working papers in 2015 on female labour market participation in India, Raising the economic participation of women in India – a new growth engine?, Determinants of the Low Female Labour Force Participation in India and Determinants of Female Entrepreneurship in India. These papers highlight the

problems Indian women face in participating in productive activity including the social and cultural factors side-lining women from the labour force and entrepreneurial activity, and demand issues such as India’s overall weak job creation. The OECD also released another working paper in 2015, Gender Equality and Economic Growth in India A Quantitative Framework, which estimates the positive impact of increased female labour force participation on economic growth in India.

The OECD works with India on labour market policies in the context of the G20 in co-operation with the International Labour Organization, the International Monetary Fund and the World Bank. The work focuses on promoting employability, good-quality jobs and entrepreneurship as a source of jobs and growth. The report G20 Labour Markets in 2015: Strengthening the Link between Growth and Employment, co-drafted by the OECD, includes statistics on employment trends in India.

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The Government of India has initiated a process to bring social security coverage to the entire population, nonetheless overall social spending in India is low by international comparison and access to quality healthcare remains a challenge. The OECD supports India in promoting engagement in the areas of health, pensions and social welfare.

OECD work on social policy continuously seeks out new good practices to match changing socio-demographic profiles and labour market conditions. Through the OECD/Korea Policy Centre, the OECD biennially publishes Asia/Pacific editions of Society at a Glance, Pensions at a Glance and Health at a Glance, each including data on India. The OECD actively engages in collecting health data in collaboration with the World Health Organisation (WHO) Regional Office for South-East Asia.

India started engaging with the OECD on private pensions, three years after the introduction of the new National Pension System in 2004. In 2007 it became a Participant to the OECD Working Party on Private Pensions (WPPP), and Indian officials actively contribute to the WPPP and benefit from sharing experiences and good practices with other regulators on the challenges of a private pension system in the early stages of development. Since 2006, India has also been a governing member of the International Organisation of Pension Supervisors (IOPS), hosted by the OECD. India has been very active in the standard setting work of the WPPP and IOPS, including the recent revision process of the OECD Recommendation of the Council on Core Principles of Occupational Pension Regulation.

Data on India is included in the OECD Social Institutions and Gender Index (SIGI), which is OECD Development Centre’s flagship gender research and advocacy programme, consisting of a database on social institutions accompanied by in-depth country profiles for over 160 countries. The database is updated every two years and captures discriminatory social institutions across five areas: decision making within the family, son preference, secure access

to land and assets, civil liberties, and violence against women. The latest edition of the results from SIGI was launched in the synthesis report in December 2014. Although India ranks as having high levels of gender discrimination in social institutions, it has put in place a legal framework to counteract prejudice against women.

Secretary-General Angel Gurría and Mr. Kailash Satyarthi, Indian Nobel Laureate and founder of the Kailash Satyarthi Children’s Foundation (KSCF), signed an agreement in May 2016 to develop collaboration to promote children’s welfare and well-being. The initiative will include joint projects and exchange of best practices and information.

www.oecd.org/elswww.oecd.org/finance/private-pensions www.oecd.org/site/netfwd www.genderindex.org/country/india

Promoting social inclusion and health system performance

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J Angel Gurría, OECD Secretary-General (seated to right) and Kailash Satyarthi, Nobel Laureate and founder of the Kailash Satyarthi Children’s Foundation (KSCF) (seated to left) sign an agreement for KSCF and the OECD to work together to fight child poverty and exploitation in May 2016 at the OECD Headquarters in Paris, France.

“There can be no peace or sustainable economic growth in the world while globally, 5.5 million child slaves and 168 million child labourers toil at the expense of their education for others’ profits. I am delighted that the OECD, under Secretary Angel Gurría’s leadership, has joined me and my new foundation, the Kailash Satyarthi Children’s Foundation, to end this blight on society. Together OECD and KSCF will encourage greater collaboration between governments, corporations and civil society and to address gaps in policies to end this once and for all.

We must all do our bit to solve this urgent problem before one more childhood is lost, before one more education, one more future is squandered.”

Kailash Satyarthi, Nobel Peace Prize Laureate and founder of the Kailash Satyarthi Children’s Foundation (KSCF)

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India has made upgrading the skills of its large, young population a top national priority for development and for moving up global value chains. India’s 2015 National Policy for Skill Development and Entrepreneurship seeks to better the quality of skills training, make education more responsive to employers’ needs and increase access to education for disadvantaged groups. It aims to improve the skills of 500 million young people by 2022.

Having worked with over 40 members and emerging economies on the design of effective vocational education and training (VET) systems, the OECD can mobilise international knowledge and experience to support reforms in a range of priority areas for India, from the development of apprenticeship schemes, to new ways to assess skills directly and facilitate their recognition across formal and informal sectors.

India engages with the OECD to foster and assess creativity and critical thinking in education. It participates in the work of the OECD’s Centre for Educational Research and Innovation (CERI) and is currently involved in a project led by CERI which explores the synergies between the Indian Smart Cities Initiative and OECD work to determine the drivers of individual and societal well-being across major cities around the world. The project is intended to expand understanding of the skills required by 21st century economies and connect with India’s goals to bolster entrepreneurship and innovation.

Access to education and skills development is key to inclusive growth. In 2009, two Indian states – Tamil Nadu and Himachal Pradesh – took part in the Programme for International Student Assessment (PISA). Now conducted in more than 80 economies, PISA shows the extent to which 15-year-olds have acquired the skills needed for success in life and work. This could provide Indian policy makers with valuable evidence on the factors associated with student outcomes and the types of interventions that could raise performance and narrow achievement gaps across socio-economic groups.

The OECD not only measures skills in student and adult populations, it also works with countries to develop skills strategies tailored to specific needs and contexts. The evidence shows that using both cognitive (literacy, numeracy) and “soft” (communicating, influencing, negotiating) skills in the workplace and maintaining them over a lifetime is strongly related to greater skills proficiency – which, in turn, is linked to economic and social well-being.

www.oecd.org/eduwww.oecd.org/edu/ceri

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Building a knowledge economy

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India is currently implementing policies to foster a culture of innovation, entrepreneurship and harness the digital economy. It has set up the Atal Innovation Mission under the National Institution for Transforming India (NITI Aayog) to draw upon national and international experiences respectively.

The OECD works with Indian policy makers to develop evidence-based policy advice on the contribution of science, technology and innovation to well-being and economic growth. Indian officials participate in meetings of the OECD Committee for Scientific and Technological Policy and the Working Party on Science and Technology. It is also a member of the Advisory Group of the OECD Innovation for Inclusive Growth project that analyses innovation and related policies from the perspective of social, industrial and territorial inclusiveness. A high-level conference on Innovation for Inclusive Growth was organised in New Delhi in

February 2015 with the active participation of Mr. Amitabh Kant, CEO of the NITI Aayog and former Secretary at the Department of Industrial Policy and Promotion. The objective of the conference was to share lessons learned and foster discussion and policy exchange among stakeholders on the contribution of innovation to inclusive growth. The project findings were published in June 2015 in the report Innovation Policies for Inclusive Growth.

India is also included in other OECD publications promoting a knowledge economy. The Innovation Imperative: Contributing to Productivity, Growth and Well-being sets out a concrete agenda to strengthen innovation performance by identifying priorities for policy makers that together provide the basis for a comprehensive and action-oriented approach to innovation. India is one of the countries featured in the OECD Science and Technology Outlook and Science, Technology and Industry Scoreboard, published every other year, which benchmark key

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L Professor Anil Gupta, Founder of the Honey Bee Network and Dominique Guellec and Karen Maguire from the OECD Directorate for Science, Technology and Innovation participate in the International Conference on Innovation for Inclusive Growth held in February 2015 in New Delhi, India.

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trends and the performance of innovation and R&D policies in more than 45 OECD and major non-OECD economies.

OECD also works with India on the digital economy covering domestic and cross-border economic, societal, regulatory and technical issues. India joined the Seoul Declaration for the Future of the Internet Economy in 2008 which focuses on how to further the development of the Internet economy through multi-stakeholder co-operation. Trends, opportunities and challenges in trade, innovation and digital security for OECD member and partner countries, including India are included in the OECD Digital Economy Outlook.

www.oecd.org/sti/stpolicy www.oecd.org/sti/industryandglobalisation www.oecd.org/sti/inno/knowledge-and-innovation-for-inclusive-development.htm.

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Promoting a first-class steel industry

India has grown to become the world’s third largest steel producer, behind China and Japan. The country’s crude steelmaking capacity reached more than 117 million tonnes in 2015 and is expected to continue to increase to almost 130 million tonnes by 2018. India continues to enjoy solid growth in steel demand.

The OECD is working closely with India to promote more efficient production. As India is a Participant in the Steel Committee, officials from the Ministry of Steel join other del-egates from major steel-producing economies to discuss in-dustry challenges. India’s steel and raw material policies are covered extensively in OECD documents and publications.

The OECD Steel Market Developments series, the OECD Steelmaking Capacity Portal and a number of reports released by the Steel Committee provide access to a range of analyses and data on global steel market and capacity developments, including trends in the Indian steel industry. Steel consumption is growing faster in India compared with other major emerging market economies. Prospects for steel demand are relatively good in the medium-term in view of the ongoing economic reform process, infrastructure development, the Make in India Initiative, and urban development of smart cities. Investment in the country’s steel industry is increasing rapidly to meet growing demand. India’s very low consumption of steel per capita also suggests that the country has significant scope for further growth in steel demand in the long term as economic development progresses.

www.oecd.org/sti/steel

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Meeting transport infrastructure needs

Since the 1990s, India’s growing economy has seen rapid transport development, but challenges remain in building new and transforming current infrastructure to maximise the impact on the socio-economic well-being of society.

In 2009, India joined the International Transport Forum (ITF), an intergovernmental organisation of 57 member countries hosted by the OECD. The ITF aims to help shape the international transport policy agenda, ensuring its contribution to economic growth, environmental protection, social inclusion and the preservation of human life.

The ITF includes analyses of India´s transport sector and policies in its publications. The ITF Transport Outlook examines scenarios for the development of long-term global passenger and freight transport volumes. The 2015 edition pays particular attention to analysing the impact of diverse urban transport policy scenarios, especially in developing regions where most urban population growth will occur in the following decades. It includes a specific analysis of urban transport policy scenarios for India showing that while the country is still in the early stages of its motorisation process for private cars, there is a need to further develop public transport in a number of Indian cities.

In preparation for the COP21, the ITF also published a discussion paper in December 2015 on Low Carbon Mobility in Mega Cities - What Different Policies Mean for Urban Transport Emissions in China and India. The results were presented during the COP21 session on Mitigating the Climate Change Impacts of Urban Travel. According to the report, increases in CO2 emissions from motor vehicles in Indian cities by 2030 will range from 112% in the best case (Jaipur) to 305% in the worst case (Mumbai) and from 255% to 706% respectively by 2050. As cities grow and new urban agglomerations develop, the demand for transport and the total distance travelled by Indians will grow as well, with cars and motorised two-wheelers increasingly becoming the preferred mode of travel.

L Kishor Patil, the Managing Director and CEO of KPIT receives the “Promising Innovation in Transport Award” from K.L. Thapar, the Founder and Chairman of Asian Institute of Transport Development, and José Viegas, the Secretary-General of the International Transport Forum in May 2016 in Leipzig, Germany.

“It is an honour to receive this recognition from a world renowned institution like the International Transport Forum. It encourages us to continue our efforts to create technologies that are environmentally friendly and cost effective. Our smart electric bus technology will enable green, intelligent and affordable public transportation.”

Kishor Patil, Managing Director and CEO of KPIT Technologies, receiving an award at the International Transport Forum

Since 2008, the ITF has hosted an Annual Summit bringing together ministers from around the world to share policy perspectives with CEOs, heads of international organisations, thought leaders from civil society and academia, and media. The 2016 Summit focused on Green and Inclusive Transport. Mr. K.L. Thapar, Founder and Chairman of Asian Institute of Transport Development who also served as a Principal Advisor to the former Planning Commission, participated as a speaker in the session on Inclusive Transport Planning for Low Density Rural Areas. The India-based global technology firm, KPIT Technologies, won an award for developing a system that can convert new and existing diesel buses into full electric buses.

The ITF, in collaboration with the Airports Council International (ACI) and the International Civil Aviation Organisation, organised the 2nd Annual ACI Conference on Investing in Airports in Goa in December 2016. The conference covered topics related to economic regulation, financing frameworks and tools to modernise infrastructure and services at the world’s airports to help meeting future demand.

www.itf-oecd.org

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Meeting transport infrastructure needs

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Combating climate change

In recognition of the risks of climate change for development and livelihoods in India, the country signed the COP21 Global Climate Agreement in April 2016. India’s National Action Plan on Climate Change commits to carbon emission reduction and supporting renewable energy.

During the COP 21 meetings in December 2015 in Paris, the OECD committed to helping its Members and Partner countries obtain a comprehensive picture of their performance on climate change. The Climate Change Expert Group (CCXG) on the United Nations Framework Convention on Climate Change, for which the OECD and International Energy Agency (IEA) serve as a Secretariat, provides analytical input to international climate change negotiations. The CCXG holds regular seminars and organises the Global Forum on Environment events with a wide variety of country delegates and experts, including from India.

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The OECD has produced an array of reports to pursue its mission of supporting both developed and emerging countries, including India, to contribute to the successful implementation of the Paris Agreement:

l Climate Change Risks and Adaptation: Linking Policy and Economics (2015) identifies how governments can manage risks arising from a changing climate, highlighting India’s increasing energy demand for cooling.

l Policy Guidance for Investment in Clean Energy Infrastructure: Expanding Access to Clean Energy for Green Growth and Development (2015) outlines available policy options to make the most of private investment opportunities in clean energy infrastructure. The publication describes India’s National Solar Mission, explains the country’s approach on carbon pricing mechanisms and highlights the state of its energy infrastructure, particularly with regard to clean and renewable energy sources.

l Climate Change Mitigation: Policies and Progress (2015) reviews trends and progress on climate change mitigation policies in the OECD and partner economies. Policy options to deal with energy efficiency and security in India are addressed in the report.

l Climate Finance in 2013-14 and the USD 100 billion Goal (2015) provides an estimate of progress against developed countries’ commitment to mobilise USD 100 billion a year by 2020 for climate action in developing countries.

l Mobilising the Debt Capital Markets for a Low-carbon Transition (2016) reviews the evolution of and trends in green bond markets, and looks at domestic policies being implemented to promote green bond market development.

www.oecd.org/env/cc

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Fighting biodiversity loss

India recognises that addressing biodiversity loss begins with emphasising the economic value of diversity. Agriculture, fisheries and forestry have been set out as priority sectors for adopting sustainable development measures.

OECD works with India in advancing the global agenda on integrating biodiversity in development objectives. The OECD analyses biodiversity and ecosystems, and the use of economic instruments and other policy incentives to promote their conservation and sustainable use, in support of the Convention on Biological Diversity. Ongoing work on Biodiversity and Development: Mainstreaming and Managing for Results seeks to derive lessons learned and good practice on mainstreaming biodiversity at various government levels and entry-points. Insights have been drawn from India, a country which has aligned biodiversity and development goals in both the national biodiversity strategy and the national development strategy, and has set clear targets to include the value of biodiversity in national and state planning processes, development programmes and poverty alleviation strategies.

A 2013 OECD publication on Scaling-up Finance Mechanisms for Biodiversity examines the potential of six instruments (including environmental fiscal reform, payments for ecosystems, services and markets for green products) to mobilise finance for biodiversity conservation and sustainable use and how they can best be designed and implemented. It also examines environmental and social safeguards.

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Towards a cleaner and healthier environment

Along with many other countries, India faces high social costs caused by environmental degradation, air and water pollution – all of which need to be addressed to ensure that economic growth is sustainable.

India is covered in a number of OECD publications which seek to assess the varying impacts of environmental degradation. The OECD Environmental Outlook to 2050 addresses the implications of demographic and economic trends over the coming decades in four key areas of global concern: climate change, biodiversity, water and the health impacts of environmental pollution. The publication includes projections for India. The Cost of Air Pollution: Health Impacts of Road Transport provides evidence on the health and economic impacts of air pollution from road transport. The report shows that in 2010, close to 700,000 Indians died prematurely due to air pollution, with the economic costs to the Indian society estimated at USD 0.4 trillion.

The OECD database on instruments used for environmental policy provides information on environmentally related taxes, fees and charges, tradable permit systems, deposit refund systems, environmentally motivated subsidies and voluntary approaches used in environmental policy. The database includes information on India and highlights many of its environmentally motivated subsidies such as those on generation of electricity from renewables and waste paper production. The database also identifies many environment related taxes imposed nationally, for example on motor vehicles and motor vehicle fuels, and on electricity. However, these taxes coexist with environmentally harmful subsidies, such as for diesel fuel, that worsen local air pollution and related health problems.

www.oecd.org/environmentwww.oecd.org/env/policies/database

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Improving water management

India’s Prime Minister Narendra Modi has highlighted the importance of reducing water risks. Improving water security is essential for India’s development. With total water demand in India expected to rise by over 70% by 2025, a huge gap between demand and supply is expected in the coming years. This could act as a significant constraint to economic growth.

The OECD aims to contribute its expertise in water management and experience in accompanying water policy reforms, on issues such as water allocation, water pricing, and the economic dimension of river basin management plans. Collaborative efforts to reduce shared water risks can emerge through common understanding, strategies, solutions and well-aligned incentives. In such an effort, the OECD, the Federation of Indian Chambers of Commerce and Industry (FICCI), the Asian Development Bank (ADB) and the 2030 Water Resources Group (WRG) organised a seminar on Water Risks and Stewardship in New Delhi in August 2014 together on how to manage water risks in India.

The OECD Principles on Water Governance, published in June 2015 and translated into Hindi, provide a framework for governments to put in place better water policies, and they

will be used to develop a broader OECD perspective on water management over the coming years. The Principles provide guidelines for countries on how to strengthen their efforts on climate adaption and sustainable development and build a solid base for the OECD to further consolidate existing water policies.

The forthcoming report Groundwater Allocation, to be released in early 2017, focuses on the sustainability of water use for cities, farms, industry and the environment. The publication will draw on a series of case studies in different countries, including one on the reforms of groundwater allocation in the state of Gujarat.

The OECD Water Governance Initiative is an international multi-stakeholder network of members from the public, private and non-for-profit sectors gathering twice a year to share good practices in support of better governance in the water sector. At the 7th meeting of the Initiative that took place in June 2016, the implementation of the OECD Principles on Water Governance was discussed.

www.oecd.org/water

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Strengthening chemicals and biotechnology safety

CHEMICALSAs investment and innovation in India increases, the proper management and regulation of chemicals and biotechnology will be vital for the protection of human health.

The chemicals industry is one of the world’s largest sectors, and many countries have comprehensive regulatory frameworks for managing chemicals based on testing and health/environmental impact assessments. Since many chemicals are produced in more than one country and traded across borders, different national policies on chemical management can lead to the duplication of testing and assessment as well as wasted industry and government resources.

The OECD and India are working together to harmonise chemicals testing and assessment, and to share the burden of testing. India is an Associate to Bodies responsible for the Council Acts related to the Mutual Acceptance of Data in the Assessment of Chemicals (MAD) including the Joint Meeting of the Chemicals Committee and the Working Party on Chemicals, Pesticides and Biotechnology, and the Working Group on Good Laboratory Practice, which oversees MAD system implementation.

India has been a party to the OECD Mutual Acceptance of Data (MAD) multilateral agreement since 2011. It is estimated that sharing non-clinical safety test results for chemical products save governments and chemical producers at least EUR 150 million per year across OECD members and other participating countries. The MAD system requires testing based on the OECD Test Guidelines and the OECD Principles of Good Laboratory Practice (GLP). This has helped in creating economic opportunities for local testing laboratories and removing potential trade barriers for Indian chemicals exported to OECD members and other

MAD countries (Argentina, Brazil, Malaysia, Singapore and South Africa). India participates in overseeing the MAD system implementation and in on-site evaluations of other countries’ GLP compliance monitoring systems. The Indian GLP Compliance Monitoring Authority hosted the 12th OECD GLP training course was held in Hyderabad in October 2015, and focused on developing strategies for conducting inspections.

www.oecd.org/ehs/mad www.oecd.org/env/glpwww.oecd.org/env/testguidelines

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BIOTECHNOLOGY India’s National Biotechnology Development Strategy 2015-2020 aims to establish India as a world-class bio-manufacturing hub through significant investments for the creation of new biotech products and creating a strong infrastructure for R&D and commercialisation.

India participates actively in OECD programmes on the safety of novel foods and feeds, which help make risk and safety assessment procedures more efficient. The aim of these programmes is to harmonise the risk and safety assessments of modern biotechnology products, such as genetically engineered organisms, and facilitate relevant information sharing. India provides expertise on the biology and composition of tropical crops such as maize, rice, sorghum, sugarcane and cowpea, enabling the assessment of crop species derived from genetically engineered varieties. The Centre for Research in Medical Entomology of Madurai is also contributing to an OECD document on the biology of the Aedes aegypti mosquito, a vector of dengue fever which is being fought with biotechnology.

The OECD, World Bank and Center for Environmental Risk Assessment (CERA) have formed a partnership which seeks to strengthen the technical capacity of developing countries involved in establishing a harmonised and scientifically sound biosafety system. The OECD’s Global Forum on Biotechnology reviews how knowledge in the life sciences and biotechnology is governed, shared, regulated and managed. It explores new linkages between the life sciences and information and communication technologies – areas in which India’s expertise would be greatly welcome.

www.oecd.org/env/ehs/biotrack

Strengthening chemicals and biotechnology safety

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Providing affordable and clean energy

The International Energy Agency (IEA), an autonomous body within the OECD, works to ensure reliable, affordable and clean energy for its 29 member countries and beyond.

IEA-India co-operation covers a wide range of analytical and policy advisory work. In 2015, the India Energy Outlook: World Energy Outlook Special Report was prepared with the objective of providing a comprehensive assessment of the multiple challenges and opportunities facing India as it develops the resources and infrastructure to meet its

rapidly growing energy needs. The report was strengthened by significant and continuous collaboration with, and input from, key Indian stakeholders. This included the participation of the Vice-Chair of NITI-Aayog; the Minister of Power, Coal and New and Renewable Energy; and the Minister of Petroleum & Natural Gas at a WEO workshop held in New Delhi in partnership with NITI-Aayog.

The WEO special report was launched in New Delhi, where the IEA Executive Director was accompanied by the Vice-Chair of NITI-Aayog and the Minister of Petroleum & Natural Gas, a notable vote of confidence in the report and in the relationship with the IEA. Launches were also held in Bangalore and Mumbai, featuring high-level discussions with Indian energy experts underlining IEA collaboration with Indian partners beyond Delhi. The report was covered extensively in the Indian and international press and has become a reference point in the Indian energy debate.

L Shri Narendra Modi, Prime Minister of India and Dr Fatih Birol, IEA Executive Director in January 2016 in New Delhi, India.

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fuel efficiency standards for heavy-duty vehicles. This area promises large gains but is also technically challenging and India can gain from IEA member country best practices.

In 2015, the IEA organised a first roundtable with the Indian Petroleum and Natural Gas Regulatory Board and representatives of IEA member countries to discuss data collection and management issues. The aim was to share best practice of regulatory approaches and help PNGRB developing statutory regulations that ensure the confidentiality of data collected from companies.

www.iea.org www.iea.org/countries/non-membercountries/indiawww.iea.org/publications/freepublications/publication/india-energy-outlook-2015 www.iea.org/statistics

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Providing affordable and clean energy

Minister Pradhan has quoted the analysis on more than one occasion in his interventions in parliament.

Minister Pradhan also referred to the analysis in his interventions in the upper house of Parliament. The Executive Director also had the unique opportunity to present the key findings of the India Energy Outlook in a meeting convened by Indian Prime Minister Modi.

The IEA’s Energy Efficiency in Emerging Economies programme is supporting the contribution that India’s energy efficiency policies are making to address the country’s strategic priorities of economic and social development while also enhancing energy security, industrial competitiveness and addressing climate change concerns. A key activity in 2015 was a joint workshop with the Ministry of Petroleum and Natural Gas on developing and implementing

L Launch of the World Energy Outlook’s special “India Energy Outlook” in New Delhi on 27 November 2015 in the presence of Dr Arvind Panagariya, Vice Chair of NITI Aayog and G20 Sherpa, and Shri Dharmendra Pradhan, Minister for Petroleum and Natural Gas.

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Developing clean and safe nuclear power

With a population of 1.3 billion, India’s electricity needs are already significant and, looking ahead, potentially enormous. India has a strong commitment to develop additional nuclear power as a way to meet its rising energy needs and enhance its energy security on a low-carbon basis. India plans to have a first pilot reactor service by 2022 and commercial reactors deployed by around 2030, although many economic, technical and regulatory challenges need to be overcome.

Co-operation between India and the Nuclear Energy Agency (NEA) continues to grow, with Indian experts participating in a number of NEA meetings, notably on nuclear safety and regulation, radioactive waste management, radiological protection and nuclear legislation. Indian experts have also been invited to take part in the NEA’s economic studies.

India’s Atomic Energy Regulatory Board (AERB) has been a full member of Multinational Design Evaluation Programme (MDEP) since 2012, for which the NEA acts as Technical Secretariat. The MDEP brings together the nuclear regulators of 15 countries

to collaborate on safety design reviews of new reactors. India also participates in the NEA Hydrogen Mitigation Experiments for Reactor Safety (HYMERES) Project, which is specifically aimed at topics of high safety relevance for both existing and future nuclear power reactors.

In January 2016, the NEA participated in a public seminar in Trivandrum, India, titled Nuclear Power, Radiation and Regulation: A Development Perspective organised by the Kerala State Higher Education Council, the Menon Institute of Legal Advocacy Training, TERI University and the Nuclear Law Association, India (NLAIN). The seminar aimed to inform the public about the prospects of nuclear energy in India and the legal framework for nuclear regulation. The NEA has also been regularly co-sponsoring and giving lectures at the nuclear law courses organised by NLAIN and TERI University.

www.oecd-nea.orgwww.oecd-nea.org/mdepwww.oecd-nea.org/jointproj/hymeres.html.

L The NEA lectured at the “Nuclear Energy and Law” course organised by NLAIN and TERI University in January 2016 in Trivandrum, Kerala.

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OECD LEGAL INSTRUMENTS

– Decisions are legally binding on Members and non-Members that have adhered to them (Adherents). While they are not international treaties, they do entail the same kind of legal obligations as those subscribed to under international treaties. Adherents should implement the Decisions and take the measures necessary for such implementation.

– Recommendations are not legally binding but practice accords them great moral force as representing the political will of Adherents. There is an expectation that Adherents will do their utmost to implement them.

– Declarations are solemn texts setting out relatively precise policy commitments which are subscribed to by governments.

– Arrangements and Understandings are negotiated and adopted in the framework of the Organisation by some Members and/or non-Members.

– International Agreements may be concluded by countries in the framework of the Organisation and are legally binding on the Parties, which may include Members and non-Members.

OECD LEGAL INSTRUMENTS TO WHICH INDIA HAS ADHERED

Decisions:

l Decision of the Council concerning the Mututal Acceptance of Data in the Assessment of Chemicals (MAD) (2011)

l Decision-Recommendation of the Council on Compliance with Principles of Good Laboratory Practice (2011)

l Decision of the Council revising the OECD Schemes for the Varietal Certification or the Control of Seed Moving in International Trade (2008)

l Decision of the Council revising the OECD Standard Codes for the Official Testing of Agricultural and Forestry Tractors (1988)

Declarations:

l Declaration on the Fight Against Foreign Bribery – Towards a New Era of Enforcement (2016)

l Declaration on Automatic Exchange of Financial Account Information in Tax Matters (2014)

l Declaration for the Future of the Internet Economy (Seoul Declaration) (2008)

l Paris Declaration on Aid Effectiveness (2005)

l Istanbul Ministerial Declaration on Fostering the Growth of Innovative and internationally Competitive SME (2004)

l The Bologna Charter on SME Policies (2000)

International Agreements:

l Convention on Mutual Administrative Assistance in Tax Matters (2012)

PARTNERSHIPS IN OECD BODIES

Non-Members can be invited to participate in OECD Committee work in three different statuses:

Associates participate in a Committee, a project or the development or revision of a legal instrument for an open ended period with the same rights and obligations as OECD Members, with the exception of discussions related to the accession of new Members to the Organisation.

Participants participate in OECD Bodies usually for an open-ended period, except in discussions marked as confidential.

Invitees are invited to one meeting at a time, for non-confidential items only.

ANNEXES . 61

Annexes

INDIA’S PARTICIPATION IN OECD BODIES

Associate in:

l Review of the G20/OECD Principles of Corporate Governance (2015)

l OECD/G20 Project on Base Erosion and Profit Shifting (2014)

l OECD Network on Fiscal Relations Across Levels of Government (2011)

l Joint meeting of the Chemicals Committee and the Working Party on Chemicals, Pesticides, Biotechnology: Bodies responsible for the Council Acts related to the Mutual Acceptance of Data in the Assessment of Chemicals (MAD) (2011)

– Working Group on Good Laboratory Practice (2011)

– Working Group of National Co-ordinators of the Test Guidelines Programme (2011)

Participant in:

l Competition Committee (2012)

l Committee on Consumer Policy (2006)

l Committee on Fiscal Affairs (2006)

l Working Party on Private Pensions, Insurance and Private Pensions Committee (2006)

l Steel Committee (1998)

As a Key Partner, India may be invited as an Invitee to the meetings of all OECD bodies.

Discover reports, data and analysis about India alongside the world’s leading economies on OECD iLibrary, the global knowledge base – www.oecd-ilibrary.org

For news and information about OECD work and events with Indiawww.oecd.org/india

Other Programmes:

l Multinational Design Evaluation Programme, serviced by the OECD Nuclear Energy Agency (2012)

l Financial Action Taskforce (2010)

l International Transport Forum (2009)

l Global Forum on Transparency and Exchange of Information for Tax Purposes (2009)

l OECD Development Centre and its Governing Board (2001)

NEWS AND PUBLICATIONS

62 . ACTIVE WITH INDIA

Annexes

AN

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ANNEXES . 63

64 . ACTIVE WITH INDIA

The OECD: A Global Policy Network

The Organisation for Economic Co-operation and Development (OECD) is an international organisation helping governments tackle the economic, social and governance challenges of a globalised economy. It provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies.

The OECD Member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States of America.

Brochure design by baselinearts.co.uk

EURASIAACTIVE WITH

Global Relations SecretariatOECD, 2 rue André Pascal75775 Paris Cedex 16France www.oecd.org/globalrelations GRS.contact@oecd.org

www.oecd.org/eurasia November 2016

Global Relations SecretariatOECD, 2 rue André Pascal75775 Paris Cedex 16France www.oecd.org/globalrelations GRS.contact@oecd.org

www.oecd.org/india December 2016