Analyzing the value of the Indian duty free market access scheme for Ugandan export

International Centre for Trade & Sustainable Development (ICTSD) has examined the impact of India’s duty free market access scheme on Ugandan exports. The study finds that, in general, impact was low and the update of the scheme in 2014 did not alter this: Uganda’s export to India still constitutes less than 1 % of total Ugandan exports. Several reasons can be identified, some of them inherent to the duty free market scheme, others related to the economic and institutional setting of Uganda.

The preferential scheme set up by India excludes several products in which Uganda has a comparative advantage. These products account for about half of Uganda’s export. Furthermore, policy-related, institutional and structural constraints hamper Ugandan stakeholders to fully benefit from the duty free import scheme. Examples are lack of an effective export strategy and policies promoting business and enabling FDI. In addition, supply-side constraints also curtail Ugandan export options. However, it is not all bad news. The study also points to the fact that India is one of the major investors in Uganda. Investments are made in several sectors such as finance, real estate, ICT and agriculture. If these investments are complemented with technological collaboration and a revision of the market access scheme, substantial progress can be made.

Source: ICTSD