Preferential Market Access: India’s Duty Free Tariff Preference Scheme for LDCs

India’s duty free scheme for LDCs came into effect on 13 August 2008. The scheme was revised in 2014 and import duties are being removed for 98.2 per cent of all tariff lines. 97 tariff lines are excluded and another 114 lines are included in the ‘Margin of Preferences’ list.  The updated scheme also applies less stringent rules of origin.

All LDCs are eligible to participate in the scheme. In order to be a beneficiary, LDCs have to submit a letter of intent and must provide information on signatories of rules of origin certificates.

India also accords preferential market access to Bangladesh, Bhutan and Nepal under the South Asia Free Trade Arrangement. In addition, Lao PDR and Bangladesh receive LDC benefits under the Asia Pacific Trade Agreement.


Utilization by LDCs:

 As of March 2018, 31 LDCs (the Maldives and Samoa graduated) benefit from the scheme. In 2016, India’s imports from LDCs accounted for US$9,926 million.

Available Smooth Transition Procedures:

India’s DFQF does not contain formal smooth transition provisions. However, the Maldives, Samoa and Equatorial Guinea, which graduated respectively in 2011, 2014 and 2017, are still beneficiaries.

Resources:

  1. Guide to India’s Duty Free Tariff Preference Scheme for LDCs
  2. Duty free tariff preference scheme for LDCs by India
  3. Centre for WTO Studies – Discussion paper No. 1
  4. India’s Duty-Free Tariff Preference scheme for Least Developed Countries communication from India, Addendum, G/C/W/651/Add.1, WT/COMTD/N/38/Add.1.
  5. ITC-International Trade Statistics