GlenDoolittle2 at 08:01, 9 August 2023

2023-08-09T08:01:00Z

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'''Duty Free Tariff Preference (DFTP)''' is a [[unilateral]] [[Reciprocal trade agreement|non-reciprocal]] preferential [[tariff]] scheme provided by the [[Government of India]] for the [[least developed countries]] (LDCs). The scheme was officially introduced on 13 August 2008. India was the first [[developing country]] to introduce a preferential tariff program for the LDCs.<ref name="LRA">{{cite web|date=November 2015|title=India’s Duty Free Tariff Preference (DFTP) Scheme for Least Developed Countries (LDCs)|url=https://www.lra.org.ls/sites/default/files/2017-03/India%20s%20Duty%20Free%20Tariff%20Preference%20DFTP%20Scheme%20for%20Least%20Developed%20Countries%20DCs.pdf|access-date=5 October 2021|website=Lesotho Revenue Authority}}</ref><ref>{{cite web|title=Utilising India’s Duty Free Preference Scheme for LDCs: Analysis of the Trade Trends|url=https://www.researchgate.net/publication/257635823_Utilising_India%27s_Duty_Free_Preference_Scheme_for_LDCs_Analysis_of_the_Trade_Trends_Centre_for_WTO_Studies_Indian_Institute_of_Foreign_Trade|access-date=5 October 2021|website=researchgate.net|publisher=Centre for WTO Studies}}</ref>

Under the DFTP scheme, 98.2% of product categories originating from LDCs are offered duty free and preferential treatment. Only 1.8% of product categories imported into India from LDCs are subject to regular duties. As of March 2018, 31 LDCs benefit from the scheme. India made US$ 9.93 billion worth of imports from LDCs in 2016.<ref name="UN"/>

India also provides preferential market access to [[Bangladesh]], [[Bhutan]], [[Maldives]] and [[Nepal]] under the [[South Asian Free Trade Area|South Asia Free Trade Arrangement]], and to [[Laos]] and Bangladesh under the [[Asia-Pacific Trade Agreement]].<ref name="UN"/><ref>{{cite web |last1=Tavares |first1=Marcia |title=Preferential market access for goods {{!}} LDC Portal |url=https://www.un.org/ldcportal/preferential-market-access-for-goods/ |website=United Nations |access-date=5 October 2021}}</ref>

==Background==
The [[World Trade Organization Ministerial Conference of 2005|World Trade Organization Hong Kong Ministerial Declaration]] of December 2005 required all [[Developed country|developed countries]], and [[Developing country|developing countries]] who declared themselves in a position to do so, to extend duty-free and quota-free market access for products originating from the least developed countries (LDCs).<ref name="CommerceMin">{{cite web |title=India’s Duty Free Tariff Preference (DFTP) Scheme for Least Developed Countries (LDCs) |url=https://commerce.gov.in/wp-content/uploads/2020/02/MOC_636434269763910839_international_tpp_DFTP.pdf |website=Ministry of Commerce |access-date=5 October 2021 |date=9 October 2017}}</ref>

Prime Minister [[Manmohan Singh]] announced the introduction of the Duty Free Tariff Preference scheme at the first [[India–Africa Forum Summit]] in [[New Delhi]] on 8 April 2008.<ref name="UNCTAD">{{cite web |title=HANDBOOK ON INDIA’S DUTY-FREE TARIFF PREFERENCE SCHEME for least developed countriesfor least developed countries |url=https://unctad.org/system/files/official-document/itcdtsbmisc77_en.pdf |website=UNCTAD |access-date=5 October 2021}}</ref> The scheme was officially introduced on 13 August 2008, and was notified to the [[World Trade Organization]] on 5 September 2011.<ref name="UN">{{cite web |last1=Scelta |first1=Gabriella |title=Preferential Market Access: India's Duty Free Tariff Preference Scheme for LDCs |url=https://www.un.org/ldcportal/preferential-market-access-indias-duty-free-tariff-preference-scheme-for-ldcs/ |website=United Nations |access-date=5 October 2021}}</ref>

==Benefits==
When the DFTP scheme was introduced in 2008, India committed to eliminating customs duties on over 85% of tariff lines (for items in the [[Harmonized System]] 6-digit level of classification), reducing duties on the basis of a prescribed margin of preference{{efn|The margin of preference is the percentage difference between the [[most favoured nation]] (MFN) rate of duty and the preferential rate of duty}} for 9% of tariff lines, and maintaining duties on the remaining 6% tariff lines over a period of 5 years. India had successfully met its pledge by 2012. The margin of preference granted for the 9% of tariff lines ranged from 10-90%.<ref name="UNCTAD"/>

Following consultations with beneficiary countries, the [[Ministry of Commerce and Industry (India)|Ministry of Commerce and Industry]] revised the scheme in April 2014 to further boost exports from LDCs by eliminating tariffs on 98.2% of all tariff lines imported from LDCs. As a result, only 1.8% of tariff lines imported into India from LDCs are subject to duties. The most common items on the excluded list are vegetables and vegetable products, which accounted for 37% of the excluded items list, and prepared foodstuffs which accounted for 33%.<ref name="UNCTAD"/><ref>{{cite web |title=India increases duty free tariff line to African exports up to 98 percent |url=https://ictsd.iisd.org/bridges-news/bridges-africa/news/india-increases-duty-free-tariff-line-to-african-exports-up-to-98 |website=International Centre for Trade and Sustainable Development |access-date=5 October 2021 |language=en}}</ref>

==Beneficiary countries==
In order to become a beneficiary under the DFTP scheme, a prospective beneficiary country must provide a [[letter of intent]] and specimen seals and signatures of the officials authorised to issue the [[certificate of origin]].<ref name="CommerceMin"/>
{| class="wikitable sortable"
|-
! No. !! Country !! Date joined
|-
| 1 || Cambodia || 13 August 2008<ref name="Intercen"/>
|-
| 2 || Tanzania || 13 August 2008<ref name="Intercen"/>
|-
| 3 || Ethiopia ||28 August 2008<ref name="Intercen" />
|-
| 4 || Mozambique ||28 August 2008<ref name="Intercen" />
|-
| 5 || Samoa ||28 August 2008<ref name="Intercen" />
|-
| 6 || Malawi ||28 August 2008<ref name="Intercen" />
|-
| 7 || Laos ||28 August 2008<ref name="Intercen" />
|-
| 8 || Uganda ||31 October 2008<ref name="Intercen" />
|-
| 9 || Rwanda ||31 October 2008<ref name="Intercen" />
|-
| 10 || Madagascar ||31 October 2008<ref name="Intercen" />
|-
| 11 || Benin ||19 January 2009<ref name="Intercen" />
|-
| 12 || Myanmar ||19 January 2009<ref name="Intercen" />
|-
| 13 || Eritrea ||19 January 2009<ref name="Intercen" />
|-
| 14 || Burkina Faso ||20 March 2009<ref name="Intercen" />
|-
| 15 || Gambia ||20 March 2009<ref name="Intercen" />
|-
| 16 || Sudan ||4 May 2009<ref name="Intercen" />
|-
| 17 || Senegal ||9 June 2009<ref name="Intercen" />
|-
| 18 || Lesotho ||6 August 2009<ref name="Intercen" />
|-
| 19 || Mali ||6 August 2009<ref name="Intercen" />
|-
| 20 || Somalia ||13 May 2010<ref name="Intercen" />
|-
| 21 || Bangladesh ||14 May 2010<ref name="Intercen" />
|-
| 22 || Burundi ||15 May 2010<ref name="Intercen" />
|-
| 23 || East Timor ||8 June 2010<ref name="Intercen" />
|-
| 24 || Zambia ||8 June 2010<ref name="Intercen" />
|-
| 25 || Central African Republic ||1 December 2010<ref name="Intercen" />
|-
| 26 || Afghanistan ||1 June 2011<ref name="Intercen" />
|-
| 27 || Comoros ||1 January 2012<ref name="Intercen" />
|-
| 28 || Liberia ||1 January 2012<ref name="Intercen" />
|-
| 29 || Yemen ||2 April 2013<ref name="Intercen" />
|}

===Previous beneficiaries===
Countries cease to become DFTP beneficiaries when they are no longer designated as LDCs by the [[United Nations]], although the transition is not immediate and countries often continue to receive LDC benefits for a period even after they graduate from LDC status. Samoa and Equatorial Guinea which graduated in 2015 and 2017 continue to be beneficiaries.<ref name="UN"/>

Maldives graduated from LDC status in 2011 and was removed from the DFTP scheme in 2015.<ref name="Intercen">{{cite web |title=INDIA’S DUTY FREE TARIFF PREFERENCE SCHEME FOR LDCs |url=https://www.intracen.org/uploadedFiles/intracenorg/IndiaDutyFreeTariff.pdf |website=International Trade Centre |access-date=5 October 2021 |date=2015}}</ref> However, under article 12 of the South Asia Free Trade Agreement, Maldives is accorded LDC status in the agreement and in any subsequent contractual undertakings.<ref>{{cite web |last1=Tavares |first1=Marcia |title=Preferential market access for goods {{!}} LDC Portal |url=https://www.un.org/ldcportal/preferential-market-access-for-goods/ |website=United Nations |access-date=5 October 2021}}</ref>

==Notes==
{{noteslist}}

==See also==
* [[Free trade agreements of India]]

==References==
{{reflist}}

[[Category:Foreign trade of India]]
[[Category:Custom and excise duties in India| ]]

Duty Free Tariff Preference - Revision history

GlenDoolittle2 at 08:01, 9 August 2023