India’s duty-free access offer to LDCs an important and timely initiative, says CUTS

April 09, 2008, New Delhi
The much awaited and politically significant initiative of providing duty-free market access to 50 least developed countries (LDCs) has finally been formally announced by India yesterday. The Prime Minister of India, Dr. Manmohan Singh made this important announcement at the First India-Africa Forum Summit being held in New Delhi. India will now unilaterally provide preferential market access to most exports from all LDCs.

“This is an extremely important and timely step by India to further promote South-South cooperation”, says CUTS, a leading Southern voice on trade and development issues. Although the decision was delayed by a few months it seems that this package would create meaningful access for LDCs in Indian markets. Earlier the Indian Commerce Ministry insisted that it needed some more time to work out a proposal that would be effective in stimulating LDC exports to India.

That the Indian Prime Minister chose to make this announcement at the First India-Africa Forum Summit speaks a lot about its political significance. The Summit is being attended by six Presidents and many senior Ministers from Africa. The timing is also important as the Doha Round of trade negotiations by the WTO (World Trade Organisation) Members has entered into a crucial phase. WTO’s Director-General, Mr. Pascal Lamy is seriously thinking about convening a Ministerial meeting next month to strike a final deal. Support from LDCs will be crucial for finalizing this deal.

In about a fortnight the quadrennial UNCTAD Conference (UNCTAD XII) is to begin at Accra, the capital of Ghana in Africa, where attending nations are expected to review the progress of implementation of GSTP (Global System of Trade Preferences among developing countries). This is an UNCTAD-led initiative for boosting South-South trade cooperation which urges larger developing countries to provide unilateral trade preferences to LDCs.

India’s preferential market access scheme to LDCs would cover 94 percent of India’s total tariff lines, and is better than what Brazil and China have offered to LDCs. While China allows this preference to only 39 LDCs, Brazil’s scheme is limited to only 32 LDC members of the WTO. Moreover, contrary to a general perception that India would provide zero-duty access to LDCs on just industrial products and only low-duty on farm products, duty-free access will be provided for agricultural products such as sugar, cotton and cocoa.
For more information, please contact:
Pranav Kumar, Policy Analyst, CUTS +9198295 87897;