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India’s preferential scheme for LDCs


Source: BS

 Context: According to a report by the LDC Group at the World Trade Organization (WTO), approximately 85% of the 11,000 products offered at zero tariffs by India to least developed countries (LDCs) under the duty-free quota-free (DFQF) scheme remain unutilized.


About the duty-free quota-free (DFQF) scheme :

Aspect Information
About the scheme The Scheme requires all developed and developing country members to provide preferential market access for all products originating from all LDCs.
Origin The decision to provide duty-free quota-free (DFQF) access for LDCs was first taken at the WTO Hong Kong Ministerial Meeting in 2005.
India India became the first developing country to extend this facility to LDCs in 2008, providing market access to 85% of India’s total tariff lines to better integrate LDCs into the global trading system and improve their trading opportunities.
Expansion The scheme was expanded in 2014, providing preferential market access on over 98% of India’s tariff lines to LDCs. India offers 11,506 preferential tariff lines to LDCs, of which 10,991 are duty-free.
Reasons for low utilization Lack of awareness among exporters about the scheme and its benefits.
Incomplete or inaccurate data regarding utilization rates.
Significant amounts of LDC exports entering India under non-preferential (most favoured nation) tariff route, despite being covered by DFQF.