INDIA TO EXTEND DUTY FREE MARKET ACCESS TO LDCs

India earlier this month announced plans to grant unilateral market access to most exports from least-developed countries (LDCs).

Indian Prime Minister Manmohan Singh said that the duty- and quota-free access scheme would cover products that account for 92.5 percent of LDCs' total global exports (and 94 percent of India's total tariff lines). Covered products of interest to African countries in particular - Africa is home to 34 of the world's 50 LDCs -- include cotton, cocoa, sugar cane, and copper and aluminium ores.

Singh made the announcement at the first Indo-African Forum summit in New Delhi on 8 April. At the gathering, South African President Thabo Mbeki, whose country is not an LDC, praised the decision as beneficial for all of Africa. "This will allow us to fight our common enemies - poverty and underdevelopment," he said. "Without this cooperation, our economies would remain localised and fail to grow."

India is hoping to catch up with China in terms of access and influence in Africa. Over the past decade, China has surpassed India in trade with the continent; its trade with African countries amounted to some $55 billion in 2006-07, compared to only $20 billion for India. Like Beijing, New Delhi is eager to gain access to the continent's rich oil and mineral reserves.

WTO Members agreed in December 2005 that all developed countries, and developing countries "declaring themselves in a position to do so," would unilaterally accord unrestricted unilateral market access to exports from LDCs. However, this came with an exception for 3 percent of all tariff lines for countries unwilling to fully liberalise trade; some LDCs at the time said that this would suffice to block many of their very limited number of competitive exports.

Pradeep Mehta, head of CUTS International, told the Financial Express newspaper that New Delhi should ensure that "none of the items which are of interest to Africa find a place in India's negative list" of products for which tariffs would remain in place.

While opening the summit, Indian Prime Minister Singh spoke of the importance of increased market access to the development dimension of international trade. In addition to announcing the new trade preferences, he announced that India would double its line of credit to African nations to $5.4 billion, and begin more than $500 million worth of infrastructure projects on the continent over the next five years.

ICTSD reporting, "Duty Free Access Scheme for LDCs" THE FINANCIAL EXPRESS, 9 April 2008. "India allows duty-free imports from poor African countries" LIVEMINT.COM, 9 April 2008.