Duty-free market access scheme for LDCs

Written by Economy Bureau | New Delhi, Apr 8 | Updated: Apr 10 2008, 04:19am hrs
In a bid to catch up with China in trade ties with Africa, secure access to resources and garner support to secure a permanent seat in the United Nations Security Council, India on Tuesday said it would unilaterally give preferential duty-free access for exports from least developed countries (LDC), 34 of which are in Africa.

Addressing the First Indo-Africa Forum Summit here, Prime Minister Manmohan Singh said India and Africa have coordinated positions in the UN and other international forums. No one understands better than India and Africa the imperative need for global institutions to reflect current realities and to build a more equitable global economy and polity, Singh said. He also said both sides also recognised the importance of market access in ensuring the development dimension of international trade. Over a dozen African countries are attending the Summit and the participants include heads of state like South Africas Thabo Mbeki.

Announcing a duty free tariff preference scheme for LDCs, Singh said the Scheme would cover 94% of Indias total tariff lines and provide preferential market access on tariff lines that comprise 92.5% of global exports of all LDCs. Products of immediate interest to Africa which are covered include cotton, cocoa, aluminium ores, copper ores, cashew nuts, cane sugar, ready-made garments, fish fillets and non-industrial diamonds, the Prime Minister said.

Nagesh Kumar, director-general, Research and Information System for Developing Countries, said India itself is a low income country with a per capita income of below $1,000 and is seeking more market access for its products in other countries. But, being a responsible emerging economy, India has shown solidarity with other low income countries by such generous measures.

However, Pradeep Mehta, secretary general, CUTS International, said: Since 6% of Indias total tariff lines and some of Africas exports are not covered by the scheme, it should see that the scheme serves Africas genuine interests by ensuring that none of the items which are of interest to Africa find a place in Indias negative list (items not subjected to tariff reduction commitments).

New Delhi is also concerned that though Chinas trade with African countries was less than that of Indias in 1999, currently it stands at $55 billion, compared to Indias $20 billion in 2006-07. Indias trade with Africa was just $967 million in 1991.

The Prime Minister said over the next 5 to 6 years, India would undertake projects against grants in excess of $500 million and give priority to develop infrastructure in the the continent in areas of power, railways, telecom and IT. We will strengthen local capabilities by creating regional and pan-African institutions of higher education, especially in sciences, Information Technology and vocational education and investment in research and development in renewable forms of energy, and agricultural development, the PM said.

However, Biswajit Dhar, head of the centre for WTO Studies, IIFT, said, China had taken the first step in this regard with Africa and has backed it up with being proactive for finding markets for Chinese industries in return. India should also encourage its investors to look at viable investment opportunities at the least possible price in Africa.

Experts said in return for the measures taken to help African countries, India would expect access to rich natural resources as well as food and energy supplies. Though China is focusing on countries like Sudan, where several countries have voiced human rights concerns, India has ties with many southern and eastern African countries.