India's duty-free tariff preference scheme for least developed countries

Communication from india

Addendum

The following communication, dated 17 November 2015, is being circulated at the request of the delegation of India.

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This communication updates the information provided in the 5 September 2011 notification of India’s Duty-Free Tariff Preference (DFTP) Scheme, which was circulated in documents G/C/W/651 and WT/COMTD/N/38.^[1]

India's Duty Free Quota Free (DFQF) Scheme is a unilateral non reciprocal tariff preference scheme for Least Developed Countries (LDCs). India became the first developing country to extend this facility to LDCs. India announced the DFTP Scheme for LDCs in the year 2008. The Scheme was announced to give support to the LDCs in their trade initiatives. Under the Scheme, by 2012, 85% of India’s total tariff lines were made duty free, 9% tariff lines enjoying a Margin of Preference (MOP) ranging from 10% to 90% and only 6% of total tariff lines retained in the Exclusion List with no duty preferences, for the exports from LDCs.

To fully meet the obligations under the Hong Kong Ministerial Mandate of 2005, the DFTP Scheme has been expanded. Effective from 1 April 2014 (vide Customs Notification No. 8/2014 dated 1 April 2014), the DFTP scheme now provides duty free/preferential market access on about 98.2% of India’s tariff lines (at HS-6 digit level of classification). Only 1.8% of the tariff lines have been retained in the Exclusion List, with no duty concessions. As per the notification, only 97 lines are under exclusion list and 114 lines are under MOP list. Rest of the lines are under duty free list.

Apart from the expansion in the product coverage of the Scheme, procedural matters related to the Rules of Origin provisions of the DFTP Scheme have also been simplified vide notification no. 29/2015-Cus (NT), dated 10 March 2015. The following important changes have been made:

i.      Change in the origin criteria to Change in Tariff Sub-Heading (CTSH) + up to 70% non-originating material instead of the earlier criteria of Change in Tariff Heading (CTH)+ up to 70 % non-originating material;

ii.     Allowing the option for calculation of value addition based on ex-works price of the goods also instead of FOB value only in the earlier Scheme;

iii.    Allowing the Certificate of Origin (CoO) in A4 size paper of white colour in the prescribed format, instead of the earlier requirement of blue coloured CoO under DFTP scheme.

To become a beneficiary under the DFTP Scheme, the prospective beneficiary country is required to provide a letter of intent as well as specimen seals and signatures of the officials authorised to issue the certificate of origin under the DFTP Scheme.

The Scheme has been made operational vide Customs Notifications No. 96/2008-Customs and 100/2008-Customs (Non-Tariff) dated 13 August, 2008. Subsequent notifications issued are 99/2008, 113/2008, 7/2009, 24/2009, 45/2009, 59/2009, 86/2009, 63/2010, 64/2010, 67/2010, 95/2010, 121/2010, 45/2011,90/2011, 113/2011, 56/2012, 19/2013, 33/2013, 08/2014, 12/2015 and 29/2015 (Non-Tariff). All these notifications are available on the Government of India (Central Board of Excise & Customs) website http://www.cbec.gov.in/. 

The important notifications for products coverage (96/2008, 56/2012 and 08/2014) can be found at the web-links:

http://www.cbec.gov.in/htdocs-cbec/customs/cs-act/notifications/notfns-2008/cs-tarr2008/cs96-2k8

http://www.cbec.gov.in/htdocs-cbec/customs/cs-act/notifications/notfns-2012/cs-tarr2012/cs56-2012

http://www.cbec.gov.in/htdocs-cbec/customs/cs-act/notifications/notfns-2014/cs-tarr2014/cs08-2014 ; and

The important notifications for Rules of Origin (100/2008 and 29/2015) can be found at the web‑links:

http://www.cbec.gov.in/htdocs-cbec/customs/cs-act/notifications/notfns-2008/cs-nt2008/csnt100-2k8  ;

http://www.cbec.gov.in/resources//htdocs-cbec/customs/cs-act/notifications/notfns-2015/cs-nt2015/csnt29-2015.pdf

For details of the DFTP Scheme:

http://commerce.gov.in/trade/international_tpp_DFTP.pdf 

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