African LDCs to get preferential access

The government is considering a proposal to offer import duty concessions to goods coming from African Least Developed Countries (LDCs).

Indications are that customs duty on imports from these countries could be reduced by as much as 75 per cent.

The move to offer trade concessions to LDCs is part of the government's attempt to gain their support during multilateral negotiations.

Developed countries like the United States and the European Union regularly offer trade concessions to LDCs to win their support on specific issues.

"LDCs in Asian countries are already covered by special provisions under existing trade treaties, however, there was nothing for countries in the African continent," said officials in the Planning Commission.

Asian LDCs like Bangladesh, Nepal, Bhutan and Myanmar, are given preferential access and other concessions under existing trade groupings like the South Asian Association for Regional Cooperation (SAARC) and BIMST-EC, a grouping of Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan, Nepal for economic cooperation.

LDCs in South-East Asia like Laos and Cambodia will be covered when India's trade agreement ASEAN is finalised.

A framework agreement has been signed with ASEAN and rules of origin are being worked on.

The concessions are unlikely to be misused by other countries to export to India, as was the case in the free trade agreement with Sri Lanka, said officials.

"Most African LDCs are located in the Northern and Eastern parts of the continent, which means that the transportation costs of shipping the goods to India would negate any price advantage third countries could have," he said. Officials said offering them preferential access would open up these markets for Indian exports.