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India to offer tariff concessions

India will offer tariff concessions from 30 to 40 per cent on the margin of preference (MOP) to the least developed countries, reports KA Badarinath.

india Updated: Dec 06, 2006 19:28 IST

India will offer tariff concessions from 30 to 40 per cent on the margin of preference (MOP) to the least developed countries (LDCs) to boost South - South trade amongst developing and least developed countries.

The concessions will be across a comprehensive list of 3313 items that also include from textiles and agriculture sectors.

Commerce and Industry Minister Kamal Nath has put forth this proposal ahead of the third round of negotiations with members from General System of Trade Preferences (GSTP) group. The margin of preference for GSTP members is benchmarked to the tariffs applicable to Most Favoured Nation (MFN) countries.

Sources close to the commerce ministry revealed that all the members of the G-77 – a group of developing countries – would be eligible for tariff concessions up to 20 – 25 per cent on a MOP basis.

India’s offer will torpedo United States and European Union’s game plan of driving differences between the LDCs and the smaller developing countries from the G-77 group, said a Commerce Ministry official .

Commerce Secretary Gopal K Pillai has asked all the Ministries and Departments to come up with their comments on the proposed list by this weekend.

Sources said that countries like India, Brazil, Taiwan, Hong Kong, Singapore, Thailand and Malaysia have been beneficiaries of such trade and tariff preferences provided by developed countries to push their goods and services.

However, smaller developing countries and LDCs like Haiti, Nepal and Sub-Saharan Africa are yet to benefit from concessional tariffs.

The latest example of providing tariffs concessions reflected in the Free Trade Agreement (FTA) entered into between China and Pakistan. Under the FTA, Pakistan can export 1768 items at just 20 per cent on margin of preference to China.

United States Trade Representative (USTR) office study of April 2005 has reportedly estimated that preferential tariffs to least developed countries will boost the latter’s exports by 11 per cent globally.

India has come up with its latest "tentative list" for the benefit of exports by GSTP members and LDCs following a general agreement within the ruling alliance. The list is in consonance with recommendations made by an inter-ministerial group in June this year.

All members of GSTP group are expected to make offer of items to which concessional tariff or zero-duty imports would be allowed.