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TMI BlogDuty Free Tariff Preference (DFTP) SchemeX X X X Extracts X X X X X X X X Extracts X X X X ..... Duty Free Tariff Preference (DFTP) Scheme X X X X Extracts X X X X X X X X Extracts X X X X ..... providing duty-free or reduced-duty access for a wide range of products exported from these countries to India. It is part of India's commitment to fostering trade with LDCs and supporting their integration into the global economy. Overview of India's DFTP Scheme: The DFTP Scheme was introduced in 2008 and provides duty-free or preferential tariff treatment for products imported from LDCs into India. It is aimed at helping LDCs increase their exports to India by making their products more competitive in the Indian market through tariff preferences. Key Features of India's DFTP Scheme * Duty-Free Access to Indian Market: Under the DFTP scheme, products from LDCs are eligible for duty-free access to the Indian market. This means that goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds from LDCs can enter India without being subject to regular customs duties, provided they meet certain criteria. * Eligible Countries: * The DFTP scheme is available to all LDCs recognized by the United Nations. India offers this preferential access to around 48 countries classified as LDCs, including countries in Africa, Asia, and the Pacific. * Eligible Products:A wide range of products from LDCs can benefit from the DFTP scheme. These include: * * Agricultural products: Fruits, vegetables, spices, and grains. * Textiles and garments: Clothing, fabrics, and textiles made in LDCs. * Handicrafts and traditional goods: Handwoven textiles, jewelry, and locally produced crafts. * Leather goods: Leather garments, bags, and ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessories. * Minerals and metals: Products like gold, diamonds, and other raw materials. However, there are some exceptions, such as products related to sensitive sectors (e.g., some agricultural products) that may not be fully included under the scheme. * Rules of Origin: * To qualify for the DFTP preferences, the goods must meet specific rules of origin. These rules ensure that the products are genuinely sourced from LDCs, not from third-party countries. * The key rules of origin typically require that a certain percentage of the product's value or transformation must originate in the LDC for it to be eligible for duty-free treatment in India. * Preferential Tariff Treatment: In addition to duty-free access, the scheme also pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides preferential tariff rates for certain goods, making Indian imports from LDCs more cost-competitive compared to imports from non-LDC countries. * Certificate of Origin: To benefit from the DFTP scheme, exporters from LDCs must provide a Certificate of Origin (COO) to prove that the goods meet the required origin criteria and are eligible for preferential treatment. The COO is a critical document for clearing customs and claiming the duty-free status under the scheme. Benefits of India's DFTP Scheme for LDCs * Enhanced Market Access: The DFTP scheme offers LDCs an opportunity to access the Indian market without the burden of tariffs. This creates a significant competitive advantage for LDC exporters who might otherwise face high ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riffs when exporting to other countries. * Economic Development: By providing preferential access to the Indian market, India's DFTP scheme contributes to the economic development of LDCs. Increased exports from LDCs can help generate employment, reduce poverty, and stimulate industrial and agricultural growth. * Support for Diversification: The scheme encourages LDCs to diversify their export products by giving them access to a large, emerging economy like India. This reduces LDCs' dependence on a few export markets and promotes greater trade diversity. * Strengthening Bilateral Relations: The DFTP scheme helps strengthen trade ties between India and the LDCs, fostering closer economic cooperation and partnership in regional and glob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al trade. * Promotion of Sustainable Development: The preferential trade treatment under the DFTP scheme supports the sustainable development goals (SDGs) of LDCs by promoting inclusive growth and reducing the barriers to entry for LDC products. Challenges and Considerations: While the DFTP scheme offers significant benefits, there are also some challenges and considerations for both LDC exporters and Indian importers: * Compliance with Rules of Origin: Exporters from LDCs need to ensure that their products meet the rules of origin to avoid issues with customs clearance in India. This requires proper documentation and sometimes a more detailed understanding of the production process. * Quality Standards: Goods imported from LDCs may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need to meet specific quality standards and regulations set by Indian authorities. This can be a barrier for LDC exporters if their products do not comply with these standards. * Logistical and Infrastructure Constraints: Some LDCs may face challenges related to infrastructure, logistics, and transportation that could affect the efficiency of exports to India. Delays in shipping or customs clearance can sometimes undermine the benefits of the DFTP scheme. * Limited Awareness and Capacity: Some exporters in LDCs may not be fully aware of the opportunities available under the DFTP scheme, or they may lack the capacity to meet the regulatory and documentation requirements needed to take advantage of the preferential treatment. Country Cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erage : As of June 2023; Thirty-Five (35) LDCs have been notified as beneficiaries to the scheme*. These countries include the following: S. No. Country name S. No. Country name S. No. Country name 1 Benin 13 Liberia 25 Togo 2 Burkina Faso 14 Madagascar 26 Zambia 3 Burundi 15 Malawi 27 Afghanistan 4 Chad 16 Mali 28 Bangladesh 5 Comoros 17 Mozambique 29 Cambodia 6 Central African Republic 18 Niger 30 Timor Leste 7 Eritrea 19 Rwanda 31 Lao PDR 8 Ethiopia 20 Senegal 32 Myanmar 9 Gambia 21 Somalia 33 Haiti 10 Guinea 22 Sudan 34 Yemen 11 Guinea Bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssau 23 Uganda 35 Sierra Leone 12 Lesotho 24 Tanzania *Those LDCs which have graduated out of UN list of LDCs have been deleted from this list Implementing Notification of the DFTP Scheme and Notifications of Accessions The relevant Indian customs notifications pertaining to the DFTP Scheme are: Notification No. Date Title 23/2022 - Customs 30-Apr 2022 Seeks to amend the various Customs Tariff notifications in order to align the HS Codes of the said notifications with the Finance Act, 2022, w.e.f. 01.05.2022 60/2021-Cus 30-Dec2021 Seeks to amend FTA/PTA notification to align with HSN 2022 w.e.f. 1.1.2022 50/2021-Cus 22-Oct 2021 Seeks to amend notification No. 96/2008- Customs dated 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .08.2008 to include Sierra Leone 26/2021-Cus 08-Apr 2021 Seeks to amend customs notifications to make changes consequential to enactment of Finance Act, 2021 16/2021-Cus 05-Feb 2021 Seeks to amend notification Nos. 96/2008-Customs, 57/2009-Customs, 101/2007-Customs and 50/2018-Customs consequential to imposition of Agriculture Infrastructure and Development Cess (AIDC) 36/2019-Cus 30-Dec 2019 Seeks to amend Customs Tariff notifications so as to align them with amended Customs Tariff. 68/2017-Cus 27-Jul2017 Seeks to amend Notification No. 96/2008-Customs dated 13th August 2008 to insert S. No. 35-Republic of Niger and S. No. 36 Republic of Guinea in the Schedule to the notification. 02/2017-Cus 27-Jan 2017 Seek ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to further amend Notification No. 96/2008-Customs dated 13.08.2008 so as to prescribe a Margin of Preference of 60% for all goods falling under sub-heading [0802 80] under the Duty Free Tariff Preference (DFTP) scheme. 67/2016-Cus 31-Dec 2016 Seeks to amend Notification No.105/1999- Customs; 75/2005- Customs; 74/2005-Customs; 28/1995- Customs; 76/2003-Customs; 21/2012- Customs; 72/2005- Customs; 24/2005- Customs; 101/2007-Customs; 12/2012- Customs; 26/2000- Customs; 73/2005- Customs; 10/2008- Customs; 96/2008- Customs; 57/2009-Customs; 72/2005- Customs; 151/2009- Customs; 85/2004- Customs; 46/2016-Cus 23-Aug 2016 Seeks to further amend Notification No. 96/2008-Customs dated 13.08.2008 so as to include 'Republic of Guinea-Bissau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' in the list of countries eligible for preferential tariff under the said notification. 39/2016-Cus 21-Jun 2016 Seeks to further amend Notification No. 96/2008-Customs dated 13.08.2008 so as to include Republic of Togo' and Republic of Chad' in the list of countries eligible for preferential tariff under the said notification. 34/2016 -Cus 19-May 2016 Seeks to further amend notification No. 96/2008-Customs dated 13.08.2008, so as to carry out the following changes: to omit 'Samoa' and 'Maldives' from the list of countries eligible for preferential tariff under the said notification; to amend the name of 'Republic of East Timor' as 'Democratic Republic of Timor-Leste'. 12/2015- Cus 10-Mar 2015 Seeks to amend notification N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 96/2008 Customs, dated the 13th August, 2008 29/2015-Cus (N.T.) 10-Mar 2015 Customs Tariff (Determination of Origin of Products under the Duty Free Tariff Preference Scheme for Least Developed Countries) Rules, 2015. 08/2014-Cus 01-Apr 2014 Seeks to amend Notification No. 96/2008Customs, dated 13-08-2008 (DFTP scheme for LDCs ) 33/2013-Cus 19-Jun 2013 Seeks to amend the notification No. 96/2008-Customs, dated 13th August, 2008 so as to include "Republic of Haiti" in the list of Least Developed Countries 19/2013-Cus 02-Apr 2013 Seeks to amend the notification No. 96/2008-Customs, dated 13th August, 2008 so as to include "Republic of Yemen" in the list of Least Developed Countries eligible to avail of the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty free tariff preferences (DFTP) scheme 56/2012-Cus 01-Oct 2012 Seeks to amend notification no. 96/2008Customs dated 13th August 2008, so as to provide deeper concessions under DFTP scheme for Least Developed Countries (LDCs). 113/2011 -Customs 23-Dec 2011 Amends Notification No. 96/2008-Customs, dated the 13th August, 2008 90/2011 - Customs 16-Sep 2011 Seeks to amend Notification No. 96/2008 Customs dated 13th August 2008, to provide deeper concessions under DFTP scheme for Least Developed Countries (LDCs). 45/2011 - Customs 01-Jun 2011 Seeks to amend notification no. 96/2008 Customs, dated 13.08.2008 so as to include Islamic republic of Afghanistan" as one of the beneficiaries to DFTP scheme" 121/2010 - Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms 01-Dec 2010 Amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 96/2008-Customs, dated the 13th August, 2008 95/2010 - Customs 15-Sep 2010 Amends Notification No. 96/2008-Customs, dated the 13th August, 2008 67/2010 - Customs 08-Jun 2010 Amends Notification No. 96/2008-Customs, dated the 13th August, 2008 64/2010 - Customs 14-May 2010 Amends Notification No. 96/2008-Customs, dated the 13th August, 2008 63/2010 - Customs 13-May 2010 Amends Notification No.96/2008-Customs, dated the 13th August, 2008 86/2009 - Customs 06-Aug 2009 Amends Notification No. 96/2008-Customs, dated the 13th August, 2008 59/2009 - Customs 09-Jun 2009 Amends Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication No. 96/2008-Customs, dated the 13th August, 2008 45/2009 - Customs 04-May 2009 Amends notification No. 96/2008-Customs, dated the 13th August, 2008 24/2009 - Customs 20-Mar 2009 Amending Notification published vide number G.S.R. 590(E), dated the 13th August, 2008. 07/2009 - Customs 19-Jan 2009 Amends Notification No. 96/2008-Customs, dated the 13th August, 2008 113/2008-Cus 31-Oct 2008 Uganda, Rwanda and Madagascar - Exemption to imports therefrom - Amendment to Notification No. 96/2008Cus. 99/2008 - Customs 28-Aug 2008 Amendments in the notification No. 96/2008-Customs, dated the 13th August, 2008 96/2008 - Customs 13-Aug 2008 Regarding Duty free tariff preference for Least Developed Countrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s
Conclusion: India's Duty Free Tariff Preference (DFTP) scheme provides a valuable opportunity for Least Developed Countries (LDCs) to access the Indian market on preferential terms, thus helping these countries increase their exports and foster economic development. By offering duty-free access and preferential tariffs on a wide range of products, India is supporting LDCs in their efforts to integrate more effectively into global trade. For LDC exporters, it is crucial to understand the eligibility requirements, rules of origin, and required documentation (such as the Certificate of Origin) to benefit fully from the scheme. X X X X Extracts X X X X X X X X Extracts X X X X
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