Trade policy review report by the secretariat

3.1.7  Preferential tariffs

102. 
     India grants preferences under its reciprocal regional trade agreements and also under the duty-free quota-free programme for LDCs. In comparison with the overall applied MFN tariff of 13%, average preferential tariffs under its regional trade agreement range from 0.8% for the least developed country members of the SAFTA – Bangladesh, Bhutan, Maldives, Nepal and Afghanistan to 13% for MERCOSUR. Preferences granted especially to Chile and MERCOSUR as well as Thailand, with which India has a framework agreement, are minimal. In its other agreements India provides preferences currently ranging from between 42.8% for Singapore and 88.6% for Sri Lanka and 96.4%, with the share of duty free tariffs between 8% for The Republic of Korea and 79.9% for Sri Lanka; LDCs under SAFTA are also given greater preferences, covering 96.4% of the tariff, with 99.1% of India's tariff duty free for imports from these partners (Table 3.7).
     

Table 3.17 Summary analysis of India's preferential tariffs, 2014-15

	Preferential lines^a	Total		WTO agriculture		WTO non-agriculture
		Average (%)	Duty free rates (%)	Average (%)	Duty free rates (%)	Average (%)	Duty free rates (%)
	(% of all tariff lines)
MFN		13.0	2.7	36.4	4.5	9.5	2.4
RTAs
SAFTA 1	73.3	6.9	2.7	15.9	4.5	5.5	2.4
SAFTA 2	96.4	0.8	99.1	6.2	92.9	0.0	100.0
ASEAN	85.5	5.2	65.2	23.9	41.6	2.4	68.7
Philippines	85.2	8.5	3.3	30.0	4.5	5.3	3.1
APTA	9.8^b	12.4	4.4	36.3	4.5	8.8	4.4
Mercosur	3.2	13.0	2.7	36.4	4.5	9.5	2.4
Chile	2.0	12.9	2.7	36.3	4.5	9.4	2.4
Japan	79.5	8.8	18.2	30.7	6.0	5.5	20.0
Korea, Rep. of	77.8	7.7	8.0	28.8	4.5	4.5	8.6
Malaysia	86.1	5.1	65.2	23.7	41.6	2.4	68.7
Singapore	42.8	9.6	24.4	33.9	11.3	5.9	26.4
Sri Lanka	88.6	2.4	79.9	5.6	94.1	1.9	77.8
Thailand	2.4	12.8	5.1	36.1	5.6	9.3	5.0
LDCs	94.7	1.9	94.1	13.4	77.1	0.2	96.7

a The percentage of preferential lines includes only lines on which the rates are lower than the corresponding MFN applied rate and fully applied at the 8-digit level. The 2014-15 effective MFN tariff consists of 11,481tariff lines out of which 305 lines bear a duty free rate.

b For Bangladesh, the %age of preferential lines equals 10.2%.

Note: LDC: Notification Nos. 08/2014, 56/2012. Preferential Tariffs applied to 31 countries: Cambodia, Tanzania, Ethiopia, Mozambique, Samoa, Malawi, Lao PDR, Uganda, Rwanda, Madagascar, Benin, Myanmar, Burkina Faso, Eritrea, Gambia, Sudan, Senegal, Lesotho, Mali, Somalia, Maldives, Bangladesh, Burundi, East Timor, Zambia, Central African Republic, Afghanistan, Liberia, Comoros, Yemen and Haiti.

SAFTA 1: Notification No. 68/2012. Applied to Pakistan and Sri Lanka.

SAFTA 2: Notification No. 99/2011. Applied to Bangladesh, Bhutan, Maldives, Nepal, Afghanistan (LDC countries).

APTA: Notification Nos. 134/2006, 89/2006. Applied to Bangladesh, China, Rep. of Korea, Sri Lanka.

Mercosur: Notification Nos. 121/2011 and 57/2009.

Chile: Notification No.116/2011.

Japan: Notification Nos. 36/2014, 09/2014.

Korea, Rep. of: Notification Nos. 35/2014, 151/2009.

Malaysia: Notification No. 37/2014.

Singapore: Notification Nos. 01/2015, 35/2012, 34/2012, 33/2012, and 69/2009.

Sri Lanka: Notification Nos. 121/2011, 52/2008, 3/2007, 2/2007, 128/2006, 57/2005, 43/2003, 126/2002, 20/2001, 26/2000.

Thailand: Notification Nos. 38/201, 115/2011, 131/2006, 86/2006, 285/2004.

ASEAN: Notification No. 38/2014. Preferentials applied to Brunei, Malaysia, Singapore, Thailand, Viet Nam, Myanmar, Indonesia, Lao PDR, and the Philippines.

Source: WTO Secretariat calculations, based on information provided by the Indian authorities and CBEC notifications.

1. 
   In comparison, under the Duty Free Tariff Preference (DFTP) scheme, India grants unilateral preferences to 31 LDCs, with 94.7% of the tariff subject to preferential reductions, with the resulting overall average tariff applied to imports from these LDCs at 1.9%.