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
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%.
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%.