India offers duty-free access to LDCs in services trade

09 September 2015

The union cabinet today gave its approval for preferential treatment by India to least developed countries (LDCs) by allowing duty-free trade in services, as mandated by the World Trade Organisation (WTO).

India will soon notify preferential treatment to the LDCs in trade in services in respect of market access, technical assistance and capacity building and waiver of visa fees for LDC applicants applying for Indian business and employment visas.

The preferences will be bound with validity for 15 years from the date of notification an official release said, adding that a generous offer in trade in services by India should win the country goodwill of LDCs.

India already offers duty-free tariff preference (DFTF) scheme for trade in goods to LDCs and an equally generous offer in services trade will help India preserve and consolidate its leadership position on LDC issues.

Further, given the development dimension of the Doha Round of the WTO, it is important that India makes liberal offers to LDCs in trade in services also. Moreover, several of the LDCs are located in South Asia while a majority is in Africa with whom India maintains special relations.

India's preferential treatment to the LDCs in trade in services would involve a cost of Rs6.5 crore annually on account of waiver of visa fees and Rs2.5-3 crore per annum, for providing training in management and technical consultancy courses to LDC applicants.

As regards offers under market access is concerned there are no direct financial implications.

As per the WTO mandate, decisions of the WTO Ministerial Conferences and requests made by the Least Developed Countries (LDCs), developed country and developing country members of the WTO, in a position to do so, were to voluntarily consider providing LDCs preferential treatment in services trade.

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