To improve the market access and to promote exportation to India, this emerged country announced a special scheme for least developed countries, which is the Duty Free tariff Preference Scheme (DFTS), under the WTO (World Trade Organization). This tariff came into effect in August 2008 with tariff reductions spread over five years, for various items being exported to India.
The scheme provides for duty free items on about 85% of India’s total tariff lines (traded products). Applied customs duty would be removed over a period of 5 years with 20% reduction each year. In addition, the Scheme also grants preferential market access as per margin of preference which is available on about 9% of tariff lines (458 items). The MOP ranges from 10% to 100% on different items and is available on the applied rate of duty as on the date of imports.
Actually, for duty free items and the positive list containing 458 items, four tranches of reductions have already been effected since August 2008. Last and final reduction were completed in 2012. Since then, the tariff for the traded products included in the positive list of this scheme is cut to zero.
As for example, the zero tariffs are applicable to items such as dry beans like lentils, chick peas beans, white pea beans; synthetic fibres, textile materials, leguminous vegetables, seafood products (prawns, fish), etc. This zero tariff is beneficial for Madagascar but so far the Malagasy businessmen have not yet utilized this advantage.
It is noted that duty free and the positive list cover about 92.5 of global exports of least developed countries. Products of immediate interest to Madagascar which are covered in the preferential market access on tariff lines, include also cotton, cocoa, aluminium ores, copper ores, cashew nuts, ready-made garments, fish-fillets and non-industrial diamonds.
Only 6% of tariff lines are under the exclusion list composed of 326 items, on which no tariff preference is available. This scheme excludes fruits and vegetables, milk products, rice in husk, wheat, coffee, maize, flour.
Ties between India and Madagascar would benefit from the Duty Free tariff Preference Scheme. It will boost the volume of trade between the two countries for mutual benefits. According to figures from Institute of National Statistic, the volume of exports to India is increasing every year, for the last four years. In 2008, the value of exports was around 40 billion Ariary to reach almost 149 billion Ariary (CAF price) last year. As far as imports from India are concerned, they were decreasing from 2009 to 2010 and in the last years, they are on the rise, as it is shown in the tables below.
Export from Madagascar is still less compared to imports from India and hence the export should increase to get more balanced international trade and the Malagasy businessmen should take advantage of the Duty Free tariff Preference Scheme of the Government of India.
For further details, please visit: http://commerce.gov.in/trade/international_tpp_DFTP.pdf
The volume of trade between India and Madagascar is shown in tables below:
Madagascar: Total import of India Origin
|
Year
|
Value in Ariary CAF
|
Net weight in kg
|
|
2007
|
129 821 856 881
|
89 700 153
|
|
2008
|
308 794 496 305
|
196 240 707
|
|
2009
|
243 767 755 301
|
124 564 838
|
|
2010
|
125 345 436 213
|
136 166 225
|
|
2011
|
240 413 006 869
|
142 277 965
|
|
2012
|
272 767 188 627
|
174 700 640
|
Madagascar: Total Export to India |
|
|
|
Year
|
FOB Value in Ariary
|
Net weight in kg
|
|
2007
|
33 028 760 750
|
39 133 441
|
|
2008
|
18 151 824 591
|
24 882 312
|
|
2009
|
40 750 851 014
|
27 888 181
|
|
2010
|
95 676 197 698
|
51 840 812
|
|
2011
|
128 627 669 789
|
73 350 370
|
|
2012
|
148 811 388 980
|
51 790 411
| |
|
|
|
|
|
|
|
|
Source: DGINSTAT/D S E/SSES/COMEXT/
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