New Delhi: India has said it will permit duty-free imports from the so-called least developed countries, or LDCs, 34 of which are in Africa, in a move that will help it build better relations with nations in a continent where China has stolen a march for natural resources among what were considered India’s traditional allies.
The scheme, first reported by Mint on 11 February, was announced at the India-Africa Forum Summit that began on Tuesday in the Capital. Speaking on the occasion, Prime Minister Manmohan Singh said the preferential market access would cover 94% of all product categories, or tariff lines, imported into India. For the African LDCs, the scheme will cover 92.5% of tariff lines exported.
“Africa will benefit extensively from this opportunity,” said M.A. Wade, President of Senegal, in his address at the summit. South African President Thabo Mbeki agreed: “This will allow us to fight our common enemies—poverty and underdevelopment. Without this cooperation, our economies would remain localized and fail to grow.”
Prime Minister Manmohan Singh greets South African president Thabo Mbeki at the India-Africa Forum Summit on Tuesday
Ram Upendra Das, fellow at government-funded body Research and Information System for Developing Countries, said the move is not just significant for African exporters but will also give greater credence and muscle to India’s stand at various global trade negotiation fora. “For some time now, the developed world has criticized India for only asking for greater market access from them without offering the same to the LDCs. This announcement should silence such criticism,” Das said.
Apart from 34 countries in Africa, the LDC grouping has 16 other countries. Of the 16 countries outside Africa, nine are in Asia, while five are island nations in the Pacific and one each in the Indian and Atlantic oceans.
Historically, India has shared cordial relations with African countries. However, India’s trade with Africa has remained largely neglected and amounts to around 7% of its global trade.
Between April and December 2007, the period for which the latest data is available, India’s imports from African countries reached the $11.09 billion (Rs44,360 crore) mark, growing at 23.87% over the same period the previous year. This was 6.44% of India’s overall imports.
In terms of imports during this period, almost 99% of imports from Nigeria and Angola and almost 78% from Guinea were mineral fuels and mineral oils. And more than 60% of the imports from South Africa were precious and semi-precious stones.
Das said while India’s import basket from Africa is “concentrated” at present, the picture will change as African LDC exporters now have access to the thriving Indian market without any reciprocal obligation. “Indian market is expanding and the domestic producers, in most cases, would not be adversely affected by new imports,” he added.