Embassy of India, Bamako, Mali : DFTP Scheme of the Government of India

DFTP Scheme of the Government of India

Embassy of India

Bamako

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Duty Free Tariff Preference Scheme (DFTP) of Government of India

The Government of India has extended Duty Free Tariff Preference (DFTP) Scheme to Mali in order to provide duty free and quota free market access to Malian products into India. Under this scheme, India provides duty free access to 98.2% of its tariff lines (at HS 6-digit level of classification) to products originating or produced in Mali.

2. Background: Under the decision of the WTO Hong Kong Ministerial Meeting, held in December 2005, India became the first developing country to extend duty free quota free market access for products of the Least Developed Countries (LDCs). India announced the Duty-Free Tariff Preference (DFTP) Scheme for LDCs in the year 2008. The Scheme was announced to give support to the LDCs in their trade initiatives. To become a beneficiary under the DFTP Scheme, the prospective beneficiary country is required to provide a letter of intent as well as specimen seals and signatures of the officials authorized to issue the certificate of origin under the DFTP Scheme. The prescribed format of the letter of intent and specimen seals and signatures of the authorised officials, as required under the Scheme have been placed at Annex I and Annex II respectively.

3. Expansion and simplification of the DFTP scheme in 2014

Based on deliberations with beneficiary countries and taking into account the inputs from domestic stakeholders, the DFTP Scheme was expanded by the Department of Commerce in 2014 both in terms of coverage and facilitation of trade. Based on the amendments carried out through Customs tariff Notification No. 8/2014 dated 1st of April, 2014, the DFTP scheme now provides duty free/preferential market access on about 98.2% of India’s tariff lines (at HS 6-digit level of classification). Only 1.8% of the tariff lines have been retained in the Exclusion List, with no duty concessions. As per the notification of 2021, only 97 lines are under exclusion list and 115 lines are under MOP (Margin of Preference) list. On all other lines, zero duty access has been provided for exports from beneficiary LDCs.

Secondly, with a view to facilitate trade, certain procedural modifications to the Rules of Origin of the DFTP Scheme were made through customs non-tariff notification 29/2015- Cus (NT), dated 10th March, 2015. The key changes in the notification were as under:

i. Rules of origin criteria changed to CTSH + 30% (instead of the earlier criteria of CTH+30%);

ii. Allowing the option for calculation of value addition based on either ex-works price of the goods or FOB value only (the 2008 scheme had only the option of FOB value)

iii. Certificate of origin shall be in ISO standard plain A4 size paper in the prescribed format, (instead of blue coloured A4 size paper).

In short, the new expanded and simplified DFTP Scheme provides improved market access to the beneficiary countries as well as to the other eligible LDCs. Further CBIC has clarified in Circular No. 53/2020- Customs (8 December, 2020) that where value of goods does not have impact on originating status i.e., the originating criteria is wholly obtained, the certificate of origin issued in terms of duty-free tariff preference scheme for LDCs with third party commercial invoice may be accepted.

4. Positive list under DFTP scheme: Under the DFTP Scheme, at present, there are 114 tariff lines that enjoy Margin of Preference (MoP) ranging between 10% to 60%. The list of tariff lines covered under the Positive List is enclosed at Annex III.

5. Exclusion list under DFTP scheme: The list of tariff lines excluded from the DFTP scheme, known as exclusion list currently has 97 items. These tariff lines can be seen at Annex IV.

It may be noted that except the Tariff lines mentioned at Annex III and IV rest of the tariff lines enjoy zero duty treatment for export to India.

6. The format for ‘Certificate of Origin’ to be furnished by the exporting Malian company to avail benefit under DFTP scheme is enclosed at Annex V.

7. Nodal point of Contact for DFTP related queries in Government of India:

The Director,

Trade Policy Division (NAMA desk),

Department of Commerce

Government of India

Email: d5tpd-doc@nic.in

The authority in the Central Board of Excise and Customs for DFTP Scheme will be:

The Director (International Customs),

Central Board of Excise and Customs

Department of Finanace, Government of India

Tel: +91-11-2309 3380 Fax: +91-11-2309 3760

Email: diricd-cbec@nic.in