Duty-Free Quota-Free (DFQF) scheme

Why in news?

• According to a report by the LDC Group at the World Trade Organization (WTO), approximately 85% of the 11,000 products offered at zero tariffs by India to least developed countries (LDCs) under the duty-free quota-free (DFQF) scheme remain unutilized.

About Duty-Free Quota-Free (DFQF) scheme:

• The Scheme requires all developed and developing country members to provide preferential market access for all products originating from all Least Developed Countries (LDCs).
• The decision to provide duty-free quota-free (DFQF) access for LDCs was first taken at the WTO Hong Kong Ministerial Meeting in 2005.
• India became the first developing country to extend this facility to LDCs in 2008, providing market access to 85% of India’s total tariff lines to better integrate LDCs into the global trading system and improve their trading opportunities.
• The scheme was expanded in 2014, providing preferential market access on over 98% of India’s tariff lines to LDCs. India offers 11,506 preferential tariff lines to LDCs, of which 10,991 are duty-free.

PRACTICE QUESTION:

Consider the following statements in respect of the ‘Duty-Free Quota-Free (DFQF) scheme’ of WTO:

Statement – I: Products originating form Least Developed Countries are provided preferential market access under this scheme

Statement – II: India is the largest beneficiary of the scheme

Which one of the following is correct in respect of the above statements?

(a) Both Statement I and Statement II are correct and Statement II is the correct explanation for Statement I

(b) Both Statement I and Statement II are correct and Statement II is not the correct explanation for Statement I

(c) Statement I is correct but Statement II is incorrect

(d) Statement I is incorrect but Statement II is correct.

Answer