The Indian commerce ministry proposes granting DFQF, which would, however, not be extended to 776 sensitive items covered under South Asian Free Trade Area (Safta) and India-Asean Free Trade Agreement, sources said.

The concessions to the LDCs will not be more favourable than what has been negotiated for the LDCs under Safta and the tariffs will be gradually phased out to zero in equal annual instalments over five years.

The commerce ministry contends that giving the unilateral tariff concessions will create the necessary political goodwill for India among the 50 LDCs in Asia, Africa and Latin and Central America and help it secure their support on key issues of concerns to New Delhi, said the sources.

The imperative for India to be proactive on unilateral tariff concession is more in view of China having already offered such preferential access to exports from 39 LDCs in Africa.

In view of this, it is necessary for India to give greater market access to LDCs to help their dependence on developed countries, said the sources.

The LDCs comprise an important bloc at the World Trade Organisation talks and at the Hong Kong ministerial meeting in December last year some LDCs had threatened to use veto if they were denied DFQF access.

The Hong Kong meeting has given time until 2008 to start the duty-free quota-free scheme with developing countries allowed to phase in their commitments. Members facing difficulties are allowed to provide market access for at least 97 percent of products originating from LDCs.

Preferential access has helped LDCs boost their exports from below world average in 1990s even though the rate of this growth has been slow, trade analysts say.

However, the gains of this access has been uneven with Bangladesh and Angola accounting for more than 35 percent of total LDC exports in 2004.