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The South Asia Free Trade Agreement (SAFTA) was agreed to among the seven South Asia countries that form the South Asian Association for Regional Cooperation (SAARC): Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka

SAFTA came into effect on 1 January 2006, with the aim of reducing tarrifs for intraregional trade among the seven SAARC members. Pakistan and India are to complete implementation by 2012, Sri Lanka by 2013 and Bangladesh, Bhutan, Maldives and Nepal by 2015.

SAFTA replaces the earlier South Asia Preferential Trade Agreement (SAPTA) and may eventually lead to a full-fledged South Asia Economic Union.

The road to implementation, however, is plagued by the overarching conflict between India and Pakistan.

last update: May 2012
Photo: Serg!o/Wikipedia/CC BY-SA 3.0

Domestic manufacturers concerned over reduction in tariffs
Domestic manufacturers are having nightmares as the tariffs of imported finished goods from South Asian Free Trade Agreement (SAFTA) member countries would come down to five percent from the next fiscal year, while the duties on raw materials used to produce same products remain much higher, an official said on Saturday.
Huge potential exists in Indian market for Pakistani items
Indian market has huge potential for Pakistani items, but experts are discussing India’s import impact on domestic economy, ignoring the potential of services sector exports to that country, according to speakers of a seminar on Thursday.
Financial services to be kept out of SAFTA talks: Government
The government has decided to exclude financial services from the SAARC agreement on trade in services, following strong objection from the Reserve Bank of India, or RBI. The central bank has argued that India has already allowed access to foreign banks under the World Trade Organization agreement.
India, Pakistan to start discussions on import duties cut
India and Pakistan will soon begin discussions on a preferential trading arrangement to lower import duties on an array of goods. The talks will be held under ambit of South Asia Free Trade Agreement (SAFTA) signed eight years ago between member states of South Asian Association for Regional Cooperation (SAARC), a senior Indian official said on Saturday.
Pak opens door to all Indian products
The Federal government’s decision to liberalise trade with India and cabinet approval to eliminate negative list by year end are going to open country’s doors to Indian products whereas Pakistan has nothing significant to export India except raw gypsum, salt and dry fruits.
SAARC countries agree to reform trade, visa regime
The eight member states of the South Asian Association for Regional Cooperation vowed to reduce the size of their respective sensitive lists of non-tradable items and expressed satisfaction over signing of the Saarc Agreement on Trade in Services.
Industry suggests Pak auto NTBs on Indian goods
Following the expected Most Favoured Nation (MFN) status to India by Pakistan, PAAPAM says both the countries should allow transfer of technology through joint ventures and technical assistance agreements, making the regional industry competitive, say auto industry experts while talking to journalists here on Monday.
Saarc: PM may suggest economic integration
As Prime Minister Manmohan Singh heads for the Maldives next week to participate in the 17th Saarc summit, it is expected that he will be suggesting some mechanisms to promote a greater level of regional economic integration.
Modest agenda on Saarc table, 4 pacts to be signed
With many of its big ideas still await implementation, the eight-member South Association for Regional Cooperation (Saarc) countries seem to have gone for a modest agenda this time.
Pakistan’s last-minute retraction irks India
India is particularly displeased with Pakistan, after an early end to a party it was enjoying over Islamabad’s proposed grant of a ‘most favoured nation’ (MFN) status in bilateral trade. All eyes are now focused on Pakistan commerce secretary Zafar Mahmood’s upcoming India visit. This is likely to be followed by a sideline meeting between the prime ministers of the neighbouring countries.


  • SAARC Secretariat
    The South Asian Association for Regional Cooperation (SAARC) comprises the seven South Asian countries of Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka