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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

Safta ’sensitive list’: 20 percent reduction approved
The Cabinet on Wednesday approved a 20 percent reduction (233 tariff lines) in sensitive list for South Asian Free Trade Area (Safta) which, according to the Commerce Ministry, will earn goodwill for the country.
As Pak finally relents, MFN to boost India ties
Pakistan on Wednesday approved a proposal granting India the status of “most favoured nation” which would pave the way for direct import and export of goods and services. Textile, automobile and auto component trade through the land route with easier tariffs and quota restrictions are a distinct possibility.
Pakistan improves offer, but still no MFN status to India
Pakistan is ready to double the number of goods it imports from India, but has stopped short of offering full-fledged most-favoured nation, or MFN, status it had promised earlier this year as part of bilateral confidence-building measures.
BD wants duty-free access of all products to Indian market
Bangladesh has sought duty-free access of all its products to the Indian market to bring down the trade gap between the two neighbouring countries, Commerce Minister Faruk Khan said.
Now, a South Asia Forum to boost Saarc
The last summit of the South Asian Association for Regional Cooperation (Saarc), last month in Thimphu, had mandated creation of a South Asia Forum, consisting of diverse stakeholders from all member-countries to generate ideas to further links. This is now taking shape.
For harnessing South Asia’s trade potential
The South Asia Free Trade Agreement (SAFTA) has so far been long on promises but short on actions. It was envisaged to raise inter-regional trade in South Asia - which is one of the world’s least economically integrated regions - to $40 billion by 2015 from $11bn in 2007, shortly after it was agreed. But that now clearly remains a very tall promise.
SAARC Chamber vows to promote trade
All members of the SAARC Chamber of Commerce and Industry (SAARC CCI) unanimously resolved to promote trade and strengthen economic ties besides accelerating the developmental activities among member countries.
India, Pakistan agree to enhance trade
India and Pakistan agreed Thursday to set up a joint working group to enhance trade, in a further move designed to ease tensions between the nuclear-armed South Asian rivals, officials said.
India-Pakistan trade talks tomorrow
On the eve of India-Pakistan trade talks, New Delhi on Tuesday said “possible doables” to upgrade bilateral economic engagement would be clear after the Commerce Secretaries complete their discussion in Islamabad.
The cost of regional pacts
Given the changing international trade environment, India needs to strike the right balance between regionalism and multilateralism.


  • 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