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
Bangladesh signed a deal with India to export 8 million pieces of readymade garments to the neighboring country with zero tariffs under the South Asia Free Trade Agreement.
By observing the overall mood at the 14th SAARC summit that was held in New Delhi in April of 2007, one might sense that a change in the perception about SAARC may be occurring.
Indian Foreign Secretary Shivshankar Menon yesterday urged India’s smaller neighbours to overcome political issues to become stakeholders in the India-led regional economic growth by dismantling trade and road and water transport barriers.
Business houses in South Asian region are seeking specific timeframe to remove bottlenecks that hinder trade and investment in the SAARC region. It is sad to note that whatever developments take place in the business and political forums; those are not implemented at the operation level.
Bangladesh’s business leaders are rather dismayed at India’s recent duty-free market access offer, as they have expressed the view that mere duty-free access could not ensure free flow of goods into Indian market unless non-tariff and para-tariff barriers are removed.
Business leaders Sunday expressed their dismay that the SAARC had failed to deliver "much" in the fields of economy and politics in the South Asian region, although it could attract the attention of the international community.
Pakistan, which is keen on exporting cement and wheat to India, on Thursday said it is willing to fulfil its SAFTA commitments if the issue of non-tariff barriers are addressed.
The SAARC countries are now striving to set a uniform product standard for the group after years of complaints by the weaker ones among them about non-acceptance of their national certifications of product quality by their stronger counterparts. It has persistently posed as a difficult non-trade barrier that has obstructed bilateral trade.
Pakistan is in violation of the agreement on South Asian Free Trade Area (SAFTA) and the Vienna Convention by discriminating against India in the implementation of the regional accord, aside from risking its credibility as a negotiating partner, Indian High Commissioner Satyabrata Pal told a conference.
Trade experts say countries in the South Asian region can form a major textile and apparel hub - provided they can work together. Right now, mutual mistrust and trade barriers against each other, are stopping SAARC countries from cashing in on a waiting opportunity.
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