Mangalorean | 3 March 2008
India acts to encourage free trade in South Asia
New Delhi, March 3 (IANS) — In a bid to accelerate the South Asian Free Trade Agreement (Safta), India will let 244 additional items to be freely traded with least developed countries in the region.
"India has unilaterally decided to reduce its negative list with reference to the Least Developed Countries (LDCs) of Saarc from 744 to around 500," Commerce and Industry Minister Kamal Nath said at the third Safta Ministerial Council here Monday.
The LDCs in the Saarc (South Asian Association for Regional Cooperation) region are Bangladesh, Nepal, Bhutan and Maldives.
A negative list contains items of trade on which there is no reduction in duty.
"We would be in a position to notify the revised negative list within the next few months," the minister said even as he added that other non-least developed countries (NLDCs) should also consider reviewing the negative list.
"The intra-Saarc trade, which is now at five percent, has to move to 10 percent in the next three to five years. We are now looking at greater engagements with the LDCs," the minister said at the sidelines of the meeting.
"We are also looking at the new administration in Pakistan in pushing the Safta and taking positive steps towards greater cooperation."
Intra-regional trade amongst the Saarc countries currently stands at $20 billion at 4.8 percent and member countries have decided to take it up to about $40 billion that is 10 percent by 2011-13, officials said.
The minister further said the regional study on trade in services has being completed giving the government an opportunity for an effective services agreements among Saarc countries.
"Almost all member have agreed to take services forward as an agreement. To make the Safta agreement encompass services is also important," he said.
India has so far reduced import duties to zero on all items other than those in the negative list for LDCs with effect from Jan 1 this year.
Seven South Asian countries signed the Safta agreement in January 2004 that included India, Bangladesh, Pakistan, Sri Lanka, Nepal, Bhutan and Maldives.
It is supposed to meet at least once a year and discuss smoother flow of trade between the Saarc countries.