SAFTA FINALISED: KAMAL NATH
Date : 01 Dec 2005
Location : New Delhi
The South Asian Free Trade Area (SAFTA) Agreement has been finalised, Shri Kamal Nath, Minister of Commerce & Industry, has indicated. The Minister, who is in Brussels in connection with G-90 Summit as a Special Invitee, indicated this in a message on receiving intimation from Kathmandu about the deliberations of the Committee of Experts on SAFTA which met there from 29th November-1st December 2005 to resolve the outstanding issues on SAFTA so as to complete the negotiations. Senior officials of the Commerce & Industry Ministry participated in the meeting.
SAFTA, signed during the 12th SAARC Summit held at Islamabad, Pakistan, in January 2004 is scheduled to come into force on 1st January 2006 and to be fully operational by 2016.
“ Implementation of SAFTA will further strengthen our trade relations with the SAARC countries”, Shri Kamal Nath said.
A Committee of Experts (COE) consisting of delegates from all Member States, has been negotiating on all outstanding issues pertaining to SAFTA, namely (1) Rules of Origin (2) Sensitive List (3) Mechanism for Compensation of Revenue Loss (MCRL) for the Least Developed Contracting States (LDCS) and (4) Technical Assistance to LDCS (Technical Assistance). Matters regarding Technical Assistance had been finalised earlier.
Under Article 7 of SAFTA, a phased tariff liberalisation programme from the date of its coming into force, is envisaged. In first two years, non-LDCS (non-Least Developed Contracting States) will bring down tariffs to 20%, while LDCS will them down to 30%. Non-LDCS will then bring down tariffs from 20% to 0-5% in five years, Sri Lanka (which a non-LDCS) in six years and LDCS (from 30% to 0-5%) in eight years. Moreover, non-LDCS will reduce their tariffs for LDC products to 0-5% in three years. This tariff liberalisation would not be applicable to the tariff lines included in the Sensitive Lists to be incorporated in this Agreement as an integral part.
India’s total trade with SAARC countries increased from US $ 4816.88 million in 2003-04 to US $ 5205.57 million in 2004-05 registering an increase of 8.07%.