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| Countries under the South Asian Free Trade Area (SAFTA) |
New Delhi: Indian Cabinet has approved Reduction of 30% (264 tariff lines) from the SAFTA Sensitive list for Non Least Developed Countries (NLDCs) allowing the peak tariff rates to reduce to 5% within three years, as per agreed SAFTA process of tariff liberalization.
This shall reduce India’s Sensitive list for Pakistan from 878 to 614 tariff lines. With this decision India has effectively performed its lead role in harmonising the SAFTA framework and ensuring move towards a vibrant economic community and move towards normalisation of trade relations with Pakistan.
India has, in the last one year, steered the trade liberalization process under SAFTA so as to accelerate the pace of the process for SAFTA Economic Integration. A major step taken in this direction was to unilaterally reduce its sensitive list for the Least Developed Countries (LDCs) under SAFTA, in November 2011, to 25 tariff lines thus allowing all other imports at zero basic customs duty. Afghanistan, Bangladesh, Bhutan, Maldives and Nepal benefited as a result of this trade liberalisation move.
The bilateral trade dialogue with Pakistan resumed in April 2011. Sustained discussions at various levels resulted in the drawing of a roadmap for an uninterruptible and irreversible trade liberalisation process.
Commerce Ministers of India and Pakistan, during the bilateral meeting held at Islamabad on 14th February 2012, agreed that India will consider reduction of up to 30% of its SAFTA Sensitive List, within four months of the notification of a small negative list by Pakistan. Consequently, Pakistan Government moved from its ‘positive list’ regime to a ‘negative list’ regime notifying it in March 2012.
India has also taken significant steps to take forward the trade liberalisation process. It has removed the restrictions on investments from Pakistan, agreed upon a liberalised visa regime, opened a state of the art Integrated Check Post (ICP) to encourage two way trade.
Further liberalization of trade will be according to the roadmap which will be discussed in next meeting of the Commerce Secretaries.