New Delhi/Islamabad, January 1
The long-awaited South Asian Free Trade Area (SAFTA), paving way for free trade of goods among countries of the region, came into being today but Pakistan was yet to complete the formality of ratifying it.“The ratification process is underway. It is just that it was not completed yesterday (the deadline). We hope to do it very soon,” Pakistan Foreign Office spokesperson Tasneem Aslam said in Islamabad.
However, Indian Commerce Ministry officials here said legally the agreement came into effect from January 1.
Operationalisation of SAFTA is a landmark in the history of the SAARC grouping, which comprises India, Pakistan, Bangladesh, Sri Lanka, Maldives, Nepal and Bhutan.
SAFTA was agreed upon at the historic Islamabad Summit in 2004 and was being operationalised as per the implementation schedule. India ratified the agreement on December 29.
“Implementation of SAFTA will further strengthen our trade relations with SAARC countries,” Commerce Minister Kamal Nath had said.
As per the agreement, India, Pakistan and Sri Lanka will bring down their customs duties to 0-5 per cent by 2013 while least developed members Bangladesh, Maldives, Nepal and Bhutan will do it by 2018.
New Delhi has a sensitive list of 884 items for non-LDCs and 765 for LDCs. These are those items on which tariff reduction will be carried out.
India being the larger and relatively developed economy will be providing concessions to least developed countries, including a mechanism for compensation of revenue loss due to reduction in duties and technical assistance.
According to Pakistan’s Minister of State for Commerce Hamid Yar Haraj, SAFTA was intact, but its implementation from January 1 was “next to impossible”.
“Free Trade Area agreement was singed by the Commerce Ministry. Free trade with India is an issue of such importance that it has to be decided by the government. We don’t have any fresh directive from the government (about implementation of SAFTA),” he was quoted as saying.
—PTI
