SAFTA in place - India notifies customs concessions
The South Asia Free Trade Area (SAFTA), consisting of India, Pakistan, Sri Lanka, Bangladesh, Bhutan, Nepal and the Maldives, was to have come into force from 1st January (see -02 -01- 2006) but was delayed for six months to give member countries time to put their systems in place. Nepal was given an additional month.
Under the new regime, tariffs on 4,000 items in Bhutan, Bangladesh, Nepal and Maldives are to be lowered from 12.5 percent to zero by July 2008. In the case of India, Pakistan and Sri Lanka, the tariff is to be lowered to five percent by 2013.
In SAFTA, Bangladesh, Bhutan, Nepal and Maldives are categorized as 'Least Developed Countries' (LDCs) and India, Pakistan and Sri Lanka are designated as 'Non-Least Developed Countries' (NLDCs).
Just like India, Pakistan’s Central Board of Revenue has also issued notifications for the SAFTA rates, but they are not applicable for India. When it comes to India, Pakistan cannot think of economics without politics. Pakistan had announced that it would apply SAFTA provisions with all countries except India. And with India, it is linked to Kashmir!
Interestingly, in Maldives, there is a great appreciation for SAFTA; Maldives exports only fish and imports everything else.