SAFTA can expand trade, investment in SAARC countries: Study

Greater Kashmir

Mumbai, Mar 12: The South Asian Free Trade Agreement (SAFTA), likely to be implemented in the middle of current year, can lead to manifold expansion of trade and investment in the region, a study says.
India, whose annual trade growth rate of 21.8 per cent in SAARC region has been higher than 18.6 per cent with the rest of the world during FY01-FY05, can gain signficantly owing to its strong manufacturing competitives in the South Asian Association for Regional Cooperation, the study adds. SAARC comprises seven countries — Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives, Bhutan and India.
However, the DHL India Trade Outlook says at present India’s exports to SAARC countries are highly concentrated in terms of commodities but expects India’s export basket to diversify once SAFTA comes into force in June-July. SAARC members’ exports to India are restricted because India’s average applied tariffs are considerably higher than other six members. India can become the largest market in the region for the remaining SAARC members if it lowered tariffs.
The intra-regional trade of SAARC countries is, however, very low, costituting just 4.7 per cent of its total trade with the world in 2004, the study says but adds, ‘’India’s approach towards SAARC is positive and constructive.’’ (UNI)