South Asian Free Trade Area (SAFTA), paving way for free trade of goods among countries of the region, came into being on Sunday but Pakistan was yet to complete the formality of ratifying it.
"The ratification process is underway. It is just that it was not completed on Saturday(the deadline). We hope to do it very soon," Pakistan Foreign Office spokesperson Tasneem Aslam said in Islamabad.
However, Indian Commerce Ministry officials said that legally the agreement comes 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 is being operationalised as per the implementation schedule.
The Indian Cabinet had ratified the agreement on December 29.
"Implementation of SAFTA will further strengthen our trade relations with the SAARC countries," Commerce Minister Kamal Nath had said.
As per the agreement, SAARC member countries India, Pakistan and Sri Lanka will bring down their customs duties to 0-5 per cent by 2013 while the Least developed members Bangladesh, Maldives, Nepal and Bhutan will do it by 2018.
{{/usCountry}}As per the agreement, SAARC member countries India, Pakistan and Sri Lanka will bring down their customs duties to 0-5 per cent by 2013 while the Least developed members Bangladesh, Maldives, Nepal and Bhutan will do it by 2018.
{{/usCountry}}New Delhi has a sensitive list of 884 items for non-LDCs and 765 for LDcs. These are those items on which tariff reduction would be carried out.
India being the larger and relatively developed economy will be providing concessions to Least Developed Countries (LDCs), including a mechanism for compensation of revenue loss due to reduction in duties, technical assistance.