E-Paper
With SAFTA, SAARC trade to double
Strengthening of infrastructure and tariff reduction could see trade among SAARC countries grow from around $ 7-14 bn: FICCI.
Strengthening of infrastructure and tariff reduction in a stipulated time frame could see trade among SAARC countries grow from around $7 billion to $14 billion by 2010, industry body FICCI said on Tuesday.
The South Asian Free Trade Agreement, which came into operation from January 1, is expected to multiply intra- regional trade similar to other groupings like ASEAN, NAFTA and EU, FICCI said in a release.
Regional trade in ASEAN region before grouping was only 7 per cent and shot up to 49 per cent by 2003. Similarly in NAFTA, it was only 12 per cent before grouping, but became 44 per cent by 2003 and in EU, it was 23 per cent in early 80s but went up to 67 per cent in 2003, FICCI said.
The intra-regional trade in SAARC could not go above 4 per cent of the total trade of the region inspite of the South Asian Preferential Trade Agreement due to its halting progress and very limited coverage of the trade basket.
With SAFTA now in place, the region is all set to reap the real benefits of regional trade liberalization on the pattern of other trading blocs, it said.
FICCI suggested that scope of SAFTA must be expanded to cover trade in services and investment liberalization as well. Private sector needs to be given adequate incentives to set up enterprises across South Asia, it said.
The chamber said if South Asia becomes an integrated market, it can draw much higher FDI for the entire region with a huge market size of over 1.5 billion people and around $610 billion middle class and expanding consumer base.
