CII proposes stabilisation fund

The Confederation of Indian Industry (CII) has suggested the government allow duty free access of products from other countries in the region. The initiative comes as part the industry chamber's efforts to promote economic cooperation in the South Asian Association of Regional Cooperation (Saarc) region.

The suggestion, which forms part of CII's 15-point agenda for Saarc cooperation"" covering financial, agricultural, entrepreneurship and people areas""comes on the eve of the countries in the region deciding on a free trade agreement in Islamabad.

The CII suggestions, outlined in a paper titled 'South Asia: Regional Economic and Trade Cooperation, make it clear that the completion of South Asian Free Trade Area (Safta) and the Agreement on Saarc Preferential Trading Arrangement (Sapta) by 2005 is a must to double the current $6 billion intra-Saarc trade. It can go a long way to further double the trade volumes in every 5 years, the paper adds.

CII's agenda of economic cooperation calls for setting up a regional fund to help countries in the region carry out necessary stabilisation programmes and overcome fiscal problems. The paper also has suggestions for establishing a regional infrastructure development fund and setting up a South Asian Institute for Bankers.

The industry chamber has also proposed that potential investors from south Asian countries be allowed to invest in the country's stock exchanges and that India develop an efficient regulatory mechanism. "India can help in training of stock-brokers and other intermediaries," the paper suggests.

The CII also puts forward an extensive network of cooperation for the development of agriculture and rural economy. "Establishing wholesale trading-cum-distribution centres within the region for specific agricultural products would be the key towards better cooperation. The establishment of a South Asian Centre for Agricultural Research and Extension centres to help smaller economies modernise their agricultural operations also holds the key for better relations within the Saarc region," the chamber points out.

The focus on development of entrepreneurship, technical manpower and technology development and marketing of products will boost growth in the region. It also suggests the establishment of an integrated network of small-scale manufacturing and outsourcing as part of its agenda to improve enterpreunership in the region.

In order to promote intra-regional investments, the CII has proposed to enact an intra-regional treaty on investment promotion, with the thrust on protection of investment.

The CII has also said the elimination of non-tariff barriers, including customs hurdles through trade facilitation measures and harmonisation of product standards and technical specifications in a time-bound programme, are very significant for Saarc cooperation.

The chamber has also proposed a South Asian Policy for cooperation in the tourism sector to encourage people to people contacts.