India will be trimming its list of sensitive items by 20 per cent next month under the South Asian Free Trade Agreement. It would also be reducing the peak tariffs for Pakistan and Sri Lanka from by three per cent under the 2006-enforced seven-country pact, commerce and industry and textiles minister Anand Sharma said on Thursday.
The provisions in the 2004-signed accord, which aims to reduce customs duties of all traded goods to zero by 2016, permits India to reduce its peak tariffs from 11 to 8 per cent on 94 per cent of its tariff lines or range of products for the western neighbour and the island-nation.
“India is keen to engage more with Pakistan and develop deeper economic linkages,” Sharma said, addressing representatives from member-nations that comprise the South Asian Association of Regional Cooperation (Saarc).
“That will give more depth and width to our relationship. India, on its part, needs to do a lot more in the South Asian regions,” he told the South Asia Forum organised by Ficci.
The minister recalled that the the Minutes of a fortnight-old meeting of the India-Pakistan Joint Working Group on ‘Economic Commercial Cooperation and Trade Promotion’ here said the peak tariff rates would be 8 per cent by January 1 next year. This will be further slashed to 5 per cent by 2013, said the August 23-24 August meet.
India already allows duty free access for the least developed countries under Saarc grouping for almost 97 per cent of the total tariff lines.
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The decision to prune its negative list would boost intra-regional trade and investment in South Asia, which currently stands at $13 billion compared to $600 billion worth of global trade, he said. “It is imperative that we create a more conducive investment climate, a more harmonious linkage between our industry bodies and a strong political commitment for an integrated South Asia.”
Saarc comprises Bangladesh, Nepal, Bhutan, Afghanistan and Maldives besides India, Pakistan and Sri Lanka. The next summit of the 1985-formed organisation will be at Maldives on November 10-11.