Cabinet may take up Safta, WTO today

The Cabinet is likely to take up tomorrow ratification of the South Asian Free Trade Agreement, which is to come into effect on January 1, 2006. The Cabinet may also take up the Hong Kong WTO ministerial declaration at its meeting.

As per the provisions in Safta, member countries barring the least developed countries (LDCs) will bring down their tariffs by 20 per cent at the end of the first year.

They will bring down their tariffs in the range of 0-5 per cent after seven years, effectively reducing their import duties by 15 per cent every year. LDCs will get 10 years to bring down their tariffs to 0-5 per cent.

India has a negative list of 884 items, but for LDCs it has 764 items. These are those sensitive items on which no tariff reduction will take place.

New Delhi will also convert its specific duties into their ad valorem equivalents on certain textile items over three years, a move expected to give market access to textiles from Pakistan. Saarc's total exports in 2003-04 stood at $4,170.5 million, while its imports stood at $679.68 million.

The Cabinet is also expected to take up the Hong Kong WTO ministerial declaration for discussion. Commerce and Industry Minister Kamal Nath, who led the Indian delegation at the WTO meeting, will make a presentation at the meeting.

The Cabinet is also likely to take up a Bill seeking to simplify tax laws. Besides, the Cabinet may take up the government securities Bill, which will enable the Reserve Bank to trade government papers in demat form.