India may take Safta issue with Pak to Saarc

With Pakistan formally stating that its trade with India even under the Saarc free trade agreement (Safta) will continue to be limited to the positive list, New Delhi is considering taking up the issue either bilaterally or at the level of the Saarc secretariat.

On July 1, the date for effecting tariff liberalisation under Safta, Pakistan announced tariff reductions on over 4,800 import goods from Saarc countries.

However, it said the tariff reduction would be limited to only selected items from India which were part of the positive list.

There are only around 771 items from India which are included in the positive list. New Delhi has notified tariff reduction on 380 items from Pakistan and Sri Lanka.

"As of now, Safta is not operational between India and Pakistan," a commerce ministry official said, adding that the ministry was now considering the option of raising the issue at the level of the Saarc secretariat.

Another option being considered is to examine the issue bilaterally. "Since Pakistan has not reduced tariffs as per Safta, we could also consider withdrawing our concessions to it," an official said.

Officials added that the issue was likely to be taken to the trade and economic relations committee headed by Prime Minister Manmohan Singh.