India Initiates Major Free Trade Move in SAARC.

Addu: In a major boost to its trade liberalisation effort, India yesterday reduced its sensitive list for least developed countries to 25 from 480 and said zero basic customs duty access would be given to all the removed items.

"I am happy to announce that, in a major trade liberalisation effort, the government of India has issued a notification to reduce the sensitive list for the least developed countries under the South Asian Free Trade Area Agreement from 480 tariff lines to 25 tariff lines," Prime Minister Manmohan Singh, in his address at the South Asian Association for Regional Cooperation (Saarc) summit, to loud applause.

"Zero basic customs duty access will be given for all items removed with immediate effect," he added.

‘Free growth'

Under the Safta agreement, member countries are allowed to retain a ‘sensitive list' that are not offered for concessional treatment. Now least developed countries like Bangladesh, Bhutan and Nepal will have increased access to Indian markets. Tariff line refers to a category in a country's tariff schedule.

Singh said he recognised that non-tariff barriers were an area of concern. "India is committed to the idea of free and balanced growth of trade in South Asia. Competition begins at home. Our industries have to learn to compete if our economies are to have a future in this globalised world that we live in," he said.

As per the Safta agreement, non-LDCs that include India, Pakistan and Sri Lanka, are required to reduce their tariff to five per cent by 2013, while LDCs are required to reduce tariff to this level by 2016.

For non-LDCs India maintains 865 tariff lines under sensitive list while Pakistan has 1,169 items. Among the other members Sri Lanka has 1,065; Bangladesh 1,254, Bhutan 157; Maldives 671 and Nepal 1,313 tariff lines under sensitive list.

Noting that all South Asian nations could benefit from the respective comparative advantages, he said these include the hydropower and natural resource endowments, possibilities of earnings from transit, marine resources, scientific and technological base and above all young population, which will drive consumption and investment in the years ahead.

‘Uncalled for burden'

"We should expedite the finalisation of the Saarc Agreement on Investment," he told the heads of states and governments of the eight member-nations.

Pointing out that the Saarc summit had come at a time when the global economy was under acute stress, Singh said this had imposed "a fresh and entirely uncalled for burden" on the region's development efforts.

"We hope the leaders of the major economies, particularly in the Eurozone, will show the wisdom and will that are required to revive the global economy," he said. Singh last week ago attended the G20 meet at Cannes in France, where the Eurozone issues drew much attention.

"The world economy is going to take time to recover. In the meantime, developing countries like ours will be squeezed for capital, investments and markets for our exports," he said.

Source : gulfnews.com