South Asian Free Trade Area (Safta)

South Asian Free Trade Area (SAFTA) Objective The objective of the agreement is to promote good competition in the free trade area and to provide equitable benefits to all the countries involved in the contracts. It aimed to benefit the people of the country by bringing transparency and integrity among the nations. SAFTA was also formed in order to increase the level of trade and economic cooperation among the SAARC nations by reducing the tariff and barriers and also to provide special preference to the Least Developed Countries (LDCs) among the SAARC nations. Purpose of the Agreement  The purpose of SAFTA is to encourage and elevate common contract among the countries such as medium and long term contracts. Contracts involving trade operated by states, supply and import assurance in respect of specific products etc. It involves agreement on tariff concession like national duties concession and non-tariff concession. Participating Countries Peoples Republic of Bangladesh Kingdom of Nepal Kingdom of Bhutan Islamic Republic of Pakistan Republic of India Democratic Socialist Republic of Sri Lanka Republic of Maldives   Trade Liberalization Program  According to the Trade Liberalization Program Contracting countries must follow the following tariff reduction schedule. There should be a fall to 20% tariff from the existing tariff by the Non Least Developing Countries and 30% reduction from the existing tariff by the Least Developing Countries. But trade liberalization scheme is not be applied for the sensitive list because this list is to be negotiated among the contracting countries and then to be traded. Sensitive list will involve common agreement among the contracting countries favoring the least developed contracting countries. SAFTA Ministerial Council (SMC) will be participating to review the sensitive list in every four years with view of reducing the list.   Sensitive list Sensitive list is a list with every country which does not include tariff concession.  1.       Bangladesh has 1,233 products on the sensitive list for the Least Developing countries and 1,241 for the non-Least developing countries under the SAFTA. Bangladesh will reduce the sensitive list by 246 items for the least developed countries (LDCs) and 248 for the non-LDCs. 2.       India has 480 items on the sensitive list for the LDCs and 868 for the non-LDCs. India announced on the September in Dhaka that he will reduce the Sensitive List by 46.  3.       Bhutan has 150 items for both the LDCs and non-LDCs and has no plan of shortening its list. 4.       Nepal has 1,257 for the LDCs and 1,295 for the non-LDCs. Nepal has reduced its list by 259 from its previous list of 1295. Now its 1036, said joint secretary at Ministry of Commerce and Supplies. 5.       The Maldives has 681 for all seven SAFTA nations. 6.       Pakistan had 1,169 in its sensitive list but has cut its sensitive list by 20%. Now the list has shortened from 1169 to 936. 7.       Sri Lanka has 1,042 and Afghanistan has 1,072 items on the negative list.