In a major trade liberalisation effort in South Asia, India on Thursday drastically slashed the sensitive list for Least Developed Countries under SAFTA from 480 tariff lines to just 25 under which zero basic customs duty will be given for all the removed items.
Prime Minister Manmohan Singh made this declaration to a thunderous applause from the Heads of Government and State at the inauguration of the 17th Summit of the eight-nation SAARC grouping.
Leaders of Bangladesh, Bhutan, Maldives and Nepal which comprise the Least Developed Countries (LDC) in South Asia were among those present to hear Singh’s announcement.
In his speech, that was heard with rapt attention, Singh also said that he recognised that non-tariff barriers were an area of concern and India was committed to the idea of free and balanced growth of trade in South Asia.
Emphasising that integration of SAARC economies should move faster at a comfortable pace, he said India has special responsibilities that flow from the geography of the region and the size of its economy and market.
“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. Zero basic customs duty access will be given for all items removed with immediate effect,” he said.
With ‘Building Bridges’ as its theme, the Summit hosted by Maldives in the southern most point of the island lying south of equator, is being attended by Pakistan Prime Minister Yousuf Raza Gilani, Sri Lankan President Mahinda Rajapaksa and Bangladesh Prime Minister Sheikh Hasina among others.
President Mohammad Nasheed of Maldives in his inaugural address said the meeting should build on the momentum of its earlier decision on the full implementation of the South Asia Free Trade Agreement (SAFTA).
In order to realise the full implementation of SAFTA, he said the Summit should mandate the Finance Ministers to discuss a mechanism to promote capital flows and investments and to see progress that would result in ultimate scrapping of the SAFTA Sensitive List.
Singh said industries in the South Asian region have to learn to compete if their economies were to have a future in the globalised world.
“We can all benefit from our respective comparative advantages. These include our hydro-power and natural resource endowments, possibilities of earnings from transit, marine resources, our scientific and technological base and above all our young population which will drive consumption and investment in the years ahead. We should expedite the finalisation of the SAARC Agreement on Investment,” he said.
Singh, who last week attended the G20 Summit, referred to the acute crisis in the global economy, which he said has imposed a fresh and entirely uncalled for burden on developing countries.
“We hope that 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.
However, he said that the world economy was going to take time to recover.
“In the meantime developing countries like ours will be squeezed for capital, investments and markets for our exports. We should seek imaginative ways to create new avenues and sources of growth and investment in South Asia,” Singh said.