📝Economic Cooperation and Trade
🔶Sri Lanka is one of the largest trading partners of India in South Asia.
🔶India in turn is Sri Lanka's largest trade partner globally.
🔶Trade between the two countries grew particularly rapidly after the entry into force of the India-Sri Lanka Free Trade Agreement in March 2000.
🔶Bilateral trade in 2015 amounted to US $ 4.7 billion. Exports from India to Sri Lanka in 2015 were US$ 4.1 billion (up by 2.1%), while exports from Sri Lanka to India were US$ 645 million (up by 3.2%) (MEA December 2016).
🔶 According to Sri Lankan Customs, bilateral trade in 2016 amounted to US $ 4.38 billion.Exports from India to Sri Lanka in 2016 were US$ 3.83 billion, while exports from Sri Lanka
to India were US$ 551 million.
🔶India is among the top four investors in Sri Lanka with cumulative investments of over US$ 1 billion since 2003.
🔶Sri Lanka is one of the largest trading partners of India in South Asia.
🔶India in turn is Sri Lanka's largest trade partner globally.
🔶Trade between the two countries grew particularly rapidly after the entry into force of the India-Sri Lanka Free Trade Agreement in March 2000.
🔶Bilateral trade in 2015 amounted to US $ 4.7 billion. Exports from India to Sri Lanka in 2015 were US$ 4.1 billion (up by 2.1%), while exports from Sri Lanka to India were US$ 645 million (up by 3.2%) (MEA December 2016).
🔶 According to Sri Lankan Customs, bilateral trade in 2016 amounted to US $ 4.38 billion.Exports from India to Sri Lanka in 2016 were US$ 3.83 billion, while exports from Sri Lanka
to India were US$ 551 million.
🔶India is among the top four investors in Sri Lanka with cumulative investments of over US$ 1 billion since 2003.
📝Development Cooperation between India and SL
🔶 The conclusion of the armed conflict saw the emergence of a major humanitarian challenge, with nearly 300,000 Tamil civilians housed in camps for Internally Displaced Persons (IDPs).
🔶The Government of India put in place a robust programme of assistance to help the IDPs return to normal life as quickly as possible.
🔶This included: construction of 50,000 housing units, rehabilitation of the Northern Railway lines, wreck-removal and rehabilitation of the KKS Harbour, establishment of Vocational Training Centres, construction of a Cultural Centre at Jaffna, restoration of Thiruketheeswaram Temple, establishing an Agricultural Research Institute in the Northern Province.
🔶 The conclusion of the armed conflict saw the emergence of a major humanitarian challenge, with nearly 300,000 Tamil civilians housed in camps for Internally Displaced Persons (IDPs).
🔶The Government of India put in place a robust programme of assistance to help the IDPs return to normal life as quickly as possible.
🔶This included: construction of 50,000 housing units, rehabilitation of the Northern Railway lines, wreck-removal and rehabilitation of the KKS Harbour, establishment of Vocational Training Centres, construction of a Cultural Centre at Jaffna, restoration of Thiruketheeswaram Temple, establishing an Agricultural Research Institute in the Northern Province.
📝The China Factor In Relations of India and SL
🔶During the Mahinda Rajpaksha tenure(2005-2015) Tilt towards China was evident. This era saw projects such as the Hamabntota port and Colombo port City granted to the Chinese.
🔶The construction of the Hambantota port was completed and operations began in 2010. It was part of a slew of mega infrastructure projects launched by then Sri Lankan president Mahinda Rajapaksa, whose family hailed from the coastal city of Hambantota. All of them were funded by Chinese loans, which stoked apprehension in New Delhi about the Rajapaksa government’s red carpet for Beijing.
🔶 During the Current government: The Hambantota port has been handed over to China on 99 year lease as part of a debt for equity swap.
🔶 In May 2017, Sri Lanka had rejected Chinese request to dock a submarine on its
port.
🔶Sri Lanka is also a keen supporter of the Belt and Road Initiative (BRI)of China.
🔶During the Mahinda Rajpaksha tenure(2005-2015) Tilt towards China was evident. This era saw projects such as the Hamabntota port and Colombo port City granted to the Chinese.
🔶The construction of the Hambantota port was completed and operations began in 2010. It was part of a slew of mega infrastructure projects launched by then Sri Lankan president Mahinda Rajapaksa, whose family hailed from the coastal city of Hambantota. All of them were funded by Chinese loans, which stoked apprehension in New Delhi about the Rajapaksa government’s red carpet for Beijing.
🔶 During the Current government: The Hambantota port has been handed over to China on 99 year lease as part of a debt for equity swap.
🔶 In May 2017, Sri Lanka had rejected Chinese request to dock a submarine on its
port.
🔶Sri Lanka is also a keen supporter of the Belt and Road Initiative (BRI)of China.
📝India Interest In Bilateral Relations with SL
🔶 The Mattala Rajapaksa International Airport (MRIA) in Hambantota, 250 km south from Colombo, was built with with Chinese assistance of $190 million, more than 90 per cent ofthe total cost. Today, MRIA is running into losses and Sri Lanka is unable to pay back dues to China’s EXIM Bank. Ironically, Sri Lanka may now hand over the airport to India so that it can repay the Chinese loan.
🔶India is also interested in developing container facilities at the Colombo Port and developing the Trincomalee harbour.
🔶The RBI initiative- Sri Lanka’s location is strategic for India’s maritime security, and China’s RBI – Maritime Silk Route. India is strongly asserting against China which is trying to build strategic assets in the garb of infrastructure projects all around India. India has conveyed to Sri Lanka its conerns about security and Sri Lanka has assured of not allowing anything against India’s security interests.
🔶 The Mattala Rajapaksa International Airport (MRIA) in Hambantota, 250 km south from Colombo, was built with with Chinese assistance of $190 million, more than 90 per cent ofthe total cost. Today, MRIA is running into losses and Sri Lanka is unable to pay back dues to China’s EXIM Bank. Ironically, Sri Lanka may now hand over the airport to India so that it can repay the Chinese loan.
🔶India is also interested in developing container facilities at the Colombo Port and developing the Trincomalee harbour.
🔶The RBI initiative- Sri Lanka’s location is strategic for India’s maritime security, and China’s RBI – Maritime Silk Route. India is strongly asserting against China which is trying to build strategic assets in the garb of infrastructure projects all around India. India has conveyed to Sri Lanka its conerns about security and Sri Lanka has assured of not allowing anything against India’s security interests.
📝India-Maldives Relations
🛡️Background
🔶An archipelago of 1,200 coral islands, spanning roughly 115 square miles, Maldives is Asia's smallest nation, both by area and population.
🔶 India was among the first to recognise Maldives after its independence in 1965 and to establish diplomatic relations with the country.
🔶 Indian Coast Guard's Dornier was the first to land at the Ibrahim Nasir Airport with relief and supplies after the tsunami of December 26, 2004.
🔶 India maintains a naval presence in Maldives, at the request of the Maldives, since 2009.
🔶 December 5, 2014, India dispatched “water aid” to the Maldivian capital of Male, after a fire destroyed the generator of its biggest water treatment plant.
🔶The first-ever presidential elections under a multi-candidate, multi-party system were held in October 2008 only to be removed in 2012 and replaced by Abdulla Yameen Abdul Gayoom in a 2013 election.
🛡️Background
🔶An archipelago of 1,200 coral islands, spanning roughly 115 square miles, Maldives is Asia's smallest nation, both by area and population.
🔶 India was among the first to recognise Maldives after its independence in 1965 and to establish diplomatic relations with the country.
🔶 Indian Coast Guard's Dornier was the first to land at the Ibrahim Nasir Airport with relief and supplies after the tsunami of December 26, 2004.
🔶 India maintains a naval presence in Maldives, at the request of the Maldives, since 2009.
🔶 December 5, 2014, India dispatched “water aid” to the Maldivian capital of Male, after a fire destroyed the generator of its biggest water treatment plant.
🔶The first-ever presidential elections under a multi-candidate, multi-party system were held in October 2008 only to be removed in 2012 and replaced by Abdulla Yameen Abdul Gayoom in a 2013 election.
📝Security status between India and Maldives
🔶The location of Maldives in the Indian ocean makes it important from the perspective of maritime security. It is situated in a mid-way between Strait of Malacca and Suez, which are the world’s busiest trade routes and thousands of cargoes pass through these trade routes.
🔶At the same time, as Kerala and Lakshadweep are in close proximity to the Maldivian islands, there are always India’s concerns about the possible use of Maldives’ territory against it.
🔶Maldives also occupies a special place in India’s foreign policy priority list because of increasing cases of piracy in the Indian Ocean near Somalia and Strait of Malacca, which has made the position of Maldives very important for establishing Naval bases for security in the Indian Ocean.
🔶In 2014 it was decided that next meeting would be held in Maldives. However, it remains to be held.
🔶The location of Maldives in the Indian ocean makes it important from the perspective of maritime security. It is situated in a mid-way between Strait of Malacca and Suez, which are the world’s busiest trade routes and thousands of cargoes pass through these trade routes.
🔶At the same time, as Kerala and Lakshadweep are in close proximity to the Maldivian islands, there are always India’s concerns about the possible use of Maldives’ territory against it.
🔶Maldives also occupies a special place in India’s foreign policy priority list because of increasing cases of piracy in the Indian Ocean near Somalia and Strait of Malacca, which has made the position of Maldives very important for establishing Naval bases for security in the Indian Ocean.
🔶In 2014 it was decided that next meeting would be held in Maldives. However, it remains to be held.
📝Economic and Development Cooperation between India and Maldives
🔶 India is a leading development partner and has established many of the leading institutions of Maldives including the Indira Gandhi Memorial Hospital (IGMH), Faculty of Engineering Technology (FET) and Faculty of Hospitality & Tourism Studies (IMFFHTS).
🔶Currently, India has provided US $ 100 million Stand-by Credit facility (SCF) to Maldives, including long-term loans and revolving credit for trade.
🔶 Under new Line of Credit worth US$40 million offered by the Government of India to Maldives, the Overseas Infrastructure Alliance (OIA) of India has been given a contract to construct 485 housing units in Maldives.
🔶 India and Maldives signed a trade agreement in 1981, which provides for export of essential commodities. Growing from modest beginnings, India-Maldives bilateral trade
stood at Rs.700 crores (MEA, 2015).
🔶 India is a leading development partner and has established many of the leading institutions of Maldives including the Indira Gandhi Memorial Hospital (IGMH), Faculty of Engineering Technology (FET) and Faculty of Hospitality & Tourism Studies (IMFFHTS).
🔶Currently, India has provided US $ 100 million Stand-by Credit facility (SCF) to Maldives, including long-term loans and revolving credit for trade.
🔶 Under new Line of Credit worth US$40 million offered by the Government of India to Maldives, the Overseas Infrastructure Alliance (OIA) of India has been given a contract to construct 485 housing units in Maldives.
🔶 India and Maldives signed a trade agreement in 1981, which provides for export of essential commodities. Growing from modest beginnings, India-Maldives bilateral trade
stood at Rs.700 crores (MEA, 2015).
📝Democratic Transition in Maldives
🔶Maumoon Abdul Gauoom served as the president of Maldives from 1978 to 2008.
🔶 In 2008 under pressure from the civil society democratic reforms were initiated and a new constitution was adopted
🔶Mohamed Nasheed was the first democratically-elected President of Maldives in 2008. He was made to step down after a series of events that has been described in some quarters as a coup in 2012.
🔶Ever since the Indian Ocean archipelago is witnessing political tussles.
🔶Nasheed had taken refuge at Indian High Commission once, fearing arrest under the regime of his successor.
🔶In 2013 Abdulla Yameen was elected president in 2013
🔶Nasheed Was jailed for 13 years in 2015 on terrorism charges, his conviction was widely condemned internationally. In 2016 Mohd. Nasheed received poltical asylum in the UK
🔶Maumoon Abdul Gauoom served as the president of Maldives from 1978 to 2008.
🔶 In 2008 under pressure from the civil society democratic reforms were initiated and a new constitution was adopted
🔶Mohamed Nasheed was the first democratically-elected President of Maldives in 2008. He was made to step down after a series of events that has been described in some quarters as a coup in 2012.
🔶Ever since the Indian Ocean archipelago is witnessing political tussles.
🔶Nasheed had taken refuge at Indian High Commission once, fearing arrest under the regime of his successor.
🔶In 2013 Abdulla Yameen was elected president in 2013
🔶Nasheed Was jailed for 13 years in 2015 on terrorism charges, his conviction was widely condemned internationally. In 2016 Mohd. Nasheed received poltical asylum in the UK
📝Recent Dynamics In Maldives
🔶 For China Maldives is a key link in its maritime silk road plan under the Belt and Road Initiative (BRI).
🔶In December 2017, Maldives Signed a Free Trade Agreement with China, while endorsing its Maritime Silk Road project shunned by India for its strategic implications in the Indian Ocean.Maldives’ strategy of achieving economic progress by making use of its geographic advantages.
🔶 In 2012 relations between India and Maldives came under a strain after Male had terminated the agreement it entered into with GMR in 2010 for the modernisation of the Ibrahim Nasir International Airport.
🔶The country's anti-graft watchdog has ruled out any corruption in the leasing of the international airport to GMR. The airport expansion project was subsequently given to the
Chinese company, which will plough in US $ 800 million.
🔶 For China Maldives is a key link in its maritime silk road plan under the Belt and Road Initiative (BRI).
🔶In December 2017, Maldives Signed a Free Trade Agreement with China, while endorsing its Maritime Silk Road project shunned by India for its strategic implications in the Indian Ocean.Maldives’ strategy of achieving economic progress by making use of its geographic advantages.
🔶 In 2012 relations between India and Maldives came under a strain after Male had terminated the agreement it entered into with GMR in 2010 for the modernisation of the Ibrahim Nasir International Airport.
🔶The country's anti-graft watchdog has ruled out any corruption in the leasing of the international airport to GMR. The airport expansion project was subsequently given to the
Chinese company, which will plough in US $ 800 million.
📝South Asian Association for Regional Cooperation (SAARC)
🛡️Background
🔶South Asian Association for Regional Cooperation (SAARC) was founded in Dhaka on 8 December 1985. Its secretariat is based in Kathmandu, Nepal.
🔶SAARC has eight members (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal,
Pakistan and Sri Lanka).
🔶 These eight nations of South Asia constitute 3 per cent of the world’s area, but house 21per cent of the global population. India, significantly, constitutes 70 per cent of SAARC’s area and population.
🔶 The organization promotes multilateral cooperation and regional integration. It launched
the South Asian Free Trade Area in 2006.
🔶19th SAARC Summit, scheduled to take place in 2015 in Islamabad, was postponed due to non participation of India and other countries owing to Pakistan's interference in the
domestic affairs of other countries.
🛡️Background
🔶South Asian Association for Regional Cooperation (SAARC) was founded in Dhaka on 8 December 1985. Its secretariat is based in Kathmandu, Nepal.
🔶SAARC has eight members (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal,
Pakistan and Sri Lanka).
🔶 These eight nations of South Asia constitute 3 per cent of the world’s area, but house 21per cent of the global population. India, significantly, constitutes 70 per cent of SAARC’s area and population.
🔶 The organization promotes multilateral cooperation and regional integration. It launched
the South Asian Free Trade Area in 2006.
🔶19th SAARC Summit, scheduled to take place in 2015 in Islamabad, was postponed due to non participation of India and other countries owing to Pakistan's interference in the
domestic affairs of other countries.
📝The Organisation
🔶 The Charter Bodies are the main mechanisms of SAARC. These include the Summit, Council of Ministers, Standing Committee, Programming Committee, Technical Committees and Action Committees.
🔶 The Summit is the highest decision making authority in SAARC. These meetings are hosted biennially by the Member States in rotation in alphabetical order. The Member State hosting the Summit assumes the Chair of the Association until the next such meeting hosted by another Member State.
🔶 The key outcome of the SAARC Summit is the Declaration. It contains decisions and directives of the Heads of State or Government to strengthen regional cooperation in the agreed areas.
🔶 The Charter Bodies are the main mechanisms of SAARC. These include the Summit, Council of Ministers, Standing Committee, Programming Committee, Technical Committees and Action Committees.
🔶 The Summit is the highest decision making authority in SAARC. These meetings are hosted biennially by the Member States in rotation in alphabetical order. The Member State hosting the Summit assumes the Chair of the Association until the next such meeting hosted by another Member State.
🔶 The key outcome of the SAARC Summit is the Declaration. It contains decisions and directives of the Heads of State or Government to strengthen regional cooperation in the agreed areas.
📝Evolution Of SAARC
🔶 The idea of SAARC itself was put on the table by Bangladeshi leader Ziaur Rehman in the late 1970’s and it was Bangladesh which had actually pushed forward the idea of SAARC at initial stages.
🔶 Dhaka pursued the idea of SAARC initially with a view to containing the “hegemony” of India in South Asia, a view fuelled by the structural asymmetry between India and its smaller South Asian neighbors.
🔶 India also on the other hand was not very enthusiastic about the idea of SAARC as it believed that given the fact that itS neighbors harboured too many apprehensions about it and this will hamper the prospects of India at the organization, rather it will become a platform for bashing India.
🔶 Pakistan also was not very enthusiastic about SAARC since its inception as it knew that SAARC would be dominated by India (due to its sheer size).
🔶 The idea of SAARC itself was put on the table by Bangladeshi leader Ziaur Rehman in the late 1970’s and it was Bangladesh which had actually pushed forward the idea of SAARC at initial stages.
🔶 Dhaka pursued the idea of SAARC initially with a view to containing the “hegemony” of India in South Asia, a view fuelled by the structural asymmetry between India and its smaller South Asian neighbors.
🔶 India also on the other hand was not very enthusiastic about the idea of SAARC as it believed that given the fact that itS neighbors harboured too many apprehensions about it and this will hamper the prospects of India at the organization, rather it will become a platform for bashing India.
🔶 Pakistan also was not very enthusiastic about SAARC since its inception as it knew that SAARC would be dominated by India (due to its sheer size).
📝Factors Shaping the Agenda: Initial Phase of SAARC
🛡️The initial phase gave shaped the functioning of SAARC future as seen in the following:
🔶No Bilateral Issues: From the very inception of SAARC as an idea, India insisted that it would not agree to the use of any international forum for discussion of bilateral disputes
and would prefer to resolve them on a bilateral level only.
🔶Small countries Apprehensive on Trade: The smaller countries on the other hand were notinterested in putting trade & commerce on the agenda of SAARC as they were apprehensive that such a move will flood their market with Indian goods given the relatively larger size of Indian economy.
🔶Non-Controversial issues only: The SAARC agenda has focus on nine non-controversial areas of cooperation known as- “SAARC integrated programme of action” or “Regional Program of action”. The nine areas were- Agriculture & Rural development, Transport & Communication, Science & Technology, Culture, Health, Population control, Sports and Arts.
🛡️The initial phase gave shaped the functioning of SAARC future as seen in the following:
🔶No Bilateral Issues: From the very inception of SAARC as an idea, India insisted that it would not agree to the use of any international forum for discussion of bilateral disputes
and would prefer to resolve them on a bilateral level only.
🔶Small countries Apprehensive on Trade: The smaller countries on the other hand were notinterested in putting trade & commerce on the agenda of SAARC as they were apprehensive that such a move will flood their market with Indian goods given the relatively larger size of Indian economy.
🔶Non-Controversial issues only: The SAARC agenda has focus on nine non-controversial areas of cooperation known as- “SAARC integrated programme of action” or “Regional Program of action”. The nine areas were- Agriculture & Rural development, Transport & Communication, Science & Technology, Culture, Health, Population control, Sports and Arts.
📝Principles of the SAARC Charter
🛡️ Keeping the apprehensions of both India and its smaller neighbours in mind, SAARC developed a charter which would guides its functioning based on:
🔶Sovereign equality.
🔶Territorial integrity.
🔶Political independence.
🔶 Non interference in domestic matters.
🛡️ Keeping the apprehensions of both India and its smaller neighbours in mind, SAARC developed a charter which would guides its functioning based on:
🔶Sovereign equality.
🔶Territorial integrity.
🔶Political independence.
🔶 Non interference in domestic matters.
📝 SAARC Regional
1. CentresSAARC Agriculture Centre (SAC), Dhaka
🔶Established in 1989 with the mandate to provide timely, relevant and universal access to information and knowledge resources to all the agricultural practitioners of the SAARC .
🔶Member Countries to achieve their respective goals through networking agricultural knowledge and information systems by adopting the appropriate information and communication technologies, management practices and standards.
1. CentresSAARC Agriculture Centre (SAC), Dhaka
🔶Established in 1989 with the mandate to provide timely, relevant and universal access to information and knowledge resources to all the agricultural practitioners of the SAARC .
🔶Member Countries to achieve their respective goals through networking agricultural knowledge and information systems by adopting the appropriate information and communication technologies, management practices and standards.
📝SAARC Cultural Centre (SCC), Colombo, Sri Lanka
🔶This center was established in 2009 with the mandate to promote regional unity through cultural integration and intercultural dialogue and contribute towards preservation, conservation and protection of South Asia’s cultural heritage within the framework of the SAARC Agenda for Culture.
🔶This center was established in 2009 with the mandate to promote regional unity through cultural integration and intercultural dialogue and contribute towards preservation, conservation and protection of South Asia’s cultural heritage within the framework of the SAARC Agenda for Culture.
📝2. SAARC Energy Centre (SEC), Islamabad
🔶Established in 2006 with the mandate to act as a catalyst for the economic growth and development of South Asia region by initiating,coordinating and facilitating regional as well
as joint and collective activities on energy.
🔶 SEC would provide technical inputs for the SAARC Working Group (and other) meetings on Energy, and will facilitate accelerating the integration of energy strategies within the region by providing relevant information, state-of-the-art technology and expertise.
🔶Established in 2006 with the mandate to act as a catalyst for the economic growth and development of South Asia region by initiating,coordinating and facilitating regional as well
as joint and collective activities on energy.
🔶 SEC would provide technical inputs for the SAARC Working Group (and other) meetings on Energy, and will facilitate accelerating the integration of energy strategies within the region by providing relevant information, state-of-the-art technology and expertise.
📝SAARC Disaster Management Centre (SDMC), Delhi, India
🔶This Centre was re-established in November 2016 for expanded role by merging four erstwhile SAARC Centres viz.
(1) SAARC Disaster Management Centre (SDMC – New Delhi, India);
(2) SAARC Meteorological Research Centre (SMRC – Dhaka, Bangladesh);
(3) SAARC Forestry Centre (SFC – Thimphu, Bhutan);
(4) SAARC Coastal Zone Management Centre (SCZMC – Male, Maldives) with the mandate to support Member States in their Disaster Risk Reduction initiatives through application of Science & Technology, knowledge from multiple disciplines, exchange of best practices, capacity development, collaborative research and networking in line with the Global Priorities /Goals and other relevant frameworks adopted by Member States.
🔶This Centre was re-established in November 2016 for expanded role by merging four erstwhile SAARC Centres viz.
(1) SAARC Disaster Management Centre (SDMC – New Delhi, India);
(2) SAARC Meteorological Research Centre (SMRC – Dhaka, Bangladesh);
(3) SAARC Forestry Centre (SFC – Thimphu, Bhutan);
(4) SAARC Coastal Zone Management Centre (SCZMC – Male, Maldives) with the mandate to support Member States in their Disaster Risk Reduction initiatives through application of Science & Technology, knowledge from multiple disciplines, exchange of best practices, capacity development, collaborative research and networking in line with the Global Priorities /Goals and other relevant frameworks adopted by Member States.
📝Trade and Commerce: The SAARC Preferential Trade Arrangement (SAPTA)
🔶The idea of including trade and commerce on the agenda of SAARC was first given a concrete form in 1993 with the signing of (SAARC Preferential Trading Arrangement (SAPTA) signed in Dhaka on the 11th of April 1993 which provided for the adoption of various instruments of trade liberalization on a preferential basis.
🔶 Another aspect was SAARC’s more economically developed countries agreed to assist the less developed countries in the region. SAPTA was launched in 1995.
🔶The idea of including trade and commerce on the agenda of SAARC was first given a concrete form in 1993 with the signing of (SAARC Preferential Trading Arrangement (SAPTA) signed in Dhaka on the 11th of April 1993 which provided for the adoption of various instruments of trade liberalization on a preferential basis.
🔶 Another aspect was SAARC’s more economically developed countries agreed to assist the less developed countries in the region. SAPTA was launched in 1995.
📝 Features of (SAFTA)
🔶Member states will reduce tariff barriers in a time bound manner. Maximum tariff will be in the range of 0-5%.
🔶Non LDC’s of SAARC (India, Pakistan, Srilanka) had a timeframe of 7 years to reduce tariffs, while the LDC’s were provided a time frame of 10 years. As per SAFTA, South Asia was to become a free trade zone by 2016. Instead of positive list, concept of sensitive list was introduced (sensitive list would include items which would not be subjected to time bound commitment with regard to tariff reduction). However, it was agreed upon that sensitive list would be revised regularly with the objective of bringing reductions.
🔶A dispute resolution mechanism for tariff and non-tariff barriers related disputes was agreed upon
🔶Member states will reduce tariff barriers in a time bound manner. Maximum tariff will be in the range of 0-5%.
🔶Non LDC’s of SAARC (India, Pakistan, Srilanka) had a timeframe of 7 years to reduce tariffs, while the LDC’s were provided a time frame of 10 years. As per SAFTA, South Asia was to become a free trade zone by 2016. Instead of positive list, concept of sensitive list was introduced (sensitive list would include items which would not be subjected to time bound commitment with regard to tariff reduction). However, it was agreed upon that sensitive list would be revised regularly with the objective of bringing reductions.
🔶A dispute resolution mechanism for tariff and non-tariff barriers related disputes was agreed upon
📝Steps to Strengthen SAFTA
🔶At SAARC summit 2011-India has announced the removal of 46 textile items from India’s negative list
(a) India has also removed all the 25 items on sensitive list for Least Developed Countries (LDC’s) of SAARC.
(b) Steps have been taken to revive border hats at Meghalaya & Tripura border b/w India & Bangladesh.
(c) India has given five South Asian partners duty free access to 99.7% of their goods
🔶At SAARC summit 2011-India has announced the removal of 46 textile items from India’s negative list
(a) India has also removed all the 25 items on sensitive list for Least Developed Countries (LDC’s) of SAARC.
(b) Steps have been taken to revive border hats at Meghalaya & Tripura border b/w India & Bangladesh.
(c) India has given five South Asian partners duty free access to 99.7% of their goods