India’s Current Engagement of FTAs and PTAs

Agreement on South Asian Free Trade Area (SAFTA)

Seven countries consisting of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka signed SAARC Preferential Trading Agreement (SAPTA) in April 1993. 

The objective of the agreement is to give preferential market access to the member countries in a limited way.

The 12th SAARC Summit held in Islamabad in January 2004 signed the agreement for establishing South Asian Free Trade Area (SAFTA). 

• For free trade in goods among SAARC members

• The developing country members (India, Sri Lanka and Pakistan) have to reduce existing tariffs to 20% within 2 years & to 0 – 5% within 5 years.

• The rest of the least developed countries have to reduce tariffs to 30% within 2 years and to 0 – 5% within 8 years. 

• Each country will maintain a list of sensitive items to protect the interest of the stakeholders

SAFTA replaced SAPTA.  Effective from 1st January 2006.

Sensitive items and rules of origin clause of SAFTA are being finalised.