The South Asian Free Trade Area (Safta) is implemented raising expectations in growth of inter regional trade, while Pakistan is yet to approve it formally.
Approval process is on the move and the country plans to finish this procedure soon, said Tasneem Aslam, spokesperson of Pakistan Foreign Office, Islamabad.
However, the agreement was effective from January 1, 2006, said officials of Indian Commerce Ministry officials.
The Inidan Cabinet approved the implementation of Safta on December 29, 2005, after which the member countries of Saarc would be greatly impacted.
Safta would help India in building up its commercial relations with the Saarc countries, Commerce and Industry Minister, Kamal Nath said.
Safta was agreed upon at the Islamabad Summit in 2004 and is being operationalised as per the implementation schedule.
According to agreement, Saarc member countries India, Pakistan and Sri Lanka will reduce their customs duties to 0-5 percent by 2013 while the least developed members (LDCs), Bangladesh, Maldives, Nepal and Bhutan will do it by 2018.
As India is larger and comparatively developed nation, it will be offering concessions to LDCs including a mechanism for compensation of revenue loss as a result of decrease in duties and technical assistance.
The LDCs to be compensated include Bangladesh and Maldives also.
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