Strengthening of infrastructure and implementation of tariff reduction under Safta agreement will lift the regional trade to US$ 14 billion from existing $ 7 billion by 2010, hope Indian business leaders.
Safta, which came into operation at the beginning of this year, is expected to multiply intra-regional trade just as other groupings like Asean, Nafta and EU, said the Federation of Indian Chamber of Commerce and Industry (FICCI) in a press release yesterday.
"But, Bangladesh has to take initiatives to remove non-tariff barriers to benefit from the South Asian Free Trade Area (Safta)," Mir Nasir Hossain, president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), told the news agency.
Regional trade in the Asean before the grouping was only seven percent and shot up to 49 percent by 2003. Similarly, in Nafta, it was only 12 percent before the grouping, but became 44 percent by 2003 and, in the EU, it was 23 percent in the early '80s but went up to 67 percent in 2003, FBCCI president said.
The Indian apex trade chamber further said if South Asia becomes an integrated market, it could draw a much higher FDI for the entire region that has a huge market size of over 1.5 billion people.
As per the agreement, developing members will bring down their customs duties to 0-5 percent by 2013 while the least developed country (LDC) members will do it by 2018.
Bangladesh, the Maldives, Nepal and Bhutan are the LDC members of the seven-nation Saarc. Afghanistan is expected to join the regional grouping later this year after completion of certain formalities.
