Agreement on South Asian Free Trade Area (SAFTA)

This agreement establishes the South Asian Free Trade Area (SAFTA) among the seven SAARC member states to promote mutual trade and economic cooperation by eliminating barriers to the cross-border movement of goods.

The agreement involves the Governments of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. It affects the trade sectors, specifically regarding tariffs, non-tariff measures, and direct trade measures, and includes specific provisions for Least Developed Countries (LDCs) within the group.

• Non-Least Developed Contracting States must reduce tariffs to 20% within 2 years of the agreement coming into force.
• Least Developed Contracting States must reduce tariffs to 30% within 2 years of the agreement coming into force.
• Non-Least Developed Contracting States must reduce tariffs from 20% to 0-5% within a subsequent 5-year period (6 years for Sri Lanka).
• Least Developed Contracting States must reduce tariffs from 30% to 0-5% within a subsequent 8-year period.
• Non-Least Developed Contracting States must reduce tariffs to 0-5% for products from Least Developed Contracting States within 3 years.
• Contracting States must eliminate all quantitative restrictions on products included in the Trade Liberalisation Programme.
• A SAFTA Ministerial Council (SMC) and a Committee of Experts (COE) are established for administration, monitoring, and dispute settlement.

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