Cabinet approves SAFTA

By agencies   |   Thursday, 29 December 2005, 08:00 Hrs
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NEW DELHI: The Government today cleared the Agreement for South Asian Free Trade Area (SAFTA) paving the way for free trade in goods among the SAARC member countries from January 1, 2006.

Briefing newspersons after the Cabinet meeting, Finance Minister P Chidambaram said the Union Cabinet has approved the Agreement signed among SAARC nations in Islamabad in January last year.

India being the larger and relatively developed economy will be providing concessions to Least Developed Countries (LDCs), including a mechanism for compensation of revenue loss due to reduction in duties, technical assistance.

The LDCs include Bangladesh and Maldives, Chidambaram said.

Union Commerce Minister Kamal Nath said coming into force of SAFTA would be a historic milestone in the economic profile of the countries of the SAARC region.

"Implementation of SAFTA will further strengthen our trade relations with the SAARC countries," he said after the Cabinet meeting chaired by Prime Minister Manmohan Singh.

The Cabinet also gave its approval to offer Bangladesh an additional Tariff Rate Quota (TRQ) of two million pieces of garments besides six million already offered.

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