If sectors like agriculture, textiles, leather, pharmaceuticals, rubber, light machinery, automobile parts, etc. are put under the sensitive lists then the region shall not be able to harness the benefits of SAFTA and the resulting vertical integration of industries across the countries of the region in these key areas of South Asian competence.
Sri Lanka may well emerge as the hub of rubber based industries, Bangladesh for energy-intensive industries, Bhutan for forest based and so on.
As a Step 2 of SAFTA, FICCI suggests that the scope of SAFTA must be expanded to cover trade in services and investment liberalization. Private sector needs to be given adequate incentives to set up enterprises across South Asia.
For this, an encouraging investment climate is essential and concluding a Regional Investment Agreement within SAARC is a must. This alone shall result in maximizing gain from enhanced intra trade and investment flows.
While in the year 2004, FDI inflows into India touched a record of US $ 5 billion, in Pakistan & Bangladesh; it rose to around US $ 1 billion but in other countries of SAARC it is well below US $ 1 billion. However if South Asia becomes an integrated market, it can draw a much higher FDI for the entire region with a huge market size of over 1.5 billion people and around 610 billion US$ burgeoning middle class and expanding consumer base.
The reduction in tariff rates as effected by SAFTA shall multiply trade and commerce only if it is complemented and supported by adequate infrastructure and trade facilitation measures by member Governments.
This includes improving and strengthening the network of road and highways, railways and air and shipping agreements, harmonization of custom regulations, quality standards, easy visa regulations, dispute settlement mechanism, etc.
FICCI is the rallying point for free enterprises in India. It has empowered Indian businesses, in the changing times, to shore up their competitiveness and enhance their global reach.
Federation of Indian Chambers of Commerce and Industry
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.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
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