The Government has approved a 30 per cent reduction in 264 tariff lines under the South Asian Free Trade Agreement sensitive list for Non Least Developed Countries.
The decision by the Union Cabinet on Friday will allow peak tariff rates to come down to five per cent within three years, as agreed under the SAFTA process of tariff liberalisation.
“This shall reduce India’s sensitive list for Pakistan from 878 to 614 tariff lines. With this decision, India has effectively performed its lead role in harmonising the SAFTA framework and move towards normalisation of trade relations with Pakistan,” an official statement said.
The bilateral trade dialogue with Pakistan resumed in April 2011. Sustained discussions at various levels resulted in the drawing up of a roadmap for trade liberalisation. Recently, restrictions on investments from Pakistan have also been removed, while India has agreed upon a liberalised visa regime and opened an Integrated Check Post (ICP) to encourage two-way trade.
“Further liberalisation of trade will be according to the roadmap, which will be discussed in the next meeting of the commerce secretaries,” the statement said.
A major step taken by India in the last year to accelerate the pace of the process for SAFTA economic integration was to unilaterally reduce its sensitive list for the Least Developed Countries in November last year , to 25 tariff lines. This allowed all other imports at zero basic customs duty. Afghanistan, Bangladesh, Bhutan, Maldives and Nepal benefited as a result of this.