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Improvement needed in SAFTA: Menon

B. Muralidhar Reddy

ISLAMABAD : Indian High Commissioner to Pakistan Shivshankar Menon told the SAARC Chamber of Commerce and Industry here on Thursday that improvements in the South Asian Free Trade Agreement (SAFTA) to be operationalised from July 1, 2006, were called to embark on the path to regional economic reintegration and cooperation.

Speaking on the theme `SAFTA — Pathway to Economic Union' Mr. Menon said that to reach the goal of a South Asian Economic Union by 2020, along with several other steps, SAFTA needs to be improved.

He told the Chambers that India was ready to make efforts to improve its connectivity within the South Asian region and with the rest of the world for enhanced trade in goods and services.

The envoy said SAFTA as of now was confined only to trade in goods.

"For SAFTA to realise its potential, it would be logical to extend it to trade in services and to extend its scope to cover instruments. Services are the single largest contributor to GDP in South Asia, accounting for 40-50 per cent of the GDP," he said.

Mr. Menon said the next stage for SAFTA would be to facilitate intra-regional investment flows and build supply capabilities. "As important as improvements in SAFTA is the establishment of connectivity between us, and with the rest of the world.

Development

This would require the development of highways, railways and inland waterways and other transport links between us."

The High Commissioner said India had made some proposals for increased air connectivity at the Dhaka Summit.

He said India was willing to make the necessary effort and had launched a major infrastructure project with an investment of around $200 million to create 13 new, modern, integrated inland ports on its land border.

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