WHAT IS FTA?
• FTA- FREE TRADE AGREEMENT
• Facilitates tariff free trade between countries.
• Agreement which reduces the existing barriers
• It involves agreement on tariff concession like
national duties concession and non-tariff
• It is a FTA between the seven members of the
India, Bangladesh, Bhutan, Maldives, Nepal, Pa
kistan and Sri Lanka.
• The agreement incorporates trade in goods.
• Services and investment are not incorporated.
SAFTA IS SIGNED BETWEEN:
SOUTH ASIAN ASSOCIATION OF REGIONAL COOPERATION
• SAFTA is an agreement reached on 6 January
2004 at the 12thSAARC Summit
in Islamabad, Pakistan.
• The officials signed a framework agreement on
SAFTA to reduce customs duties of all
traded goods to zero by the year 2016.
• The SAFTA agreement came into force on 1
• In the final five-year phase ending 2012, the
20 percent duty will be reduced to zero in a
series of annual cuts.
• Trade Liberalization Programme
• Non-tariff Barriers
• Negative List (sensitive list of items)
• Rules of Origin
• Safeguard Measures
• Institutional Arrangements
• Consultations and Dispute Settlement
BENEFITS TO MEMBER
• Significant gains for the small economies of the
• Attracts foreign capital.
• Better political relations and peace.
• Part of the informal trade diverted to official
• Informal trade diversion brings in hefty
revenues for the nations.
• Elimination of tariffs has increased
intra-regional trade by 1.6 times the previous
• A unified approach together.