NEW DELHI: Strengthening of infrastructure and tariff reduction within a time frame can result in trade among SAARC countries growing to $14 billion by 2010 from $7 billion.
Asserting this, the Federation of Indian Chambers of Commerce and Industry (FICCI) on Tuesday said the South Asian Free Trade Agreement, which came into operation from January 1, is expected to multiply intra-regional trade similar to other groupings like ASEAN, NAFTA and the EU.
A FICCI statement said regional trade in the ASEAN region before the grouping came into being was only 7 per cent and shot up to 49 per cent by 2003. Similarly in NAFTA, it was only 12 per cent before grouping, but became 44 per cent by 2003 and in the EU it was 23 per cent in early the 1980s but went up to 67 per cent in 2003.
The intra-regional trade in SAARC could not go above four per cent of the total trade of the region in spite of the South Asian Preferential Trade Agreement owing to its halting progress and very limited coverage of the trade basket. With SAFTA now in place, the region is all set to reap the real benefits of regional trade liberalization on the pattern of other trading blocs, it said. FICCI suggested that the scope of SAFTA must be expanded to cover trade in services and investment liberalization. Private sector needs to be given incentives to set up enterprises across South Asia, it said.