Nirupama Subramanian

On withdrawal of SAFTA concessions

  • Pakistan Commerce Secretary quoted as saying India has withdrawn the concessions
  • Indian High Commission clarifies that at least for now the concessions stay

    ISLAMABAD: Reports in Pakistani newspapers that India had pulled off the plug on tariff concessions to Pakistan under the South Asia Free Trade Area agreement were "wrong," the Indian High Commission said here on Tuesday.

    The local press carried statements by Pakistan Commerce Secretary Asif Shah that India's decision to withdraw the concessions was "a matter of great regret" and "a violation of Article 7" of the SAFTA agreement. He said Commerce and Industry Minister Kamal Nath announced the withdrawal of concessions at the meeting of the SAFTA ministerial council in Kathmandu on Monday.

    No retaliation

    The official is reported to have said that Pakistan was not considering any retaliatory measures against India. But Pakistan trades with India on the basis of a highly restrictive positive list of 1,000 items even after the implementation of SAFTA. For India, Pakistan implements SAFTA concessions only for the items on the positive list. Trade outside this list is officially barred.

    The newspaper reports suggested that Pakistan would continue with this regime unless India removed its "massive restrictive non-tariff barriers," which were affecting Pakistani exports.

    Mr. Shah is reported to have said that the positive list was Pakistan's non-tariff barrier against India.

    Discussion on trade

    The SAFTA ministerial council, which met in the Nepal capital, discussed Pakistan's decision and to continue trading with India on the basis of the positive list, even after the implementation of the regional free trade agreement in July 2006.

    India clarifies

    In a statement, the Indian High Commission pointed out that Mr. Kamal Nath said the opposite of what was reported in Pakistan.

    According to the statement, Mr. Kamal Nath told a press conference in Kathmandu that while India had the right and the option to deny SAFTA benefits to Pakistan because of Islamabad's denial of these benefits to New Delhi, India would "not withdraw for the time-being" these concessions.

    The Minister said the SAFTA Commerce Ministers had urged Pakistan to comply with the free trade agreement it had signed and acceded to, in letter and in spirit.

    Quoting the Minister, the statement said the ministerial council "made it clear to Pakistan that there cannot be a qualified implementation of SAFTA."

    He added that India and Pakistan would discuss the issue bilaterally, and another Ministerial Council meeting would review this issue in six months.