India Cuts Pak Sensitive List by 30%,
Tariff to Fall to 5% in 3 years
The Cabinet on 18 August approved Reduction of 30% (264
tariff lines,) from the SAFTA Sensitive list for Non Least Developed
Countries (NLDCs) allowing the peak tariff rates to reduce to 5% within three
years, as per agreed SAFTA process of tariff liberalization. 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 ensuring move towards a vibrant economic community and move
towards normalisation of trade relations with Pakistan.
India has, in the last one year, steered the trade
liberalization process under SAFTA so as to accelerate the pace of the process
for SAFTA Economic Integration. A major step taken in this direction was to
unilaterally reduce its sensitive list for the Least Developed Countries (LDCs)
under SAFTA, in November 2011, to 25 tariff lines thus allowing all other
imports at zero basic customs duty. Afghanistan, Bangladesh, Bhutan, Maldives
and Nepal benefited as a result of this trade liberalisation move.
The bilateral trade dialogue with Pakistan resumed
in April 2011. Sustained discussions at various levels resulted in the drawing
of a roadmap for an uninterruptible and irreversible trade liberalisation
process.
Commerce Ministers of India and Pakistan, during
the bilateral meeting held at Islamabad on 14th February 2012, agreed that
India will consider reduction of up to 30% of its SAFTA Sensitive List, within
four months of the notification of a small negative list by Pakistan.
Consequently, Pakistan Government moved from its ‘positive list’ regime to a
‘negative list’ regime notifying it in March 2012.
India has also taken significant steps to take
forward the trade liberalisation process. It has removed the
restrictions on investments from Pakistan, agreed upon a liberalised visa
regime, opened a state of the art Integrated Check Post (ICP) to encourage two
way trade.
Further liberalization of trade will be according
to the roadmap which will be discussed in next meeting of the Commerce
Secretaries.
[Ref: PIB (MoC&I) Press Release dated 18 August 2012]