Failure to sign TFA at SAARC is disappointing: CII

Neha Dewan | @TheDollarBiz

India's Prime Minister Narendra Modi along with the SAARC leaders, during the 18th SAARC Summit, in Dhulikhel, Nepal, on November 27, 2014. (Pic. source - PMO, India)

  The Confederation of Indian Industry (CII) has said that it is disappointing that several Trade Facilitation Agreements could not be signed at the 18th SAARC Summit that concluded yesterday. CII has welcomed Prime Minister Narendra Modi’s suggestions for a 3-5 year business traveller card for SAARC nationals and the Special Purpose Facility for financing regional infrastructure. However, it said that other agreements could help reduce trade barriers and trade cost significantly within the region. CII said that the SAARC Motor Vehicle Agreement for the regulation of passenger and cargo vehicular traffic would lead to seamless movement of cargo, personal vehicles and passengers across land borders. The SAARC Regional Railways Agreement too would harness the economic potential of the region, while the SAARC Framework Agreement for Energy Cooperation (Electricity) could ensure integrated operation of the regional power grid, CII said. CII urged SAARC leaders to finalise agreements that would promote trade facilitation and hoped that these would be signed at the earliest. “We hope that PM’s call for simpler procedures, common standards, and better facilities would contribute to faster action towards trade and investment linkages on the SAARC platform,” said Chandrajit Banerjee, Director General, CII. It is reported that the agreements were blocked by objections by Pakistan over border concerns. However, SAARC members are expected to negotiate in the coming months. “A time period of three months has been set for approval to the Motor Vehicle and Railway pacts," Sushil Koirala, Prime Minister, Nepal, said at the concluding session of the summit.  The next SAARC summit will be held in Islamabad in 2015 as Pakistan is next in line in the alphabetical order of the eight member countries. India has a trade surplus with other SAARC countries. In FY2013-14, India’s exports to other SAARC countries stood at around $17.5 billion (about 5.5% of India’s total exports), compared to imports worth around $2.47 billion (about 0.54% of India’s total imports). “Cross-border investments into other SAARC countries to export to India would help balance the trade surplus with the SAARC member economies, which is presently a concern,” said Banerjee.    

This article was published on November 28, 2014.