India Inc for market access to smaller SAARC nations

By Staff
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Google Oneindia News

New Delhi, Mar 29 (UNI) Barely days ahead of the SAARC Summit to be held here, India Inc today said it is in favour of giving duty free market access to smaller and less developed neighbours like Bangladesh, Maldives, Bhutan and Nepal.

''Indian Industry would fully support the government to come out with any package for India's smaller neighbours since the size of our industry and economy is large enough to accommodate the requirements of these countries,'' Venugopal N Dhoot, President, industry body Assocham said.

India has extended a commitment to review its non-tariff barriers and generate better access to the market as part of the South Asia Free Trade Agreement (SAFTA).

The removal of the trade barriers will result in increased economic activity spreading prosperity across the South Asian region. This will have a direct bearing on the purchasing power of the less developed countries thereby providing market to the Indian goods.

Thus, implementation of SAFTA would be a win-win situation for all the member countries, Assocham added.

''A strong regional block would be instrumental in fighting the economic war with the developed world,'' said Mr Dhoot.

Indian economy which is expected to be a trillion dollar economy by March 2008 has also the responsibility of sharing the fruits of growth with its neighbours, the chamber felt.

According to Assocham, SAARC region accounted for a mere 2.5 per cent of the country's total foreign trade in April-October 2006.

Therefore, the opening up of India's market under the trade agreement is not likely to have a major impact on the domestic market.

The imports from the SAARC countries amounted to 0.857 billion dollars, contributing just 0.82 per cent to the total imports over the same time period. The total imports during the period stood at about 104 billion dollars.

Exports to the region were worth 3.56 billion dollars in the period, forming almost five per cent of India's total exports, which were close to 71 billion dollars in April-October 2006.

The country has been running a comfortable trade surplus with the SAARC region in the past, with surplus of 4.4 billion dollars in the first seven months of the current fiscal.

India is the second fastest growing economy in the world after China with the potential of offering numerous opportunities in terms of markets, investments, technology and entrepreneurial resources for the countries in the region.

By enabling its neighbour countries to capitalise on these prospects, it will send a strong message of India's commitment of a responsible nation on the globe, said Assocham.

Pakistan's reluctance to grant Most Favored Nation (MFN) status to India even under the recently ratified SAFTA is another issue that warrants a solution as soon as possible, it said.

UNI

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