Professional Documents
Culture Documents
Group Members
Nimit sheth- 102 Roopesh thopate- 138 Sanjana narayan- 145 Shikha poddar- 149 Swapnil sawale- 163 Yogesh rane 179 Harshada dhage - 182
SAARC
The South Asian Association for Regional Cooperation Bangladesh An organization of South Asian Nations founded in 1985 Dedicated to Economic, Technological ,Social & Cultural India development Countries part of this : Bangladesh, Bhutan , India, Pakistan Bhutan Maldives SAARC , Nepal,Maldives and Sri Lanka Afghanistan joined in 2007 Headquartered in Kathmandu, Nepal. Sri The SAARC seeks to promote the welfare of the peoples of South Asia, strengthen collective self-reliance Nepal Cooperate with international and regional organizations.
Afghanistan * Lanka Pakistan
Objectives of SAARC
To improve the quality of life and welfare of people of the SAARC member countries To develop the region economically, socially and culturally To provide the opportunity to the people of the region to live in dignity and to exploit their potentialities To enhance the self-reliance of the member countries jointly To provide conductive climate for creating and enhancing mutual trust, understanding and application of one anothers issues To enhance the cooperation with other developing economies
Contd..
To extend cooperation to other trade blocks To have unity among member countries Promotion of active collaboration and mutual assistance in the economic, social,cultural, technical and scientific fields Strengthening of cooperation among the Member States in international forum on matters of common interest Acceleration of economic growth Social progress and cultural development in the region
Bilateral Trade
Agreement provides for expansion of trade and economic cooperation Making mutually beneficial arrangement for the use of waterways, railways and roadways, passage of goods between two places in one country through the territory of the other Exchange of business and trade delegations and consultation to review the working of the Agreement at least once a year
Contd..
Indias trade with Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka are governed by the bilateral treaties/agreements India-Bangladesh : October 04, 1980. Indo-Maldives : Trade Agreement signed on March 31, 1981 India and Nepal : Treaty of Trade to regulate bilateral trade, which was re-negotiated and renewed for five years with effect from March 2002 Treaty of Transit to facilitate each others trade with third countries After independence, India and Pakistan signed a standstill agreement under which goods from one country to another were exempted from customs duty Sri Lanka, having an adverse trade balance with India for the last several years, was seeking Indias support for finding ways & means to reduce the trade gap The first formal Agreement on Trade and Commerce between India and Bhutan was concluded in 1972.
Cont
Trade affects growth in three primary ways:
First, trade encourages the flow of resources from the low productive sectors to high productive sectors, leading to an overall increase in output Second, With unemployed resources, an increase in export sales leads to an overall expansion in production and a fall in the unemployment rate Third, international trade also enables for the purchase of capital goods from foreign countries and exposes an economy to the technological advances of the developed countries.
Contd..
Prices: Low technology intensive items, such as leather footwear, garments, gems and jewellery and textile products, which are typical of any developing countrys export profile, they are price-elastic Should be beneficial Government policies: More liberal government policies are likely to be beneficial for an FTA. Higher trade volume, resulting from external sector liberalization, is expected to increase the likelihood of FTA formation
SAPTA
SAARC Preferential Trading Arrangement
In December 1991, the Sixth Summit held in Colombo approved the establishment of an Inter Governmental Group (IGG) to formulate an agreement to establish a SAARC Preferential Trading Arrangement (SAPTA) by 1997 The Agreement reflected the desire of the Member States to promote and sustain mutual trade and economic cooperation within the SAARC region through the exchange of concessions.
SAFTA
The objectives of SAFTA are to promote and enhance mutual trade and economic cooperation among the 'Contracting States' by interalia: Eliminating barriers to trade in, and facilitating the cross-border movement of goods between the territories of the Contracting States. Promoting conditions of fair competition in the free trade area, and ensuring equitable benefits to all Contracting States, taking into account their respective levels and pattern of economic development. Creating effective mechanism for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and Establishing a framework for further regional cooperation to expand and enhance the mutual benefits of this Agreement.
Bilateral
Bhutan
744
01.01.2009*
Nepal
744
01.01.2009*
Sri Lanka
865
429
01.01.2011
CTH+3 CTH+35% 5%
Maintain sensitive lists, consisting of items which are not subject to tariff reduction. Only three countries namely Bangladesh, India and Nepal maintain different sensitive lists for LDCs and NonLDCs
Harmonisation of standards, reciprocal recognition of tests and accreditation; Harmonisation of customs clearance and customs These measures indicate elimination of noncooperation;
tariff barriers (NTBs) will be a major trade task Transit facilities, particularly for land-locked contracting in order to enhance intra-regional trade in states; South Asia.
Removal of barriers to intra-SAARC investments; Development of communication system and transport infrastructure; Rules of fair competition and promotion of venture capital, simplification of procedure for business visas
Challenges
Determine the impact of SAFTA on SAARC countries. The political economy of the selection of excluded sectors and rules of origin. The "behind-the-border" restrictions. The coverage of SAFTA. The cross border investment. Finally the benefits of SAFTA should be seen to be equitably shared.
Business opportunities
South Asia remains one of the least integrated regions in the world The FTA is very less among the union countries as compared to other countries SAFTA is also a vehicle of promoting better political ties among neighbours SAFTA will help to bring about greater trade diversification.
I N D I A
Textile products
Although most importing countries accept the quality certification from ISO and Bureau Veritas, Sri Lanka asks for certification from its own agencies like Sri Lanka Standards Institution. This is a problem for Indian exporters as they have to get this certificate and incur the cost and the time even though they have an ISO certificate from a recognised agency in India. Sri Lanka does not accept products packed in straws. They demand that such products be packed in 5-ply corrugated boxes. India does not manufacture enough 5-ply corrugated boxes to meet the existing demand. The prices are too high compared to the other countries. This actually increases the costs of the packaging and affects the product pricing in the international market. Regarding the first category of barriers in Sri Lanka majority of the firms faced barriers related to product standards. In the second category of barriers majority of the firms felt there were barriers related to banks and to competition. Majority of the firms exporting to Sri Lanka disagreed that there was any kind of discrimination against them vis--vis other competitors. Majority of the firms exporting to Sri Lanka stated that they incurred expenses between 0 and 5% of total sales revenue to meet standards.
Sanitary ware
Others
Other barriers
Many buyers in Sri Lanka demand under invoicing in order to save themselves from import duties. This causes exporters undue harassment. Also Indian banks like the State Bank of India do not confirm the LC issued by Banks of Thailand and most banks of Vietnam. Due to non-confirmation of the LCs the exporters are not able to take orders. On the other hand, some of the private banks like Citibank, HSBC do confirm the Letter of Credit.
I N D
Whenever there are disturbances at the Indo-Pak border, the mobile connections are not operational. While road routes for trade between India and Pakistan are non-existent, rail and air connectivity between the two countries has been erratic. Indian entrepreneurs facing NTBs of their products like electronic items, jute goods, machinery, plastic goods, textile and chemical items in Bangladesh. There are about 600 varieties of rice are grown in India. These include both basmati and non- basmati rice. Sri Lanka, accepts up to 100% broken rice (nonbasmati). In Sri Lanka, exporters require the KEMA4 certificate (ISO standards) even though the product certified by several reputed third-party inspection agencies like Crown Agents, ISO 9001:2000, Lloyds, Bureau Veritas, S.G.S. Robert, W. Hunt Company, BSI Inspectorate, Griffith UK, OMIC Japan, Tubescope Vecto GmbH Germany etc. Even though obtaining this certificate is not very complex or expensive, it demands lot of time and effort, which is an irritant to exporters. Sri Lanka specifies registration in their country even if the Indian exporter has registration in India. This registration is specific to Sri Lanka and is not a mandatory procedure for exports to other countries. Hence, this aggravates the agony of the exporter especially while exporting to Sri Lanka In case of mango pulp export to Sri Lanka, Indian exporters are required to obtain a Health certificate from the Ministry of Health of Sri Lanka. This test is conducted in order to specify the exact contents of the product. This test is conducted over a period of 2 days and costs about Rs.5000- Rs.7000 per consignment.
Transformers
I
Cosmetics
A
Mango pulp
Conclusion
India, being the largest economy in SAARC, its role is widely regarded as crucial in determining the effectiveness of SAFTA and therefore, it will have to play a proactive & leading role in drawing the future agenda or the road map of SAFTA Should cut down the size of its sensitive list initially 1200, now 744 for LDCs The issues relating to non-tariff measures should be addressed in a time bound manner providing technical assistance and building capacity for setting up the agencies/institutions Encouraging sourcing of inputs from other SAARC members Take efforts for promoting investments in other SAARC members (Maldives & Nepal) especially the LDCs so that overall economic activity is generated and greater employment opportunity are created Provide better infrastructure and support at the boarder check posts of customs
CONT
In order to promote intra SAARC trade and investment flows, the SAARC Member Countries would also need to take necessary measures. Recommendations are made : Reduction of the size of sensitive list and time frame for tariff liberalisation Duty free market access Regional cummulation Addressing nontariff barriers Expanding the scope of SAFTA Trade facilitation Customs Cooperation Cooperation in infrastructure Transit treaty