SAARC

PREFERENTIAL
TRADING
ARRANGEMENT
(SAPTA)
Naina Lalwani - 19531034
The Agreement on SAARC Preferential Trading Arrangement
(SAPTA) was negotiated in the year 1993 by the 7 developing
countries that were members of
South Asian Association for Regional Cooperation (SAARC).

Which are also know as

“Contracting States”
 SAPTA
South Asian Preferential Trading
Arrangement
Bangladesh, Butan, India, Maldives, Nepal, Pakistan and Sri
Lanka
 Objectives of SAPTA
 Promoting cooperation for the benefit of
their people
 Bringing awareness about the expansion of
trade
 Providing greater opportunities of
employment
 Strengthening intra-regional economic
cooperation
 Increasing the share in the total volume of
South Asian trade
 SAPTA
After its launch, 3 round of preferential tariff
reductions have been implemented
• SAPTA 1- concluded in 1995
• SAPTA 2- concluded in 1997
• SAPTA 3- concluded in 1998

• Tariffs reduction have offered on the basis of

two categories of members: LDC and non-LDC
 Components of SAPTA
SAPTA may, inter-alia, consist of arrangements relating to:-

Tariff 
1 2 Non Tariff

Para Tariff
3 4 Direct Trade
Measures
SAPTA focuses on preferential items/
products
All products
1 2 Manufactures

Commodities in their raw,

3 semi-processed and
processed forms
 Advantages of SAPTA
 Got the business facility from the member countries of SAARC.
 Balance of trade of this region got reduced.
 This agreement increase the export.
 Under developed countries get the facility to export the goods and services
to the developed countries by lower tax.
 By this agreement a goods relation among the member countries are
created, free trade policy is established to reduce the barriers of the
business.
 This agreement develops communication, infrastructural and transit
facilities.
 Member countries get some advantages by
the agreement of SAPTA like:
 Member countries of SAARC give the advantages to create proper
business environment.
 If any country faces problem for balance of payment then SAPTA
facilitates them.
 Member countries receive joint project.
 Other information about business, tax rate is exchanged among the
member countries.
Limitation of SAPTA
 Gives access to only certain goods
 PTA is done by reducing tariffs, but it does not abolish them completely
 Unable to handle trade related disputes
 More powerful members were unwilling to accept legal mechanisms for
dispute settlement
 Many measures were not included in the SAPTA such as: harmonization of
customs clearance, import licensing, registration and banking procedures,
removal of barriers to intra- SAARC investment, etc
THANK
S!
Submitted to - Hitesh Bhatia
Navrachana University
Vadodara

By - Naina Lalwani - 19531034