ISLAMABAD, May 4: India has formally asked Islamabad for trading through a negative list concept as agreed under the South Asia Free Trade Area (Safta) for increasing formal trade between the two countries.

Talking to Dawn after the conclusion of a two-day roundtable on Safta here on Thursday, Indian High Commissioner to Pakistan Shive Shanker Menon said that the Indian authorities had raised the issue with their Pakistani counterparts in a meeting of Saarc commerce minister held in Saarc secretariat recently.

He said Pakistani side agreed to look into the Indian demand.

When asked whether India would take the issue to Saarc Dispute Settlement Committee, the Indian envoy replied that they wanted trade not disputes.

“We in India hope that from July 1, 2006 all of us in Saarc will have only negative lists and that the movement restrictions, which go against the very essence of Safta, are also abolished. If these two conditions are not met, then Safta has little operational meaning,” the envoy said while addressing the roundtable, which was organized jointly by Saarc Chamber of Commerce and Industry and the Commonwealth Business Council (CBC).

Mr Menon said if these conditions were met it could bring about trade diversification and help to formalise informal trade.

For Safta to realise its potential, he said it would be logical to extend its scope to services sector and investments.

Secretary Commerce Syed Asif Shah told the gathering that reduction in tariffs alone could not achieve sufficient benefits from the free trade in the region. “Many Saarc countries including India, the biggest economy of the region, have a number of non-tariff barriers (NTBs) with an aim to restricting imports”, Mr Shah added.

The secretary said that granting of MFN status to India was a bilateral issue and it was part of the composite dialogue.

Mr Shah said under the positive list of import from India, no India specific tariff or NTBs were in place. Every commodity, he said which was importable from India, in accordance with the current import policy order, attracted rates of duty, which were applied on MFN basis. There would be tariff reduction under Safta on items currently importable from India, he added.

The secretary said during the last 10 years, the list of importable items from India had expanded manifold and the process was ongoing.

Akhtar Mahmood, an expert on international trade, said that Saarc could not develop into a full free trade area if it excluded for too long more than 50 per cent of its GDP from its free trade rules.

The Sri Lankan commerce minister Jeyaraj Fernandopulee also called for complete elimination of NTBs to get maximum benefits from the free trade regime.

Former finance minister of Nepal Madhukar Shumshere J. B. Rana also proposed for inclusion of services sector under the ambit of Safta. He was of the opinion that trade in services would increase people to people contact in the region.