NEW DELHI, Aug 10: India on Wednesday said the South Asia Free Trade Area Agreement (Safta) that envisaged phased tariff liberalization would come into force from January 1, 2006.

“In two years, non-least developed contracting states (India, Pakistan and Sri Lanka) will bring down tariffs to 20 per cent, while least developed contracting states (Bhutan, Bangladesh, Maldives and Nepal) will bring them down to 30 per cent,” Minister of State for Commerce and Industry E.V.K.S. Elangovan informed the Rajya Sabha.

Non-LDCS will then bring down tariffs from 20 per cent to 0-5 per cent in five years, while LDCS will do so in eight years.

“Moreover, non-LDCS will reduce their tariffs for LDC products to 0-5 per cent in three years,” the state minister added.

Safta is expected to be fully operational by 2016. He said a committee of experts on Safta, consisting of delegates from all Saarc nations, was currently negotiating on the four outstanding issues — rules of origin, sensitive list, mechanism for compensation of revenue loss for LDCS and technical assistance to LDCS.

“On the indicative sensitive lists circulated by all Saarc countries, India has been holding bilateral discussions with each Saarc country, including Bangladesh and Pakistan,” the minister said.

Elangovan said the existing bilateral trade agreement with Nepal and Bhutan would continue to be in force even after the implementation of Safta.—APP