Thaindian News

New Delhi, Jan 30 (IANS) Pitching for greater free trade and investment among South Asian countries, India has stressed that the current “challenging international economic environment” can provide SAARC “a once-in-a-generation opportunity to catalyze the potential within the region”.

“We stand at an important juncture in the evolution of a more integrated South Asian economic community,” Foreign Secretary Ranjan Mathai said at the SAARC (South Asia Association for Regional Cooperation) Business Summit here last week, which brought business leaders from the region to explore ways to deepen trade and investment linkages in the region.

“We need now to speak more on the steps needed to achieve this objective,” he said while alluding to the burgeoning intra-regional trade.

In the nearly six years since the South Asian Free Trade Area Agreement’s (SAFTA) entry into force, intra-regional trade under SAFTA has touched US$1.4 billion - some 10 per cent of intra-regional trade - but growth has been extraordinarily fast.

“There is potential for more,” he said.

Conjuring up an upbeat picture of the prospects of South Asia, Mathai said: “The South Asia region could emerge as a locomotive for the world economy if we ensure an environment for rapid growth, as also build on our complementarities to make the region a magnet for greater trade, investment and financial flows.”

He called for fast-tracking a regional investment treaty and creation of regional production chains to deepen economic linkages in the SAARC region that is home to nearly one-fifth of the humanity.

“This process must be accompanied by an effort to enhance free trade in services, and to step up financial flows within the region, in particular, investment,” said Mathai.

“A SAARC Investment Promotion and Protection Agreement is pending finalisation since 2007. There is need also for policy measures that make it possible - and indeed advantageous - for our businessmen to invest in each other’s economies,” he stressed.

“In conclusion, the current challenging international economic environment could also provide SAARC a once-in-a-generation opportunity to catalyze the potential within the region,” Mathai emphasised.

“We could set the standard as a region that manages the transition from emphasizing tariff and restrictive measures as mechanisms for raising resources, to one in which economic development and infrastructure-creation generate significantly-enhanced employment, human capacity and state-of-the-art infrastructure,” he said.

“This has to be a public-private-partnership in the general meaning of that term,” he added.

At the 17th SAARC summit in the Maldives held in November last year, Prime Minister Manmohan Singh had announced virtual elimination of India’s Sensitive List for Least Developed Countries in the SAARC region.

“By slashing this Sensitive List to just 25 tariff lines, we ensured that zero basic duty will now apply on almost all goods from the five SAARC LDCs,” said Mathai.

A week ago, India assumed presidency of the business chamber of the eight-member South Asia Association for Regional Cooperation (Saarc) after a gap of 12 years and stressed it would liberalise business visa norms to boost cross-border trade and investment in the region.

Vikramjit Singh Sahney, corporate president of Sun Group, took over the presidency of the Saarc Chamber of Commerce and Industry from Bangladesh’s Annisul Haq for a period of two years.