SAFTA — South Asian Free Trade Area

UPSC Relevance: Economy

Full Form

South Asian Free Trade Area

Background

SAFTA was established through the SAFTA Agreement under the framework of SAARC.

Objective

To:

  • Reduce trade barriers

  • Promote regional trade

  • Facilitate movement of goods

  • Encourage fair competition

  • Promote economic cooperation

These objectives are explicitly stated in the SAFTA Agreement.

Members

SAFTA covers the SAARC countries:

  1. India

  2. Pakistan

  3. Bangladesh

  4. Sri Lanka

  5. Nepal

  6. Bhutan

  7. Maldives

  8. Afghanistan

Important Features

  • Tariff reduction

  • Sensitive lists

  • Rules of origin

  • Special treatment for least-developed members

  • Dispute settlement mechanism

UPSC Significance

SAFTA is important in the context of:

  • Regional integration

  • South Asian trade

  • India's neighbourhood policy

  • Regional connectivity

Prelims Trap

SAFTA ≠ SAARC

SAARC is the broader regional organization.

SAFTA is the trade agreement/framework within South Asia.