Days before the New Delhi SAARC Summit, Assocham president, Venugopal N Dhoot said: Indian industry would fully support the government if it comes out with any package for our smaller neighbours since the size of our industry and economy is large enough to accommodate the requirements of these countries.
He said India has extended a commitment to review non-tariff barriers, if any, and give better access to its market as part of the SAFTA.
Our economy, which is expected to reach a size of a trillion dollar by March 2008, should share the fruits of growth with the smaller members of the SAARC, Dhoot said.
Pakistans reluctance to grant Most Favoured Nation (MFN) status to India, even under the recently ratified SAFTA, is another issue that warrants an immediate solution, he said.
According to ASSOCHAM, the SAARC region accounted for a mere 2.5% of Indias total foreign trade in April-October 2006.
Therefore, the opening up of Indias market under the trade agreement is not likely to have a major impact on the domestic market. Imports from the SAARC countries amounted to only less than a billion dollar, contributing just 0.82 % to the total imports of 104 billion dollars.
Exports to the region were USD 3.56 billion during April-October accounting for just about 5% of total exports, which were close to USD 71 billion in this period.
India has been running a comfortable trade surplus 4.4 billion dollars in the first seven months of the current fiscal. SAFTA gives an opportunity of strengthening developing nations case of seeking market access in the developed countries, Dhoot said.
The developed world has much stronger trade ties among them. The intra regional trade under North American Free Trade Agreement (NAFTA) and that in European Union is more than 50 %. While Indias total foreign trade in April-October 2006 witnessed a growth rate of 26% over the same period in 2005, trade with SAARC countries grew only by 16 %.