Hon'ble Minister for Commerce and Industry of India Shri Kamal Nath, who visited Kathmandu on 25-26 February 2007 in connection with the meeting of the SAFTA Ministerial Council, addressed a press conference on 26 February. In his opening remarks, the Hon'ble Minister made the following main points:
On SAFTA Ministerial Council Meeting
· The 2nd SAFTA Ministerial Council meeting has taken place at an important junction, as the next SAARC Summit is to be held within just about month’s time, in New Delhi on April 3-4, 2007.
· During the 13th SAARC Summit in Dhaka, there was a recognition that the time has come to move SAARC and regional cooperation from declaratory phase into implementation. The notification and operationalisation of SAFTA in 2006 is an important development in this regard. SAFTA has the potential to bring SAARC into implementation. For this and for bringing concrete benefits to the people of our region, SAFTA needs to be implemented in letter and spirit.
· India has always believed that SAARC must be a partner in the Asian resurgence that is taking place. To be able to do that, it would be very important for us to bring about trade and economic integration within the region.
· Wide changes are taking place in the global economic architecture and countries have to engage with synergies which are being thrown up in East Asia and globally. Economic engagement of SAARC region globally, especially with East Asian economies, is very important. And for this, connectivity and greater engagement within SAARC countries is extremely important.
· In this context, it would be important for us to enhance connectivity, physical, economic and people-to-people, in the region. We expect the 14th SAARC Summit in New Delhi to take forward this idea, identify and implement concrete projects for upgrading our trade and transport infrastructure, enlarge the scope of SAFTA to include trade in services and investment and comprehensively address issues of trade facilitation, which is at the heart of increasing trade engagement successfully.
· For SAFTA's vision to create a vibrant economic region in South Asia; SAFTA is to be a vehicle for change, dynamism and offers greater opportunity for smaller economies of the region.
· SAFTA has three important 'F's - Freer, Fairer and Faster Trade
· India is committed to provide to all its neighbours greater market access and technical facilitation for greater economic cooperation in SAARC region. India wants to share its economic prosperity with its neighbours, for whom Indian economy, growingat more than 9%, is an opportunity.
· The Ministerial Council has urged Pakistan to comply, in letter and spirit, with SAFTA, an Agreement which Pakistan ahs signed and acceded to. We have made it clear to Pakistan that there cannot be a qualified implementation of SAFTA. India and Pakistan will discuss the issue bilaterally and another Ministerial Council meeting will review this issue in six months.
· We in India are committed to
o Reduction of non-tariff and perceived barriers
o Addressing all issues relating to market access for our neighbours
o Greater connectivity; transit facilities
o Developing trade infrastructure
On India-Nepal Bilateral Trade
° We greatly value our close and historical relations with Nepal.
° We are pleased that the bilateral trade treaty will be renewed with effect from 6 March 2007, as it is. We will continue to discuss deepening and widening the treaty.
° The figures of past document the usefulness of the treaty. Nepal’s exports to India have grown eleven times since 1996. India accounts for two-thirds of Nepal’s foreign trade and absorbs nearly 70% of Nepal’s total exports, up from less than 20% in 1996. This itself attests to the usefulness of India-Nepal bilateral trade treaty for Nepal, which has proved to be a vital means for strengthening bilateral economic ties and an important instrument for Nepal’s industrial and economic development.
° The need now is to work towards Comprehensive Economic Partnership Agreement (CEPA) to expand and deepen our economic ties, and include, in addition to trade in goods, trade in services and investments as well. It is the intention of Government of India and Government of Nepal to further expand the treaty of trade. The best way to do so is to explore the possibility of CEPA. A Joint Study Group could be set up in future. The process of mutual consultations has started and we believe that it will be over in two months.
Answering questions from journalists, the Hon'ble Minister reiterated that Pakistan had not complied with what they had acceded to under SAFTA. While the concept of SAFTA is based on a negative list, Pakistan has provided a positive list in the case of India. He stressed that it was not a matter of disagreement or dispute with Pakistan but only a question of Pakistan's compliance with and implementation of its obligations under the Agreement and pointed out that this approach fractures the solidarity of the economic engagement among SAFTA countries. He also pointed out that implementation of SAFTA will benefit Pakistan's economy and expressed the hope that Pakistan will recognise this and the need to implement SAFTA in letter and spirit. Replying to another query, the Minister said that as a gesture, India was not withdrawing, for the time being, the concessions it had extended to Pakistan under SAFTA. India is for consolidating SAFTA and had already implemented its obligations under the Agreement. India had the right and the option to deny SAFTA benefits to Pakistan because India was not receiving similar benefits from Pakistan under the Agreement.
In response to a query on India-Nepal trade, the Hon'ble Minister said that additional customs duty of 4% had been removed on almost all items manufactured in Nepal and exported to India, and in respect of textile products, it was under consideration of the Government of India. He also mentioned that India was awaiting some data from the Government of Nepal in this regard. Once that data is received, we will be able to address the issue satisfactorily. Asked how India could encourage Nepali exports to India, the Minister stressed that statistics attest to the fact that India is an enormous market for Nepali exports, that India provides easy access to Nepali products, and that India does not have a negative list of exports from Nepal. He emphasised that it was upto Nepal to take advantage of the automatic opportunity offered by the growing Indian economy and market, such as by further increasing its domestic production.
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