The Federation of Indian Chambers of Commerce and Industry is 'very hopeful' that the seven SAARC nations would be able to clear all roadblocks on the way to signing of Saarc Free Trade Agreement (SAFTA) at the Islamabad summit.
"As of today we are very hopeful," FICCI president Y K Modi told reporters in New Delhi on Wednesday on the eve of his departure to Islamabad where he would participate in SAARC chambers business symposium.
He said support for SAFTA had been 'across the board.' "Earlier it was believed that Pakistan was the roadblock, but in the last one year Pakistan has turned out to be a strong supporter," Modi said.
He admitted that there had been some opposition to SAFTA from Bangladesh, but said talks were on get Bangladeshis on board.
"The businessmen are almost convinced about the benefits and the President of Bangladesh Federation (of chambers of commerce) will speak at the symposium supporting the signing."
Modi said SAFTA, which has been delayed for two years, would not only boost the intra-region trade manifold, it would also be a big contributor to easing of political tensions in the region.
"Through SAFTA alone Indo-Pak bilateral trade will increase and this will also go a long way in resolving the all important issue of terrorism. The signing of the agreement is critical for both trade and easing political tension in the region."
The symposium would do the necessary lobbying with the governments in favour of SAFTA which, FICCI feels, would automatically bring down import duties and transaction costs while giving the benefits of MFN status to India in its trade with Pakistan.
Modi said SAFTA would be advantageous for both India and Pakistan who would get 'ready' neighbourhood markets for their products and services.
Indian tea, pharmaceuticals, automobiles and other consumer durables were already 'fine tuned' for the Pakistani market, he said.
Illegal trade between India and Pakistan was estimated at $2 billion, while official trade stood at $262 million, in 2002-03.
The agreement would also help increase India's trade with Afghanistan, Iran and Tajikistan, he added.
At present, intra-regional exports for SAARC is a meager 5.3 per cent as against 51.7 per cent of NAFTA, 55.2 per cent of European Union and 20.4 per cent of ASEAN.
Asked if the political instability in Pakistan would influence trade, Modi said political stability was crucial for investments, not for trade.
Amit Mitra, the FICCI Secretary General, said Indo-Pak trade during Kargil war did not plummet to zero. There was only a "small decline in the number of both legal and illegal trade between the two countries. On the contrary, demand for certain items went up."
"Official trade figures were down to $160 million from $220 million and after the war it went up to $238 million," he said.
FICCI has put forward a four-point agenda for the SAARC nations to work on to make SAFTA a reality.
The agenda requires free movement of people, goods and services, improvement of roads, railways, shipping and air links, harmonisation of customs, banking, insurance and a common arbitration procedure, and a SAARC regional agreement for investment promotion and protection to promote joint ventures and investments among member states.
