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Will SAARC strengthen economic ties?
Published on Mon, Apr 02, 2007 at 14:02, Updated on Mon, Apr 02, 2007 at 14:46 in 
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New Delhi: The South Asia Free Trade Agreement (SAFTA) aims to cut export duties by the end of this year. But a lot still needs to be done to free up trade in the region.
O P Garg is a textile and carpet exporter. His hand-woven carpets adorn homes in Brazil, the United States and Canada yet he faces many roadblocks in trading closer home.
“When you have free trade between two countries then only businessmen and people can take advantage of the opportunity,” says Garg who is the MD of Overseas Carpets.
Garg believes there is an excellent market for textiles, furniture and other cottage industry products in Pakistan where India has a distinct technological advantage.
And he is not alone, the federation of Indian export organisations has welcomed the proposal to set up a joint business council with Pakistan.
Assocham estimates India’s trade with SAARC countries to multiply to 50,000 crore rupees by 2010 and double that amount in another five years.
India's main exports to SAARC nations include cotton fabrics, transport equipment and drugs.
However, exporters want to see easier access to neighbouring markets.
“We have excellent trade relations with Sri Lanka, Bangladesh and other SAARC countries. With Pakistan only we have mixed up politics with business,” says Chairman-Northern Region, Federation Of Indian Export Organisations, R K Dhawan.
Trade between India and Pakistan still remains a tedious affair. At present, the bi-weekly Samjhauta Express transports goods across the border.
However, most goods are transported to Mumbai and then shipped to Karachi or to Dubai - a three thousand-kilometre detour, and then on to Pakistan. And for smaller industries, the costs of transportation could be prohibitively huge.
India's exports to other SAARC nations including Bangladesh and Sri Lanka consist of mainly spices and commodities like tea.
Businessmen believe India, Pakistan and Bangladesh could form a formidable combine without fear of competition amongst themselves.
“We all have common customers. In fact, in a market like cotton fabrics, the market belongs to India, Pakistan and Bangladesh. If we want then there will be no competition for us three countries in textiles for which we have a common market,” says Garg.
And maybe the SAARC summit will pave the way for greater economic cooperation in the subcontinent.
(With inputs from Jency Jacob)
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