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Shift trade to SAARC region from slowing US, Govt to business

Economic Times, India

Shift trade to SAARC region from slowing US, Govt to business

28 March 2008

PTI. NEW DELHI: The government today asked the country’s business houses to shift focus to the SAARC region and exploit the opportunities there, especially when the US and the European economies are slowing down.

"Instead of focusing on US and EU markets, we should now look at our neighbours and intra-SAARC trade... South-South trade is going to increase," Commerce Secretary G K Pillai said at a Ficci seminar here.

He said South Asia Free Trade Agreement (SAFTA) provides an opportunity for increasing regional trade which should be exploited by South Asian business houses.

Pillai said direct trade between India and Pakistan is growing at 100 per cent and is expected to further increase as the region has the potential for enhanced economic engagement.

India is importing huge amount of cement from Pakistan and expects to further interact with the stakeholders to increase trade, he said.

According to a joint study by the Asian Development Bank and the UNCTAD, implementation of full SAFTA will help India nearly double its exports to South Asia.

It said that contrary to popular impression, India and Pakistan are not the most important markets for each other. "Over 60 per cent of the increase in exports to the region for both countries are to Bangladesh".

With the government allowing foreign direct investment from Bangladesh, companies from the neighbouring country in the east would start investing in India in a couple of months, he said.

On India’s trade with Sri Lanka, he said a fresh Comprehensive Economic Partnership Agreement (CEPA) with the island nation that includes services, would be concluded in the next few months.