The Indian Cabinet today cleared the implementation of the South Asia Free Trade Area (SAFTA) with effect from 1st January 2006. Announcing this, Shri Kamal Nath, Union Minister of Commerce & Industry, said that the coming into force of SAFTA would be a historic milestone in the economic profile of the countries of the SAARC region. SAFTA was signed by all SAARC countries during the SAARC Summit held in Islamabad in January, 2004. The basic objective of SAFTA is to reduce existing tariffs within the stipulated time frame in order to boost trade among the member countries. India has kept 884 tariff lines in the Sensitive List for
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| non-LDCs (Pakistan, Sri Lanka) and 763 for LDCs (Bangladesh, Bhutan, Maldives and Nepal). India’s Sensitive Lists include goods from agriculture sector, textile sector, chemicals & leathers and sectors reserved for small-scale industries. On the market access to Bangladesh, Sensitive List includes 185 tariff lines out of 234 tariff lines in Chapters 61 & 62 of garments. To offer limited market access through Tariff Rate Quota (TRQ), the Cabinet has decided to accord 6 million pieces of fabrics with the condition that sourcing of fabrics should be either from India or of Bangladesh origin. The Cabinet has also approval of TRQ of 2 million pieces without any conditions of sourcing of fabrics. 
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