SAARC Summit: Making friends of enemies

No major deals could be signed as Pakistan held back from signing two key pacts; Agreement for Regulation of Passenger and Cargo Vehicular Traffic and SAARC Regional Agreement on Railways.

Dec 01, 2014 09:12 IST Indiaspend.org Chaitanya Mallapur |

The Prime Minister, Narendra Modi with the Prime Minister of Pakistan, Mr. Nawaz Sharif, at the 18th SAARC Summit, in Nepal on November 27, 2014.
Apart from the photo-op between Indian Prime Minister Narendra Modi and his Pakistani counterpart Nawaz Sharif, the 18th summit of South Asian Association for Regional Cooperation (SAARC) nations held recently in Kathmandu, Nepal concluded on a disappointing note.
 
No major deals could be signed as Pakistan held back from signing two key pacts; Agreement for Regulation of Passenger and Cargo Vehicular Traffic and SAARC Regional Agreement on Railways. The only pact that was signed was SAARC Framework Agreement for Energy Cooperation (Electricity).The Kathmandu Declaration highlighted "deeper integration for peace and prosperity" among member states. Some of the key features of the declaration are mentioned in the BOX below.
 
In his speech addressing the regional leaders on 26th November, Modi emphasised economic cooperation and regional trade. He said: "Today, less than 5% of the region`s global trade takes place (among ourselves). Even at this modest level, less than 10% of the region`s internal trade takes place under the SAARC free trade area. Indian companies are investing billions abroad but less than one percent of that flows into our region." Modi highlighted the role of free trade agreements between India and Sri Lanka which have strengthened relations between the neighbours.
 
SAARC, a regional organisation including India, Sri Lanka, Pakistan, Afghanistan, Bhutan, Maldives, Nepal and Bangladesh, emerged in 1985 to promote cooperation on economic, geo-political and socio-cultural fronts. SAARC also includes 9 countries in the role of observers.
 
Trade has played a key role in binding the SAARC nations together. In an effort to improve trade ties, the South Asian nations signed the South Asian Free Trade Area (SAFTA) in January 2004 during the 12th SAARC summit held in Islamabad, Pakistan. This primarily came as an initiative to transform the region into an economic union. The agreement came into force in January 2006, following which SAFTA Ministerial Council was formed comprising commerce ministers of the member states.
 
The Kathmandu Declaration reaffirmed their commitment to achieve South Asian Economic Union in a planned manner through a free trade area, a customs union, a common market, and a common economic and monetary union.
 
The total Free on Board (FOB) value of exports by member states under SAFTA has reached about $3 billion, or Rs. 18,600 crore (as on 20.09.2013) since launching the SAFTA trade liberalisation programme in July 2006.
 
Let's look at India's bilateral trade with various SAARC nations.

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