In a bid to improve ties with Pakistan,India is likely to reduce the peak tariff rate to 5 per cent within three years. If the commerce ministry has its way,then the Union Cabinet might allow a reduction in the sensitive list by 30 per cent for non-least developed countries (NLDCs). A total of eight nations are grouped under the South Asian Free Trade Area (Safta) of which India,Pakistan and Sri Lanka are NLDCs while Afghanistan,Bhutan,Bangladesh,Maldives and Nepal have been categorised as LDCs. According to a Cabinet proposal moved by the commerce ministry,the country will shrink its sensitive list by 30 per cent in the near future under the Safta trade liberalisation programme. The ministry has proposed that the peak tariff rate would be reduced to 5 per cent within three years,besides securing gradual harmonisation of the sensitive list for NLDCs and LDCs, sources said. Indias sensitive list for LDCs has just 25 items,mostly demerit goods like liquor and tobacco. Currently Pakistan maintains 1,209 tariff lines,which it should reduce to help India reap the gains of the Most Favoured Nation status granted to its neighbour. The commerce ministry has also proposed that the list of tradable commodities between India and Pakistan through the Attari border should be expanded to further bilateral trade ties. Currently India imports goods worth $171 million from Pakistan and exports commodities worth $604 million. The main items of exports under Safta are cotton yarn,pharmaceuticals,leather,chemicals,footwear soles,polished granite slabs,green marble,raw jute,steel billets,non-alloy steel,groundnut and dry coconut. The main items of import under are metaliferrous ores and metal scrap,fruits and nuts,non-ferrous metals,spices,cotton yarn and fabrics,ready-made garments (woven & knit),cement,transport equipments and petroleum,crude& products. Reports from Islamabad say that it seeks to continue the sensitive list. Goods imported under the sensitive list under Safta will be liable to normal import tariffs.
