The South Asia Free Trade Agreement (SAFTA) was signed during the 12th SAARC Summit held at Islamabad in January 2004 and came into force from 1st January 2006.

All member countries of SAARC namely India, Pakistan, Sri Lanka, Bangladesh, Nepal, Bhutan, Maldives and Afghanistan have agreed to implement SAFTA.

Pakistan has implemented SAFTA. However, in its Notification for SAFTA tariff reductions (as amended vide Order S.R.O. No 280(I)/2012 dated 20.3.2012) Pakistan has moved from ‘Positive List’ to ‘Negative List’ comprising of 1209 tariff lines, for import of goods from India. India maintains that this constitutes a derogation of SAFTA, since no reservations are permitted under Article 23 of the SAFTA Agreement.

The information was given by the Minister of State in the Ministry of Commerce and Industry Dr. E.M. Sudarsana Natchiappan in Rajya Sabha today.

Derogation from SAFTA: India contends Pakistan's negative tariff list breaches the Agreement's reservation prohibitions. Pakistan's shift from a positive list to a negative list for imports from India raises whether its tariff-notification amending tariff reductions constitutes a derogation from SAFTA, given India's contention that such reservations contravene Article 23's prohibition on reservations.