Enhancing Intra-SAARC Trade:
Pruning India’s Sensitive List under SAFTA

Nisha Taneja
Saon Ray
Neetika Kaushal
Devjit Roy Chowdhury

April 2011

List of Abbreviations
FTA - Free Trade Agreement
ISLFTA - India-Sri Lanka Free Trade Agreement
LDC - Least Developed Contracting State
NLDC - Non-Least Developed Contracting State
RCA - Revealed Comparative Advantage
SAARC - South Asian Association for Regional Cooperation
SAFTA - South Asia Free Trade Agreement
WITS - World Integrated Trade Solution

Key words
Revealed Comparative Advantage Is a ratio of the shared of given product in a country’s export to its share in world export. The revealed comparative advantage is an index used in international economics for calculating the relative advantage or disadvantage of a certain country in a certain class of goods or services as evidenced by trade flows.
Concessions-mean tariff and non-tariff privileged by agreement under Tariff Liberalization Programme.
Sensitive list-A list of items agreed by all member countries which are vulnerable to competition. It is the products of which will not be subject to tariff reduction.
Notified Sensitive List- Is the original list at the time inception of SFTA
Operational Sensitive List-Is the list constructed after taking all Central Board of Excise Customs notification into account
Non-tariff measures- Include any measure, regulation or practice other than tariff

Introduction
The last two decades have witnessed a number of attempts by South Asian countries to promote intra-regional trade through several bilateral, regional and multilateral agreements under SAFTA. The success achieved under the treaty has been quite limited. One of the reasons for SAFTA being ineffective is the large Sensitive (sometimes called negative) Lists maintained by Member Countries. Thus, in order to promote intra- region trade members