India to give loan of USD 100 mn each to its neighbours

India to give loan of USD 100 mn each to its neighbours

Addressing a meeting of the South Asia Free Trade Area Ministerial Council at Male (Maldives), Commerce and Industry Minister Anand Sharma said that India has evolved a new 'Buyer Credit Cover' for the SAARC region.

Essentially, this would be a development loan. "We would be happy to extend such development loan through our Exim bank, interest rates close to LIBOR (London Inter Bank Offer Rate)," he said.

Sharma said that the countries in South Asia need to rapidly break down barriers in key sectors like textiles, pharmaceuticals, infrastructure, electronic goods, automobiles and agriculture.

He said that foreign direct investment (FDI) and trade within the SAARC region has been much below the potential.

Sharma whose speech was made available here, urged the SAARC negotiators to complete talks for opening up trade in services through a separate agreement.

The agreement on South Asia Free Trade Area (SAFTA) came into operation from July 2006.
SAFTA provides for phased trade liberalisation programme under which India, Pakistan and Sri Lanka had to bring down their mutual import tariff to Zero-5 per cent by December 2012. For others there was a different schedule of tariff reduction.

But the objective has not been achieved and the intra-regional trade remains less than 5 per cent against 27 per cent for ASEAN and 50 per cent for European community- similar economic blocs and common markets.

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