SAFTA to move ahead
"India, Nepal, Bhutan and Pakistan have a combined hydropower potential of 200 Giga Watt (GW), of which more than three-quarters is yet to be harnessed," according to Indian commerce minister Anand Sharma.
Addressing the sixth South Asia Free Trade Agreement (SAFTA) ministerial council in Islamabad, Pakistan on Thursday he said that India has made a strong pitch for setting up a $300-billion trans-national power grid in South Asia which would enable the region to trade in electricity.
“We need to work together to harness this potential not only for following the path of sustainable development but also as a source of cost-effective power supply to retain our competitiveness in manufacturing,” he said, adding that a trans-national power grid across South Asia will not only ensure energy security in the region but also result in substantial cost saving.
Sharma pointed out that South Asia has a huge infrastructure deficit, which will need massive capital flows. "We need to work in a policy environment that permits easier cross-border investment flows, which perhaps is even more important than cross-border trade,” he said.
In the last decade, outbound foreign direct investment (FDI) from India has been $120 billion and yet more than 90 per cent of it was directed out of South Asia. "We believe that greater capital flows within the region will have a transformational impact for growth and development of our economies,” he added.
The minister said the SAARC agreement on trade and services could serve as a catalyst for cross-border investment in several sectors, including energy, tourism, telecom, IT enabled services, education and health. "The agreement should be expedited to private commercial capital flows."
India also brought up the issue for a better arrangement to enable cross-border movement of cargo vehicles in the region through a multilateral motor vehicle agreement.Sharma also pointed out that New Delhi has addressed concerns of all Least-Developed Countries (LDCs) of South Asia as all items of their interest are now allowed for import into the country at zero duty. "Many other countries in the region need to reciprocate the policy," he added.
In an oblique reference to Pakistan, Sharma lamented that many nations of the region import substantially from India and 'we do not get trade preference under SAFTA'. However, he said Pakistan had initiated steps to grant most-favoured nation status to India is a positive step that will help move the SAFTA ahead.