Q. The South Asian Free Trade Area (SAFTA) agreement provides for a “Sensitive List.” Consider the following statements regarding this list in the context of India’s external trade:
1.Products included in the Sensitive List are exempt from the tariff reduction schedule under SAFTA.
2.India’s Sensitive List under SAFTA is the same for both Least Developed Countries (LDCs) and Non-Least Developed Countries (Non-LDCs) within the SAARC region.
3.The purpose of the Sensitive List is to protect the domestic industry and agriculture of the member countries from sudden import surges.
Which of the statements given above is/are correct?
Explanation:
Statement 1: Correct. The Sensitive List is a list of products on which member countries are not required to grant tariff concessions or are subject to a reduced, non-zero tariff cut. This exempts them from the complete tariff liberalisation programme.
Statement 2: Incorrect. India maintains separate Sensitive Lists for SAARC LDCs (like Nepal, Bhutan, Bangladesh, Afghanistan) and Non-LDCs (like Pakistan, Sri Lanka). The list for LDCs is typically much smaller than for Non-LDCs, reflecting the principle of Special and Differential Treatment (S&DT) to promote their trade.
Statement 3: Correct. The primary objective of maintaining a Sensitive List is to provide protection to specific domestic sectors (e.g., local agriculture or infant industries) that might be vulnerable to competition following the full tariff liberalisation under the FTA.
