Indian Commerce and Industry Minister Kamal Nath, who is in Brussels to attend the G-90 Summit of African-Caribbean-ACP (ACP) countries, made this announcement after receiving a message from Kathmandu where the Committee of Experts on Safta (South Asian Free Trade Area) deliberated on the modalities of the agreement.

They met to resolve the outstanding issues including compensation of revenue loss to least developed countries, on Safta to complete the negotiations as agreed upon in the Saarc Summit in Dhaka last month.

Safta signed at the Islamabad Saarc Summit in 2004 is to be fully operational from 2016.

"Implementation of Safta will further strengthen our trade relations with Saarc countries," Nath said welcoming the finalisation of agreement according to an official release.

Under Article 7 of Safta, a phased tariff liberalisation programme from the date of its coming into force, is envisaged. In first two years, non-LDCs (non-Least Developed Contracting States) will bring down tariffs to 20%, while LDCs will them down to 30%. Non-LDCs will then bring down tariffs from 20% to 0-5% in five years, Sri Lanka (which a non-LDCs) in six years and LDCs (from 30% to 0-5%) in eight years. Moreover, non-LDCs will reduce their tariffs for LDC products to 0-5% in three years. This tariff liberalisation would not be applicable to the tariff lines included in the Sensitive Lists to be incorporated in this Agreement as an integral part.