Bangladesh will have to allow for next six months imports other than items under its sensitive list from the contracting states by reducing 2.5 per cent tariff from the existing rates. The highest rate of customs duty in Bangladesh is 25 per cent.

India, Pakistan and Sri Lanka will reduce their tariff for Bangladesh and other contracting states by 10 per cent from their existing rates for next six months as per the negotiation concluded at the maiden Safta Ministerial Council here on April 20, 2006.

Under the Safta roadmap, the developing members will bring down their tariffs to zero-five per cent in three years while the Saarc LDCs like Bangladesh will do it in 10 years.

"The tariff-cuts take effect as per schedule," said an official in the National Board of Revenue (NBR).

The NBR official could not inform whether other contracting states issued the order, but he said yesterday that at least no problems have been notified yet. "So, the agreement becomes operational tomorrow."

Local businesses, however, apprehended that non-tariff (NTB) and para-tariff (PTB) barriers would be an obstacle for immediate benefits.

They said it would not yield the desired results without removing the NTBs and PTBs.

"Even zero tariffs will not help achieve what we want from the Safta agreement," said a leading businessman.

The Safta Ministerial Council at their first meeting, however, formed a subgroup on the NTBs and PTBs to remove the trade barriers as soon as possible.

It would review the existing NTBs and PTBs from time to time, identify the barriers and take steps to remove the snags through bilateral and regional negotiations.

Commerce Ministry officials said the sub-group already met in their first meeting in Kathmandu on May 16-17, finalising the terms of reference of the group.