The multinationals
operating in SAARC countries are unlikely to take undue advantage
of concessional duty facility to flood the Indian market with
their goods since tariff preferences are subject to Rules of
Origin under the SAPTA Agreement. To qualify for preferential
treatment under SAPTA, goods must fulfil the following Rules
of Origin prescribed in the Agreement:
- For developing member countries
of SAARC, value-addition/ local content in the exporting country
should be 40%.
- In case a product is processed
in more than one member country of SAARC, the cumulative value-addition/local
content requirement is 50%.
- There is a relaxation of 10
per cent in these criteria for the least developed SAARC countries,
namely, Bangladesh, Bhutan, Maldives and Nepal.
The Agreement establishing
the SAARC Preferential Trading Arrangement (SAPTA) was signed
on 11th April, 1993 in Dhaka by all seven SAARC countries
namely, India, Pakistan, Nepal, Bhutan, Bangladesh, Sri Lanka
and the Maldives. SAPTA provides a framework for the exchange
of tariff concessions with a view to promoting trade and economic
cooperation among the SAARC member countries.
This was indicated
by Shri Rajiv Pratap Rudy, Minister of State for Commerce &
Industry, in a written reply in the Rajya Sabha today.
