South Asia Free Trade Area (SAFTA)

The South Asia Free Trade Area entered into force on January 1, 2006. It provides for tariff elimination for most energy products, including: 

• Mechanical equipment including pumps, appliances, and other advanced machinery; 
• Electric accumulators, transformers, capacitors, batteries; Motor vehicles; 
• Semiconductors devices and photovoltaic cells.

Rules of origin apply, by which “Minerals and other naturally occurring substances” are considered wholly obtained or produced in the originating territory of the relevant party. All other goods are considered originating from one of the signatory countries provided:

i)Non-originating materials used in the production of the good have undergone a tariff reclassification under the tariff sub-heading level of the Harmonized System; or,

ii) The qualifying value content of the good does not exceed more than 10% of the FOB value.

SAFTA also recognises special and differential treatment for LDCs- they benefit from tariff elimination for a larger number of products, and from less stringent rules of origin. 

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