Hailing Afghanistan’s entry into the South Asian Association for Regional Cooperation (SAARC), an Indian official complained about Pakistan’s refusal to implement South Asian Free Trade Agreement (SAFTA) which impeded regional trade. External Affairs Minister Pranab Mukherjee visited Kabul and invited President Hamid Karzai for the 14th SAARC summit in New Delhi in April as the 8th member of the organization.
Mukherjee said that India hoped that Afghanistan’s entry into the SAFTA system will provide India access to Central Asia but the “operationalisation (sic)” has stalled “as Pakistan never agreed to free trade” but also expressed hope that the issue can be sorted out soon. The SAFTA agreement came into force nearly eight months ago but has not been effective because of Islamabad’s insistence on tying it to the resolution of the vexed Kashmir issue and also an unreasonable insistence on working off only the 1000-odd “positive list.” New Delhi had offered Islamabad the option of reduced tariff but has not been reciprocated. Islamabad also refuses to allow transit facility for Indian to Afghanistan or Central Asia.
Mukherjee raised this issue when he visited Islamabad recently and promised to bring it up again at the SAARC Council of Ministers in February. India had already complained to the Council of Ministers at Dhaka during the previous meeting which promised to review the item during their next meeting in February. Displaying frustration at the intransigence of Islamabad on tariff and transit issue, Mukherjee insisted that “Pakistan should respond” and “in action.”
India had been a major sponsor for Afghanistan’s inclusion into the SAARC system, left out only because of internal turmoil and the rule of the extremist Taliban. Mukherjee said that Kabul’s inclusion will “strengthen the SAARC process.” During his visit, India committed to the development of Afghanistan and promised an increased aid amount from USD 650 million to USD 750 million. India has also promised to establish a 250 kilowatt transmission line from Northern Afghanistan to Kabul and build a dam for the Salam power project. The Indian Border Road Organization (a unit of the Army) is already constructing a 218 kilometer road from Zaranj to Delaram (in Iran).