The Indian cabinet approved on Thursday the introduction of a pact with its neighbours from Jan. 1 to promote free trade and economic ties in South Asia, home to nearly one-fifth of the world's population. Commerce Minister Kamal Nath said India would initially cut customs duties by five percent for goods imported from Pakistan, Sri Lanka, Bangladesh, Maldives and Nepal after the launch of the South Asia Free Trade Area (SAFTA) agreement. Although some member countries are yet to ratify the pact, Indian officials said New Delhi would go ahead with implementing the agreement from Jan. 1 and was hopeful its neighbours would follow suit. "This is a first major step for a free-trade agreement with the neighbours," Nath told reporters after a cabinet meeting, according to a report of Reuters.
