Consider the following statements: I. > The agreement on South Asian Free Trade Area (SAFTA) came into effect from Dec. 1, 2005. II. > As per SAFTA agreement terms, India, Pakistan and Sri Lanka have to decrease their custom duties to the level of 0 to 5

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Q: 118 (IAS/2006)
Consider the following statements:
I. The agreement on South Asian Free Trade Area (SAFTA) came into effect from Dec. 1, 2005.
II. As per SAFTA agreement terms, India, Pakistan and Sri Lanka have to decrease their custom duties to the level of 0 to 5 per cent by the year 2013.
Which of the statements given above is/are correct?

question_subject: 

Current Affairs

question_exam: 

IAS

stats: 

0,3,29,13,7,9,3

keywords: 

{'safta agreement terms': [0, 0, 1, 0], 'safta': [0, 0, 0, 1], 'agreement': [1, 0, 0, 0], 'south asian free trade area': [0, 0, 1, 1], 'india': [8, 1, 7, 13], 'custom duties': [0, 0, 2, 0], 'pakistan': [3, 0, 1, 2], 'per cent': [0, 1, 0, 0]}

Option 1 states that the South Asian Free Trade Area (SAFTA) agreement came into effect on Dec. 1, 2005. This is incorrect. SAFTA actually came into effect on January 1, 2006.

Option 2 proposes that according to SAFTA, India, Pakistan, and Sri Lanka were required to reduce their custom duties to between 0 and 5% by 2013. This is also false. The SAFTA agreement mandates that the Least Developed Countries (LDCs) reduce their custom duties to 0-5% within three years after the agreement was signed, however it grants a six-year period for Non-LDCs. India, Pakistan, and Sri Lanka are considered Non-LDCs, so they have had until 2012, not 2013, to meet this requirement.

As such, option 4, "Neither I nor II", is indeed the correct answer in this context as both statements I and II contain inaccuracies.

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