South Asian Free Trade Area

international agreement

Also known as: SAFTA

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Last updated

July 20, 2026

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The South Asian Free Trade Area (SAFTA) is an agreement established by the South Asian Association for Regional Cooperation (SAARC) in 2004, becoming operational in 2006. Its goal was to promote intraregional trade among SAARC member states: Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, and Sri Lanka.

However, SAFTA has seen limited success compared to similar agreements like the ASEAN Free Trade Area (AFTA). Intraregional trade in South Asia has remained low, hovering around 3% of global imports and 6-7% of global exports. This lack of progress is largely attributed to political tensions between member states, particularly between India and Pakistan, which have hindered effective cooperation and the implementation of trade agreements.1

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South Asian Association for Regional Cooperation
Initiatives and issues
The South Asian Free Trade Area (SAFTA), established by SAARC in 2004 and operational since 2006, has achieved little progress, especially when compared with the ASEAN Free Trade Area (AFTA). Within ASEAN, trade conducted between member countries grew significantly from 1992 to 2017. Indeed, intraregional imports…
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The South Asian Free Trade Area (SAFTA), established by SAARC in 2004 and operational since 2006, has achieved little progress, especially when compared with the ASEAN Free Trade Area (AFTA). Within ASEAN, trade conducted between member countries grew significantly from 1992 to 2017. Indeed, intraregional imports…
Read More