New Delhi: India on August 12 said it was firmly committed to the establishment of a Free Trade Area in South Asia but emphasised that a review of several tariff and non-tariff barriers was necessary to augment formal trade in the region.

"We are firmly committed towards the establishment of a Free Trade Area in South Asia. The region has a large potential common market and a large skilled low-wage workforce," Minister of State for External Affairs Digvijay Singh said in New Delhi.

Addressing the first Annual meeting of the South Asia Business Forum, he said there were several tariff and non-tariff barriers to trade in the region, which should be reviewed to augment formal trade within the region.

Stating that the region abounds in bio-diversity, forest resources, oil, natural gas, coal and hydro-power, Singh said countries should identify projects which bring about a synergy in the region and added that policy makers and private sector should work towards an action plan for achieving this.

Speaking on the occasion, Commerce Secretary Dipak Chatterjee referred to the significant levels of informal border trade in the sub-region and said, "Though tariff levels do not appear to be an important determinant for the informal trade, non-tariff barriers and high transaction cost appear to be more important factors".

He said cross border movement of vehicles through more liberal transit arrangements would be a definite measure not only to reduce informal trade but to foster greater sub- regional cooperation.

PTI