South Asian business leaders have called for establishing genuine free trade in the region, local media reported on Wednesday.

According to The Kathmandu Post, on the eve of the 16th summit of the South Asian Association for Regional Cooperation (SAARC) slated to be held in the Bhutanese capital Thimphu on April 28-29, they emphasized that the subcontinent should come out of politics simultaneously by resolving political differences and expanding economic integration.

Speaking at a roundtable meeting held here Tuesday on the South Asian Free Trade Area (SAFTA) which was organized to identify bottlenecks at various levels and operationalize SAFTA's issues and options, business leaders said that economic cooperation among the member countries would play a decisive role in diffusing political tension. "Since the signing of SAFTA in 2004, SAARC has made some improvements with regard to regional trade integration. However, intra-regional trade at present remains close to only 5 percent," said Kush Kumar Joshi, president of the Federation of Nepalese Chambers of Commerce and Industry.

He said that inclusion of tradable commodities in the sensitive list, non-tariff barriers, high logistic costs and lack of intra- SAARC investment had hampered rapid expansion of intra-regional trade.

He said that it was of utmost urgency to address specific issues impeding trade and investment in the region.

The two-day roundtable meeting will focus on cost and cooperation in South Asia, the impact of barriers on intra-SAARC trade and creating synergy for regional integration.

SAARC Secretary General Sheel Kant Sharma said that the volume of South Asian trade was not satisfactory. He added that intra- regional trade might not grow at a rapid rate due to high transaction costs. Removal of non-tariff and para-tariff barriers, establishment of South Asian regional standards, product certification and implementation of trade facilitation will be vital to expand the trade volume.

Business leaders said that increasing intra-regional trade depended on the willingness of India to play a leading role, flexibility in the process of trade liberalization, reduction of high transaction costs and capacity and willingness to be part of global production structures.