New Delhi, March 29 (IANS) India should give duty-free market access to its smaller and less developed neighbours like Bangladesh and Maldives while Pakistan needs to implement the South Asian Free Trade Area (SAFTA) agreement, top industry body Assocham said here Thursday.

"Indian industry would fully support the government if it comes out with any package for our smaller neighbours since the size of our industry and economy is large enough to accommodate the requirements of these countries," Venugopal N. Dhoot, president of Associated Chambers of Commerce and Industry, said in a statement.

India has agreed to review non-tariff barriers, if any, and give better access to its market as part of the SAFTA, Dhoot said ahead of the two-day South Asian Association for Regional Cooperation (SAARC) summit that begins here Tuesday.

"Our economy, which is expected to reach a size of a trillion dollar by March 2008, should share the fruits of growth with the smaller members of the SAARC," Dhoot stressed.

"Pakistan's reluctance to grant most favoured nation (MFN) status to India, even under the recently ratified SAFTA, is another issue that warrants an immediate solution," he said.

Despite the denial of MFN status, India's exports to Pakistan are steadily growing. New Delhi is, however, not happy with Islamabad's attitude towards SAFTA and wants the latter to accord reciprocal concessions without any India-specific restrictions.

According to Assocham, the SAARC region accounted for a mere 2.5 per cent of India's total foreign trade in April-October 2006. Imports from the SAARC countries amounted to only less than a billion dollar, contributing just 0.82 per cent to the total imports of 104 billion dollars.