SAARC members signed the South Asian free Trade Agreement (SAFTA). The Agreement was signed in 2004 and came into effect on:

1 January 2006

The correct answer is Option 2 - 1 January 2006

The South Asian Free Trade Area (SAFTA) is an agreement among the South Asian Association for Regional Cooperation (SAARC) member countries to promote regional trade and economic cooperation.
The SAFTA Agreement was signed in 2004 and came into effect on 1 January 2006. SAFTA aims at lowering trade tariffs.