Which of the following statements is correct?

Statement 01: SAARC members signed the South Asian Free Trade (SAFTA) agreement which promised the formation of a free trade zone for South Asia.
Statement 02: SAARC has been a runaway success.

Only Statement 01 is true

The correct answer is Option 3 - Both Statements are correct.

Statement 01: SAARC members signed the South Asian Free Trade (SAFTA) agreement which promised the formation of a free trade zone for South Asia.
Statement 02: SAARC has been a runaway success.

The South Asian Association for Regional Cooperation (SAARC) is a major regional initiative by the South Asian states to evolve cooperation through multilateral means. It began in 1985. Unfortunately, due to persisting political differences, SAARC has not had much success. SAARC members signed the South Asian Free Trade (SAFTA) agreement which promised the formation of a free trade zone for the whole of South Asia. A new chapter of peace and cooperation might evolve in South Asia if all the countries in the region allow free trade across the borders. This is the spirit behind the idea of SAFTA. The Agreement was signed in 2004 and came into effect on 1 January 2006. SAFTA aims at lowering trade tariffs. But some of our neighbours fear that SAFTA is a way for India to ‘invade’ their markets and to influence their societies and politics through commercial ventures and a commercial presence in their countries. India thinks that there are real economic benefits for all from SAFTA and that a region that trades more freely will be able to cooperate better on political issues. Some in India think that SAFTA is not worth the trouble since India already has bilateral agreements with Bhutan, Nepal and Sri Lanka.