SANEI: Completed Studies: Abstract

A Plan to Strengthen Regional Trade Cooperation in South Asia

Recent decades have witnessed a proliferation of regional integration schemes around the world involving both developed and developing countries alike. In the context of developing economies, the promotion of intra-regional trade - a key element of regional economic cooperation and integration schemes - is increasingly being viewed as an important instrument for expediting the process of economic development, mainly because of the problems in global market access and the higher transaction costs of producing for the world market.

It is widely believed that the expansion of trade on a regional level yields gains in production specialisation, efficiency and improved quality of exports, all of which benefit the countries participating in the regional co-operation effort. In view of these considerations, there has been a growing interest in promoting intra-regional trade in South Asia as well.

Against this backdrop, the objective of this study has been to examine various aspects of intra-regional trade in South Asia with a view to highlighting the problems in and prospects of strengthening trade and economic relations within the region.

After an overview of the South Asian economies, the study analyses the pattern of revealed comparative advantage and the degree of trade complementarity in South Asia. Intra-industry trade in the South Asian region is also examined. The study highlights the factors that have inhibited intra-regional trade and suggests measures to strengthen trade and economic relations in South Asia.

Download in pdf format