SANEI: Completed Studies: Abstract

Informal Trade in the SAARC Region

The proposed study, a sequence to the earlier one, attempts at widening and deepening the analysis of informal trade in South Asia both in terms of preparing estimates of informal trade in the region and in understanding the institutional mechanism of informal trade. The gaps are with respect to:

Estimates of India's informal trade with Nepal and Sri
Lanka in terms of the volume, value and structure of
informal trade, and
Institutional mechanisms supporting informal trade
between India and Sri Lanka.

In preparing estimates of informal trade, the Delphi technique would be used in the first stage for selection of the sampling frame and then to obtain the estimates. The institutional aspects of India's informal trade with Sri Lanka will be explored along the lines of the earlier analysis for Bangladesh and Nepal.

The basic framework of the proposed study would be drawn from the literature on new institutional economics focussing on issues of enforcement mechanisms including aspects of risk and information on informal trading. In addition, it would be necessary to examine the nature of differences between participants in formal and informal trade in terms of institutional arrangements and in terms of various firm attributes. The implications of regional trade agreements and bilateral free trade agreements on informal trade would also need to be analysed, including the possible impacts of the recently concluded free trade agreement between Sri Lanka and India.



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