SANEI: Completed Studies: Abstract

Trade Potentials of South Asian Economies Under The New Global Trade Regime: The Role of Some Non-price Factors (A Case Study of India, Bangladesh and Sri Lanka)

South Asian Economies are yet to emerge as a major trading force in the world economy. In spite of following trade liberalization for quite some time, most of the South Asian economies are still lagging far behind as far as exports in the world market are considered. The present project tries to highlight two major impediments creating hurdles to vibrant international trade in this region.

One is the existence of quite significant amount of mis-invoicing activities in international trade in South Asian countries, highlighting the distortions in official data consequent upon Trade and Exchange Rate restrictions in the region. The other is the concentration of both low quality and high pollution intensive goods, along with bad infrastructure in this region as the countries have similar types of factor endowment ratios. This cuts the competitive edge of the region as a whole in the global trading, especially in this regime of dwindling quotas and tariffs but strong standards.

An effort will be made in this project to estimate the volume of mis-invoiced trade for some countries of South Asia, namely India, Bangladesh and Sri Lanka, with regulation free economies of Europe, USA, Japan etc. in important traded commodities taking partner countries data. This will help to create the correct baseline picture of trade in important commodities for these countries.

Then, taking three significant non-price factors, namely, an index of infrastructure development, the proportion of ISO 9000+ goods and the pollution abatement costs of industries, the RCA and complementarity indices will be reconstructed. Based on the historical performance of these and some competing countries, who have already scored highly in trade, some projections will be made as to the roles of these non-price factors in enhancing the trade potentials of India, Bangladesh and Sri Lanka.



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