ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Export Performance of South Asia

Trade Potential, Supply Capacity, and Global Market Access

South Asia’s trade structure, trade potential, supply capacity, and global market access from 1991 to 2017 are examined through empirical research using trade indexes and gravity econometric estimation. The results broadly reflect a stagnant position of South Asia in the merchandised trade structure. South Asian economies have a comparative advantage in some sectors, which are common for them, and these became their competitive export domain. Depending on their relationship, rivalry may be beneficial. India has the highest export diversification, among other criteria, and must refocus on economic integration. The export potential exists while market access and supply capacity remain intact. As South Asia is a high-consumption economy, domestic issues should be handled tactfully and regional integration must be emphasised.

The authors would like to express their gratitude to the anonymous referee who provided valuable feedback on an earlier draft of this paper. The views expressed are those of the authors and not of the institution(s) they work for.

The South Asia regional block is a vital trade block from an economic and demographic point of view. It has a long history of trade and communication with different parts of the world. The market-driven development and a continuous reform process have transformed South Asia into a robust economic region and has been widely recognised as an emerging market economy.

The member countries of South Asia have institutionalised a regional cooperation framework known as the South Asian Association for Regional Cooperation (SAARC). Under this framework, they have constituted the South Asia Free Trade Area (SAFTA). The objective was to form a customs union by 2015 and an economic union by 2020. Neither of these has been achieved so far. Political backlash is the main reason behind this failure as regional cooperation primarily depends on peace and tranquility, stability, and, more importantly, mutual trust among the member states (Nag 2006; Armstrong 2011).

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Updated On : 8th Jul, 2022
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