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The Political Economy of Trade Integration in South Asia: The Role of India

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  • Dushni Weerakoon

Abstract

The South Asian regional trade integration process to date has generated only limited enthusiasm. It suffers from significant shortcomings, primarily on account of a very cautious approach adopted to achieve the ultimate objective of ‘free trade’ within the region. In turn, this has led to a fragmentation of the integration process, with some of the partners of the South Asian Association for Regional Cooperation (SAARC) bloc opting for a speedier and more liberal bilateral process with India. India’s engagement remains the critical feature as the single most important trading partner for almost all the other South Asian countries. However, the dynamics of Indian economic integration initiatives too have been changing rapidly, whereby it is looking increasingly to strengthen its economic relations with the wider Asian region. In this context, the question of India’s willingness to give leadership to carry the rest of South Asia as the bridge that connects the region to East Asia needs to be examined. The current evidence suggests that India has attempted to do so via a host of bilateral and regional arrangements, but that the divergences in strategic interests amongst SAARC countries has left Pakistan on the margins of an evolving scheme of overlapping trade initiatives in South Asia. Thus, while something approximating ‘free trade’ in South Asia appears to be taking shape, it is unlikely to take the form of an inclusive South Asian regional integration process envisaged by SAARC.

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  • Dushni Weerakoon, 2010. "The Political Economy of Trade Integration in South Asia: The Role of India," The World Economy, Wiley Blackwell, vol. 33(7), pages 916-927, July.
    • Handle: RePEc:bla:worlde:v:33:y:2010:i:7:p:916-927
    DOI: 10.1111/j.1467-9701.2009.01246.x
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    1. Jaime De Melo & Arvind Panagariya & Dani Rodrik, 2015. "The New Regionalism: A Country Perspective," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 14, pages 323-357, World Scientific Publishing Co. Pte. Ltd..
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    2. Zouheir El-Sahli, 2023. "The Partial and General Equilibrium Effects of the Greater Arab Free Trade Agreement," The International Trade Journal, Taylor & Francis Journals, vol. 37(2), pages 185-199, March.
    3. K.N. Harilal, 2012. "Regional Route to Multilateralism: Proliferation of PTAs among Developing Countries and WTO Negotiations," Millennial Asia, , vol. 3(1), pages 1-22, January.
    4. Shahid Ahmed & Sushil Kumar, 2014. "Impact of Sensitive Lists under SAFTA: Quantitative Assessment using a Partial Equilibrium Modeling," 2014 Papers pah96, Job Market Papers.
    5. Nisha Taneja & Saon Ray & Neetika Kaushal & Devjit Roy Chowdhury & Ratnakar Adhikari & Puspa Sharma & Paras Kharel, 2012. "Pruning India’s sensitive lists under SAFTA," Regional Economic Integration: Challenges for South Asia during turbulent times (Edited volume), in: Saman Kelegama (ed.), Regional Economic Integration : Challenges for South Asia during turbulent times (Edited volume), edition 1, volume 1, chapter 3, pages 39-54, South Asia Watch on Trade, Economics and Environment.
    6. Md. Abdur Rahman Forhad, 2014. "How many currencies in Saarc countries? a multivariate structural var approach," Journal of Developing Areas, Tennessee State University, College of Business, vol. 48(4), pages 265-286, October-D.
    7. Namra Awais, 2016. "Was the SAFTA (Phase II) Revision Successful? A Case Study of Bangladesh’s RMG Exports to India," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 21(1), pages 151-182, Jan-June.
    8. Biru Paksha Paul, 2013. "Output Relationships in South Asia: Are Bangladesh and India Different from Neighbours?," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 14(1), pages 35-57, March.
    9. Asanka Wijesinghe & Chathurrdhika Yogarajah, 2022. "Trade Policy Impact on Global Value Chain Participation of the South Asian Countries," Journal of Asian Economic Integration, , vol. 4(1), pages 24-48, April.

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