Assessing the trade–connectivity linkages in South Asia in post-pandemic period: an empirical investigation

The study unravels the relationship between trade and connectivity and presents a narrative to re-energise the South Asian regional economic integration in the post-pandemic period. In addition, the study also examines the effect on conflicts and institutional factors in South Asian trade. The study uses the bilateral gravity analysis in 2SLS (Two-Stage Least Squares) framework to address the endogeneity issues. The study finds that South Asia may gain enormously if they reduce the conflicts across the border and secure improvement in both hard and soft infrastructure. Given that the trade is a dynamic concept, connectivity disruption costs cause havoc to the region, which then promotes dis-integration. Facilitating business beyond the border in post-pandemic requires an enhanced trade facilitation and connectivity in the region. The renewed and shared agenda of the South Asian regional cooperation in post-pandemic should, therefore, aim to reduce both intra- and inter- regional trade facilitation gaps as well as to expand the connectivity. The process of South Asian regional integration has to contribute to narrowing the gaps by providing resources for the development of trade infrastructure. Therefore, South Asia has to enhance its own connectivity and trade facilitation arrangement to take forward the agenda of South Asian integration.