[11] Anderson and A. Ayres, “Economics of Influence: China and India in South Asia,” Expert Brief by Council on Foreign Relations, www.cfr.org/expert-brief/economics-influence-china-and-india-south-asia. This political letter provides an overview of India`s trade trends with its neighbours to determine the current state of trade links. A comparison with China was also made given its growing presence in the neighbourhood since 2005. On the basis of the analysis, the letter concludes with policy recommendations to promote better intra-regional trade. Despite the increase in trade, India`s trade with its neighbourhood remained roughly between 1.7% and 3.8% of world trade. Between 1988 and 1996, the country`s share of trade doubled as a result of an increase in the volume of trade and the value of trade. This could be attributed to economic liberalization in Bangladesh, India, Nepal, Pakistan and Sri Lanka in the 1990s. [7] Gravitational equations have also been used to measure unsured trade barriers, to distinguish between theoretical trade models, and to analyze the effects of trade policy (ex-post or ex-ante).11 The latter has been criticized and refined (e.g.B. One of the most important is that, for the analysis of the gravitational equation to be appropriate, it must be considered (or “condition”) that the political changes envisaged do not alter the fundamental relationship between the masses of countries and their trade flows12 Given the relatively small size of South Asian countries in world markets, such an assumption does not appear to pose a problem for the scenarios envisaged. In summary, the general approach to balance provides an opportunity to answer a number of broader questions, but requires data that is not readily available to some of the countries we are interested in.13 Although the assessment of the benefits and limitations of each methodology goes beyond the scope of this document, it can be argued that they are complementary and not replaced.14 The purpose of SAFTA is to promote and improve common contracts between countries such as medium- and long-term contracts. State-managed trade contracts, the supply and import insurance of certain products, etc.

This is an agreement on tariff concessions such as national customs concessions and non-tariff concessions Despite these agreements, trade in the neighbourhood has remained well below its potential. This is an example of the fact that agreements alone are not enough to facilitate trade if trade barriers are not addressed holistically. The existence of paratarifs, high logistical costs, inadequate infrastructure and continued informal trade combined with other non-tariff barriers (NB) are the main reasons for India`s weak intra-regional trade in the neighbourhood. As a result, the cost of trade in South Asia remains unusually high. [8] The SEA called on the government to fill a gap in the South Asian Regional Free Trade Pact that was used to circumvent tariffs through imports of palm oil and soybeans from Nepal and Bangladesh.