Title: A study on India’s trade relationship with SAARC countries

Authors: Ratna Vadra

Addresses: Department of Economic Environment and Strategy and International Business, Institute of Management Technology, Raj Nagar, P.O. Box No. 137, Ghaziabad 201 001, Uttar Pradesh, India

Abstract: India occupies 70% of the SAARC region, both geographically and economically, and the remaining six nations of the SAARC borders only with India and not with each other. As the biggest, and the most industrialised trading partner among the SAARC countries, India has to recognise that a special responsibility devolves on her and take a lead in making the Regional Economic Cooperation a reality in South Asia. The present study reveals that there are enormous opportunities for forging closer economic relations among SAARC countries. These opportunities could be fully utilised through the twin processes of trade liberalisation and industrial restructuring which are complementary to each other. The SAARC Preferential Trade Arrangement (SAPTA) is the first step in trade liberalisation. However, the scope of SAPTA has to be sufficiently widened in order to derive substantial benefits from preferential trading agreements. It is suggested that the SAARC countries adopt a combined approach for tariff elimination, tariff reduction and preferential or concessional tariffs. This process will help in moving quickly towards the creation of a Free Trade Area in the SAARC region. This paper studies the India’s trade with SAARC countries during the period 1999–2000 to 2009–2010 and examine whether SAPTA is successful in increasing India’s intra-regional trade.

Keywords: trade liberalisation; regionalism; South Asia; trade expansion; SAARC countries; India; regional economic cooperation; tariff elimination; tariff reduction; preferential tariffs; concessional tariffs; Free Trade Areas.

DOI: 10.1504/IJICBM.2012.044016

International Journal of Indian Culture and Business Management, 2012 Vol.5 No.1, pp.15 - 36

Published online: 20 Dec 2014 *

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