South Asian countries must remove non-tariff and para-tariff barriers and improve connectivity to boost regional trade, ministers and economists said yesterday.
“We must now revive old linkages in the region to help bring a dramatic change to the entire region,” Commerce Minister Tofail Ahmed said.
“So all non-tariff and para-tariff barriers must be removed.”
Ahmed spoke at a plenary session, 'the Power of 1.6 billion: A Blueprint for Prosperity', during the South Asia Economic Conclave in New Delhi.
At present, trade among the Saarc countries is just 5 percent of global trade by the members, according to the Confederation of Indian Industry (CII).
In comparison, the EU countries do twice as much internal trade (over $800 billion in 2013).
With deeper intra-regional cooperation, South Asia can increase trade to $100 billion in five years from $28 billion now, said Sanjay Kathuria, lead economist for the World Bank's South Asia.
“South Asia was not always disconnected, but corridors today are fragmented, deterring trade.”
Regional cooperation will result in a 250 percent hike in intra-regional trade, he said
Kathuria said countries would have to position South Asia as a gateway between East and Central Asia and the Middle East, create a fully functional South Asia Free Trade Area, tackle non-tariff barriers and encourage private and intra-regional investment.
Bhutan's Economic Affairs Minister Lyonpo Norbu Wangchuk said there is huge hydropower potential in his country from which both Bangladesh and India can benefit.
But agreements on the issue will have to be a win-win situation for all countries, he said.
Nirmala Sitharaman, Indian minister for commerce and industry, Chandrajit Banerjee, director general of the CII, Sunil Bahadur Thapa, commerce minister of Nepal, Abdulla Jihad, finance minister of the Maldives, and C Raja Mohan, fellow of Observer Research Foundation, also spoke.
The CII organised the three-day event with support from the Indian government and the WB, aiming to achieve inclusive growth through deeper economic integration in South Asia. The event ends today.