Regional Trade Dynamics: Opportunities and Challenges in South Asia

Abstract

South Asia, encompassing Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka, remains one of the least economically integrated regions globally. Despite its proximity and shared historical ties, intra-regional trade accounts for less than 5% of the region's total trade, a stark contrast to East Asia's 35% and Europe's 60%. This paper examines the opportunities and challenges inherent in enhancing regional trade dynamics in South Asia. By analyzing trade complementarities, infrastructure deficits, political tensions, and institutional frameworks, the study provides a comprehensive overview of the current landscape. Furthermore, it explores policy recommendations aimed at fostering greater economic integration, emphasizing the need for improved connectivity, harmonized trade policies, and collaborative regional initiatives.