Regional trade among South Asian countries can grow to US$44 billion but the potential remains untapped for lack of policy support, a World Bank finding shows at a crucial juncture.
And the lack of integration is caused by bureaucratic tangles as, according to the World Bank, moving a truck from India into Bangladesh requires 55 signatures along the way.
Though a lot of initiatives were planned under the SAARC or the BIMSTEC, at the end of the day, all this failed to take off.
The South Asian Association for Regional Cooperation or SAARC is identified as the least integrated region among dozens of regional blocs in the world as it presently has an intra-regional trade of around 5.0 per cent of total exports compared to 50 per cent in the ASEAN region and 22 per cent in Sub-Saharan Africa.
To drive a truck across the border from India into Bangladesh, 55 signatures and 22 documents are a prerequisite, a senior WB official said, depicting the lack of integration among the South Asian countries.
''And the process takes 138 hours to complete,'' he said about the cumbersome clearing of cross-border trade in a media interview recently.
This highlights poor show of intra- trade of SAARC compared to other regional trade blocs.
Ever since South Asian countries signed on SAFTA deal, its intra-regional trade has been at a very low level as, a World Bank report said, SAARC intra-trade is around 7.0 per cent of the region's total trade.
Under SAPTA usual practice is to negotiate trade concessions on a product-by-product basis and that is why nothing significant has been accomplished through the preferential trading arrangement, save a few minor tariff concessions.
On the other hand, BIMSTEC officials have time and again expressed the hope to operationalise free-trade agreement within the member- countries but it has also been stuck in a quagmire for long.
''Specially, lack of agreement between India and Thailand over duty structure of some products caused the delay,'' an official of the BIMSTEC commented about state of the sub-regional cooperation forum of countries across the Bay of Bengal.
Movement of vehicles through Bangladesh, Bhutan India and Nepal under the BBIN agreement couldn't kick-start either. According to experts the BBIN alone can help boost the national income of Bangladesh by 16.6 per cent. An official of the World Bank recently echoed this view.
Experts say geopolitical issues are also problematic in fostering the regional trade. In the ASEAN realm the inter-country trade is 10 per cent and in the European Union it is 60 per cent because their ''intra-regional harmony is much better than the South Asian region's''.
''The rivalry between Pakistan and India has made the SAARC dormant for years though it could be a vibrant regional platform,'' Jakir Hossain, Professor of Development Studies of Rajshahi University, told the FE.
He feels that the Ukraine war, which triggered tensions among the countries in the West, may be a good opportunity to strengthen the cross-country trade in the South Asian region. ''It is natural when the supply chain suffers, countries look for alternatives and for countries like Bangladesh or India going for more integration in trade and connectivity will be a more feasible option,'' he says.
