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Trade Facilitation for Efficiency & Regional Integration in South Asia: The Case of Pakistan and India
By: SDPI

Year: 2008-09

Team Members: Shakeel Ahmed

Background:
Many studies analyze Pakistan’s trade with South Asia. A common theme is the existence of a large untapped trade potential between Pakistan and its South Asian neighbours, particularly India. However, despite the indicated complementarities; trade between SAARC countries has remained low. Intra-regional trade in South Asia accounts for a mere 4 to 5 percent of the SAARC countries’ total exports worldwide (FPCCI 2003). Several studies demonstrate that reducing trade barriers and instituting various trade facilitation measures would rather increase trade than divert it. Sector based analyses also confirm the significant losses incurred by South Asian nations, in particular Pakistan, by refusing to engage in increased trade with neighboring countries (Katti, 1999). These foregone trade losses occur primarily in tea, sugar, rice, pharmaceuticals, cement, tires and passenger vehicles. A supply chain analysis of the sugar and wheat sectors by Burki et al (2006) illustrates that trade in these items between India and Pakistan could be sustainably enhanced in the absence of trade barriers.

With this changing trend in trade between the two countries trade and transport issues have drawn immense attention of policy makers, academics and industry representatives.

Objective:
The trade facilitation study, which is currently underway, also examines the following impediments to trade between India and Pakistan:

  • The nature of routes and modes
  • Transport (rail, road, sea and air) and other infrastructure
  • Customs
  • Standards
  • Trade Policy
  • Business Mobility
  • Transaction Costs (Time and Money)

For More Information, Contact the Following Person:


Shakeel Ahmed Ramay