India lags China in South Asian trade despite Free Trade Agreements

In the last two decades, China has established itself as a major trade partner of the South Asian nations. Beyond Pakistan, China has made inroads into South Asia by becoming Bangladesh’s top trading partner in 2015, and bolstering trade and investment with Nepal, Afghanistan, the Maldives, and Sri Lanka. This mainly reflects the region’s strategic importance for China’s Belt and Road Initiative (BRI).

Until 2005, India and China were close in their overall trade volume with South Asia. However, after 2005, China consistently increased its trade with South Asia, barring a slight dip in 2009 because of the global financial