Economic integration woes of South Asia

Economic and trade outcomes have remained persistently stunted because of the hostile political relationship between India and Pakistan

A recent World Bank Report — A Glass Half Full (2018) — says intra-regional trade in South Asia, lowest among all regions in the world, has the potential to increase three times its present levels, and trade between India and Pakistan has the potential to increase from its current insignificant $2 billion to $37 billion. The report thus reiterates a well-known fact that trade in South Asia is far below its potential. Among the many earlier studies on the subject is one by the author (“India’s Global Trade Potential: The Gravity Model Approach”, Global Economic Review, 2006; ICRIER Working Paper