India's gross domestic product (GDP) could rise up by as much as eight per cent if its northeastern region is fully integrated and the logistical bottlenecks are removed with the neighbouring countries like Bangladesh, Nepal and Bhutan, remarked a senior World Bank official in a virtual event on Wednesday.
Responding to a query regarding India's potential for export and import in the region, the official remarked that currently India only trades one- third of its potential with the South Asia region.
“If India were to trade fully with the South Asia region, India's GDP could be almost eight per cent higher than what it is now. These are huge gains to be made. [eg.] India's exports alone would see an increase of 170 per cent if it were to finalise agreements with Bangladesh. Imports will also grow, but at a slow rate. Overall, it will be a positive net balance for India,” said Auguste Tano Kouame, country director for India, World Bank.
Similarly, the northeastern region will see an increase in its GDP by 11 per cent and a significant increase in its exports as well, if the motor vehicles agreement (MVA) between the countries in the region is operationalised, said Auguste Kouame.
Earlier, Bhutan opted out of the 2015 quadrilateral agreement last year citing environmental concerns.
“As of now, the MVA is being discussed among three countries with the focus on cargo and passenger protocols. Specific test routes have been finalised and they are yielding positive results. There are certain misunderstandings as well regarding the agreement and its necessary to [dispel] them ,” added Cecile Fruman, Director for Regional Integration, South Asia, World Bank.
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Besides, apart from standardising the rules and regulations, the country director also called upon the need to increase cross border investments by both the public and private sector, in a bid to revive the trading culture in the region among the common people.