Towards Free Trade in South Asia: The Impact of Regional Trade Policies

Abstract

The South Asian region, comprising seven countries - India, Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan and the Maldives - houses 22 per cent of the world's population. The region has a long history of inward-looking policies in relation to international trade. Apart from Sri Lanka, which initiated progressive liberalisation policies in the 1970s, the other South Asian countries remained closed economies until the late 1980s. However, the 1990s had seen a change in the policy directions for these countries towards trade liberalisation. South Asia has launched several regional and bilateral initiatives to increase trade since the formation of the South Asian Association for Regional Cooperation (SAARC) in 1985. One of SAARC's significant achievements has been the South Asian Preferential Trading Arrangements (SAPTA), which was signed in 1993 and implemented in 1995.