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India's Role in South Asia Trade and Investment Integration

Publication | July 2009
India's Role in South Asia Trade and Investment Integration

With its dominant position, India will have to adopt asymmetrical responsibilities to promote regional economic cooperation. Other governments will also have to respond positively for successful regional integration in South Asia.

Recent developments in South Asian countries, especially the re-emergence of democratic governments, new growth momentum despite the global economic downturn and greater openness, warrant a fresh look at the region's prospects for economic integration. On the basis of a thorough review of the literature on potential and prospects of regional integration in South Asia and after examining the trends in intra-SAARC trade and investment flows, this paper finds that the progress in regional cooperation has been far short of potential. The paper, therefore, focuses on the "real impediments" to regional integration and on that basis makes a set of policy oriented recommendations for furthering deeper regional integration in South Asia. It also emphasizes that given its dominant size, human resources, and aspirations for a global role, India will have to take on a disproportionately larger responsibility for promoting regional cooperation in South Asia. However, regional integration will not be achieved by India's unilateral actions alone. Neighboring governments will have to respond positively to Indian initiatives for successful regional integration in South Asia.

Contents 

  • Introduction
  • The Case for Trade and Investment Integration in South Asia
  • Trade and Investment Patterns in South Asia
  • Progress in Policy-Led Initiatives and Challenges for South Asia Trade and Investment Integration
  • Prospects and Strategic Direction in South Asian Regional Integration
  • Conclusion
  • Appendixes