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Prospects for a South Asian free trade agreement: problems and challenges


  • Jain, Subhash C.


South Asia is a huge area with a population of over 1.2 billion people. Yet, trade between nations in this region is meager. A South Asian Free Trade Agreement should help in boosting trade in the region. Such an agreement will be mutually beneficial for all the South Asian nations. Unfortunately, the chronic enmity between India and Pakistan makes the trade agreement difficult. In spite of this, there are hopeful signs that some sort of trade agreement in South Asia may occur in the beginning of the next century. This optimism is based on the fact that seven nations in the region (Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka) have entered into a Preferential Trade Arrangement called SAPTA which became operational in December 1995. SAPTA may lead to a fully-fledged trade agreement once the nations realize the benefits of market cooperation. As a large nation in the region, India must take the lead if ever South Asian Free Trade Agreement were to become a reality.

Suggested Citation

  • Jain, Subhash C., 1999. "Prospects for a South Asian free trade agreement: problems and challenges," International Business Review, Elsevier, vol. 8(4), pages 399-419, August.
  • Handle: RePEc:eee:iburev:v:8:y:1999:i:4:p:399-419

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    Cited by:

    1. Perera, Anil & Ralston, Deborah & Wickramanayake, J., 2014. "Impact of off-balance sheet banking on the bank lending channel of monetary transmission: Evidence from South Asia," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 29(C), pages 195-216.
    2. Devanthran, Haritharan, 2009. "Interdependence of SAARC-7 countries: an empirical study of business cycles," MPRA Paper 32798, University Library of Munich, Germany.


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