Trade Facilitation and Economic Integration in South Asia: Understanding the Regional Perspective

South Asia (SAARC) is widely regarded as one of the least economically integrated regions in the world despite geographical proximity, shared history, and cultural ties. Over the past decade, SAARC has initiated significant efforts to enhance integration through liberalisation, and therefore, intraregional trade surged to around 5% of the region’s total trade. In the purview of these scenarios, this study examines the axioms of trade facilitation and non-tariff barriers and their impact on trade volumes by employing an econometric model, namely the computable general equilibrium (CGE) model based on the Global Trade Analysis Project. This study opens an avenue in a general equilibrium framework that makes predictions more likely by using certain model assumptions, and, therefore, findings suggest focusing on key industries to demonstrate the effectiveness of reforms and their benefits, strengthening SAFTA by reducing both tariff and non-tariff barriers (NTBs), and incorporating investment and trade in services into SAFTA. Based on the findings of the study, the study favours regional integration and suggests policies to achieve the potential of regional cooperation and integration. The key sectors, such as textiles and clothing (T&C), automobiles and parts, and various manufacturing goods, experience significant growth due to trade facilitation improvements. The expansion of T&C exports, in particular, leads to an increase in women’s employment opportunities and is expected to reduce the gender wage disparity in South Asia.