Dr Suman Sahai WHEF2013 Forum

WHEF 2013 @ Bangkok : Strengthening Economy, Shaping Future

WORLD HINDU ECONOMIC FORUM

Trade Barriers in South Asia

Suman SahaiChairperson



Trade Barriers in South Asia

“Reducing regional trade barriers could result in a 17% increase in GDP for Bangladesh and Sri Lanka, a 15% increase for India, & a 5% increase for Pakistan by 2020” -Isabel Guerrero

• Regional borders impede S Asia’s economic growth.• Only two borders – Afghanistan/Pakistan & India/Nepal – are open to trucks. • Mountains of paperwork. • Complying with trade formalities in S Asia takes 30 days - Lat Am - 20 days - OECD - 11 days



• Container shipment within S Asia costs 25 % more than within Lat Am & 50 % more than within OECD

• Trade from India to Pakistan goes via Dubai rather than over land or from Karachi to Mumbai.

• Poor infrastructure, logistics & inefficient management systems have lowered trade competitiveness.

• Rail networks do not connect S Asian countries

• Track gauge differences mean trains from one country cannot run in another.



• S Asia trade with other countries

• Trade with SAARC – 3 %

• Trade with ASEAN – 25%



Needed

• Infrastructure integration

• Customs reform

• Systems modernization

• Capacity building

• Monitoring & evaluation



Needed

• Regional power grid integration (energy deficits take heavy toll on S Asian economies) • Nepal, Bhutan, & Central Asia have huge hydropower resources - can be developed & traded • Coal & natural gas resources of B-desh, India & Pakistan can add to energy security of the region



Telecom Barriers

• Telecom & electronic infrastructure must be integrated in the region - B-desh to India phone call costs double a B-desh to US call• Exorbitant roaming rates - Bhutanese in India pays 60 times more for a call than a call with an Indian SIM Card • Facilitating intra-regional trade will mean - cheaper transport, bigger markets, broader supply chains

• Will reduce - production cost, create jobs.



Barrier to Horticultural/Agriculture Exports

• Poor sanitary & phytosanitary testing

- losses from rejected consignments - high transaction costs due to duplicative testing - high levels of entry-point inspection & treatment of goods on arrival



BCIM (Bangladesh, China, India & Myanmar)

• BCIM urged governments to remove trade barriers for greater economic cooperation in the region

Barriers:- • Poor transport connectivity (rail, water & road) • Low investment

Myanmar – new trading partner - agriculture - gems - manufacturing - services

Dr Suman Sahai WHEF2013 Forum

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