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Abstract
This article assesses the potential and challenges of economic integration in South Asia. It reviews SAARC and SAFTA initiatives, intra-regional trade patterns, and structural impediments to deeper integration such as political mistrust, tariff barriers, and poor infrastructure. It argues that closer integration could unlock significant welfare gains, yet requires trust-building, improved connectivity, and harmonization of trade regimes.
Full Text
The body begins by mapping intra-SAARC trade flows and the low level of intra-regional trade compared to ASEAN or the EU. It identifies structural issues including overlapping FTAs, sensitive lists, and poor logistics. The study also highlights emerging opportunities such as energy trade, regional value chains in textiles, and cross-border investments. Case studies of Indo-Bangladesh trade corridors and Nepal–India power trade are provided. The article concludes with policy recommendations: reducing non-tariff barriers, investing in transport corridors, and institutionalizing dispute settlement. Integration is framed as both an economic imperative and a peace-building measure.