Impact of Free Trade on South Asia with Ref ere nee to India

Abstract

The world has witnessed formation of several regional economic cooperation in different parts of the world after the World War II The significant success in regional economic cooperation in different parts of the world has been reflected in formation of South Asian Association for Regional Cooperation (SAARC) in 1985 among seven countries of South Asia, namely Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. In any regional economic cooperation, trade is a key component SAARC is not exception to this. In 1995, they have established South Asian Preferential Trade Area (SAPTA). The idea of economic interdependence within the South Asian region had gained importance after formation of SAPTA, in particular. In the 8th SAARC Summit in 1995, the member countries have decided to form South Asian Free Trade Area (SAFTA) by the year 2005. Therefore, a quantitative economic analysis of any national economy within SAARC should allow its trade relation with member countries. In the present paper, we study the quantitative impact of duty free access to India s market for imports on SAARC countries.