Journal of Agricultural Development and Policy

Agriculture is the back bone for increasing GDP in all South Asian countries as about 60 per cent of the population is dependent on agriculture. Agricultural trade plays an important role in achieving food-security and meeting deficit domestic demand and stabilizing prices. The present paper depicts that Nepal, Pakistan, Bangladesh and Afghanistan had stable markets for India’s agricultural commodities whereas Bhutan, Maldives and Sri Lanka were highly unstable importer of India’s agricultural commodities among SAARC countries as they retain zero per cent of their previous market share. Bangladesh had a stable market for all five commodities such as cereals, cotton, dairy products and bird eggs, coffee, tea, mate & spices and sugar and honey reflected by retention probabilities 78.93, 37.83, 39.02, 37.96 and 41.66 per-cent respectively among SAARC member countries. India has week Revealed Comparative Advantage (RCA) only in dairy products and bird eggs before and after SAFTA while India enjoyed comparative advantage in export of cotton after formation of SAFTA. The study suggested that India should focus on export promoting policies such as increase participation in international trade fares and improve quality of product to be competitive in international market.