Current Status and Future Prospects of Regional Integration among SAARC Countries

Even after twenty five years of existence, SAARC has achieved little progress in the area of regional economic cooperation. Intra SAARC trade is very low and continues to be stagnant for a long period. This is mainly due to the non cooperation of two largest economies of the region namely India and Pakistan within the regional cooperation agreement. Other small countries often became the victim of India-Pakistan political rhetoric and were not in a position to influence policy decisions for rapid economic cooperation. If the current status of trade relations continue, SAARC will become irrelevant in the face of rapidly spreading regionalism in the rest of the world. In this backdrop, the paper looked in to the current status of regional integration in SAARC using intra and inters regional trade and analyzed the degree of regional integration through different trade indices. The paper argues that there is an urgent need to improve India Pakistan trade relationship and Pakistan should extend MFN status to India. Also India should remove all Non Tariff Barriers towards all other SAARC members and give additional market access to small partners.