More trade integration to help South Asian economies: report

Live Mint, March 23, 2012
Of the total benefits to consumers, India is expected to gain 30.7%, followed by Nepal (23.5%) and Bangladesh (20.5%)

New Delhi: Further integration of trade among South Asian economies could yield as much as $2 billion (around Rs. 10, 000 crore) in benefits to consumers in the region, a study released by CUTS International said on Thursday.

The study titled Cost of Economic Non-Cooperation to Consumers in South Asia said the gains will be on account of savings on expenditure on imported products from the rest of the world in selected categories, if such products are sourced from within the region.

We have derived potential consumer welfare accruing to each country by taking the difference between the total import expenditure in selected products incurred by a country and likely import expenditure if that country were to import those products at a lower price from within the region,” the report said.

Of the total gains to consumers, India is expected to gain 30.7%, followed by Nepal (23.5%) and Bangladesh (20.5%). Consumers in Sri Lanka and Pakistan are expected to gain 14.8% and 10.6%, respectively.

The study maintained that the estimates represent only the minimum gains, as the benefits could be much higher because of other positive impact from trade liberalization.

Pakistan on Wednesday formally made the transition to a negative list-based trade with India by announcing a list of 1,209 items to be put on such a list.

Annual gains to Indian consumers are estimated at $597.29 million. “This will be on account of replacing costlier imports from the rest of the world with imports from within the region in 161 product categories,” the report said.

The study found more than 90% of the gains to India would accrue from importing plastic-based articles from Pakistan.

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