Regional Integration in South Asia

Trends, Challenges and Prospects

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Regional Integration in South Asia: Trends, Challenges and Prospects presents an objective assessment of trade and economic co-operation among South Asian nations and highlights policy issues to foster regional integration. The analyses presented in this volume go beyond the usual discussions on trade-in-goods to provide insightful perspectives on potential new areas of co-operation, emerging challenges, and country-specific views on regional and bilateral trade co-operation issues.

Written by influential analysts and researchers, the volume’s 24 chapters include perspectives from Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka, and examinations of new areas of co-operation such as investment, regional supply chains, energy and cross-border transport networks.



India–Sri Lanka Free Trade Agreement and the Proposed Comprehensive Economic Partnership Agreement: A Closer Look

In pre-colonial times there were strong economic relations between India and Sri Lanka, but these relations diluted during nearly four and a half centuries of colonial rule. Soon after independence in both countries, economic relations strengthened, but not significantly, as a result of inward-looking economic policies dominating in both economies until about the mid-1980s. The economic links began to pick up in the 1990s with the liberal economic regimes consolidating in both economies, and received a boost in 1998 when the two countries signed a bilateral India–Sri Lanka Free Trade Agreement (ISLFTA), which came into operation in March 2000. This was a pioneering attempt in the direction of trade liberalisation in the South Asian region and involved the liberalisation of trade in goods. Sri Lanka’s economic objectives were to increase trade ties with South Asia’s dominant economic power, to induce the transformation of Sri Lanka’s exports from low-value-added goods to high-valueadded goods aimed at niche markets and to provide low-income groups with cheap consumer imports from India (Kelegama 1999).


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