News / Economy

India Looks to Boost Trade with South Asian Nations

External Affairs Minister of India Sushma Swaraj speaks with her Bangladeshi counterpart Abul Hassan Mahmood Ali at the Ministry of Foreign Affairs, Dhaka, June 26, 2014.
External Affairs Minister of India Sushma Swaraj speaks with her Bangladeshi counterpart Abul Hassan Mahmood Ali at the Ministry of Foreign Affairs, Dhaka, June 26, 2014.
Anjana Pasricha

India’s new government is moving ahead to deepen trade and investment ties with its neighbors, as South Asia remains one of the least economically integrated regions in the world.

Before wrapping up a visit to Bangladesh Friday, Indian foreign minister Sushma Swaraj announced several concessions: New Delhi will relax visa requirements, supply more power to its neighbor and increase investments to address a trade imbalance in its favor.

Swaraj pointed out that India would not be able to pursue its development agenda without bringing its smaller neighbors along with it.

This is the broader message from India’s month-old government as it promises to step up trade and investment with countries like Nepal, Bangladesh, Sri Lanka and Bhutan.

Indian foreign ministry spokesman Syed Akbaruddin said economic goals top the agenda.

“The overriding priority for India is to scale and speed our comprehensive national development and we will try to work out measures by which our diplomats in the region can assist in that national endeavor,” said Akbaruddin.

South Asia has been the flavor of the month in the Indian foreign ministry offices since Prime Minister Narendra Modi made the unprecedented gesture of inviting heads of neighboring countries to attend his inauguration. He followed that up with a visit to Bhutan in mid June.

Analysts say the stepped-up diplomacy is partly intended to limit China’s sphere of influence in South Asia. But equally important is a drive to give more primacy to trade in a region where political hostility and suspicion have impeded economic integration. 

South Asia - a populous region of two billion people -- lags behind other parts of the world in regional trade. Economists compare the meager five percent of trade in this bloc to the more robust 25 percent in the Association of South East Asian Nations.

Cross border trade has been restricted between the region's two biggest countries, India and Pakistan, due to their hostile ties. A 2005 agreement to turn the region into a free trade zone has failed to yield substantive results.  High tariffs remain an impediment.

Economist Rajiv Kumar at the Center for Policy Research in New Delhi says the key to better economic integration is to remove mistrust.

He is optimistic. Kumar said the new government has signaled that it will move to allow freer movement of goods, people and services.

“At the moment Bangladesh trucks are not allowed to come into India and go to wherever they want, or we do not allow access of Pakistani trucks to go across to Bangladesh, etc. All of that can change if India was to take a more magnanimous or more foresighted views, that this trade will only benefit us and open its borders and its markets to our neighbors. The most important part will be to India become more open, more liberal and permit our neighbors to benefit from our own growth and our own large market,” said Kumar.

India is promising to build new road and rail links in the region and boost infrastructure at border trading posts.

For example, Swaraj said India is willing to increase the frequency of a train service which links it to Bangladesh and will explore the possibility of starting a bus service between the two countries. A road connecting India to Myanmar, which is also known as Burma, is expected to open in October.

Analysts say revitalizing economic ties in South Asia could bring big benefits for a region that is battling high levels of poverty.

You May Like

Turbulent Transition Imperils Tunisia’s Arab Spring Gains

Critics say new anti-terrorism laws worsen Tunisia's situation while others put faith in country’s vibrant civil organizations, women’s movement More

Burundi’s Political Crisis May Become Humanitarian One

United Nations aid agencies issue warning as deadly violence sends tens of thousands fleeing More

Yemenis Adjust to Life Under Houthi Rule

Locals want warring parties to strike deal to stop bloodletting before deciding how country is governed More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Texas Town Residents Told to 'Just Leave' Ahead of Flood Threati
X
Greg Flakus
May 29, 2015 11:24 PM
Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video Texas Town Residents Told to 'Just Leave' Ahead of Flood Threat

Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video New York's One World Trade Center Observatory Opens to Public

From New Jersey to Long Island, from Northern suburbs to the Atlantic Ocean, with all of New York City in-between.  That view became available to the public Friday as the One World Trade Center Observatory opened in New York -- atop the replacement for the buildings destroyed in the September 11, 2001, attacks.  VOA’s Bernard Shusman reports.
Video

Video Seoul Sponsors Korean Unification Fair

With inter-Korean relations deteriorating over the North’s nuclear program, past military provocations and human rights abuses, many Koreans still hold out hope for eventual peaceful re-unification. VOA’s Brian Padden visited a “unification fair” held this week in Seoul, where border communities promoted the benefits of increased cooperation.
Video

Video Purple Door Coffeeshop: Changing Lives One Cup at a Time

For a quarter of his life, Kevin Persons lived on the street. Today, he is working behind the counter of an espresso bar, serving coffee and working to transition off the streets and into a home. Paul Vargas reports for VOA.
Video

Video Modular Robot Getting Closer to Reality

A robot being developed at Carnegie Mellon University has evolved into a multi-legged modular mechanical snake, able to move over rugged surfaces and explore the surroundings. Scientists say such machines could someday help in search and rescue operations. VOA’s George Putic reports.
Video

Video Shanghai Hosts Big Consumer Electronics Show

Electronic gadgets are a huge success in China, judging by the first Asian Consumer Electronics Show, held this week in Shanghai. Over the course of two days, more than 20,000 visitors watched, tested and played with useful and some less-useful electronic devices exhibited by about 200 manufacturers. VOA’s George Putic has more.
Video

Video Forced to Return Home, Afghan Refugees Face Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.

VOA Blogs

World Currencies

EUR
USD
0.9115
JPY
USD
123.92
GBP
USD
0.6554
CAD
USD
1.2443
INR
USD
63.800

Rates may not be current.