Region: Commerce across Southasia

The surge in cross-Southasian commerce, which could be of great benefit to the peoples across the region, has yet to happen, even if the economic logic is clear enough. The reason for this can be found within the national establishments of each country, which are still in the process of consolidating themselves. In the context of impressive economic growth of India, and the need to spread this across the region, as well as the need to shore up post-conflict economies as in Sri Lanka and Nepal, it is time to make one more push for cross-Southasian trade. Not only would doing so bring more and cheaper products and services to the people, but trade remains perhaps the best confidence-building measure – restraining both ultra-nationalist posturing as well as the martial spirit.

Unfortunately, Southasia today trades mostly with the outside world, rather than within itself. Whereas 25 percent of trade of the countries of ASEAN is with each other, in the Subcontinent this figure stands at a dismal four percent. This represents a colossal inefficiency, and underlines the failure of opinion-makers in each of our countries to build public opinion on the need to open up trade. For instance, Nepal is unable to take adequate advantage of the massive market next door in Uttar Pradesh and Bihar – to produce and sell its hydropower, or develop its tourism, agro-forestry and all manner of service industries with an eye to the markets across the border. While a Nepal-India transit treaty was signed in 1996, its on-the-ground implementation remains poor. For this reason, Nepal's annual growth in gross domestic product has remained consistently below three percent for more than a decade, even as India's has climbed from six to nine percent. This has also allowed the current rhetoric of ultra-nationalism the space in which to flourish in Kathmandu.