Growth Potential of Business

in South Asia

Shweta Hada
 Lots of potential
in
Hydroelectricity Trade and investment
agreements with
India, China, and
other countries
$500 million Millennium
Challenge Corporation

Political uncertainty
and a difficult Expand Nepal’s
business climate electricity
infrastructure
 Man-made trade barriers have held
SOUTH ASIA back intraregional trade in South
Asia.

Without the barriers it could grow

from its current value of $23 billion
to $67 billion.

Intraregional trade in South Asia

remains one of the lowest in the
world.

Four critical barriers to regional

trade: tariffs and para tariffs, non-
tariff barriers, connectivity costs,
and a broader trust deficit.
The latest edition of the South Asia Economic Focus, Exports Wanted, finds
that:

“the region’s growth, while still robust, is mainly driven by domestic demand,
which in turn swelled imports and far outstripped exports, further widening
trade gaps and current account deficits, and triggering currency depreciation in
some countries”.
Nepal has the potential to increase exports to South Asian
countries four-fold.

Nepal mostly exports to South Asia and has a trade deficit

of $10.8 billion which is equivalent to 37 percent of its
GDP. 

More than 36 percent of Nepal’s imports from South Asia

are under sensitive lists, more than any other country in
the region.
Indo-Nepal Trade Treaty

SAFTA

BIMSTEC
Nepalese manufactured articles allowed into India free of
Customs Duties on a Fixed Quota Basis

ARTICLES MT per Year

Vegetable Fats 100,000
Acrylic Yarn 10,000
Copper Products 10,000
Zinc Oxide 2,500
 Nepal must make a quick and prudent decision to reap benefits from
SAFTA. This means a paradigm shift from the traditional ‘import-based
revenue policy’ to the “wider economy benefit policy”
i. Trade and Investment
ii. Technology
iii. Energy
iv. Transportation and Communication
v. Tourism
vi. Fisheries
vii. Agriculture
viii. Cultural Cooperation
ix. Environment and Disaster Management
x. Public Health
xi. People-to-People Contact
xii. Poverty Alleviation
xiii. Counter Terrorism and Transnational Crime
xiv. Climate Change.