INDIA-BANGLADESH TRADE POTENTIAL UNDER SAFTA
Abstract
In this paper, the Potential Trade Approach is used to examine the trend and potential of trade between India and Bangladesh under SAFTA. SAFTA was formed with the intention to replace SAPTA, which was limited in its scope. SAFTA’s ultimate aim was to put in place a full-fledged South Asian Economic Union on the lines of the European Union. The ‘Contracting States’ recognized that it was necessary to progress beyond a Preferential Trading Arrangement to move towards higher levels of trade and economic cooperation in the region by removing barriers to cross-border flow of goods. Thus, the SAFTA agreement was signed on 6th January 2004 and came in to effect on 1st January 2006. The proposed study will make use of the secondary data. The time of the study extended from 1991-2014/15. The results show that there is tremendous trade potential with Bangladesh and trade can more than double.
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