India-Pak trade can cross $6 bn: Report

Trade between India and Pakistan can increase to $6.6 billion if barriers are removed and the neighbouring country implements the South Asia Free Trade Area (SAFTA) agreement, a report by the Indian Council for Research on International Economic Relations (ICRIER) has said.

"Trade between the two nations is very small as compared to trade between India and its other large partners in South Asia," the ICRIER report said.

India's exports increased 157% to $428.1 million and imports 143% to $82.1 million in the first quarter of FY07 as against the corresponding period last year, according to official figures.

On the other hand, informal trade through a third country is estimated to be in the range of $2 billion, the report said.

"With several regions integrating further through the free trade agreements (FTAs), it is imperative for the South Asian countries to enhance the pace of their liberalisation," it added.

In a larger context, South Asia is the least integrated region compared to other regions, namely East Asia, Europe and Central Asia, Latin America, Middle East, North Africa and Sub-Saharan Africa.

Regional liberalisation within Asia indicates that SAFTA would ultimately lead to integration with a larger community within the continent through BIMSTEC and ASEAN, the paper said. However, success of SAFTA in turn would depend on trade relations between India and Pakistan.