The South Asian Association for Regional Cooperation (SAARC): Integration Trends and Trade with Russia

Abstract

The South Asian Association for Regional Cooperation (SAARC) is the most integrated association in the South Asian region. Over the past four decades, the countries achieved some progress in liberalising mutual trade by reducing customs duty rates. But centrifugal factors, such as differentiation by levels of economic development, low level of interdependence and complementarity, political disagreements, frequent civil conflicts and riots (as in Sri Lanka in April 2022) have a negative impact. The purpose of the study is to analyze evolution of the integration processes in South Asia and the results achieved, as well as their influence on the changes in mutual trade within SAARC. The state, problems and prospects for Russia’s trade with the SAARC countries are considered, with the changes aft er February 24, 2022. In general, SAARC has moved from a preferential trade zone to a free trade zone. The latter (in case of full implementation of the set goals and objectives in the relevant agreements) will cover goods, services and investments. The concept of transition to a deeper stage of integration – the South Asian Economic Union - is proposed. So far, a low level of economic interdependence remains (the share of mutual exports in total exports is 7.0 %) and there are many contradictions between the participating countries.