Experts have put stress on making the South Asia Free Trade Area (Safta) vibrant based on trust to ensure a win-win situation for all countries in the region and boost regional trade and cooperation.
They were addressing a webinar organised by the World Bank Group on Wednesday as part of its One South Asia initiative.
Cecile Fruman, director regional integration and engagement of South Asia, moderated the discussion titled "How can regional cooperation support South Asia's Covid-19 recovery?"
Diplomats, researchers, business people, World Bank high officials, politicians, economists, trade analysts and policymakers of different countries participated in the event.
Cecile Fruman said bilateral and regional relationship should be developed on mutual benefit and confidence. Otherwise, it would not sustain, and no party would benefit.
Shyam Saran, former Indian foreign secretary and currently a senior fellow at the Centre for Policy Research, said some initiatives taken by India are creating tensions in the region. He suggested mitigating tensions through mutual understanding.
India has a good and positive relationship with Bangladesh but some new issues are arising, which will be resolved rapidly, he added.
"Once Covid-19 vaccines come, it would be difficult for India alone to produce it in huge quantities for 1.5 billion people," he said, recommending that the government and non-government organisations collaborate in vaccine production for a large number of people.
A resilient supply chain is needed not only in India but also in other countries when the economy is restored to normal, he pointed out.
He emphasised greater regional cooperation for social and economic recovery in South Asia in the post-pandemic period.
Rubana Huq, president at Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said Bangladesh might miss out on grabbing the Indian market more in the post-LDC period due to high tariff along with non-tariff and para-tariff barriers.
So, she urged a vibrant SAFTA for increasing bilateral trade between the two countries.
Bangladesh will face a 10% duty on apparel export to the Indian market after the country's LDC graduation.
Rubana sought a positive mentality and support of India in minimising Bangladesh's rising trade deficit with the country.
The trade between the two countries stands at $8.6 billion, of which, $7.75 billion is in favour of India. Bangladesh exported goods worth $1.1billion to India in a year for the first time since its independence, Rubana mentioned.
India has more than $60 billion worth of domestic apparel markets with 18% growth every year, she said, adding that India cannot alone serve its domestic market and can consider Bangladesh as a major supplier for its local markets.
The BGMEA president also said India should allow the presence of more Bangladeshi goods in their value chain so that export from Bangladesh to this neighbouring country increases.
The trade between Bangladesh and India grew 45 times over the last 10 years which indicates that the potential of future trade although the unit price of Bangladeshi goods exported to India declined by 1.62% during this time.
Rubana identifies the export of personal protective equipment (PPE) as a new opportunity, and said PPE has turned into a major export item for Bangladesh. India can be a big source for the fabrics of this specialised item.
Industries, knowledge and the governments of South Asian nations should have greater collaboration for more trade within South Asia.
If the land ports between Bangladesh and India do not work well, the bilateral trade will face a lot of trouble, she said, demanding seamless flow of goods through the land ports between the two countries.
South Asia has a lot of potential for e-commerce markets because of an increased number of internet users in this region. So, an online marketplace can be formed among the South Asian nations, Rubana said.
Regional integration, cooperation, and engagement can produce significant gains across South Asia. Intra-regional trade, for instance, stands at only a third of its potential with an estimated gap of $23 billion, according to the World Bank.
Cooperation in energy between Bangladesh, Bhutan, India, and Nepal could lead to savings of $17 billion.
Transporting goods across the region can cost up to 50% more than within the Organisation for Economic Co-operation and Development countries. As South Asia grapples with the economic impact of Covid-19, it has an opportunity to strengthen regional institutions, improve regional infrastructure and connectivity, advance trade policy, and develop cross-border solutions to shared problems
Swarnim Wagle, chairman of the Institute for Integrated Development Studies (IIDS) and former vice-chair of the National Planning Commission of Nepal, said pharmaceutical products would be the major export items in the South Asian region.
He said the upcoming Covid-19 vaccines should be global public goods and the countries in the region should take joint initiatives to make vaccines available for all.
He suggested continuing Saarc videoconferencing during the pandemic, ecological recovery, and removing non-tariff and para-tariff barriers in trade among the South Asian nations.
The IIDS chairman also suggested financial cooperation like loan under the line of credit scheme and strengthening the Saarc food bank for food security in this region.
Hartwig Schafer, vice-president at World Bank Group for South Asia Region, advocated for more support in the trade of power among the South Asian nations.
He said power trade among the Central Asian nations is prevalent. He recommended ensuring more robust supply chain management among the South Asian countries for more trade.