By ADB, December 2015
The presence of a fast growing economy in the region can lead to substantive growth spillovers to other countries in South Asia through enhanced trade and investment opportunities.In spite of growth in almost all countries in the region and the existence of an emerging economy, South Asia (which comprises Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka), remains the least integrated region in the world. India has emerged as one of the fastest growing economies in the world and has the potential to become a growth pole in South Asia. The growing market in India can benefit the region and the cheaper resources available in the region can help India to improve its global competitiveness.Delineating the extent of trade and FDI liberalization that South Asia experienced between 1990 and 2012, this study identifies how liberalization has boosted industrial development and triggered structural changes in the manufacturing sector. It also assesses the implications of the presence of India in the region, one of the fastest growing economies in the world. Further, the study suggests a way forward for developmental regionalism in South Asia, emphasizing the benefits of “One Asia” and the peace dividend.