SAFTA to have positive impact for S Asia: ADB-UNCTAD

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New Delhi, March 28: even on sensitive list items were considered, Bangladesh would not make any significant regional export gains.

A disaggregated look shows that Bangladesh's wearing apparel sector would grow by 6% due implementation of the second phase of SAFTA. Its global exports of wearing apparel would increase by $ 500 million, out of which $ 6 million would be to South Asian countries. SAFTA would induce a relocalisation of output with major production increase in wearing apparel ( 5.5%) and leather sector (3%), leading to an increase in employment. Bangladesh's output in chemicals, rubber and plastics would rise by 2%, while its global exports would go up by 10% - an indication of Bangladesh emerging as a competitive producer in chemicals, pharma plastics and ceramics.

Regarding India, the study said that a full SAFTA would help it to nearly double its exports to South Asia, but the export gains would be limited to a few agriculture commodities and auto sector. India can gain significantly in exports of poultry and sugar. Pakistan would be the main market for Indian sugar exports. India's highest output gains would be in poultry sector (over 100%). In sugar sector output gains would be 1.33% and the auto sector would grow by one to 4%, with its regional exports expected to increase by 10% to 40%. India's global wearing apparel output would decline by 2.5% and its imports would increase by 7%, due to increased competitiveness of Bangladesh.

In 2008-09, India's exports to South Asia would increase by 3.41% and its exports to other countries by 0.09%, while its global imports would increase by 0.11% on account of the implementation of the first phase of SAFTA. By 2016 India's total output would increase by 0.08%, its exports to South Asia would increase by 90.44%, its exports to other countries would increase by 1.19% and its global imports would increase by 1.68%.

For Pakistan a full SAFTA would double its exports to South Asia and would have good results on its important employment intensive agriculture sectors like wheat, horticulture, poultry and other food products. It output in textile sector would increase by 0.5%, but would lose out in wearing apparel and leather sectors. Pakistan lose in sugar sector due to increased imports from India.