This article discusses some key constraints in the way of developing South Asian value chains. Using a qualitative approach we have surveyed private sector representatives from Bangladesh, India, Pakistan and Sri Lanka. The article, among other challenges, particularly notes, (a) lack of functional economic corridors in the region; (b) conflict zones brewing mistrust between neighbours; (c) slow progress on trade facilitation and free trade agreements in the region; (d) and non-tariff barriers that prevent skills and technology transfer in the region, as some of the most important issues requiring policy response.
In order to strengthen the region-wide value chains, the article recommends priority implementation of pending agreements related to transport, energy, connectivity and dispute resolution. Second, in order to bring down the cost of doing business, trade facilitation measures across the region may be expedited. Third, government-to-government contact needs to be enhanced and institution-specific connectivity is important to resolve issues such as compliance with product standards, visas for business community and technical staff, harmonization of licenses and permits (for example, at the state level in India), and opening up of bank branches.
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