Agricultural Trade in South Asia: How important are the Trade Barriers?

Greater intra-regional trade in agricultural goods by reducing tariff and non-tariff barriers is often considered to be a good way of promoting rural development and improving food security in South Asia. Openness to trade of agricultural sector varies across South Asian countries, yet agricultural trade plays a crucial role as, in many countries, its share in exports is reasonably high, apart from the fact that most of them are net food-importing countries. Analysing different trade-related indictors and using a modified gravity model, the paper concludes, while factors like lack of complementarities, lack of diversification of export baskets and lack of trade facilitation are important barriers to trade, supply constraints appear to be the most important barrier, though there is scope for improvement in reducing tariff and non-tariff barriers as well.