Q.How far is it justified to say that a new chapter of peace and cooperation might evolve in South Asia if all the countries in the region allow free trade across the borders ?
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →Free trade across South Asian borders could foster peace and cooperation by creating economic interdependence and shared prosperity, but deep-rooted political conflicts, trust deficits, and asymmetries in the region mean trade liberalization alone cannot guarantee lasting peace without parallel diplomatic and security arrangements.
The promise of regional integration through free trade rests on a compelling logic: when nations trade freely, they build stakes in each other's stability and prosperity. Economic interdependence raises the cost of conflict, creates cross-border business lobbies that favor peace, and channels competitive energies into markets rather than battlefields. South Asia, home to nearly a quarter of humanity yet accounting for barely three percent of global trade and less than one percent of intra-regional trade, stands to gain enormously from dismantling trade barriers. The European Union's journey from the ashes of two world wars to a peaceful economic community offers an inspiring template—former enemies bound together by coal, steel, and eventually a single market.
For South Asia, the potential benefits are tangible and immediate. India and Pakistan, despite decades of hostility, share cultural ties, complementary agricultural and industrial products, and border communities that remember a time of free movement. Bangladesh's garment industry could source fabrics more cheaply from Indian and Pakistani mills; landlocked Nepal and Bhutan could access larger markets through Indian ports; Afghanistan could become a land bridge connecting South Asia to Central Asia. The South Asian Free Trade Area (SAFTA), established in 2006, exists on paper but remains largely ineffective due to extensive sensitive lists, non-tariff barriers, and the exclusion of services. Genuine free trade would multiply these economies' growth rates, lift millions from poverty, and create a middle class with vested interests in regional stability.
Yet the optimism must be tempered by South Asia's particular realities. The region's conflicts are not primarily economic but rooted in territorial disputes, historical grievances, and questions of identity that predate modern trade patterns. Kashmir remains a flashpoint between nuclear-armed India and Pakistan; the Line of Control has seen repeated violations regardless of trade volumes. Sri Lanka's ethnic reconciliation, the Rohingya crisis in Myanmar and Bangladesh, and Afghanistan's chronic instability involve communal, religious, and strategic dimensions that tariff reductions cannot address. Trade between India and China has grown massively over the past two decades, yet border tensions culminated in deadly clashes in 2020—a stark reminder that commerce does not automatically dissolve sovereignty disputes or strategic rivalry.
The India-Pakistan trade relationship illustrates the limits of economic logic. Even when trade was permitted through official channels, it never exceeded a few billion dollars annually—a fraction of the potential estimated at twenty billion or more. Political crises repeatedly led to trade suspensions, showing that security concerns override commercial interests when governments perceive existential threats.
The asymmetry within South Asia also complicates the picture. India's economy dwarfs its neighbors combined, creating fears of economic domination rather than partnership. Smaller countries worry that free trade would turn them into captive markets for Indian goods while their own industries struggle to compete. Pakistan's reluctance to grant Most Favored Nation status to India, despite WTO obligations, reflects not just political hostility but genuine anxiety about trade deficits and industrial vulnerability. For free trade to foster cooperation rather than resentment, it would need to be accompanied by mechanisms that address these imbalances—development funds, technology transfers, and safeguards for infant industries—none of which emerge automatically from open borders.
Trust, or rather its absence, remains the fundamental obstacle. Decades of wars, proxy conflicts, cross-border terrorism, and mutual recriminations have created a security mindset in which every interaction is viewed through a zero-sum lens. Intelligence agencies, military establishments, and nationalist political constituencies in each country have institutional interests in maintaining threat perceptions. Free trade requires not just policy changes but a psychological shift—a willingness to see neighbors as partners rather than adversaries. Such shifts typically follow political breakthroughs rather than precede them. The Oslo Accords came before Israeli-Palestinian economic cooperation; German-French reconciliation was a political decision that enabled the European Coal and Steel Community, not the other way around. …
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.