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If the trade bloc comprises of geographically proximate countries, the trade agreement is known as ‘regional trade agreement. Most of these trade agreements are done to enhance the business situation in a region by the coordination offered by each of the member states.
Back in 2006, on the first day of January, the agreement on South Asia Free Trade Agreement came into force. Out of their members India, Pakistan and Sri Lanka are known as Non Least development Contracting state (NLDCS) and Bhutan, Bangladesh, Maldives are Nepal are referred as Least Developed Contracting States (LDCS) (Commerce, n.d.). The member countries of this agreement are able to avail a number of trade opportunities which are specifically available to the member countries of this agreement. These agreements have emerged to promote multilateral trade with a commitment to offer higher rate of economic growth worldwide. However, the spread of these regional blocs has denied allowing the non member countries to take the advantage of free trading. To enjoy the benefits of free trading which include enhanced resource allocation, improved level of efficiency, exposure to new innovative ideas, technologies and products the South Asia countries must ensure trade facilitation, economic cooperation to other Agreements and higher investment across the countries in that region. Despite of the fact that South Asia Association for regional Cooperation (SAARC) is being into existence for the last 25 years, still in 2004, the percentage of intra regional trade was only of 4 % of the total trade amount (Kemal, 2004).
In a review, World Bank has revealed that all the regional grouping does not boost the trade and enhance the growth automatically. Although, the objective of these regional trading groups is to promote inter regional trade and economic growth, a large no of groups fail to achieve the same (Kemal, 2004). SAFTA has allowed
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