The Confederation of Indian Industry (CII) has called upon SAARC leaders to create the right environment for boosting trade.
The CII statement comes ahead of the 17th SAARC Summit in the Maldives on November 10-11.
“The CII is encouraged by Pakistan's decision to grant most favoured nation status to India, which can transform the trading environment of the region. With proper implementation of the South Asian Free Trade Agreement (SAFTA), countries can leverage regional dynamics for growth,” said Mr Chandrajit Banerjee, Director General, CII.
Currently, intra-regional trade stands at around five per cent in South Asia, compared with over 50 per cent in East Asia and about 20 per cent in Latin America.
India's trade with SAARC countries has gone up from $6.9 billion in 2005-06 to $15 billion in 2010-11.
However, trade is highly skewed in favour of India, and it needs to examine the goods it can import from its neighbours, the CII said.
The industry body has recommended services, energy and electricity, and logistical connectivity as new areas of economic cooperation in South Asia.