India is a founding member of the SASEC Program, joining with Bangladesh, Bhutan, and Nepal in 2001 to form this project-based partnership. Maldives and Sri Lanka became full members of SASEC in May 2014, following several years as active observers.

The Twelfth Five-Year Plan (2012-2017) of the Government of India—which seeks faster, sustainable, and more inclusive growth—highlights the need to engage more proactively with the global community at bilateral, regional, and multilateral levels. Placing greater emphasis on the regional cooperation agenda, the Twelfth Five-Year Plan recognizes that the benefits can go well beyond what is possible through the bilateral route.

SASEC Projects in India

Since 2002, the Government of India has signed 13 ADB-financed SASEC investment projects worth more than $5 billion.

India: SASEC Projects
Source: SASEC Project Portfolio, as of October 2019

Source: SASEC Project Portfolio, as of October 2019

In addition to the projects, ADB-financed technical assistance has supported SASEC investment projects in India, regional cooperation forums and knowledge-sharing initiatives, and pilot projects since 2001. A total of nine national technical assistance projects (cumulative worth around $10.28 million) have assisted India in project preparation, strategic planning, and capacity building.

Trade Snapshot

Direction of Intra-regional Trade

The value of India's merchandise exports and imports trade with other SASEC member countries, using International Monetary Fund data from 2017, is captured in the tables below.

India's top import source from the SASEC subregion is Myanmar, with imported goods valued at $743 million. Sri Lanka follows closely, with imported goods valued at $606 million.

Bangladesh is India's 9th largest export market, with exports valued at over $7.2 billion. Nepal is India's 13th largest export market, with exported goods from India valued at almost $5.6 billion.

India Trade in SASEC Subregion

Source: IMF Direction of Trade Statistics, as of May 2018

India Trade - Import

Source: IMF Direction of Trade Statistics, as of May 2018

India Trade - Export

Source: IMF Direction of Trade Statistics, as of May 2018

Ease of Doing Business

India climbed to rank 77 in 2018, from 100 in 2017, by enacting the following reforms:

  • Dealing with Construction Permits: India streamlined the process of obtaining a building permit and made it faster and less expensive to obtain a construction permit. It also improved building quality control by introducing decennial liability and insurance. This reform applies to both Delhi and Mumbai;
  • Getting Electricity: The Delhi Electricity Regulatory Commission reduced charges for low voltage connections. Getting electricity was also made easier in Delhi through a reduction in the time for the utility to carry out the external connection works;
  • Paying Taxes: India made paying taxes easier by replacing many indirect taxes with a single indirect tax, the GST, for the entire country. India also made paying taxes less costly by reducing the corporate income tax rate and the employees’ provident funds scheme rate paid by the employer. This reform applies to both Delhi and Mumbai;
  • Trading across Borders: India reduced the time and cost to export and import through various initiatives, including the implementation of electronic sealing of containers, the upgrading of port infrastructure and allowing electronic submission of supporting documents with digital signatures. This reform applies to both Delhi and Mumbai; and
  • Labor Market Regulation: India (Mumbai) changed regulations pertaining to weekly holiday work, overtime hours and paid annual leave.

Source: Doing Business, accessed December 2018

Note: The World Bank/International Finance Corporation's annual flagship Doing Business Report measures the ease of doing business by ranking economies from 1 to 190, based on quantitative indicator sets that can be compared across economies and over time, with first place being the best and indicating a regulatory environment is conducive to business operation. Of immediate relevance to SASEC aims and goals are indicator sets on Starting a Business, and Trading across Borders.

Logistics Performance Index (LPI)

Of the SASEC member countries, India scored highest at 3.18 and a rank of 44. India's overall LPI score in 2018 is ahead of the South Asia regional average of 2.51. The country posted its best scores in timeliness (3.5), tracking and tracing (3.32), and international shipments (3.21).

India LPI 2016

Source: World Bank LPI (accessed December 2018)

Note: The LPI overall score reflects perceptions of a country's logistics based on six core dimensions: (i) efficiency of customs clearance process, (ii) quality of trade- and transport-related infrastructure, (iii) ease of arranging competitively priced shipments, (iv) quality of logistics services, (v) ability to track and trace consignments, and (vi) frequency with which shipments reach the consignee within the scheduled time. The scores for the six areas are averaged across all respondents and aggregated to a single score using principal components analysis. A higher score indicates better performance.

Economic Outlook

Asian Development Outlook

GDP in India grew by 5.0% in the first quarter of fiscal year (FY) 2019 as consumption, investment, and production slowed. Foreign direct investment inflows grew in the first 4 months of FY2019 owing to improvement in the ease of investment. Growth is expected to rebound to 7.2% in FY2020, fostered by policy interventions.

Source: Asian Development Outlook 2019 Update (ADB)
South Asia Regional Update

GDP growth slowed to 6.8% in FY2018/2019 and will pick up to 7.2% in 2020. Core inflation is decelerating on slowing growth. Headline inflation averaged 3.4% in FY2019 and projected to rise to 3.6%. For FY2019/2020, the macroeconomic outlook is favorable subject to downside risks. Land, labor, and product market reforms, with higher infrastructure investment, would help support investment, productivity, and job-rich growth.

Source: South Asia Regional Update, August 2019 (IMF)