The south Asian countries initiated a process of preferential trade liberalisation with the establishment of the South Asian Association for Regional Cooperation (SAARC) in 1985. It then took a decade for the region to put in place practical measures to promote trade through a regional agreement. The South Asian Preferential Trade Agreement (SAPTA) came into operation in 1996 with the expectation ofmoving towards a South Asian Free Trade Agreement (SAFTA), the implementation of which eventually began in 2006.1 Despite all this, south Asia remains a least integrated region, with trade among member countries accounting for approximately 5 per cent of their total trade. Many experts, however, suggest that expanded regional integration beyond trade in goods, together with co-operation in developing supply chains, has considerable potential for growth and development in the region.