India and Bangladesh are already working on a Comprehensive Economic Partnership Agreement (CEPA), or free trade agreement (FTA), which would set an example for giving a boost to regional trade in South Asia, Commerce Minister Suresh Prabhu said on Friday.
Launching a World Bank Group report on trade in South Asia, Prabhu said that during his just-concluded visit to Bangladesh and talks with his counterpart there, it had been decided to set up seven borders 'haats', or markets, some of which will start functioning immediately.
"During my visit to Bangladesh, I proposed that we should try to sign the Comprehensive Economic Partnership Agreement and we are working with our Bangladeshi counterparts to take it forward," Prabhu said.
"India and Bangladesh have agreed to upgrade trade logistics for seamless movement of cargo and we have already identified seven dual hubs, some of which will start working immediately," he said, adding that given the cultural and linguistic affinities between both countries there is immense potential for trade and cooperation.
The Minister also said India and Sri Lanka are "working closely together" to finalize a free trade agreement.
The World Bank report - "A Glass Half Full: The Promise of Regional Trade in South Asia" - says India's trade with South Asia at around $19 billion is only 3 percent of its global trade worth $ 637 billion.
The report also points out that current trade between India and Pakistan at a paltry $2 billion annually, could go up to $37 billion in the absence of artificial barriers.
(With inputs from agencies.)