Transport Connectivity in South and
South-West Asia
Dr. Arbind Prasad
Director General
Federation of Indian Chambers of Commerce & Industry (FICCI)
New Delhi, India
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• Transport infrastructure development has played a key role in the growth of
world trade
• Many Asian countries have substantially expanded their transport infrastructure;
yet, in most Asian countries transport densities and effective network access
levels are still much lower than in Europe or North America
• Poorly developed land transport linkage constrains regional economic
integration in the South and South-West Asia (SSWA) region
• The SSWA region is better connected with Europe and North America than with
itself. As a result, the trade costs are high and the benefits of geographical
proximity and contiguity are not available to the region’s trade
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• The non-tariff costs for intra-region trade are higher than exporting to the United
States of America and Europe, thus effectively denying to intra-regional trade
the advantage of geographical proximity and contiguity
• With its geographical contiguity, South and South-West Asia has great potential
for cooperation in the area of connectivity
• It emerges among the least integrated regions in the world and has the bulk of
its potential for regional economic integration to be exploited
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• Enhancing transport connectivity is essential for economic and trade
development, closing development gaps, and economic and social integration in
the region
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The benefits of regional integration are mutual for all participating
countries, as the value of the networks of even the larger countries and
coastal areas will increase as networks/markets in hinterlands and
neighbouring smaller economies get connected. An increased network
size will make the combined network more useful and competitive,
even when a newly connected economy does not significantly
participate in the Regional Production Networks
Source: Toward an Asian Integrated Transport Network; UNESCAP & AITD
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• Reduced transportation costs and enhanced intra-regional trade from
increased regional integration
• Higher level of economic activity and social development
• Boost to lagging regions from improved and low cost connectivity with
regional & global markets
• Facilitates industrial transport and thus crucial for larger production, cost
effectiveness, and reliability of supply
• Inclusive trade and economic growth
• Advantages of network externalities with expansion of networks and
integration of transport corridors
• Greater synergies from connecting regional frameworks
• Emerge as a hub of East-West trade
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Intra-regional trade in South Asia has begun to grow and has doubled in absolute terms in
recent years. The South Asian region has also remained attractive to individual South Asian
countries as an export destination vis-à-vis the rest of the world.
Intra-SAARC exports (as percentage of total exports)
Source: IMF, Direction of Trade Statistics, 2012
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Intra-SAARC imports (as percentage of total imports)
Source: IMF, Direction of Trade Statistics, 2012
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Sector
Particular
Road transportation
(passenger bus
services)
Delhi-Lahore, Amritsar-Nankana Sahib, AmritsarLahore, Poonch-Rawalakot, Srinagar-Muzaffarabad,
Kolkata-Phuentsholing, Agartala-Dhaka, etc
Rail transportation
(passenger train
services)
Delhi-Lahore, Kolkata-Dhaka, etc
Shipping Links
Air Links
Mumbai-Karachi, Colombo-Kolkata, ColomboChittagong, etc
Delhi-Lahore, Mumbai-Karachi, Dhaka-Karachi, DelhiKatmandu, Colombo-Mumbai, Colombo-Delhi, etc
Source: Connectivity, Trade Facilitation and Regional Cooperation in South Asia – Prabir De
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• Absence of integrated and improved cross-border transportation
network and regional transit system
• Poor quality and inefficient infrastructure services, both hardware and
software
• High transportation costs, poor institutions, inadequate cross-border
infrastructure, and absence of a regional transit trade
• Lack in regional transit due to poor intra-regional and inter-regional
connectivity (Missing links in road and rail networks)
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• High non-tariff trade costs resulting high cost of moving goods across the
borders
• High-tariffs exist for certain sensitive products, and strong presence of
Non-Tariff Barriers (NTBs)
• Cumbersome cross-border and transit transport facilitation
• Procedural complexity, multiple handling and inefficient border corridors
• Different standards on vehicles and drivers across countries
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• Poor quality and missing links of road network
• Difficult terrain, with mountain ranges and many rivers
• Lack of connectivity between rail networks in the region
• Differences of rail gauges and incompatible rolling stocks
• Insufficient handling capacity of land ports at borders
• Reliance on feeder rather than mainline services due to draught
restrictions at ports
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Sector
Countries
Particular
Road
• transportation
(passenger bus
services)
India and Bangladesh
-------------------------------------India and Myanmar
Kolkata – Dhaka, Agartala – Dhaka
----------------------------------------------No link so far
Rail transportation
(passenger train
services)
India and Bangladesh
-------------------------------------India and Myanmar
Kolkata – Dhaka
----------------------------------------------No link so far
Aviation
(international
flight connection)
India and Bangladesh
-------------------------------------India and Myanmar
Many
----------------------------------------------Kolkata – Yangon
Inland waterways
(cargo)
India and Bangladesh
-------------------------------------India and Myanmar
Yes
----------------------------------------------No Link
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• India permits overland transit facility for Bangladeshi products to reach
Nepal by rail via Rohanpur-Singabad section
• Post partition, goods from Agartala travel 1,645 km to Kolkata, while
direct distance would be around 350 km, if direct movement via
Bangladesh was available
• Assam’s tea travels to Kolkata over a 1,400 km distance; if access to
Chittaogong port was available, it could save 60% of the distance
• Despite Railways in the region inherently integrated (from British)
between India, Pakistan and Bangladesh, the through connectivity is
lacking
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• Security checks at the border are unnecessarily long and delays the
consignment
• Delays at borders due to different operating hours across the border
• Delays in transit from road as the trucks need to be changed at the
borders. Also, there is narrow road for truck movements and waiting
period for trucks at times is more than 20 days
• Limited air connectivity with traders in Pakistan, Bhutan and Maldives
• Logistics delays at the Benapole/ Petrapole border (Bangladesh-India
land border) and the resultant demurrage charges reduces traders
margins
• Lack of trade infrastructure at borders like proper warehouse facilities,
EDI, etc
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• Train service at Wagah is underutilized (almost 60 to 70%), and could be
enhanced by increasing efficiency and proper management.
• Delays due to railway operational procedures, such as train inspection,
brake testing, checking of wagons and their equipment, recording of
wagon and consignment details, etc
• Absence of open wagons to transport coal across the borders
• Delay in consignment due to non availability of wagons at borders. Also,
there are delays due to ‘wagon balancing’
• Quite often, due to unavailability of wagons, the transfer of goods takes
place close to one month; as first the goods are sent to Wagah border
where they are unloaded, then again loaded on Pakistani wagons
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• Developing and upgrading land-based transport infrastructure
• Constructing “missing links”
• Removing non-physical barriers to transport
• Regional transit agreements to enable cross border movements
• Constantly improving the performance of border corridors and Land
Customs Stations (LCSs)
• Eliminating the asymmetry between the Land Customs Stations
• Removing multiple handling of goods at border
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• Economic integration depends heavily on the density and quality of
connectivity or so to say regional infrastructure
• Lack of regional connectivity is one of the major constraints hindering the
potential of regional growth and economic integration
• A stronger connectivity not only strengthens the intra and inter-regional
trade but also generates higher income and prosperity
• Economic integration moves well when rising intra-regional trade is
supported by developed infrastructure, stronger connectivity networks and
improved trade facilitation measures
• An integrated action plan required for developing transport connectivity and
trade facilitation in the region
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THANK YOU
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