Report

50 QUANTIFICATION OF BENEFITS FROM ECONOMIC COOPERATION IN SOUTH ASIA
Table 6.4 Bangladesh Employment Gaining Sectors
(% change)
Winning Sectors
Employment Increase
Wearing apparel 5.90
Leather products 3.60
Chemical, rubber, plastic products 2.32
Cereal grains n.e.c. 1.48
Wood products 1.25
Forestry 1.20
Metals n.e.c. 1.12
Beverages and tobacco products 0.81
Processed rice 0.73
apparels, leather products, chemicals, cereal grains,
wood products, forestry, metal (n.e.c), beverages and
tobacco products and processed rice (Table 6.4). While
sectors which lose out on employment due to SAFTA
are petroleum products, meat products, transport
equipment, electronic equipment, dairy products, metal
products, gas, crops, sugar cane and sugar beet (Table
6.5).
Table 6.5 Bangladesh Employment-Losing Sectors
(% change)
Losing Sectors
Employment Decrease
Petroleum, coal products –48.82
Meat products n.e.c. –26.92
Transport equipment n.e.c. –16.00
Electronic equipment –6.21
Dairy products –5.67
Metal products –2.88
Machinery and equipment n.e.c. –2.66
Gas –2.17
Crops n.e.c. –2.10
Sugarcane, sugarbeet –1.95
India
A full SAFTA will help India to nearly double its exports
to South Asia (Table 6.6). India’s export gains from
SAFTA are limited to a few agriculture sectors and the
auto sector where it is seen to have relative comparative
advantage vis-à-vis the rest of South Asia.
There are two agricultural sectors where India does
gain significantly from SAFTA– poultry and sugar. In
fact, its highest output gain is in the poultry sector,
where output in ‘Other meat products’ shows an
increase of over 100%, indicative of the high level of
demand of poultry and high levels of protection of the
same in the region. There is a 1.33% increase in output
in sugar. Pakistan will be the main market for sugar
exports in the region. India’s auto sector grows by
1–4% on account of SAFTA, with its regional exports
Table 6.6 Impact of SAFTA on Output,
Employment and Trade: India (% change)
Year Output Effect on Exports Global Global
Unskilled to Exports Imports
Employ- South
ment Asia
2008-09 0 –0.00001 3.41 0.09 0.11
2016 0.08 0.00002 90.44 1.19 1.68
in this sector increasing by 10–40%. This result is
validated by the fact that countries like Bangladesh and
Pakistan do maintain high tariffs in the auto industry.
India’s global wearing apparel imports increase by 7%
and with its output declines by 2.5%. The increase in
imports is not significant in absolute terms; because
India’s global import base is low (about $30–35 million
in 2004). The decline in output is therefore largely
attributable to loss in exports to the rest of the world
(about 3.3% decline), which may be attributed to an
increased competitiveness of Bangladesh in the wearing
apparel sector.
India’s auto sector grows by 1–4% on account of
SAFTA, with its exports to the region increasing by
10–40%. This result is validated by the fact countries
like Bangladesh and Pakistan do maintain high tariffs
in the auto industry.
India’s global wearing apparel imports increase by
7% and while its output declines by 2.5%. The increase
in imports is not significant in absolute terms, because
India’s global import base is low (about $30–35 million
in 2004). The decline in output is therefore largely
attributable to loss in exports to the rest of the world
(about 3.3% decline), which may be attributed to an
increased competitiveness of Bangladesh in the wearing
apparel sector.
In terms of impact of SAFTA on employment (Table
6.7), the following sectors gain in terms of employment
generation.
Table 6.7 India Employment Gaining Sectors
(% change)
Winning Sectors
Employment Increase
Meat products n.e.c. (poultry, etc.) 116.67
Transport equipment n.e.c. 3.80
Petroleum, coal products 2.68
Sugar 1.33
Mineral products n.e.c. 1.19
Motor vehicles and parts 0.88
Dairy products 0.83
Paper products, publishing 0.64
Sugarcane, sugarbeet 0.63
However, SAFTA leads to loss of employment in
the following sectors (Table 6.8).