Abstract
Regional collaboration is a stepping stone for economic integration in a geographic region. Economic integration might be pursuing through cooperation agreements between the nations of the region which are mostly policy induced integration. The growth of RTAs has been very rapid, particularly since 1990’s. Regional economic integration between developing nations is advocate in the context of preferential and free trade arrangements, specialization, economies of scale and enlargement of markets, as most of these countries cannot attain in isolation. The India–Sri Lanka Free Trade Agreement (ISFTA) was signed between India and Sri Lanka in December 1998 and came into operation in March 2000. It is now around 15 years since this FTA has been signed and through this period the bilateral trade among these two nations has reached new heights and dimensions. This study analyzed the trade performance and term of trade between India and Sri Lanka by using the time series data from 2000 to 2013.
Keywords: Regional Trade Agreements (RTA), Exports, Imports, Term of Trade, FTA.