Dr. Ram Upendra Das, Fellow of the Research and Information System for Developing Countries, India, however, holds the view that SAARC has not fared badly in creating a trade bloc when compared with the time taken for the EU and ASEAN to integrate their economies.

He said the EU took almost half a century to come up with a trade bloc while ASEAN formed in 1967 is still formulating an intraregional trade pact. SAARC was formed in the 80s and SAFTA was introduced in 2004.

"South Asia has demonstrated that it is the fastest in creating economic integration in the world," Dr. Das said, addressing a meeting of academics and journalists in Nepal over the weekend.

"I am not saying that policy makers are doing their best to deliver results, but given the speed in which other regional groupings have fared SAARC has done well," he said.

He said the SAARC Secretariat must be strengthened as it lacked the capacity to consolidate and coordinate.

Economists argue that creating a regional trade bloc in South Asia is hampered in the absence of a political will amongst the member states but Dr Das contends this view.

He goes on to say that it is the business sector that is demonstrating a lack of will to push for regional economic integration in their quest for profit maximization at the expense of ethical business practices.

"There are instances where countries import certain goods from outside the region at higher price rather than the lower quality substitute from within the region. The price may be twice as much but it does not mean that quality is twice as much," Dr. Das said commenting on perceptions held by consumers created by corporate entities.

He said that Pakistan had spent US$ 600 million extra in 1994 on such items while Sri Lanka spent US$ 426 million.

"The magnitude of foreign exchange that was being lost was staggering," Dr. Das said, adding that he used to calculate these figures but soon gave up doing so after 1994.

"This happens because there is an information gap and the tendency to be Eurocentric (or pro-west)."

He went on to say that business view rules of origin (ROO) as obstacles to trade.

"But this is not the case. Rules of origin simply states that a certain percentage of the inputs of a product has to come from within the region and this is consistent with the development agenda of SAARC and helps create employment. Why should we compensate third part countries who are not part of out agreement," he pointed out.

But with SAFTA not bringing in the desired results, Dr Das suggests countries opt for bilateral trade agreements.

"But there should not be any confusion between bilateral and regional trade agreements as policy makers could give mixed signals to the business sector. Bilateral agreements are stepping stones towards regional integration,’ he said.

While intra-regional trade accounts for less than 5 percent of South Asia’s total trade, Dr. Saman Kelegama, Executive Director, Institute of Policy Studies Sri Lanka said there is a vibrant informal sector.

"This means that trade in the region could be as much as 11 percent," he said.