筆者認為南盟國家的一個突出表現是區域內貿易的規模似乎較小，而發達國家由于其依賴性而具有實質性。區域貿易額有限，因為制造業和來源地缺乏補充，而且南盟國家內部貿易產生的財政問題直接利潤不太可能是積極的。盡管如此，該行業的買賣也因政治沖突產生的基本僵化而有所保留。

Chapter 1: Introduction 

1.1 Research Gap of the Study
In  the  present  globalized  world  total  depend  on  any  country  is  on  its  foreign trade.  Defiantly  it  is  trade  which  is  giving  a  country  a  leading  role  in  world  and making it as a world economic power. While all those countries that has foreign trade is  not  balanced  are  economically  weak.  At  present  globalized  world  all  those countries  are  poor  who  are  facing  trade  deficit.  As  all  SAARC  members  are underdeveloped economies therefore it needs to have surplice trade but unfortunately are members of SAARC are facing huge trade deficit which is also its main cause of poverty. There are many determinants of trade deficit in SAARC  countries including weak  industries,  high  rate  of  taxes,  high  export  duties,  weak  infrastructure,  lack  of scientific  methodologies  in  industries, uncompetitive  products, and  lack of access to international  market.  Many  individual  studies  have  been  conducted  on  the  matter concerned but an organized and systematic study yet could not be done which could explore  trade  deficit  and  its  determinant  in  SAARC  countries.  Though  SAARC countries have also signed free trade agreement but did not implemented full mostly because  of  India  and  Pakistan  rivalries.  Pakistan  and  India  are the  big  and  powerful countries  of  SAARC  therefore  this  organization  has  been  dominated  by  India  and Pakistan. This study is proposed to explore systematically the trade deficit of SAARC countries and critically examined its determents. 
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1.2 Significance of the Study
Economy  is  the  backbone  of  present-day  nation-states  and  key  for  individual prosperity and overall, all development of any state or nation. There are many means to grow and expand the economy of a state to make it a big economy. Among these means  trade  is  most  important  one.  In  present  globalized  world  no  country  is sufficient to fulfill its routine indigenous needs therefore export the goods which are more than  its  need  and  import which the state concerned  is  lacking. Trade deficit  is the  difference  between  these  two.  The  critical  world  economic  review  shows  that those countries are wealthier and economically strong who has no trade deficit while the rest are poor. Like other regions SAARC countries are economically weak mainly due to trade deficit. It needs to overcome the trade deficit  to improve  its economies, decrease  its  dependency  over  others,  bring  prosperity  and  remove  poverty  as  all SAARC countries are  fighting war against poverty. Half and  in some case  more the half of the population of these countries are living below the poverty line. Therefore, this study will be very important on two levels  i.e. state level and individual level as well.  Before  this  proposed  study  no  one  conduct research  study  neither  on  SAARC countries  trade  deficit  nor  on  its  determinants.  Moreover,  this  study  will systematically  study trade deficit of the SAARC member as well as  its determinants therefore its results and conclusion would be  a  significant element to the established Information  body  on  the  problem  concerned.  It  would  also  help  SAARC  states overcome  trade  deficit, to  improve  their  economies  and  would  ultimately  contribute to prosperity. 
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Chapter 2: Literature Review

2.1. Determinants of Trade Deficit
In  contrast  with  different  locales,  South  Asia's  fares  incorporate  an  abnormally enormous  portion  of  work  serious  makes.  India  appreciates  the  best  situation  in  the area  regarding  a  moderately  differentiated  fare  structure  with  its  main  20  ware bunches representing just 43 percent of fares. Be that as it may, the structure of fares in  various  SAARC  part  nations  has  experienced  huge  changes  in  the  on-going  past. An  empowering  highlight  is  that  their  assembling  yield  has  been  relentlessly expanding. 
The initiative itself is now twenty years old. The association should be in the full growth  of  its  youth  and  it  will  be  ready  to  get  on  new  tasks  and  challenges.  But, unluckily,  SAARC  states  takes  the  image  of  high  profile  and  small  performance, commitment, objectives,  lacking concrete, and  even a sense of regional  identity. For example,  the  issues  of  discovering  continuing  advantages  in  joint  development,  the irreconcilable  and  reconcilable  differences  over  the  direction  and  volume  of development,  and  the  allocation  of  advantages  among  the  members  have  not  been marked by any of the SAARC organization.
Exchange deficiencies are just the aftereffect of a larger number of imports than sends  out  for  an  economy  in  a  specific  period.  In  any  case,  the  basic  causes  can  be convoluted, changing period by period (and nation by nation). It is generally hard to distinguish  the  causes  from  the  impacts  because  numerous  variables  connect  at  the same time (Pingfan, 2001).
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2.2 South Asia Free Trade Area (SAFTA)
The  exchange  organizations  that  advanced  amongst  the  South  Asian  nations probably  will  not  encourage  a  fast  increment  in  intraregional  exchange  because  of feeble  exchanging  relations  among  the  SAARC  nations  (Pitigala,  2005).  This  view was  bolstered  by  an  investigation  of  Baysan,  et  al.  (2006).  They  contended  that the financial  cases  for  SAFTA  were  moderately  frail.  From  a  financial  point  of  view, neither a subjective contention nor a quantitative appraisal that was accessible to give one explanation  to feel excited about the course of action. Also, contrasted with the remainder  of  the  world,  this  locale  was  minor  both  as  far  as  monetary  size  as estimated  by  GDP  (and  per  capita  salary)  and  the  offer  on  the  planet  exchange. Hence, exchange  inclinations to the local accomplices would probably  be prompting an outcome of exchange preoccupation as opposed to exchange creation. Essentially, the  proof  of  exchange  correspondingly  in  South  Asia  is  blended,  so  exchanging activity depended on a powerless suggestion (Das, 2007). 
As  of  late,  new  farmer  and  Pierola  (2007)  found  that  the  courses  of  action  of particular exchanging South Asia  including SAFTA  missed the mark regarding their potential  in  light of  item exceptions, extraordinary game plans  for chosen  items and prohibitive standards for purpose of root. In this manner, however upside possibilities for  SAFTA  were  extraordinary,  profits  by  this  exchanging  course  of  action  were dubious. Thus, the approach creators will require steady assurance to make it fruitful in  future.  Bader  (2006)  contemplated  the  consequence  of  exchange  shortage  (fares and  imports) on  the  development  of  a  nation.  The  point  of  this  investigation  was  to evaluate the connection among fare and exchange deficiency.

Figure: 1 Intraregional trade as a share of gross domestic product in 2006 

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CHAPTER 3: AN OVERVIEW OF THE SAARC ECONOMIES ........................................ 24
3.1 TRENDS AND PATTERNS IN INTRAREGIONAL TRADE IN SOUTH ASIA ....................... 27
3.2. TRADE SURPLUS/DEFICIT &REMITTANCES ........................ 29 
CHAPTER 4: RESEARCH METHODOLOGY ...................... 31
4.1 THEORETICAL FRAMEWORK .................................... 31
(I) EXPORT ..................................... 31
(II) IMPORT ........................... 31 
CHAPTER 5: RESULTS AND DISCUSSION ..................... 40
5.1 DETERMINANTS OF TRADE DEFICIT ............................ 40
5.2 ROBUSTNESS CHECK WITH ALTERNATIVE METHODOLOGY ................42

Chapter 5: Results and Discussion

5.1 Determinants of Trade Deficit
Before  observing  in  the  long  and  short  run  potential  effect  of  the  independent variables  on  trade  deficit,  it  is  important  to  make  the  check  the  stationary  of  the regressors  and  regressend  in  such  a  way  that  the  variable(s)  are  stationaries  at  1(1) and I(0). If the selected variable(s) are stationary at 1(2)Then the results are not valid (Ouattara 2004).Therefore, Levine et al. (2002) and I’m et al. (2003) unit root tests is utilized to analyze the request for joining between the picked factors. He brings about (Table  2)  Note that  any  of  these  factors  are  incorporated of  request I(1) or I(0)  and nobody of the factors is coordinated of request I(2) or overhead, which unmistakably bolster  the  PCSE  estimation  system  as  opposed  to  other  elective  co-integration strategy  (Lv  and  Xu  2018).Table  2  and  table  3  represent  the  Pearson  correlation coefficient  among  some  variables  in  the  current  study.  Table  3  expressed  the  strong positive  correlation  of  all  explanatory  variables  between  the  export  and  other.  The association  certain  independent  variables  and  trade  deficits  are  highly  negative.  To lessen  Multicollinearity  interference  to  regression  results,  in  subsequent  regression there is no problem regarding multicollinearity in our certain variables.

Table 1. Unit Root Test Results: 

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Chapter 6: Conclusion

Trade is the very  important matter of 21st century economy. It had crucial  function  for the  economic  expansion  of  countries  as  well  as  fulfilling  the  needs  of  humans.  Like  many other regional organizations SAARC is struggling since its inception to improve its economy, remove  trade  deficits  and  make  itself  the  regional  economic  power  but  due  to  many  trade determents its member countries are facing trade deficit. To remove it primarily the member countries,  need  to  improve  its  industries,  improve  the  quality  of  their  goods,  develop infrastructure, and decrease taxes on exports.