Economic

Integration
Presented By:
Aadhar Manglik (08302)
Ashish Dua
(08313)
Karan Agarwal
(08323)
Sarabjeet Singh (08341)
Shrey Bharadwaj (08362)
Tanisha Kalra
(08351)

Economic Integration
Can be defined in social and economic
terms
In economic terms, it represents
arrangements that remove trade barriers
( tariffs and quotas).
Social integration is concerned more with the
cultural aspect, traditions and habits.
Both help in creating a market for each
others goods and services.

Objectives
Obtain economic benefits.
Helps in economic growth by increase in
foreign investments.
To strengthen political ties.
The bargaining strength of the union
improves.
Protect infant industries.

FORMS OF
INTEGRATION

Free Trade Area Free Trade among members,

abolishes all restrictions, own commercial policies.

Customs Union Uniform Commercial Policy.

Common Market Free movement of labour and

capital.

Economic Union Unified monetary and fiscal

policies, a common central bank.

Economic Integration Movement of goods,

unified social policies, super national organizational
structure.

Prospects and Benefits

for
India
Enhance domestic demand through trade policy,
hard and soft connectivity, rules and regulations
among others.
Large income gains can be achieved due to
existing and expanding large domestics markets
consisting of primarily young population,
particularly large middle class population.
Economic Integration can re-balance and diversify
its growth, especially export away from high
dependence on export to advanced economies
towards regional demand and trade from PRC to
India.
ASEAN economic dynamism and high growth and
FDI can contribute to Indias prosperity and

ECONOMIC INTEGRATION OF
DEVELOPING COUNTRIES and
LDCs

RATIONALE

To accelerate economic development and

strengthen their trading and bargaining power

LDCs can simultaneously solve 2 problems

through integration :
1. Opportunity for free trade with other countries

that are at similar levels of development.

2. Trade with advanced countries without being

harmed by their superior economic power.

UNFAVOURABLE

FACTORS

Political Difficulties

Apprehensions of relatively poor and weak countries

Lack of adequate infrastructural facilities
Unequal distribution of the gains due to unequal

economic status
Loss of revenue from custom duties

SAARC
Member Countries: India, Pakistan, Bangladesh, Nepal, Sri
Lanka, Bhutan and Maldives.
Headquarters: Kathmandu, Nepal
Objective: to accelerate economic and social development
through optimum utilization of human and material
resources.
Major share of worlds poor live in these countries.
All the major countries of the region have trade deficit.
Majority of population is dependent on agriculture.
Intra-regional trade is an important means of promoting
regional cooperation.

Problems facing
Economic Integration
1. Border disputes, ethnic issues, political outlook etc.

cause distrust and prevent emotional closeness.

2. Member countries emphasize on exports with

developed countries, neglecting intra regional trade.

3. Member countries are competitors in the international

market.
4. Foreign exchange problems
5. Underdevelopment of transport, communications etc.
6. Limited Complementarity.