Lack of connectivity among eight countries of South Asia is a major impediment for

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intra- regional trade, which has the potential to grow over eight times, SAARC secretariat chief said here.

"Infrastructure constraints... Combined with the fact that we are perhaps one of the least connected regions in the world constitute a major structural impediment," SAARC Secretary General Sheel Kant Sharma recently told industry leaders and bureaucrats from the Ministry of External Affairs.

He said trade potential in South Asia has been pegged at USD 85 billion by the Asian Development Bank. At present, the regional trade is barely USD 10 billion.

The cost of intra-SAARC trade is among the highest in the world. "It leads to lower and restricted trade among the countries in the region and limits positive impact of cut in tariffs," Sharma said.

The South Asian Association for Regional Cooperation (SAARC) is an association of Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan, India and Sri Lanka.

He said cut in infrastructure and transport costs have the same effect as tariff liberalisation in boosting trade.

"For every 1 per cent reduction in cost, trade stimulus is about 5 per cent. Of considerable merit is the fact that this benefit is passed along the entire supply chain ... shippers, truckers, traders or end users," he said.