The cost of trade is the highest in South Asia thanks to higher transport expenses, according to research focused on the shift to paperless trading.
The study, titled "Quantitative Analysis of the Move to Paperless Trade", carried out by the Commonwealth Secretariat, showed that trade cost in the country was over 80% of trade revenues in 2020.
This is just 80% in Pakistan and more than 60% in India and Sri Lanka.
The amount is less than 20% in the UK and over 20% in Singapore, Canada and New Zealand.
The survey was conducted on the 54 Commonwealth countries having more than $5 trillion trade, considering both import and export.
This exorbitant cost may be reduced to less than 20% once the overall digitization is adopted by 2026, its report says.
However, the report also said that public sentiment across emerging Asia, particularly Bangladesh and Malaysia, was seen as a potential obstacle to rapid adoption or reforms in reducing the trade costs.
The report also sought solutions to the current challenges facing Commonwealth nations in implementing paperless trade by means of qualitative desk research, discourse analysis and semi-structured in-depth interviews.
For total transport cost for $25,000 worth of shipments, Bangladesh required in 2020 less than $20,000.
This is the same for Pakistan. But in India transport cost is less than $15,000 for $25,000 shipment.
However, the average total transport cost in 54 Commonwealth economies is over $16,000.
The cost will come down below $5000 after overall automation for Bangladesh, the report mentions.
The documentary-compliance cost in Bangladesh also remained over $200 for $25,000 shipment. It may be reduced to less than $100 for $25,000 export.
The report, however, says the transport costs were higher as Covid-19 created supply disruptions, pushing up import and transportation costs.
It also mentioned that costs were worsened by the potential for border fraud and corruption, making the costs of transporting goods between countries extremely high.
However, there are some Commonwealth economies like Tonga and Gambia counting more than 100- percent trade cost as a share of trade revenues.