Why are regional and economic groupings formed? | Learn NCERT solution | Education portal Class 11 Indian Economic Development | Study online Unit-10 Comparative Development Experiences of India

Q.1:- Why are regional and economic groupings formed?



Regional economic grouping is one of the major instrument of promoting international trade activities among countries. It focusses on creation of larger economic unit from smaller national economies. Regional and economic groupings such as the SAARC, European Union, ASEAN, G-8, G-20, BRIGS etc are formed to increase economic co-operation among nations in the neighbourhood or those sharing common economic Interests. This is particularly considered essential by developing countries as they all facing competition not only from developed nations but also amongst themselves in the relatively limited economic space enjoyed by the developing world. Besides, co-operation with other economies in our neighbourhood is also required, as all major common economic activities in the region have an impact on overall human development in a shared environment.