The purpose of this paper is to explore the trade and investment potential under the ambit of regional cooperation comprising the seven contiguous countries of Bangladesh, India, Sri Lanka, Nepal, Bhutan, Thailand and Myanmar (BIMSTEC). The study addressed the latest update of BIMSTEC economic cooperation and then explored the economic impact of the regional integration. The potential economic impact of the BIMSTEC economic cooperation as well as BIMSTEC FTA could promote the growth for the region. One of the major findings of the paper is that a large part of BIMSTEC's trade has remained unrealized and the trade transaction cost is one of the major trading barriers prohibiting the growth of BIMSTEC intra-regional trade. The study reinforces that improvement in infrastructure and connectivity that leads to less trade transportation costs should be a necessary step in order to realize BIMSTEC's trade and investment potential. The paper concludes that liberalization of non-policy barriers will spur BIMSTEC's trade and economic cooperation.
