In South Asia, the negotiations on regional trading agreements have gained much importance in recent years. The first step in this direction came into force in 1995 when the SAARC Preferential Trading Arrangement (SAPTA) was signed. In early 2004, the member countries reached into an agreement to form a South Asian Free Trade Area (SAFTA). The SAFTA has become a parallel initiative to the multilateral trade liberalization commitments of SAARC member countries. SAFTA has been effective from July 1, 2006. It has been agreed that among South Asian developing countries, Pakistan and India will eliminate all tariffs by 2012, and Sri Lanka by 2013. On the other hand the South Asian LDCs, i.e., Bangladesh, Bhutan, Maldives and Nepal will eliminate all tariffs by 2015. Apart from SAFTA, there have been other initiatives for RTA in this region involving the South Asian countries (i.e. BIMSTEC). Also a number of bilateral FTA negotiations are in order among the South Asian countries. There are conflicting views on the potential impacts of regional trading agreements. On the one hand, there have been some strong arguments for the regional economic integration in South Asia as this integration is argued to generate significant intraregional trade and welfare gains for the South Asian countries. On the other hand critics have pointed out that though there may be substantial increase in welfare for the region as a whole, the distribution of welfare gain may be highly unequal. For the South Asian LDCs the potential welfare loss due to trade diversion may be higher than the potential welfare gain out of trade creation. SANEM aims to promote the use of sophisticated economic modeling techniques to examine the impacts of different RTAs and bilateral FTAs in South Asia.