The South Asian Association for Regional Cooperation (SAARC) is approaching its silver jubilee as an inter-state organisation for advancing co-operation in the South Asian Sub-Region. Promotion of intra-regional trade is a significant focus of the SAARC. Nonetheless, intra-regional trade has not substantially expanded in the sub-region. This article critically analyses the background of the organisation and some facets of its first preferential trade agreement, the South Asian Preferential Trade Arrangement to illustrate what underlying factors have hindered progress in the sub-regional trade expansion. It demonstrates that above and beyond the dynamics of economic determiners, socio-political factors have been big stumbling blocks to the progress of trade co-operation within the SAARC.