GS Paper 2
Syllabus: International Relations
Context: C. Raja Mohan discusses the evolving economic landscape of South Asia. He highlights recent visits by leaders like Nepal’s Prime Minister Pushpa Kamal Dahal and Sri Lankan President Ranil Wickremesinghe to Delhi, showcasing a shift in South Asian regionalism.
India’s vision of regional economic integration in South Asia is based on enhanced intra-regional trade, investment flows, and regional transport and communication links in South Asia. South Asian Association for Regional Cooperation (SAARC) and India’s Neighbourhood First Policy are the two vehicles in this process.
How India’s growing economy is having a positive effect on South Asia?
|Economic Growth||India’s economy is growing and poised to become the third-largest economy.|
|Trade Volumes||Intra-regional trade grew from 2% in 1990 to 6% now (but compared to ASEAN countries ( over 27% integration, it is still low)|
|Bilateral Trade Potential||India’s exports: $16 billion to Bangladesh, $6 billion to Sri Lanka, and over $8 billion to Nepal in 2022.|
|Cross-Border Connectivity||Major initiatives for cross-border connectivity are complementing trade volumes e.g., trains and bus services with Bangladesh, Nepal|
|Economic Reform||Economic crises in countries like Sri Lanka and Pakistan are pushing for serious economic change.|
|Openness to Trade and Investment||Nepal and Sri Lanka are more open to trade, investment, and connectivity with India.|
|Global Power Rivalry Influence||US-China rivalry and India- China conflict have altered the Subcontinent’s geo-economic dynamics.|
|Support for Regionalism||Western nations are supporting India-centered regionalism and economic integration in the region.|
|Transformational Potential||These factors combined could potentially transform South Asia’s economic landscape.|
South Asian regional integration can overcome political disputes:
- Economic Interdependence: As trade benefits economies, it encourages nations to resolve political issues.
- Sub-Regional Initiatives:g., BMIC, India-Mynmmar trilateral highway, SAFTA.
- People-to-People Contacts: Promoting cultural exchanges, educational programs, and tourism can help build positive relationships among citizens across borders.
- Shared Challenges: Addressing common challenges like climate change, terrorism, and natural disasters requires cooperation.
- Diplomatic Engagement: Confidence-building measures, trust-building initiatives, and regular dialogues can help ease tensions.
- Economic Incentives: Japan’s effort in promoting India-Bangladesh connectivity
India can lead South Asia’s development by:
- Boosting regional trade, connectivity, and investment.
- Providing an ecological blueprint for biodiversity protection and climate response.
- Focusing on regional food security and supply chains.
- Promoting sub-regional initiatives for cooperation.
- Representing South Asian interests in international forums.
Together the three trends — the region’s new economic openness, India’s vigorous neighbourhood policies, and Western support for an India-centred regionalism in South Asia — could transform the Indian subcontinent’s geo-economic landscape. India’s rising economic tide could help lift all boats in South Asia.
Trade integration among South Asian countries will translate into better economic opportunities and shared prosperity for people living in these countries. Elucidate (15M)