Home Contact Us  

India & the World - Articles

Print Bookmark Email Facebook Subscribe
#4803, 12 January 2015

Regional Economy

IPCS Forecast: South Asian Regional Integration
Amita Batra
Professor of Economics, Centre for South Asian Studies, School of International Studies, JNU, New Delhi

In May 2014, when India made the unprecedented gesture of inviting the heads of all SAARC member-countries for the oath taking ceremony of its new Prime Minister, hopes were raised that a new beginning for regional cooperation in South Asia was now in the offing. A few months later, both days of the 18th SAARC Summit were spent speculating about the possibility of a breakthrough in the cold vibes shared by the heads of India and Pakistan. While the Summit was rescued with a last-minute agreement on energy cooperation, two other agreements, on road and rail connectivity were left languishing.

The much-expected revival of SAARC did not happen; but there was a hint among SAARC members of moving ahead with interested partners. The first month of 2015 has seen interesting developments with the West Bengal Chief Minister accepting Bangladesh’s invitation for a visit and a surprise outcome of presidential elections in Sri Lanka. What do these three developments mean for South Asia?  

South Asia: Open and Differentiated Regionalism
First, it is time to reformulate the idea of regional cooperation in South Asia as open and differentiated regionalism. Member-countries should come together in smaller sub-regional groups with a focussed agenda comprising both common challenges and aspirations that are cross-border in nature. Once they are successful in attaining the limited agenda, the aims and objectives can expand and so can the membership as non-members would begin incurring the costs of non-accession. In due course, sub-regionalism would serve as a preparatory ground for merging into larger groupings as it would be indicative of the members’ willingness to act in a cooperative framework with their neighbours and a readiness to join larger groupings in the region that go beyond these members.

Within South Asia, sub-regional groups already exist. Membership in some of these sub-regional groupings extends beyond South Asia to Southeast Asian/East Asian countries. These include the BBIN with Bangladesh Bhutan, India and Nepal as members; the BCIM with Bangladesh, China, India and Myanmar; and the BIMSTEC with Bangladesh, Bhutan, India, Nepal, Myanmar, Sri Lanka and Thailand, as member economies.

Instead of the existing overlapping and all-encompassing objectives of these sub-groupings, it would be better to delineate a workable agenda based on an area of comparative advantage for each and adopt a focussed approach towards its achievement. Issues of hydropower, movements of peoples, transit rights etc. could be primary areas for the BBIN; connectivity and economic corridors for the BCIM; and supply chains in textiles and clothing and gas pipelines could constitute the working agenda for the BIMSTEC.

The resource and expertise-constrained South Asian economies may then be able to contribute to and benefit from these groupings in accordance with their potential. A necessary prior requirement in this context would be the establishment of an institutional mechanism that includes a secretariat, working groups with requisite expertise, regular meetings, coordination and periodic exchange of information and reports. Over time, a merger or expansion of the sub-regional groupings could shape into regional formulation.

Accessing India's Northeast through Bangladesh
Second, apart from the Teesta water sharing arrangement and the land boundary agreement – two significant issues that might see a resolution during the West Bengal chief minister’s February 2015 visit to Bangladesh – the two countries may also like to consider the issue of full transit to India’s Northeast via Bangladesh. Preliminary action on this front was evident in 2014 when Bangladesh, under a special transit arrangement, allowed transport of food grains to Tripura through its territory. The certainty of a full transit agreement will facilitate connectivity of the Northeast Indian states with the rest of India and as a consequence, allow them to take advantage of the Indian economic dynamism.

India, Sri Lanka and CEPA
Third, the political change that Sri Lanka recently saw augurs well for the India- Sri Lanka Comprehensive Economic Partnership Agreement (CEPA) negotiations for which, beginning 2005, led to a framework agreement scheduled to be signed in 2008. Reservations regarding the services sector liberalisation, particularly mode 4 related movement of professionals, investment and non- tariff barriers (NTBs) coupled with lack of political will have prevented the CEPA from being signed and operationalised. In order for this to happen, the CEPA must uphold the same principles of non-reciprocity and differential treatment as was the case in the India-Sri Lanka Free Trade Agreement (FTA).

The India-Sri Lanka FTA is an example of a south-south trade agreement that has taken into account the asymmetry of the two economies in its provisions and yet been successful in generating a positive outcome of increased trade for both economies. Deeper integration via the CEPA may be particularly opportune when India is attempting to revive its manufacturing sector; and fears with regard to NTBs and services liberalisation may be better combated with more rational assessments of alternative liberalisation scenarios.

Strengthening developing country linkages is an imperative in the post-global financial crisis period when several traditional Western markets are unable to generate sufficient growth and hence demand for exports of these economies. Regionalism is being actively pursued by the rest of the world. South Asia must therefore make best of the available opportunities in this direction in 2015.

Print Bookmark Email Facebook Subscribe
IPCS Columnists
Af-Pak Diary
D Suba Chandran
Resetting Kabul-Islamabad Relations: Three Key Issues
Can Pakistan Reset its Relations with Afghanistan?
The New Afghanistan: Four Major Challenges for President Ghani
Big Picture
Prof Varun Sahni
Understanding Democracy and Diversity in J&K
When Xi Met Modi: Juxtaposing China and India
Pakistan?s Tactical Nuclear Weapons: The Inevitability of Instability

Dateline Colombo

Asanga Abeyagoonasekera.
Sri Lanka: Moving Towards a Higher Collective Outcome
The Importance of Electing the Best to our Nation's Parliament
Sri Lanka: Toward a Diaspora Re-Engagement Plan
Dateline Islamabad
Salma Malik
Pakistan's Hurt Locker: What Next?
IPCS Forecast: Pakistan in 2015
India-Pakistan Relations in 2015: Through a Looking Glass
Dhaka Discourse
Prof Delwar Hossain
IPCS Forecast: Bangladesh in 2015
18th SAARC Summit: A Perspective from Bangladesh
Bangladesh in Global Forums: Diplomacy vs. Domestic Politics
Eagle Eye
Prof Chintamani Mahapatra
India-US: Significance of the Second Modi-Obama Meet
Has President Obama Turned Lame Duck?
Modi-Obama Summit: Criticism for Criticism?s Sake?

East Asia Compass
Dr Sandip Mishra
India-Japan-US Trilateral: India?s Policy for the Indo-Pacific
China-South Korea Ties: Implications for the US Pivot to Asia
Many ?Pivots to Asia?: What Does It Mean For Regional Stability?
Himalayan Frontier
Pramod Jaiswal
Nepal?s New Constitution: Instrument towards Peace or Catalyst to Conflict?
IPCS Forecast: Nepal in 2015
Constitution-making: Will Nepal Miss its Second Deadline?

Prof Shankari Sundararaman
IPCS Forecast: Southeast Asia in 2015
Indonesia's Pacific Identity: What Jakarta Must Do in West Papua
Modi in Myanmar: From ?Look East? to ?Act East?
Sushant Sareen
IPCS Forecast: Pakistan in 2015
Islamic State: Prospects in Pakistan
Pakistan: The Futility of Internationalising Kashmir

Looking East
Wasbir Hussain
Myanmar in New Delhi's Naga Riddle
China: ?Peaceful? Display of Military Might
Naga Peace Accord: Need to Reserve Euphoria
Maritime Matters
Vijay Sakhuja
Indian Ocean: Modi on a Maritime Pilgrimage
Indian Ocean: Exploring Maritime Domain Awareness
IPCS Forecast: The Indian Ocean in 2015

Nuke Street
Amb Sheelkant Sharma
US-Russia and Global Nuclear Security: Under a Frosty Spell?
India's Nuclear Capable Cruise Missile: The Nirbhay Test
India-Australia Nuclear Agreement: Bespeaking of a New Age
Red Affairs
Bibhu Prasad
Countering Left Wing Extremism: Failures within Successes
Return of the Native: CPI-Maoist in Kerala
The Rising Civilian Costs of the State-Vs-Extremists Conflict

Regional Economy
Amita Batra
India and the APEC
IPCS Forecast: South Asian Regional Integration
South Asia: Rupee Regionalisation and Intra-regional Trade Enhancement
South Asian Dialectic
PR Chari
Resuming the Indo-Pak Dialogue: Evolving a New Focus
Defence Management in India: An Agenda for Parrikar
Pakistani Taliban and Al Qaeda in Afghanistan: Implications for Asian Security

Spotlight West Asia
Amb Ranjit Gupta
Prime Minister Modi Finally Begins His Interaction with West Asia*
A Potential Indian Role in West Asia?
US-GCC Summit: More Hype than Substance
Strategic Space
Manpreet Sethi
India-Russia Nuclear Vision Statement: See that it Delivers
Global Nuclear Disarmament: The Humanitarian Consequences Route
Nasr: Dangers of Pakistan's Short Range Ballistic Missile

The Strategist
Vice Admiral Vijay Shankar
Jihadi Aggression and Nuclear Deterrence
The Blight of Ambiguity
Falun Gong: The Fear Within

OTHER REGULAR contributors
Gurmeet Kanwal
Harun ur Rashid
N Manoharan
Wasbir Hussain
Rana Banerji
N Manoharan

Ruhee Neog
Teshu Singh
Aparupa Bhattacherjee
Roomana Hukil
Aparupa Bhattacherjee

Related Articles
Aparupa Bhattacherjee,
"IPCS Forecast: Myanmar in 2015," 21 January 2015
Sushant Sareen,
"IPCS Forecast: Pakistan in 2015," 19 January 2015
Shankari Sundararaman,
"IPCS Forecast: Southeast Asia in 2015," 19 January 2015
Bibhu Prasad Routray,
"IPCS Forecast: Left-wing Extremism in 2015," 19 January 2015
Rajeshwari Krishnamurthy,
"IPCS Forecast: Islamic State in 2015," 19 January 2015
Ruhee Neog,
"IPCS Forecast: Towards a Nuclear Deal with Iran in 2015," 19 January 2015
Salma Malik,
"IPCS Forecast: Pakistan in 2015," 17 January 2015
Pramod Jaiswal,
"IPCS Forecast: Nepal in 2015," 14 January 2015

Browse by Publications

Issue Briefs 
Special Reports 
Research Papers 
Seminar Reports 
Conference Reports 

Browse by Region/Countries

East Asia 
South Asia 
Southeast Asia 
US & South Asia 

Browse by Issues

India & the world  
Naxalite Violence 
Suicide Terrorism 
Peace & Conflict Database 
Article by same Author
19th Party Congress: Understanding the Economics in Xi’s Speech

India's Trade Options

Pakistan’s Economy: Significance of MSCI Elevation and FTSE Inclusion

Trump's Trade Scenarios: Implications for India

G20 Summit 2016: A Lost Opportunity?

GST: Facilitating India’s Domestic, Regional and Global Integration

Brexit Consequences: Complexities and Uncertainties

Changing Regional Contours and Imperatives for India

India and the APEC

South Asia: Rupee Regionalisation and Intra-regional Trade Enhancement

18th SAARC Summit: An Economic Agenda

Regional Economic Architecture: Is India Ready?

Y! MyWeb
Print Bookmark Email Facebook Subscribe
Year 2018
 January  February
 2017  2016  2015  2014  2013  2012  2011  2010
 2009  2008  2007  2006  2005  2004  2003  2002
 2001  2000  1999  1998  1997

The Institute of Peace and Conflict Studies (IPCS) is the premier South Asian think tank which conducts independent research on and provides an in depth analysis of conventional and non-conventional issues related to national and South Asian security including nuclear issues, disarmament, non-proliferation, weapons of mass destruction, the war on terrorism, counter terrorism , strategies security sector reforms, and armed conflict and peace processes in the region.

For those in South Asia and elsewhere, the IPCS website provides a comprehensive analysis of the happenings within India with a special focus on Jammu and Kashmir and Naxalite Violence. Our research promotes greater understanding of India's foreign policy especially India-China relations, India's relations with SAARC countries and South East Asia.

Through close interaction with leading strategic thinkers, former members of the Indian Administrative Service, the Foreign Service and the three wings of the Armed Forces - the Indian Army, Indian Navy, and Indian Air Force, - the academic community as well as the media, the IPCS has contributed considerably to the strategic discourse in India.

Subscribe to Newswire | Site Map
18, Link Road, Jungpura Extension, New Delhi 110014, INDIA.

Tel: 91-11-4100-1902    Email: officemail@ipcs.org

© Copyright 2018, Institute of Peace and Conflict Studies.