India’s claim to economic leadership of the region stands hugely compromised.Such roles demand credibility, restraint, and inclusion qualities that are undermined when domestic politics spill into public spectacle.Much is said today about geo-economics, global vision, and values-based leadership. Yet in practice, India’s regional posture increasingly relies on toxic provocation rather than strategic confidence.
Recent incidents have drawn attention to how identity politics and antagonistic signalling have begun to overshadow India’s economic narrative. A widely circulated video showing Bihar Chief Minister Nitish Kumar pulling the niqab of a Muslim woman doctor during a public appointment ceremonysparked sharp criticism. Such moments, however fleeting, reverberate far beyond domestic politics, shaping perceptions of social tolerance, institutional maturity, and political intent.
Cultural messaging has followed a similar trajectory. An Indian film released in December 2025 has faced criticism for its factually inaccurate and sensationalised portrayal of Karachi’s Lyari district, reinforcing stereotypes rather than engaging with reality. When popular culture is mobilised to caricature neighbours which is now an Indian norm, it does not remain benign storytelling it becomes political messaging and maligning the other.
These are not isolated optics. They directly contradict the language of regional cooperation and economic integration that New Delhi espouses on global platforms. Geo-economics cannot coexist with performative exclusion, nor can regional ties be built on narratives that alienate communities and neighbours alike.
South Asia’s integration as a region remains a pipe dream, despite the formulation of SAARC in 1985. The global economy itself has shifted from globalization to slowbalization, marked by protectionism, economic nationalism, and the weaponization of trade.
In this changing global context, intra-regional trade is not merely an economic issue; it is deeply intertwined with strategic, political, and geopolitical considerations. South Asia presents a compelling paradox: a region with rapidly expanding economies, yet remarkably low internal integration.
South Asia’s intra-regional trade stands at a mere 5% of its total trade, starkly contrasting with ASEAN’s 25% and the European Union’s over 60%. This underperformance costs the region billions of dollars annually and deprives it of collective economic resilience.
Addressing non-tariff barriers alone could boost regional trade by an estimated US$44–50 billion, unlocking industrial diversification and strengthening food and energy security. Stronger regional value chains could also provide resilience against global shocks such as pandemics and supply-chain disruptions. Yet, despite these clear economic incentives, South Asian economic integration remains an unfulfilled dream.
The 2024–2025 snapshot is revealing. Intra-regional trade continues to stagnate at around 5%, while trade costs remain over 20% higher than global averages due to slow tariff modernization and persistent non-tariff barriers. When responsibility for low integration is placed where it belongs, the India–Pakistan dyad becomes unavoidable. Official bilateral trade, once over US$2.1 billion in 2018, is now estimated at around US$1.2 billion, with Pakistan’s exports to India nearly halted, despite obvious complementarities in pharmaceuticals, textiles, and agriculture. South Asia’s overall growth is projected at around 6% in 2024 and 5.8% in 2025, but slowing momentum is already fuelling protectionist instincts. Despite growth, South Asia is growing alone, not growing together.
Political constraints continue to dominate economic logic. The collapse of India–Pakistan trade after 2019 shows how quickly political shocks override market rationality. Most Favoured Nation status withdrawal and tariff escalations reversed years of incremental progress. The absence of a stable dispute-resolution framework means trade is treated as a political concession rather than a stabilizing tool, leaving it vulnerable to every crisis. Domestic protectionist coalitions on both sides, industrial lobbies and agricultural producers, actively resist liberalization. Fears of Indian mass production in Pakistan and competition in textiles and rice in India reinforce these positions. Extra-regional dynamics also matter. Strategic competition involving China, particularly through CPEC, and shifting U.S. priorities shape regional trade postures. The political cost of opening borders is consistently perceived as higher than the economic cost of keeping them closed.
Policy failures reinforce this paralysis.South Asian Free Trade Area(SAFTA) remains underperforming, with long sensitive lists and weak enforcement. Bilateral trade arrangements undermine its multilateral logic, while para-tariffs distort access. Non-tariff barriers persist, with inefficient digital customs adding two to five extra days to clearance times compared to peer regions. Logistics gaps at Wagah–Attari and Petrapole–Benapole, including the lack of modern scanning, cold chains, and adequate capacity, further reduce competitiveness. High logistics inflation compounds these structural weaknesses.
For Pakistan, the way forward requires a geo-economic recalibration. Economic diplomacy must move from aid-seeking to deal-making. Pakistan’s most durable asset is its people. Upskilling youth for ageing labour markets in Europe, the Gulf, and East Asia is no longer optional. Remittances already function as Pakistan’s most reliable form of foreign investment. Post–May 2025 debates increasingly reflect a “minus-India” South Asia approach, as proposed by Dr. Moeed Yusuf in his reporttitled “Implementing Pakistan’s Geoeconomic Pivot: Strategies, Opportunities, and Challenge”, emphasising deeper trilaterals such as China–Pakistan–Bangladesh and China–Pakistan–Afghanistan, better use of CPEC to link Central and West Asia, and balancing renewed U.S. outreach with continued Chinese commitment.
In this context, the emergence of the South Asian Cooperation Alliance (SACA) as a practical, geo-economic alternative to a SAARC in coma deserves attention. With Pakistan and China leading early consultations, SACA reflects a shift from stalled political consensus to results-oriented economic cooperation. Geo-economics is not a slogan; it is Pakistan’s survival strategy. Regionalism cannot wait for Indian consent.
The path forward is not complicated, but it does require political will. SAARC can be partially revived by depoliticising technical mandates such as trade facilitation and customs cooperation. India–Pakistan trade can begin with low-politics items like medicines, surgical goods, and perishables, supported by digitised border procedures. Mutual recognition agreements, pre-arrival data systems, and a trade contact mechanism insulated from political volatility would help restore predictability. Cross-border value chains, particularly in textiles, could cut costs by 15–20% and create real interdependence.
South Asia’s integration failure is ultimately a product of political choices layered over policy weaknesses. India–Pakistan relations exert disproportionate influence, but paralysis is not inevitable. Pakistan’s future lies in a geo-economic pivot rather than reactive geopolitics. Starting small, through pilot sectors, digitised customs, and trust-building corridors, creates space for larger gains. Our geography is not a burden; it is leverage, if we choose to use it.
