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The combined population of South Asia is around 2.09 Billion while the world is around 8.24 Billion. When we compare GDP data, South Asia’s GDP is 5.2 Trillion USD, while the entire world is around 115 Trillion USD. South Asia despite having ¼ of the world population contributes only around 4.5% to the world's GDP. If we dig deeper in the data, India contributes to around 86% of South Asia’s GDP; approx 4.5 Trillion USD.

Now let's talk about South Asia’s Eastern Neighbours. If we look at the picture in that region, there is a stark contrast. The population of that region is around 701 million, approximately one quarter of South Asia's population but its entire GDP is about 4 Trillion USD. This GDP is spread across all nations. Why this big turn in this region? It was because of the Association of South East Asian Nations (ASEAN). ASEAN provided a platform for all these countries to work together.

Similar efforts were made by South Asian Countries. In 1985, South Asian Association for Regional Cooperation(SAARC) was established. It included member states of South Asia. But this organisation isn't as effective as ASEAN, despite having nearly four times population than ASEAN, the GDP of ASEAN is approximately three-quarters that of SAARC and when we compare global exports; SAARC exports goods and services worth $900 Billion while ASEAN exports $1.9 Trillion.

Why was SAARC unable to succeed?

The majority of South Asian countries were once part of the British Empire. They obtained their independence from Britain during the late 1940s. But since independence, there has been political instability in almost all countries of South Asia. Besides this there have been conflicts within and among these countries. India & Pakistan, two largest countries of South Asia, fought four wars and many skirmishes since their inception due to the dispute over the region of Kashmir, the dispute has also caused Insurgency in Kashmir. Afghanistan and Pakistan’s entire border is disputed which resulted in minor skirmishes between both nations and Insurgency in the border regions. Nepal has faced political instability, recent incidence of GenZ protest being the best example. Bangladesh has faced dozens of military coups and last year Sheikh Hasina was ousted from power, with elections planned for 2026. Sri Lanka had brutal civil war, after the end of civil war, there was some political stability but due to Government mismanagement there were protest and Rajapaksha was ousted from power in 2022.

The problem even continues beyond Conflicts. South Asia suffers from weak physical connectivity, there is poor cross-border rail, road, and energy networks that prevent the flow of goods and people. Tariff and non-tariff barriers remain high, discouraging regional trade. Smaller states also fear Indian dominance, leading to mistrust. And unlike ASEAN, SAARC lacks strong institutional mechanisms to enforce agreements making cooperation more symbolic than concrete.

In short, National Politics and Mistrust among nations are the key drivers behind SAARC's inefficiencies. When we compare the workings of ASEAN and SAARC, we find big differences. In ASEAN, there is a system called ASEAN Minus X. It is a decision-making principle used by the Association of Southeast Asian Nations (ASEAN) to enhance flexibility in regional cooperation, particularly in the field of economic integration. It allows a subset of ASEAN member states to proceed with specific agreements or initiatives, without requiring unanimous participation from all 10 members. The member states can join later on, once they're ready. Unlike ASEAN, SAARC lacks a similar mechanism. Their strict consensus rules often lead to paralysis (e.g., SAARC’s stalled summits due to India-Pakistan tensions). ASEAN Minus X’s flexibility is a key reason for ASEAN’s success.

Since the early 1990s, ASEAN members created the ASEAN Free Trade Area (AFTA) lowering tariffs across the region. The grouping fostered regional supply chains which has helped in linking production networks between Thailand, Vietnam, and Malaysia. ASEAN has also promoted tourism and easier labor mobility through visa exemptions. By comparison, SAARC’s South Asian Free Trade Agreement (SAFTA) which was signed in 2006 has failed to meaningfully boost trade because of weak implementation.

BIMSTEC: A Pragmatic Solution?

While SAARC remains mired in political deadlock, a promising alternative has emerged known as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). Launched in 1997 and revitalized by its 2022 Charter, BIMSTEC unites seven nations—Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand—spanning 1.73 billion people and a $5.2 trillion GDP. By excluding Pakistan, it dodges SAARC's veto traps and channeling energy into practical sectors like transport connectivity, Regional Trade, Energy, Counter terrorism and so on. This setup positions BIMSTEC as a bridge to ASEAN, with intra-regional trade at ~7% but poised for growth. Recent 2025 momentum, including summits on sustainable development, signals political will to avoid SAARC's pitfalls—focusing on economic development and regional cooperation.

Yet challenges persist. BIMSTEC remains under-resourced having a small secretariat and limited funding compared to ASEAN. Its Free Trade Agreement negotiations which were launched in 2004 are still incomplete. Member states often look to India for leadership but this reliance can also breed mistrust because of India's Size & Strength. Without flexible mechanisms like ASEAN Minus X, BIMSTEC risks repeating SAARC’s rigid consensus traps.

Conclusion

South Asia’s demographic weight holds immense economic potential, yet SAARC’s rigid consensus and political disputes, particularly India-Pakistan tensions have stalled integration limiting intra-trade to 5% against ASEAN’s 25%. BIMSTEC, bypassing these hurdles offers a pragmatic path with initiatives like the Master Plan for Transport Connectivity (2022-2028) and interregional ASEAN ties. To succeed, South Asia could revive SAARC with sub-regional frameworks like BBIN (Bangladesh-Bhutan-India-Nepal) or empower BIMSTEC with Minus X-style flexibility for trade and energy grids. Shared challenges like climate change, digital economy could unify efforts, leveraging India’s IT sector ($210B exports) and Bangladesh’s garments ($50B). By 2030, a reformed SAARC or robust BIMSTEC could transform South Asia’s demographic strength into global economic clout, rivaling ASEAN’s success and changing the region’s narrative from potential to power.

Sources

·         Worldometers - Southern Asia Population (2025) https://www.worldometers.info/world-population/southern-asia-population/

·         Worldometers - World Population (2025) https://www.worldometers.info/world-population/

·         IMF World Economic Outlook (April 2025) https://www.imf.org/external/datamapper/profile/SAQ; https://www.imf.org/external/datamapper/NGDPD@WEO/OEMDC/ADVEC/WEOWORLD; https://www.imf.org/external/datamapper/NGDPD@WEO/IND/GBR

·         World Bank South Asia Development Update (April 2025)

·         ClearTax World GDP Ranking (2025)

·         Worldometers - South-Eastern Asia Population (2025) https://www.worldometers.info/world-population/south-eastern-asia-population/

·         IMF World Economic Outlook (ASEAN GDP, 2025)

·         Wikipedia SAARC (Exports)

·         ASEAN Key Figures 2024 (Exports)

·         Wikipedia BIMSTEC (Population, GDP) https://en.m.wikipedia.org/wiki/BIMSTEC

·         BIMSTEC Secretariat - 6th Summit 2025

·         World Bank Trade in South Asia (SAARC intra-trade)

·         ASEAN Stats Bulletin (ASEAN intra-trade, 2024)

·         Reuters Nasscom Report (India IT exports, 2025) https://www.reuters.com/world/india/indian-tech-sector-seen-growing-51-fy25-nasscom-says-2025-02-24/

·         Bangla News Garment Statistics (Bangladesh garments, 2025)  https://inews.zoombangla.com/bangladesh-garment-export-statistics-2025-what-the-numbers-say/

·         Diversifying Global Supply Chains: Opportunities in Southeast Asia – McKinsey

https://www.macrotrends.net/global-metrics/countries/sas/south-asia/exports

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https://bimstec.org/event/247/thailand-hosts-the-6th-bimstec-summit-in-bangkok-on-04-april-2025-

https://www.stimson.org/2024/why-bimstecs-maritime-transport-agreement-is-essential-for-india/

https://www.stimson.org/2024/why-bimstecs-maritime-transport-agreement-is-essential-for-india/