SAARC and India

SAARC and India

This article deals with ‘SAARC and India Relations- UPSC.’ This is part of our series on ‘International Relations’ which is an important pillar of the GS-2 syllabus. For more articles, you can click here.

About South Asian Association for Regional Cooperation (SAARC)


  1. Afghanistan
  2. Bangladesh
  3. Bhutan
  4. India
  5. Maldives
  6. Nepal
  7. Pakistan
  8. Sri Lanka
SAARC and India


  • Kathmandu, Nepal

Last Summit

  • Held in Kathmandu (Nepal)  in 2014

Secretary General

  • Arun Bahadur Thapa of Nepal


  • Promote welfare economics.
  • Collective self-reliance among the countries of South Asia.
  • Accelerate socio-cultural development in the region.

Type of Organization

  • Decisions are taken by consensus
  • The organization reflects the South Asian identity of the countries based on shared history, language, religion, cuisines, etc.

Important Statistics

  • SAARC comprises 3% of the world’s area, 21% of the world’s population and 4% of the global economy.
  • 35% of the global youth resides in the SAARC region
  • South Asian nations also make an integrated “condominium” of common rivers, a mountain system, an ocean and a conjoint ecological system.


1980 The idea of regional political and economic cooperation in South Asia was first raised in 1980
8 Dec 1985 The first summit was held in Dhaka
Last Summit Kathmandu (Nepal) – 18th Summit in 2014

Critical Evaluation

It was formed to promote regional development and improve ties among nations. But SAARC has not been able to generate the benefits of cooperation. The reasons for this are as follows:-

1. Political reasons

  • The boundary dispute between India and Pakistan has overshadowed the functioning of SAARC. 

2. Economic reasons

  • Low inter-regional trade: While organizations like ASEAN record trade of 20%, SAARC’s trade figures are at a dismal low at about 3%.
  • GDP of SAARC nations except India is small, hampering the effective economic relations among them. 
  • Other nations fear that competition would lead to injury to the industry of other members.

3. Historical reasons

  • Different nations have fought wars and past differences in the past, which hamper cooperation in present times.

4. Geographical reasons

  • This region has poor infrastructure. Hence, economic connectivity is low due to poor road transport. 

5. Fear about India’s Big Brother attitude

  • India constitutes 70% or more of SAARC’s area and population and has political conflicts with all her neighbours. 5 members have common borders with India but not each other. They perceive India as “Big Brother” and fear using the SAARC to pursue hegemony in the region.

6. Others

  • SAARC is an organization of countries not of equal stature-economically, geographically & politically.
  • There is an increase in Chinese influence on SAARC nations like Sri Lanka, Nepal, Pakistan and Maldives.

But even after that, SAARC provides a platform to meet and discuss important issues with hostile nations such as India and Pakistan, even during tense moments.

China  factor in SAARC

  • China holds an observer status in the group.
  • All SAARC nations except India and Bhutan are part of OBOR. 
  • Pakistan, China’s all-weather friend, also demands a more participatory role for China in the SAARC grouping. 
  • China is building large scale infrastructure in SAARC nations. E.g., China has started CPEC with Pakistan, the Hambantota project with Sri Lanka, FTA with the Maldives and the railroad pact with Nepal.
  • Pakistan is pursuing its regional connectivity goals exclusively with China through CPEC. 


  • China is constructing a dam on the Brahmaputra without taking Indian and Bangladeshi concerns onboard.
  • The behaviour of China in other engagements is not so pleasant. For instance, it almost shook ASEAN by bringing Cambodia, which did not even make a final statement nowadays. 

Indian Initiatives for SAARC

1 . SAARC Satellite

  • South Asia Satellite is communication-cum-meteorology satellite by ISRO for the South Asia region. 
  • It was announced in June 2014 & launched in May 2017.
  • It has 12 Ku Transponders, with each nation getting at least One Transponder.
  • India bore the cost of the whole launch and satellite. 

2. Initiatives during Corona Period

India has taken the following measures to help SAARC countries in these challenging times

  1. COVID-19 Information Exchange Platform (COINEX), developed by India, facilitated various online learning modules. 
  2. SAARC Food Bank mechanism.
  3. Creation of SAARC COVID-19 Emergency Fund and contribution of $10 million in it.

3. Others

  • SAARC Disaster Management Centre in New Delhi 
  • Immediate medical visa for the entire region.  
  • E-connectivity– online courses and e-libraries.

South Asian Economic Union (SAEU)

All SAARC countries are committed to making South Asia an Economic Union in a phased manner

  1. Free Trade Area (Presently, we are in this stage – SAARC FTA)
  2. Customs Union
  3. Common Market
  4. Common Economic and Monetary Union. 

Bangladesh, Bhutan, India & Nepal Motor Vehicle Agreement (BBIN MVA )


  • Easing cross-border movement of people and goods


November 2014

SAARC Motor Vehicle Agreement was proposed at the 2014 summit held at Kathmandu, suspended after objection from Pakistan. 
June 2015

BBIN MVA Agreement signed at Thimpu between Bangladesh, Bhutan, India and Nepal.
April 2017 Bhutan decides to withdraw from the agreement. 

1. Environment Pollution: Diesel heavy vehicles traffic   
2. Noise Pollution: Heavy traffic will destroy the calm of the valley. 
3. Meagre Economic Benefits: Manufacturing Industry is not strong in Bhutan, so it will not benefit from this agreement 
4. Tourism may be affected. 
5. Opposition from rival parties. 
6. Fear of smuggling activities. 
April 2019

Bhutan Government announced that it would place a bill to ratify the BBIN initiative in Senate soon.


  • The agreement removes all obstacles to the movement of vehicles within the member countries. A vehicle from one country can easily go to other without much hindrance. 
  • But vehicles will be allowed to ply only on the stipulated routes and attain specific permits. 
  • Also, drivers of these vehicles will have to carry a valid passport.


  • For Nepal and Bhutan, two landlocked countries, this would improve their access to the open seas.
  • It will promote tourism. 
  • Economic interdependence had existed among these countries for centuries, as most of the region was one country before the partition of British India in 1947. later, partition disrupted the lines of communication.
  • South Asian region suffers from poverty, with a significant population living below $1 a day. Also, it is one of the least integrated regions globally. BBIN MVA can help change the scenario. 
  • It can help to counter China’s Belt and Road (BRI) Initiative in these countries. 
  • It will help in improving Logistics Performance Index (LPI) in the region. 

Future challenges

  • Cost  for implementation of the agreement will be borne by the respective countries. Since most of the countries are poor there is apprehension whether they will be ready to spend that amount.
  • Giving transit to India is a sensitive issue in Bangladesh.

Alternatives of SAARC

  • SAARC is not going anywhere. All decisions in SAARC are taken by consensus, and Pakistan blocks all the initiatives taken by India. Hence, Indian Policymakers have started to look for alternatives that exclude Pakistan. 
  • The suggested alternatives include BIMSTEC and Indian Ocean Rim Association (IORA).

Need to revive SAARC

  • SAARC serves an essential purpose as it reflects the South Asian identity of the member countries. 
  • India subcontinent, while geographically is one of the most integrated regions in the world in terms of terrain,  ecosystem,  river system etc.  But its polity, history,  economics, and below-par engagement make it one of the world’s least integrated regions of the world  –  This lack of integration can be overcome by  SAARC. 
  • South Asian countries are closely tied and face similar traditional and emerging issues like terrorism, energy shortage, hydro-politics, climate change.
  • Placing the bet on other platforms such as BIMSTEC is faulty as BIMSTEC can complement but can’t replace SAARC as SAARC is an old organization with a permanent secretariat and well-established conventions. 
  • SAARC is in line with India’s Neighbourhood First policy, of which SAARC could become the central pillar.
  • The European and ASEAN experience is testimony to the contribution of regional cooperation in economic growth.

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