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)

Members 1. Afghanistan
2. Bangladesh
3. Bhutan
4. India
5. Maldives
6. Nepal
7. Pakistan
8. Sri Lanka
Headquarter Kathmandu, Nepal
Last Summit Held in Kathmandu (Nepal)  in 2014
Secretary-General Arun Bahadur Thapa of Nepal
Objectives Promote welfare economics.
– Collective self-reliance among the countries of South Asia.
– Accelerate socio-cultural development in the region.  
Type Decision is taken by Consensus.
Organisation that 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 together also make an integrated “condominium” of common rivers, a mountain system, an ocean and a conjoint ecological system.
SAARC and India


1980 The idea of regional political and economical 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. 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-region 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

  • In past, different nations have fought wars and past differences 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 that it might use the SAARC to pursue hegemony in the region.

6. Others

  • SAARC is an organisation 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.

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.


  • 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 in 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.
  • The cost of the whole launch and satellite is borne by India.

2. Initiatives during Corona Period

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

  1. PM Modi convened the SAARC Leaders video conference.
  2. COVID-19 Information Exchange Platform (COINEX) developed by India will facilitate various online learning modules.
  3. SAARC Food Bank mechanism.
  4. 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. Both for the patient and one attendant.
  • 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, Kathmandu, which was suspended after an 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.

Reasons included
1. Environment  Pollution:  Diesel  Run  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 will 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 will have to 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 Asia today is home to one of the poorest people in the world with the significant population living below $1 a day. Also, it is one of the least integrated regions globally. This can help change the scenario.

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.
  • Alternatives that are suggested include BIMSTEC.

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