GS-2 (Mains), Mains-2018 (English)

SAARC v/s BIMSTEC – Challenges for India


SAARC & BIMSTECThe seven countries’ grouping BIMSTEC connecting South Asia with the Southeast Asia received much attention after the last year’s SAARC summit in Islamabad was postponed following tensions between India and Pakistan over terror attacks.


Basic Introduction:

-> The South Asian Association for Regional Cooperation (SAARC) is the economic and geopolitical organisation of 8 South Asian nations consisting of India, Pakistan, Sri Lanka, Bangladesh, Bhutan, Nepal, Maldives and Afghanistan.

-> The objectives of SAARC as outlined in the SAARC Charter are: to promote the welfare of the peoples of South Asia and to improve their quality of life; to accelerate economic growth, social progress and cultural development in the region; to promote and strengthen collective self-reliance among the countries of south Asia.

-> The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is an international organization involving a group of countries in South Asia and South East Asia.

-> The BIMSTEC comprises of seven countries, Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand, and came into being on 6 June 1997 through the Bangkok Declaration.


Historical Aspect associated with SAARC and BIMSTEC:

-> SAARC was formed in 1985 while BIMSTEC has been in existence in various forms since 1997.

-> SAARC has faced problems in the past, mostly attributed to India-Pakistan hostilities. India’s problems with Pakistan over Kashmir, terrorism, and nuclear issues have affected the working of SAARC since its inception. Hence SAARC doesn’t allow any bilateral agenda to be discussed on its platform, but even this provision hasn’t stopped the India-Pakistan rivalry from spilling over into the workings of the organization.

-> BIMSTEC includes include India’s northern, southern, and eastern neighbors, who are part of SAARC as well. But besides Pakistan, the grouping leaves out two other SAARC states: Afghanistan and the Maldives. Barring Pakistan, India is making efforts to remain engaged with Afghanistan and the Maldives.

-> Historically, India has preferred to maintain relations on the bilateral level rather than pursue a regional agenda under the BIMSTEC framework.

-> However, India has been an active member of SAARC, which is seen as a means to better relations with neighbors, one of the primary objectives of Indian foreign policy.

-> To break out of the deadlock due to SAARC, India is now channeling its energies toward BIMSTEC.

-> BIMSTEC offers India a chance to engage with its South and Southeast Asian neighbors without being weighed down by Pakistan’s consistently unfriendly attitude.


India’s view on SAARC:

-> For too long, India had conflated its regionalism with SAARC that was established three decades ago at the initiative of Bangladesh. While Delhi and Islamabad were both wary of the move in the mid-1980s, it was the inward economic orientation of the Subcontinent that limited possibilities for regional cooperation.

-> As the Subcontinent launched economic reforms in the 1990s, regional integration appeared a natural consequence waiting to happen.

-> As the South Asian states opened up to the world, it seemed sensible to connect with each other. But that was not how it turned out.



SAARC Failures:

-> The intra-regional trade of SAARC – amounted to $40.5 billion in 2011, which constitutes just 5% of member countries’ trade.

-> No economic integration.

-> Unresolved Border and Maritime Issues.

-> Attitude of Pakistan has been blocking connectivity initiatives such as SAARC Motor Vehicles Agreement and SAARC Railways Agreement, and refusing to cooperate on combating cross-border terrorism.


India’s Importance for SAARC & BIMSTEC:

-> In SAARC as well as in BIMSTEC, India’s demographic and economic might is a major factor. India is a rising economy and can offer large markets for trade, investment, and energy for member states of a shared regional grouping.

-> The attractiveness of the Indian market and military capacity of India will be key factors in the future of the Bay of Bengal region given the economic and security challenges ahead.


Why BIMSTEC matters for India?

-> The BIMSTEC is a bridge between South Asia and Southeast Asia.

-> The two Southeast Asian countries in the grouping, Myanmar & Thailand, have a crucial place for India’s ambitious connectivity plans for northeastern region. Myanmar is only Southeast Asian country India has a land boundary with.

-> An India-Myanmar-Thailand highway is one of the key projects in the government’s Act East (earlier Look East) policy.

-> With the India-Pakistan tension coming in way of a smooth functioning of the SAARC, grouping such as BIMSTEC can take forward the concept of regional cooperation in a different manner.

-> BIMSTEC seems to be the ideal vehicle available for India to pursue its geostrategic and geo-economic goals in the Bay of Bengal and the Asia-Pacific in the face of intense competition from China.


Reasons for BIMSTEC slow progress:

Two decades since its inception, the BIMSTEC has yet to truly succeed as an instrument of regional integration. The primary reason for the BIMSTEC slow progress is

-> Lack of interest or general inertia amongst its members.

-> Despite having the potential to enhance regional cooperation, BIMSTEC has been sluggish, and so far – due to lack of resources, and poor coordination among its member states has held only three summit meetings: Thailand, 2004; India, 2008; and Myanmar, 2014.

-> Marginal growth in intra-BIMSTEC trade. Several countries in the group have low rankings in the World Bank’s 2017 “Ease of Doing Business” index.

-> Various other impediments slow down cross-border private-sector investment, among them, deficiencies in transport and financial connectivity.

-> Very few banks of member countries are allowed to operate across borders in other BIMSTEC countries.

-> Further, the lack of harmonised regulatory regimes constricts trade and investment. Many more obstacles persist in the financial domain, such as capital controls, subsidies and price controls.

-> There have also been more pressing national and regional issues that have overtaken the group’s development.


Can BIMSTEC serve as a better regional cooperation option than SAARC?

BIMSTEC has some natural advantage over SAARC as a regional grouping due to following reasons:

(i) Absence of Pakistan Tension between India and Pakistan resulted in sluggish growth of SAARC. In BIMSTEC, there is no such conflict.

(ii) BIMSTEC more naturally lends itself to regional integration Better regional connectivity as well as economic cooperation than SAARC. BIMSTEC countries have number of infrastructural projects on the offing like Kaladan project, India-Myanmar- Thailand highway, BCIM corridor, BIMSTEC economic corridor.

(iii) Trade potential BIMSTEC countries are more open to trade.

(iv) Integration with other groups like ASEAN, CPTPP etc. will become easier through BIMSTEC.

(v) Natural resources The BIMSTEC region has a huge amount of untapped natural, water, and human resources, from hydropower potential in the Himalayan basin to hydrocarbons in the Bay of Bengal.

(vi) Cultural ties Most of the countries profess Buddhism whose roots are in India.

(vii) Development of North-Eastern India  India’s northeastern states, which lack connectivity and development, will benefit from the renewed focus on BIMSTEC. It will be in the long-term interest of India’s Northeast to have the special laws on investment be drafted for both domestic and FDI for this region.

(viii) Economic stability In the last five years, BIMSTEC member states have been able to sustain an average 6.5% economic growth rate despite the global financial slowdown.


How BIMSTEC can be made effective?

-> In this Asian and global landscape, the salience of BIMSTEC has grown for India to secure its strategic space in the neighbourhood and the Bay of Bengal region. While India is the lead country for four priority sectors—transportation and communication, environment and disaster management, tourism, and counter-terrorism and transnational crimeBIMSTEC has to move into areas of strategic cooperation.

-> The trilateral maritime security initiative with Maldives and Sri Lanka can be expanded to the five BIMSTEC countries in the Bay of Bengal littoral.

-> India’s Sagarmala project, still at an early stage, can be integrated into the cooperation framework of BIMSTEC.

-> The Asia–Africa Growth Corridor, meanwhile, is another vision that needs to be dovetailed into BIMSTEC’s components of development and cooperation projects, quality infrastructure and institutional connectivity, enhancing capacities and skills, and people-to-people partnership.

-> BIMSTEC can function as the hub for connecting Asia-Pacific and the Bay of Bengal with Africa.

-> The BIMSTEC FTA should be accorded top priority, along with connectivity, energy, and counterterrorism.

-> The BIMSTEC electricity grid connectivity agreement should be operationalised as soon as possible. A regional and sub-regional electricity grid can lead to wheeling of power across borders, trading of power, and creation of transmission projects with clear advantages for all countries.

-> Pipelines for oil, gas and petroleum products are another important aspect of energy cooperation can be prioritize. An India-Nepal pipeline is currently being constructed, and talks on another one from India to Bangladesh are also underway. Energy-rich Myanmar can also be brought into the pipeline grid when the hydrocarbon potential of the Bay of Bengal is exploited.

-> Infrastructure projects which are in the pipeline should be completed on mission mode. Among them, the 2015 Asian Development Bank (ADB) study mentions the following:

  • A new deep-water port (Kolkata/Haldia), with road and rail access;
  • Kaladan project;
  • A new container terminal in Chittagong and a new deep-water port (Payra) serving Chittagong;
  • Expansion of South Harbour in Colombo; Expansion of the deep-water port of Hambantota with a SEZ; and
  • Better road connections to the Port of Thilawa; improved port connectivity in East Dagon Township of greater Yangon; development of a new port at Dawei, as well as a deep-water port at Kyaukpyu;

-> As BIMSTEC matures with the successful implementation of its current projects, the future participation of Indonesia and Malaysia will only foster further development.



BIMSTEC must now move into a rapid implementation stage, for which the necessary resources should be injected into the Dhaka-based secretariat.

More efforts toward regional cooperation in BIMSTEC have the potential to make SAARC more and more irrelevant in Indian foreign policy discourse, although Pakistan will remain central to India’s foreign policy. Unless Pakistan seriously rethinks its strategy in SAARC, it will be hard to keep India and other states interested in the grouping.



1 thought on “SAARC v/s BIMSTEC – Challenges for India”

  1. Have given few lectures and talks in Southeast Asian countries and their awareness about India is very low, irrespective of the cultural histories. Their awareness of China stuff is much greater, ergo the deeper business and trade ties with China than India. If BIMSTEC has to succeed then the awareness gap at a people-to-people level has to be smoothened, just bragging about cultural histories goes not deepen business deals. See here for our recent Guest Talk on Bay of Bengal opportunity at New Delhi’s NIPFP


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