South Asia is the southern region of Asia, which is defined in both geographical and ethno-cultural terms. The region consists of the countries of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. India''s vision of regional economic integration in South Asia is based on enhanced intra-regional trade, investment flows and regional transport and communication links in South Asia. South Asian Association for Regional Cooperation (SAARC) and India’s Neighbourhood First Policy are the two vehicles in this process. Culturally, there are many similarities, but there are a number of cross-sub regional challenges like political and economic instability (Sri Lankan Crisis and Afghanistan Crisis) , high inflation, depleting foreign exchange reserves (Pak’s forex reserves have fallen to USD 4.3bn -its lowest since 2014) and domestic unrest that continue to simmer in the South Asian region, which hosts around a quarter of the world''s population.

Constraints / Challenges to the regional cooperation in South Asia

• Low Inter-Regional Trade: South Asia’s intra-regional trade is the lowest globally, constituting only 5% of the region’s total trade. The current economic integration is just one-third of its potential with an annual estimated gap of 23 billion dollars.
• External Influence in South Asia: Smaller neighboring countries are quite predictable in seeking to balance India''s influence through closer relations with external powers, in the past this was the US at the moment it is China. Chinese actions and policies in South Asia as well as its maritime neighbours, including Indian Ocean Island nations, have made it necessary for India to take its neighbours very seriously.
• Territorial Issues: Territorial disputes in South Asia remain a challenge to the peace, stability, and prosperity of the region. Of all interstate disputes, those over territory tend to be more likely to lead to armed conflict.
• Inefficient Management of Global Supply Chain: South Asia’s international trade integration is lower than the global average, and it is way less integrated into global value chains compared to East Asia. The countries have abysmally low exports due to the low productivity of many countries in this region.
• Political Tensions: Historical conflicts, border disputes, and ongoing political tensions between countries in the region make it difficult to foster cooperation and regional integration.
• Economic Disparities: Significant economic disparities between countries in the region make it difficult to establish a level playing field for trade and investment.
• Different levels of Economic Development: South Asia is home to some of the world''s most economically advanced countries as well as some of the least developed. This makes it difficult to establish a common economic agenda.
• Security Concerns: The region is plagued by various security concerns, including terrorism, extremism, and separatist movements, which can make regional cooperation and integration difficult.
• Small Size of Markets: Most of the countries in the region are small in terms of population, area, and GDP. This makes it difficult for businesses to operate and for regional trade to thrive.
• Lack of Trust: Lack of trust between countries in the region is a major obstacle to regional cooperation and integration.

Perhaps South Asia could learn form the ASEAN experience where concerted action and a shared vision has made it a dynamic regional grouping. In such a scenario, it becomes imperative  to assess the impediments that SAARC faces in the path of regional cooperation in order to lift it out from the morass of  poverty and underdevelopment. Given the historical context, topographic and demographic features, natural resource endowments and socio-cultural ethos, South Asia could be the most natural unit of cooperation and integration.