South Asian leaders will pile pressure on Pakistan on Thursday to salvage SAARC summit in Nepal by agreeing to electricity sharing and the free movement of vehicles across borders, measures aimed at boosting trade among nearly a quarter of the world's people.
Hopes of progress at the South Asian Association for Regional Cooperation (SAARC) meeting in Kathmandu now hinge on a morning retreat outside the mountain city, where leaders will make their case to Pakistan's Prime Minister Nawaz Sharif.
"It is likely that this matter will come up in the retreat," Indian foreign ministry spokesman Syed Akbaruddin said, adding that several states were pushing hard for an agreement.
Bangladesh also confirmed a final push to convince Pakistan in time for the summit's closing declaration later in the day.
An official in the Nepali delegation who was privy to the discussions said the focus was now on winning support for the electricity pact, which aims to create a seamless power grid across South Asia, one of the world's least integrated regions.
Pakistani officials did not respond to phone calls seeking comment.
India and Pakistan have been trying for years to reach a bilateral agreement for energy sharing across their heavily militarized border in Punjab, but the deal has faced resistance from Pakistan's army.
Despite a free trade pact in force since 2006, high tariffs and restrictions on movement mean trade among South Asian nations makes up just five percent of their total trade.
India and Pakistan have fought three wars, and last month exchanges of fire across the border in disputed Kashmir killed 20 people. Transit is so restricted across the border that large volumes of Indian goods can only reach Pakistan via Dubai.
Also last month, Pakistan agreed on electricity transit fees with Afghanistan, a step towards importing energy from Central Asia.
The squabbling between India and Pakistan has held back SAARC for years, with the two sides' disagreements preventing progress in the consensus-based grouping.
Modi is keen to make South Asia a viable counterweight to China and on Wednesday warned that regional integration would happen "through SAARC or outside it."
China is an observer at SAARC, and Vice Foreign Minister Liu Zhenmin has promised $30 billion for road building in the region over five years, and suggested increasing trade to $150 billion in the same period.