A panel comprising participants from India and Pakistan discussed the possibilities of improvement in regional cooperation and expansion of trade in South Asia on the third day of the World Economic Forum (WEF) on Wednesday.
Aroon Purie, Editor-in-Chief, India Today Group, who moderated the session on 'Strategic Outlook for South Asia', began the discussion saying, "Here is an area that has a common cultural heritage, a common history but the least-integrated economy, which presents a great opportunity... South Asia could easily double the regional trade from the anaemic $23 billion which is there today. Yet this is a region of missed opportunities. It remains one of the world's least-integrated regions. The intra-regional trade accounts for only 5 per cent of South Asia's total trade."
The panelists included SpiceJet Chairman Ajay Singh, Dalmia Group Holdings Chairman Gaurav Dalmia, Paytm founder Vijay Shekhar and Pakistan's Sania Nishtar, Founder, Heartfile, a non-profit NGO think tank.
All the panelists agreed there was a huge scope for greater integration that could boost the economy of the regional countries.
Expressing confidence on trade relations between India and Pakistan, Gaurav Dalmia said, "The possibility of trade and investments is real if you just look at India and Pakistan. There could be a lot of manufactured goods export from India...there are a lot of cross border synergies, which need to be exploited by business people but enabled by governments. The problem is there are a lot of barriers to open up trade. It makes sense for governments to open this up and the benefits would accrue almost immediately. If we don't integrate, there's a risk the region could become a proxy for India-China conflict."
Pakistan's Sania Nishtar said both the countries needed to have functioning regional institutions that provided a convening space not just for governments but people, including businessmen. "Unfortunately, Saarc hasn't taken off in the way so many institutions around the world did. There aren't enough champions willing to stand on the either side of the border to say, well, we need to step aside from politics and think about the future of a quarter of the world's population."
SpiceJet Chairman Ajay Singh highlighted how trade between South Asian countries - which is roughly 5 per cent - could be improved. "There's a great possibility of bringing down the cost of our economies by doing business with each other. Often India and Pakistan do business through Dubai, which is hugely expensive," he said.
"If you look at other blocs, NAFTA (North American Free Trade Agreement) has more than 50 per cent trade happening within the countries. Around 50-57 % trade happen within the European Union. It's a great pity that we shouldn't be trading more. Connectivity flows through trade. While we are connected by air links to most South Asian countries, the links are extremely sparse and we need to do more," Singh added.
On the need for opening up skies in the region, the SpiceJet Chairman stressed on having a system in which airlines could fly within South Asia without restrictions. "This would give a huge boost to trade as well as tourism. It's a great pity the most populous cities in the world - Delhi, Karachi, Lahore and Mumbai - have little or no air connectivity at all."
Emphasising on having better relations with neighbouring countries, Singh said the date of achieving the $5 trillion economy which the Prime Minister Narendra Modi spoke about during his keynote address would probably get advanced if we had greater links with each other.
He suggested an India-China like framework to normalise relations between India and Pakistan. "We (India-Pakistan) have border disputes with each other, let's put those aside, freeze those disputes in time and let's focus on areas where we can collaborate. The problem with Saarc is the relations between India and Pakistan, which need to be addressed."
Paytm founder Vijay Shekhar Sharma said China has a far more ambition in this region than this region has for itself.