Hurdles to Progress in SAARC: Political Tensions and Structural Challenges

The South Asian Association for Regional Cooperation (SAARC) was created in 1985 with a hopeful promise: that eight neighbouring nations could pool their strengths to lift nearly two billion people out of poverty. Four decades later, that promise remains largely unfulfilled. SAARC has not held a single summit since 2014, and the organisation is often described as being in a state of paralysis. Understanding why one of the world’s most populous regional blocs has struggled so visibly requires looking at a tangle of political rivalries, structural design flaws, and deep economic divides. This post breaks down the major hurdles that have kept SAARC from reaching its potential.

The India-Pakistan rivalry at the centre 🔗

No single factor has shaped SAARC’s trajectory more than the relationship between its two largest founding members. The rivalry between India and Pakistan, rooted in the partition of 1947 and the unresolved Kashmir dispute, has repeatedly spilled into the multilateral arena and brought collective progress to a halt. Because SAARC relies on cooperation between all members, hostility between these two states effectively freezes the entire body.

The clearest example is the cancellation of summits. The 19th SAARC Summit, scheduled for Islamabad in 2016, was called off after the Uri attack, with India leading a boycott joined by Afghanistan, Bangladesh, and Bhutan. Since then, no summit has taken place. More recently, the Pahalgam terror attack deepened mutual distrust, with India accusing Pakistan of supporting cross-border terrorism and the two sides retreating further from dialogue. When the region’s two anchors cannot sit at the same table, the smaller members are left waiting indefinitely.

Cross-border terrorism and the trust deficit 🔗

Terrorism is not just a security issue in South Asia; it is a diplomatic one that corrodes the foundation of cooperation. Repeated cross-border attacks have hardened positions and made it politically impossible for governments to extend goodwill to neighbours suspected of harbouring militants. This produces what analysts call a trust deficit – a chronic absence of confidence that prevents members from honouring agreements even when they have signed them.

A telling structural problem is that SAARC has no robust mechanism to resolve such disputes. As one analysis of the Pahalgam fallout noted, the absence of a strong dispute resolution system means the organisation cannot respond collectively to terrorism, unlike other regional bodies such as ASEAN that have taken more proactive stances on security. The result is an atmosphere where suspicion outweighs any incentive to collaborate.

Structural flaws built into the charter 🔗

Some of SAARC’s weaknesses are not accidents of politics but features written into its founding document. Two provisions in particular have crippled its ability to act.

The unanimity rule 🔗

According to Article X of the SAARC Charter, decisions at all levels must be taken on the basis of unanimity. This means a single dissenting member can block any initiative. In a region where bilateral suspicions run deep, the unanimity rule effectively hands every member a veto. Where the European Union or ASEAN can move forward with majority support, SAARC stalls the moment consensus breaks down. This design choice is a major reason why so many agreements remain on paper.

The exclusion of bilateral issues 🔗

The same Article X states that bilateral and contentious issues shall be excluded from the deliberations. The intention was pragmatic: by setting aside the most divisive disputes, the founders hoped to create space for progress on less controversial matters. In practice, this provision has become one of SAARC’s greatest stumbling blocks, as many experts have observed.

The flaw is that almost every serious problem in South Asia has a bilateral dimension. Kashmir, water sharing, border management, and trade disputes are precisely the issues that drive regional instability – yet the charter forbids the organisation from even discussing them. As the analysis points out, this inability to address bilateral matters has left SAARC unable to make substantive progress on core points of contention. The organisation is barred from confronting the very tensions that undermine it.

Economic disparities and the lopsided region 🔗

SAARC’s members are strikingly unequal in size and economic weight. India accounts for the overwhelming majority of the region’s land area, population, and GDP, while countries like Bhutan, the Maldives, and Afghanistan are far smaller and less developed. This power asymmetry shapes the entire dynamic of cooperation.

India’s dominant position creates discomfort among the smaller states, who worry about being overshadowed by their large neighbour. At the same time, Pakistan has consistently contested India’s leadership ambitions within the bloc. Researchers note that this asymmetry is a fundamental reason for SAARC’s failure to emerge as a viable organisation, since smaller members hesitate to deepen ties that might increase their dependence. Wide gaps in development levels also make it genuinely difficult to design policies that benefit everyone equally – a tariff cut that helps one economy may threaten a fragile industry in another.

The trade and connectivity gap 🔗

Perhaps the most concrete measure of SAARC’s underperformance is its dismal level of internal trade. South Asia is one of the least economically integrated regions on the planet. According to the World Bank, intra-regional trade accounts for barely 5 percent of South Asia’s total trade, compared with roughly 25 percent in ASEAN and around 60 percent within the European Union.

This is a remarkable failure for a region of close neighbours who share history, language, and culture. The South Asian Free Trade Area (SAFTA), which came into force in 2006, was meant to change this by reducing tariffs and boosting commerce. Yet intra-SAARC trade has remained stubbornly low, held back by non-tariff barriers such as bureaucratic delays, technical standards, and customs red tape that often cost more than tariffs themselves.

The high cost of trading with neighbours 🔗

Poor infrastructure compounds the problem. Inadequate roads, rail links, port facilities, and digital connectivity make it expensive and slow to move goods across borders. The situation is so severe that intra-regional trade costs in South Asia run at roughly 114 percent of the value of the goods being traded. In practical terms, this means it is often cheaper for a South Asian country to trade with a distant partner like the United States or Brazil than with the country next door. Restrictive visa regimes and weak banking links add further friction, leaving a huge share of the region’s trade potential unrealised.

Connectivity initiatives have struggled too. Agreements like the SAARC Motor Vehicles Agreement could not gain full traction, and ambitious energy projects have stalled. The region holds enormous untapped potential – hydropower from Nepal and Bhutan could power India and Bangladesh – but political mistrust has prevented the cross-border grids and pipelines that would unlock it.

Migration, refugees, and shared pressures 🔗

South Asia also faces complex human movement that strains relations between neighbours. Refugee flows, economic migration, and displacement caused by conflict create sensitive cross-border issues that members often handle bilaterally rather than collectively. Climate change is adding a new layer to these pressures, with rising sea levels threatening low-lying areas and extreme weather events displacing communities across the subcontinent. Without a coordinated regional approach, these challenges fall on individual states and become further sources of friction rather than opportunities for cooperation.

The rise of alternatives 🔗

As SAARC stalled, member states began looking elsewhere. India in particular has shifted attention toward BIMSTEC, the Bay of Bengal grouping that includes Bangladesh, Bhutan, Nepal, Sri Lanka, Myanmar, and Thailand but excludes Pakistan. This allows cooperation on connectivity and trade without the deadlock that the India-Pakistan rivalry imposes on SAARC.

This drift toward sub-regional groupings reflects a pragmatic response to SAARC’s paralysis, though it risks fragmenting the region further. Notably, SAARC has shown that functional cooperation can still work when summit-level politics is set aside. During the pandemic, leaders held a video conference in March 2020 and proposed a COVID-19 emergency fund, proving that collaboration on shared problems like health and disaster management remains possible even amid political freeze.

Why SAARC still matters 🔗

Despite this long list of hurdles, writing SAARC off entirely would be a mistake. It remains the only platform that brings all eight South Asian nations together, and the region’s shared challenges – poverty, climate vulnerability, public health, and disaster response – are inherently transnational. The potential gains from genuine integration are enormous; studies suggest that with better trade facilitation, intra-regional trade could multiply several times over to surpass $170 billion.

Realising that potential would require reforms that address the root causes: revisiting the unanimity rule, building a real dispute resolution mechanism, investing in cross-border infrastructure, and, above all, rebuilding political trust between members. None of this is easy, and much of it depends on a thaw in the India-Pakistan relationship that may be years away. But the underlying logic of regional cooperation – that neighbours prosper more together than apart – has not gone anywhere.

What do you think? If you were redesigning SAARC’s charter today, would you remove the unanimity rule and the exclusion of bilateral issues, even at the risk of inviting more conflict into its meetings? And given the shift toward BIMSTEC, do you believe SAARC can still be revived, or has the region already moved on?

References

1. https://centreline.com.pk/2025/05/27/the-future-of-saarc-amidst-india-pakistan-tensions/
2. https://niice.org.np/archives/11436
3. https://www.saarc-sec.org/index.php/resources/agreements-conventions/46-saarc-charter-provisional-rules-of-procedure/file
4. https://gulfnews.com/opinion/editorials/saarc-needs-to-create-amity-at-its-core-1.1419149
5. https://southasianvoices.org/the-irrelevance-of-saarc/
6. https://www.thefridaytimes.com/13-Nov-2025/saarc-limbo-india-pakistan-rivalry-crippled-south-asian-regionalism
7. https://politicsforindia.com/3-1-saarc-and-bimstec-psir/
8. https://testbook.com/ias-preparation/safta
9. https://www.peacedoyens.org/saarc-trade-volumes/
10. https://clarityupsc.com/international-relations-upsc-notes/saarc-regional-cooperation-challenges-bimstec-alternative-future