India’s New Economic Vision of 2022 to contribute towards Regional Progress

Authors: Srimal Fernando and Megha Gupta*

In the South Asian region, the India’s Economic Vision of 2022 is an upcoming economic model which is to change the social and economic status of the eight South Asian Association for Regional Cooperation (SAARC) nations. India with an economy of US$ 2.6 trillion is proposing to invest in twelve major sectors to achieve its forecasted target of US$ 5 trillion in the coming seven years. This economic push by India is said to double the intra-state trade between these neighboring South Asian countries and for these economic policies to get successfully implemented a stable neighborhood is essential for India and the region.

It has been thirty years, since the formation of SAARC and the improvements seen in the region are marginal. Most of the neighboring countries of India are either at low or middle income status and with the economic growth of India at a faster pace of 7% GDP and a 2025 Vision Plan will not only help India but also lift the economic status or standard of living of all other SAARC nations.

Currently India’s bilateral trade with Pakistan is US$ 5 billion, with Bangladesh is US$ 6.6 billion, with Nepal is US$ 6.35 billion, and with Sri Lanka it is US$ 5.2. If this Vision plan is implemented and India’s economy is to grow, then India’s bilateral trade with these countries will also majorly increase and in turn uplift the other member states of South Asia.

India has a strong interest in the maintenance of a more stable balance of power especially in this region and on a more fundamental level the profound changes in the next few years in India’s policy initiatives are likely to impact the seven neighboring countries.

Underlying this positive transformation, India’s role in South Asia is bound to be limited because of its bilateral disputes with Pakistan and also countries like Sri Lanka, Maldives, Nepal and Bangladesh tend to be a lot more cautious in freely trading with its neighboring countries.

It is time for all these neighboring countries to realize that, if India’s GDP grows at 9% in the next 20 to 30 years then the per capita income will also rise from US$ 1500 will rise to US$ 7000 per year as per the report by PricewaterHouseCoopers, which will significantly impact them to reach a higher income status.

In the recent years, a new line of thinking called ‘New inclusive India for the poor and the middle class has also emerged under the Vision 2022. Where, the Vision 2022 policy will be instrumental in developing the wellbeing of the 20,000 villages across the country. To a large extent of the new job creation in the industrial, tourism and service sectors will be the backbone of the Indian economy that is evolving from the Vision 2022 policy document. Further, the neighboring countries economic policy visions are also linked to the domestic economic and political interest. For instance, In the Sri Lanka’s Vision of 2025 policy document, Sri Lanka is planning to raise the per capita income to US$ 5000 per year and creating 1 million jobs by doubling the current exports to 12 billion per year. These economic initiatives will push the wellbeing of people to upper income category.

The Indian Blue Economy Vision of 2025, will also harness business potential to the Indian coastal belt and to nearby countries such as Maldives, Bangladesh, Sri Lanka and Pakistan which depends on the Indian Ocean.

The changing geopolitical and geo-economics landscape is likely to influence India and other South Asian nations and these shifts are to particularly impact the people centered policies especially in the South Asian countries, where democracy has an instrumental value in enabling the people to express and support their claims to political attention, including claims of economic needs.

All the eight countries are conscious of their responsibilities to contribute towards the economic and political stability of the region. This new 2022 economic vision of India will focus on economic prosperity, well-being for the middle class and the poor and to increase its bilateral and multilateral trade with its neighboring countries. Therefore, these policies will have a direct effect on the 1.5 billion citizens of South Asia.

*Megha Gupta, a scholar of Masters in Diplomacy, Law, Business at Jindal School of International Affairs, India.

Srimal Fernando
Srimal Fernando
Research scholar at Jindal School of International Affairs, India and an editor of Diplomatic Society for South Africa