India plans to help regional countries currently facing considerable economic challenges to help foster a more integrated South Asian region. Despite COVID-19 the Indian economy is expected to grow at between 6% (World Bank) to 7% (ADB).
Many co-operative measures have been outlined and support to Sri Lanka has already been extended with future support also assured. These measures were summarized by the Indian State Minister for External Affairs Meenakshi Lekhi on April 19 in her address at the 13th South Asia Economic Summit held in New Delhi co-organised by the Institute of Policy Studies in Colombo.
Lekhi lamented that the region with 5% intra-regional trade as a proportion of total trade lagged behind even Sub Saharan Africa at 22%. She characterized the region as the most disconnected in the world. Lekhi reiterated the BJP stance that the broader South Asian region belonged to one ethnic group and signalled India’s intention to foster more co-operations. Lekhi noted that India’s make in India campaign was not structured in such a manner as to exclude intra-regional trade and that more should be done to foster cooperation between the countries.
Lekhi highlighted that the India First Policy translated into putting India’s immediate neighbours at the forefront of foreign policy considerations. India is expected to take over the G20 Presidency in 2023.Indian Ambassador and Research and Information System for Developing Countries (Co-organisers of the event) Chairman Mohan Kumar noted that with Afghanistan, Pakistan, Nepal, and Sri Lanka all facing severe challenges the government of India had taken a considerably conciliatory tone in its foreign relations.
Kumar called for better coordination of fiscal and monetary policy throughout the region. Kumar signalled that the Indian policymakers would take a broader role in creating systems to lower the remittance costs currently incurred by the large amounts of foreign workers originating in the region. India through RBI intervention has developed one of the most advanced payment systems in the world.
India has already implemented the RuPay card network and established functionality in the UAE giving its migrant workers added convenience. India has also extended the RuPay platform to Nepal. India is willing to foster broader cooperation on the payments and remittance front with Sri Lanka but the move would come at the cost of profitability to the local banking sector. India has also established itself as a more reliable lender of last resort to the region.