Context: In this article we discuss how Peace with Pakistan is not just a bilateral matter, but is essential for India to transform South Asia.
Background

• The recent thaw in the bilateral relationship between the two neighbours India and Pakistan seems to indicate a growing, but unstated, realisation that an atmosphere of peace and tranquillity is of mutual interest to both countries.
• The Kashmir issue seems to have taken a back seat between the two countries.

Implications of India – Pakistan rivalry

• India-Pakistan animosity hurts regionalism and South Asian growth.
• SAARC has remained a victim of India-Pakistan rivalry. Pakistan has been blocking trade and connectivity and people-to-people ties. The repeated boycotting of the SAARC summits is an indication of the impairment of the organization.
• South Asia with a population of slightly over 1.9 billion and a GDP (PPP) of $12 trillion, performs badly when compared with the Association of South East Asian Nations (ASEAN) member countries which have registered impressive economic growth and development.

Potential of a vibrant bilateral relationship

Regional integration: A fair peace between India and Pakistan is not just good for the two states but for all the nations constituting the South Asian Association for Regional Cooperation (SAARC).
Economic potential: Reports from World Bank, Asian Development Bank and the European Union have noted the immense potential hidden in the South Asian economic integration.

• An economically transformed and integrated South Asian region could advantageously link up with China’s Belt and Road Initiative and even join the Regional Comprehensive Economic Partnership, unleashing great economic potential

India’s role

• India should seize the moment and become more South Asia-concerned and much less Pakistan-obsessed.
• Given its size and heft, India should take the lead in transforming the South Asian region.
• India enjoys an overwhelming ‘size imbalance’ in South Asia. The shares of India in the total land area, population, and real GDP of South Asia in 2016 are 62%, 75%, and 83%, respectively. 
• The two other big countries in South Asia are Pakistan and Bangladesh with shares in regional GDP of only 7.6% and 5.6%, respectively.
• India needs to view peace with Pakistan not as a bilateral matter, to be arrived at leisurely, but as essential and urgent, viewing it as a chance to dramatically transform South Asia for the better.

Larger agenda for the region: There should be a more focussed approach on issues plaguing the entire subcontinent like poverty and malnutrition. Co-operation and collaboration in these aspects would benefit both India and Pakistan.