Why India and Pakistan must put development before disputes

By Rajneesh Chandra, Sandeep Pandey 

The idea of India is enshrined in the Preamble to the Constitution and rooted in the values of the freedom movement. It represents a synthesis of democracy, secularism, socialism, and liberalism, with the objective of securing social and economic justice for all citizens. Economic growth, therefore, must not merely increase national wealth; it must also ensure that prosperity is equitably shared while upholding democratic and liberal values.

India's economic journey since Independence has undoubtedly been remarkable. In 1970, India's nominal GDP stood at US$62.4 billion, with a per capita income of US$114. By 2026, these figures had risen to US$4.15 trillion and US$2,813, respectively. At first glance, this appears to represent extraordinary progress. However, when adjusted for inflation and purchasing power, per capita income has increased only from approximately ₹1.6 lakh to ₹2.35 lakh. This increase has not been sufficient to lift a substantial proportion of the population out of poverty. 

The gains from economic growth have been unevenly distributed, with a disproportionate share accruing to the wealthy. This widening inequality is reflected in India's Gini coefficient of around 62, where 0 denotes complete equality and 100 denotes maximum inequality. India has undoubtedly become wealthier, but it has also become significantly more unequal, raising important questions about its ability to deliver economic justice to ordinary citizens.

A comparison of major Asian economies further highlights the divergent development trajectories over the past five decades.

In 1970, India's economy and per capita income were broadly comparable with those of China. Yet China transformed itself from a poor country into an upper middle-income economy through sustained industrialisation, export-led growth, and long-term policy consistency. South Korea similarly evolved from a low-income country into one of the world's most advanced economies. In contrast, South Asian countries, including India, Pakistan, Bangladesh, and other SAARC members, have progressed far more slowly. Although Bangladesh has made notable gains in recent decades, South Asia as a whole remains one of the poorest regions in the world. This reality demands that the leadership of SAARC adopt a shared vision of achieving broad-based economic prosperity by 2050.

Sustained economic development requires predictable fiscal policies, strong institutions, the rule of law, and, above all, peace and stability both within countries and across the region. Following the 1962 war with China, India's strategic priorities understandably shifted towards strengthening its military capabilities. Meanwhile, deteriorating India-Pakistan relations prevented South Asia from developing into an integrated economic region. Instead of promoting trade and economic cooperation, SAARC increasingly became hostage to political disputes. As a result, the region has failed to realise its enormous economic potential despite being home to nearly 1.9 billion people—almost one-quarter of the world's population—and having an average per capita income of only around US$3,000.

SAARC must therefore redefine its priorities by placing economic cooperation at the centre of its agenda. India and Pakistan, as the region's two largest countries, hold the key to this transformation. Without meaningful cooperation between them, the dream of South Asian economic integration will remain elusive.

The absence of trust between India and Pakistan has resulted in high tariff and non-tariff barriers, raising the cost of doing business in both countries. Goods that could be traded directly often have to be routed through third countries, increasing costs and reducing competitiveness. At the same time, both countries continue to allocate substantial resources to defence while facing pressing challenges in education, healthcare, nutrition, and employment. Although national security remains indispensable, durable peace would allow greater investment in human development, ultimately benefiting both societies.

The two countries also confront many common challenges, including climate change, floods, soil degradation, water scarcity, communicable diseases, and sustainable agriculture. Scientists, engineers, doctors, and agricultural experts from both countries could collaborate to develop locally relevant and cost-effective solutions. Too often, South Asia relies on technologies and policy models imported from OECD countries that may not adequately address the unique environmental and socio-economic conditions of the region.

India and Pakistan are also bound by centuries of shared history, language, literature, music, cuisine, and cultural traditions. Attempts to sever these ties have neither succeeded nor served the interests of ordinary people. Films, music, and literature from each country continue to find audiences across the border through informal channels despite official restrictions. Allowing artists, writers, filmmakers, and performers to collaborate legally would strengthen people-to-people contacts and help reduce mutual suspicion. Cultural exchanges cannot resolve political disputes, but they can create an environment more conducive to dialogue and understanding.

India, as the region's largest economy, possesses significant soft power. It should exercise this influence not in a paternalistic manner but in the spirit of partnership and mutual respect. Expanding access to medical visas for Pakistani citizens seeking treatment for cancer, cardiac ailments, and other serious illnesses would be a meaningful humanitarian gesture. While affluent patients may seek treatment elsewhere, many ordinary families could benefit from affordable, high-quality healthcare in India. Such initiatives would foster goodwill and strengthen constituencies for peace on both sides of the border.

The experience of France and Germany offers an instructive example. Before the Second World War, nationalism and repeated conflicts devastated both countries and hindered Europe's development. After 1945, however, visionary leadership recognised that lasting peace required cooperation rather than perpetual rivalry. Through reconciliation, economic integration, student exchange programmes, and sustained political dialogue, the two former adversaries laid the foundation for what eventually became the European Union. Today, war between France and Germany is virtually inconceivable because their economic and political destinies are deeply intertwined. While South Asia's circumstances are different, the broader lesson remains relevant: enduring peace is built through sustained engagement, shared institutions, and expanding economic interdependence.

India and Pakistan need not agree on every political issue before pursuing practical cooperation in trade, healthcare, science, education, culture, and regional connectivity. Progress in these areas can gradually build trust and create conditions that make the resolution of more difficult disputes easier over time. The leadership of both countries must demonstrate the political maturity and vision necessary to place the welfare of their peoples above the persistence of historical animosities.

South Asia cannot achieve its full economic potential unless its largest neighbours find ways to cooperate. A stronger and more effective SAARC could become an engine of shared prosperity, lifting millions out of poverty and creating opportunities for future generations. No country in the region can flourish in isolation. Economic instability or conflict in one country inevitably affects its neighbours through trade disruptions, migration, security challenges, and humanitarian crises. It is therefore in the collective interest of all South Asian nations to foster regional cooperation. Civil society, academia, business leaders, and policymakers must encourage their governments to pursue dialogue, strengthen regional institutions, and prioritise development over confrontation. Only then can South Asia realise its immense human and economic potential.

---

Rajneesh Chandra is a retired government servant. Sandeep Pandey is Secretary General of the Socialist Party (India).