Seventy-five years ago at the stroke of the midnight hour when the world was sleeping, India and Pakistan were waking up to freedom, shedding the yoke of colonialism and beginning a new era.

Under the terms of the Indian Independence Act, adopted by the British Parliament, the Indian subcontinent was formally divided into two new dominions of India and Pakistan on the night of Aug. 14 and 15, 1947.

On that momentous night, both countries made a tryst with destiny, with leaders promising to end misfortunes and opening of opportunities for achievements. But unfortunately, it appears that seven-and-a-half decades later, South Asia has become a lesser connected region than it was at the time of independence for want of the settlement of skewed political issues left by the colonial powers.

According to figures available from India’s PHD (Punjab, Haryana, Chandigarh, and Delhi) Chamber of Commerce and Industry, more than 70% of Pakistan’s trading transactions were with India in 1948-49, and 63% of Indian exports were destined to Pakistan. But the figures collected in 2018 showed that the trade trickled to less than 1%. After India scrapped the special status of the disputed Jammu and Kashmir state and bifurcated it into two centrally administered territories on Aug. 5, 2019, the trade has come to a complete halt.

Even before 2019, the trade between the two countries had seen a sharp downward trend with India’s trade with Pakistan declining to 0.34% during the financial year of 2010-12 from 0.48% reported during 2007 and 2009. Even as the trade has remained a trickle, business organizations say informal trade that is routing goods through third countries is thriving and is estimated that it could be more than $3 billion.

Admitting that the unsettled issue of Kashmir and the legacy of partition has defined the core of bitterness between India and Pakistan, India’s former Foreign Secretary Nirupama Rao said the people-to-people connectivity has become the first casualty of political upheaval or estrangement between close neighbors. Rao, who is also the author of The Fractured Himalaya: India, China, Tibet 1949-1962, said there was a need to think beyond the narrow confines of hyper-nationalism and the politics of amphitheater to let people prosper.

"Perhaps neither side will achieve what it regards as the best solution. Maybe what is realized will be a ‘balance of dissatisfaction’ but it may yet bring the peace crafted by mature minds, who think beyond the narrow confines of hyper-nationalism and the politics of the amphitheater, and who want our people to prosper and have better lives," she added.

SAARC remains ineffective

In 1985 at the initiative of Bangladesh, South Asian countries gathered to establish the South Asian Association of Regional Cooperation (SAARC) to find ways of promoting trade, connectivity and cooperation between its seven members – Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. Its headquarters is located in Nepal’s capital Kathmandu. Afghanistan later joined the grouping.

But due to acute disputes between India and Pakistan, its two key members, the forum has degenerated into irrelevance. The intraregional trade between eight South Asian nations remains only 5%, making it one of the most disconnected regions in the world. In contrast, the neighboring 10-member grouping of the Association of Southeast Asian Nations (ASEAN) accounts for 25% of intraregional trade. Even in Sub-Saharan Africa, intraregional trade has improved over the years to 22%.

India’s National Transport Development Policy Committee said in a report that such a low level of integration has roots in the lack of quality border management infrastructure, leading to high logistics costs, which are as high as 13-14% of the gross domestic product against the global average of 8-9%.

Over the past few years, India is promoting sub-regional grouping involving Bangladesh, Bhutan, India, and Nepal, and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation – which includes Nepal, Bhutan, Myanmar, Bangladesh, Thailand, and Sri Lanka to replace the SAARC.

In 2014 while assuming office for the first time, Indian Prime Minister Narendra Modi invited all eight leaders of SAARC countries including then Pakistani Prime Minister Nawaz Sharif to attend his swearing-in ceremony at the forecourt of Rashtrapati Bhawan, India’s presidential estate. But soon this bonhomie was lost.

The 19th SAARC Summit, scheduled to be held in Islamabad in 2016, was indefinitely postponed after India pulled out of the event. New Delhi cited cross-border terrorism as the reason for pulling out of the summit after four militants attacked an army base in the Kashmiri border town of Uri, killing 18 soldiers.

India is also peeved at Pakistan’s attempts to bring China and Central Asian states into the SAARC fold. It believes that by this move Pakistan was attempting to counter India’s influence in the region.

China is one of the observer countries in SAARC along with the U.S., the EU, Japan, Australia, Iran, and South Korea. At the 18th summit in Kathmandu in 2014, the host Nepal tried to convince countries to allow Beijing to become a full-fledged member of the grouping.

Journalist-turned-Pakistani politician Mushahid Hussain Syed said China was already a player in South Asia. He described the China-Pakistan Economic Corridor (CPEC), which runs through Pakistan-administered Kashmir, as the key economic route linking South Asia with Central Asia.

Syed, who played a key role in convincing then-Pakistani President Gen. Zia ul Haq to participate in the first SAARC summit in Dhaka, Bangladesh in 1983, said the Gwadar port was the nearest warm water port not only for China but also for the landlocked Central Asian states.

No cross-LoC trade

In 2005, India and Pakistan agreed to open the heavily militarized Line of Control (LoC) that divides Jammu and Kashmir for bus service and later in 2008 launched trade between the divided region. It was touted as one of the biggest confidence-building measures that will ultimately lead to a solution for the issue of Jammu and Kashmir.

But in 2019, the Indian government suspended cross-LoC trade, which was running using the barter system as both countries had not come to terms on which currency should be used for trading goods. But still, it had achieved a cumulative volume of $1.2 billion, a significant amount considering the nature of the economics of the region.

This trade generated around 170,000 labor days, or $12 million, for laborers and freight of around $88 million. So, cross-LoC trade helped establish a strong economic dependency between the otherwise politically turbulent neighbors, India and Pakistan.

Afaq Hussain, the director and a founding member of the Bureau of Research on Industry and Economic Fundamentals, a New Delhi-based policy research institute, said this trade had helped in creating a peace constituency and connecting the divided families of Jammu and Kashmir through economic engagement.

"As and when the governments of India and Pakistan decide to reinitiate this trade, they need to keep in mind the security and policy concerns that have been raised over the last decade," he said.

Besides giving birth to the Kashmir dispute, the partition and freedom of India and Pakistan came at a heavy price. By the time the violence faded around 1950, an estimated 3.4 million people were found missing or dead in the worst ever communal clashes. Besides, both countries went to war immediately on Kashmir. In 1948, India’s freedom icon Mohandas Karamchand Gandhi, better known as Mahatma Gandhi, was assassinated by a Hindu nationalist.

In the 75 years since their independence, relations between India and Pakistan have continued to simmer, erupting into four wars and ongoing cross-border attacks. For many in India, Pakistan and Bangladesh, the events unfolding in 1947 are also associated with losses and memories of bloody days.

Since both India and Pakistan now have leaders born after 1947, there is a need for them to learn from the past, chart a new course and find people-centric solutions to resolve disputes, and redeem the pledge of a tryst with destiny that leaders made 75 years ago, to end misfortunes, and seek opportunities and achievements.