Most of the countries of South Asia are presently suffering from varying degrees of economic instability and currency weakness arising out of Covid pandemic and conflict -induced economic decline and inflation which has reduced consumer spending in their export markets, increased food costs and unemployment, triggered recessionary tendencies , increased healthcare costs and reduced disposable income. In this scenario of rising gloom, India offers a  ray of hope in becoming the fifth largest economy in the world with potential to grow further by improving quality of output to become more competitive in the export market. Indian business should also penetrate far deeper into the rural markets of South Asia by investing in them to generate local employment and value addition by finishing and packaging there for local consumption. 

Dependence on Indian goods by rural economies will generate goodwill among the population and, hopefully, reduce the spread and use of canards by anti-India elements for promoting their political objectives. The export of light machinery for irrigation, agriculture and rural food processing/ preservation can be very useful.

To do this, however, the Reserve Bank of India (RBI) must take steps to trade in national currencies within South Asia, reducing the burden on smaller neighbours increasingly hard pressed for hard currency. Such a facility will also reduce the need for investors to buy hard currency to invest in and maintain their operations in our neighbourhood. Indian currency was once legal tender from Aden to Australia and RBI should strive again to make that happen. A start that has recently been made in rupee trade with certain countries over time should be expanded to include not only the SAARC (South Asian Association for Regional Cooperation) region but further afield to Africa and ASEAN as well. 

Capital markets can gradually be freed up as the rupee stabilises. There is no reason why the Indian rupee cannot become a respected reserve currency within the next couple of decades. or even earlier. The continuing flight of capital from India will cease thereby and India will remain an attractive investment destination if we can rapidly improve our ease of business, labour productivity and skillsAfter all south Asia will remain the world's largest market for decades to come.

Social security transfer agreements

Meanwhile, India may consider quickly extending lines of credit to Sri Lanka and Bangladesh on softer terms than IMF loans as we have enough forex reserves at present to cope with their small needs to prevent economic collapse. This will result in consolidation of South Asian economies around the Indian one and allow us as Big Brother to lift our smaller siblings out of trouble. Our entrepreneurs should be transformed into investors and manufacturers rather than mere traders. Indian enterprise must go local to become global and thereby earn respect, approbation  and influence in the process, as some of our firms like Tata, Infosys, Kirloskar, Marico, etc have achieved already.

India must promote necessary social security transfer agreements, establish equivalency in educational and professional qualifications, and promote ease of obtaining work permits to achieve in the South Asian region the freedom of movement of professionals that we have been fighting for decades in fora like the World Trade Organisation and its predecessor. Economic integration of South Asia and inter-linkages of its communications, supply and value change will enable our entire neighbourhood to prosper and reduce, if not eliminate, economic migration, augment trade in financial and value-added services and turn the region into a global powerhouse. 

Mutual dependence will also help us to mitigate the effects of climate change and reach zero-emission targets. Our leadership must take the initiative quickly to achieve this. "Carpe diem", or "Seize the Day", must be our motto to be a developed region, not just a country, by 2047. What we can do tomorrow  we must try to achieve today and what we can do today must be started now.

(The author is a retired Indian ambassador. Views are personal)