Answer:

Introduction:

Regional economic integration has been a significant goal for South Asian nations, largely propelled under the umbrella of SAARC (South Asian Association for Regional Cooperation) and lately, BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation). However, a confluence of India’s economic trajectory, its bilateral relationships, and global geopolitical dynamics has influenced this objective.

Body:

India’s Economic Growth:

• Economic Upsurge: 
  • India, projected to become the world’s third-largest economy by 2030, is crucial to South Asian economic integration. 
  • Its robust services sector and burgeoning manufacturing prowess offer immense market opportunities for its neighbors.
• Digital Revolution: 
  • With initiatives like ‘Digital India’, there’s potential for cross-border e-commerce and digital integration.
• Investment Potential: 
  • India’s investment in projects like the International North-South Transport Corridor can boost intra-regional trade.

Engagement with Neighbouring Countries:

• Trade Initiatives: 
  • Efforts like BBIN (Bangladesh, Bhutan, India, Nepal) initiative aim at sub-regional cooperation, which might serve as a precursor for broader economic integration.
• Connectivity Projects: 
  • India’s involvement in infrastructural projects, such as roadways in Myanmar or ports in Sri Lanka, augments regional connectivity.
• Bilateral Hiccups: 
  • Persistent issues, such as the India-Pakistan tensions, act as roadblocks.
  • Trade between the two nations has been minimal, causing South Asia to remain one of the world’s least integrated regions.
• Shift Towards BIMSTEC: 
  • With SAARC’s diminishing momentum, India’s pivot towards BIMSTEC for regional cooperation indicates a new strategy of engaging with more receptive neighbors for economic collaboration.

Influence of Great Power Rivalry:

• China’s BRI: 
  • The Belt and Road Initiative by China envelops many South Asian countries, creating parallel dynamics of cooperation and dependency. 
  • India remains wary of the initiative due to sovereignty concerns, especially with the China-Pakistan Economic Corridor (CPEC) traversing through Pakistan-occupied Kashmir.
• US’s Indo-Pacific Strategy: 
  • The US, viewing India as a strategic partner against China’s rise, has shown interest in South Asian economic integration. 
  • The U.S.-India partnership can catalyze regional connectivity projects.
• Geo-economic Competition: 
  • The tug-of-war between global powers in South Asia often takes a geo-economic dimension. 
  • The rivalry for ports, such as Hambantota in Sri Lanka, is a testament to this.
  • Despite the growing trade volume, India’s trade with its neighbourhood has remained roughly between 1.7% and 3.8% of its global trade. 

Conclusion:

The prospects of regional economic integration in South Asia are influenced by a delicate balance of internal growth trajectories, bilateral relationships, and broader global geopolitical shifts. While India’s economic dynamism offers opportunities, longstanding regional tensions and the shadow of great power rivalries complicate the landscape. An integrated South Asia necessitates strategic diplomacy, both at bilateral and multilateral levels, and an inclusive vision that transcends transient geopolitical skirmishes.