A Case for Greater US Focus on Infrastructure Development in South Asia

Executive Summary

Washington’s traditionally security-focused approach to South Asia is not aligned with the primarily socioeconomic priorities of smaller South Asian countries. Infrastructure is particularly important, but critical gaps in fiscal and institutional capacity constrain these countries’ infrastructure sectors. By making investments that fill these gaps, the United States can strengthen its relationships in South Asia while reaping economic benefits.

Infrastructure development is a policy priority for all South Asian countries. According to estimates, South Asia will need $6.3 trillion in climate-adjusted infrastructure investments by 2030 to maintain the current levels of economic growth. However, the region faces significant domestic and geopolitical challenges that complicate this requirement.

Building quality infrastructure will require investments from like-minded partners on transparent and sustainable terms. Given their shared interests, the United States and India are well-positioned to mobilize their resources and address the infrastructure gap in South Asia. This effort would enable both countries to harness South Asia’s economic potential, contribute to regional stability, and counterbalance China’s growing economic engagements in the region.

This policy brief argues that the geostrategic and geo-economic potential of the smaller South Asian (SSA) countries warrants additional vigor in infrastructure investments and financing from regional and global powers. It examines the challenges faced in implementing various projects so far, highlights why the United States should prioritize the region for infrastructure financing, suggests policy interventions for Washington to play a more significant role, and identifies opportunities for U.S.-India coordination and cooperation in the region.

Click here to read the Policy Brief.