South Asia’s Untapped Potential: Why the Region Contributes 25% of the World’s Population but Only 4% of Global GDP

South Asia is home to nearly a quarter of the world’s population—more than 1.8 billion people. From the bustling cities of India to the mountain villages of Nepal, from Bangladesh’s garment hubs to Sri Lanka’s ports, the region is alive with human energy, ideas, and labor. Yet, despite this massive demographic weight, South Asia contributes only around 4% to the world’s total GDP. The gap between population size and economic output is striking—and it raises an important question: why hasn’t South Asia lived up to its potential?

The Growth Story and Its Limits

It is true that South Asia has seen progress in the last two decades. India has emerged as one of the fastest-growing major economies, Bangladesh has built a world-class garment export industry, and Sri Lanka and the Maldives have invested in tourism. Yet structural challenges remain: weak regional trade, limited industrial diversification, dependence on remittances, and uneven access to quality education and healthcare.

Barriers to Regional Integration

Unlike Europe or Southeast Asia, South Asia remains one of the least integrated regions in the world. Intra-regional trade accounts for less than 5% of total trade, compared to 25% in ASEAN. Political tensions, poor infrastructure, and restrictive policies have prevented the region from harnessing the benefits of working together. Simply improving trade and connectivity could add billions of dollars to collective GDP.

A Young Population—A Double-Edged Sword

The region also has one of the youngest populations on earth. If provided with the right skills and opportunities, South Asia’s youth could drive innovation, manufacturing, and entrepreneurship. But without job creation and economic reforms, this demographic dividend could become a liability, leading to unemployment, inequality, and social unrest.

The Way Forward

For South Asia to move from 4% to a larger share of global GDP, three steps are vital:

1. Invest in human capital—better education, healthcare, and skill training.

2. Boost regional cooperation—trade, energy sharing, and cross-border infrastructure.

3. Embrace digital and green growth—using technology and sustainability as accelerators.

Conclusion

South Asia’s story is not one of failure, but of untapped potential. The numbers show a region rich in human capital but held back by fragmentation and underinvestment. If South Asia can align its strengths with bold reforms, the world could soon witness not just the demographic size of the region, but its true economic weight as well.