Last month, India's Foreign Ministry announced that Prime Minister Narendra Modi would not participate in the South Asian Association for Regional Cooperation (SAARC) summit, which was to be held in November in Islamabad.

"Increasing cross-border terrorist attacks in the region and growing interference in the internal affairs of member states by one country have created an environment that is not conducive to the successful holding of the 19th SAARC Summit," a ministry statement said.

"In the prevailing circumstances, the Government of India is unable to participate in the proposed summit in Islamabad," it added.

India's regional allies Bangladesh, Afghanistan and Bhutan also boycotted the summit. As a result of these diplomatic snubs, the Pakistani government had to cancel the meeting.

"Islamabad is facing a serious foreign policy crisis since the attack on an Indian army base in Uri, Kashmir. With India, Bangladesh and other major countries pulling out of the SAARC summit, it is definitely a major embarrassment for Pakistan," Ali K. Chishti, a Karachi-based security and defense analyst, told DW.

Pakistan's Foreign Ministry described India's withdrawal from the SAARC summit as "unfortunate."

But reports have now emerged that Pakistani authorities are exploring the possibility of a "greater" South Asia economic grouping. By including China, Iran and some Central Asian nations in the bloc, Islamabad aims to counter Indian influence on SAARC.

"A 'greater' South Asia alliance is coming about. Iran, China and Central Asian states are part of it," Mushahid Hussain, a Pakistani senator, told reporters on Tuesday, October 11, in New York.

Impediments to the Pakistani plan

Beijing is investing massively in Pakistan and has signed an economic project with Islamabad worth $46 billion (41 billion euros). With the China-Pakistan Economic Corridor (CPEC), Beijing aims to expand its clout in Pakistan and across Central and South Asia while countering US and Indian influence. The CPEC would link Pakistan's southern Gwadar port on the Arabian Sea to China's western Xinjiang region. It also includes plans to create road, rail and oil pipeline links to improve connectivity between China and the Middle East.

Senator Hussain believes that an alliance between the SAARC countries, China and Central Asia would be beneficial for everyone.

"The countries in the region are trying to forge economic alliances. Many officials from the Central Asian countries have visited Islamabad in the past few months. Pakistani PM Nawaz Sharif will soon tour the region. The country's authorities believe that Pakistan can play a vital role in linking up Central and South Asia. They think they can exploit this opportunity," Bakar Najamuddin, an expert on international relations at the Islamabad-based National University for Science and Technology, told DW.

Najamuddin denies reports that some Central Asian countries are reluctant to work with Islamabad because of its alleged support to Islamist militants. "There is a militancy problem in Uzbekistan as well as Tajikistan. You can't blame Pakistan for these problems. Afghanistan, too, has to work with Pakistan despite its warming ties with New Delhi. It is far more costly for India to connect to Central Asia through Iran. Pakistan's geostrategic significance can't be undermined," the expert underlined.

But analyst Aman Memon believes a South Asia-Central Asian grouping cannot be formed until Islamabad abandons "support" for certain Islamists. "Pakistan wants to counter Indian influence, but peace in Afghanistan is the most crucial thing in forging that kind of an alliance. It's not only Afghanistan, but also Central Asian countries that are critical of Pakistan-based militants. They are unhappy with Islamabad's regional policies that are emboldening Islamists," Memon told DW.

China's 'economic colony'

Experts point to the fact that in the present scenario, Islamabad is relying too much on Beijing. They say that Pakistan is more than willing to support China in its regional ambitions and be a "client state," given that the US has very little to offer economically and geo-politically in the present circumstances.

"Islamabad has no other option but to increase cooperation with Beijing and do what it says," development analyst Maqsood Ahmad Jan told DW. "Saudi Arabia can't be as big an investor as China, the US is unreliable, and the Pakistani government needs money urgently," he added.

Jan goes on to say that Pakistan has sold out to China for $46 billion, referring to the CPEC project. "I think the Chinese aid is not for free. Pakistan's economy is not that big, so Beijing will now take over most of our income-generating sectors."

But Ahsan Iqbal, Pakistan's minister for planning and development, believes the forthcoming economic deals with China would be beneficial for his country. "The real opportunity of this China-Pakistan Economic Corridor is that it changes the scope of the relationship from geopolitics to geo-economics," Iqbal told journalists, adding that the projects would have a "significant transformative effect on Pakistan's economy."

Jan, however, does not agree with Iqbal's assessment of Sino-Pakistani economic ties. "This will turn us into China's economic colony instead."

Additional reporting by Sattar Khan, DW's Islamabad correspondent.