The present paper explores how a subregional engagement with
bordering regions can stimulate economic cooperation among countries
in the context of low levels of trade within the South Asian subregion. With
special reference to shared historical legacy and culture-driven
interaction — formal and informal — between Nepal and the state of Bihar
in India, the paper develops a SWOT (strength, weakness, opportunity and
threat) framework to rationalize and reflect on the need for a subregional
perspective towards promotion of regional cooperation. With
complementary applications of secondary data and field research, it
shows how irrespective of formal country-level initiatives, Nepal and Bihar
have engaged in successful economic partnerships and argues that those
existing nodes represent the potential for greater subregional and
regional economic cooperation. The paper also offers insights into formal
and informal challenges and policy imperatives associated with the
operationalization of the new perspective.