Driven by India’s scale and Bangladesh’s fintech growth, South Asia’s new economic corridor is betting on digital innovation and cybersecurity.

In the past two decades, conversations about Asia’s economic future centred on China, Japan, South Korea, and the manufacturing ecosystems of East Asia. Today, a different story is pulling investor and policymaker attention: a corridor stretching across India, Bangladesh, Sri Lanka, and their neighbours, built less on factories than on a young, digitally fluent workforce.

The numbers explain the interest. The World Bank’s April 2026 South Asia Economic Update projects regional growth easing to 6.3% this year, down from 7% in 2025, before recovering to 6.9% in 2027. It is still faster than any other emerging-market region and overwhelmingly powered by India. Strip India out of the calculation, and growth across the rest of South Asia falls to roughly 4.1%, in line with other developing economies. This gap is the corridor’s defining feature: one country setting the pace, several others trying to plug into its momentum.

Two Economists, Two Different Confidences

Not everyone reads that momentum the same way. Franziska Ohnsorge, the World Bank’s Chief Economist for South Asia, has pointed to a region with a mixed industrial policy record. In her view, it is held back by limited implementation capacity, thin fiscal space, and small domestic markets in several countries. Her prescription leans cautious: broad structural reform first, with targeted measures. According to her, industrial parks, skills programmes, and export-quality standards are supplements, not substitutes.

Suman Bery, Vice Chairman of India’s NITI Aayog, strikes a more confident note. Speaking at the report’s release, he attributed India’s rising economic weight to a simpler fact: the country has avoided major financial crises along the way, a stability dividend that compounds over time. Where Franziska sees a region still proving it can execute, Suman sees an economy whose steadiness is itself the achievement.

Bangladesh Builds Its Own Capital Engine

Bangladesh’s contribution to the corridor is no longer just garments. In May 2026, 39 commercial banks jointly launched the Bangladesh Startup Investment Company, the country’s first institutionally governed, bank-backed venture capital platform, seeding it with an initial $35 million fund earmarked for at least three startups within four months. It’s a deliberate attempt to build local capital depth rather than wait for foreign venture funds to discover the market.

That capital is chasing a fintech sector that has already proven it can scale. bKash, the country’s dominant mobile financial services platform, now serves tens of millions of users and anchors an ecosystem of more than 300 fintech companies expanding from basic payments into SME lending and cross-border remittances. Where India supplies the corridor’s scale, Bangladesh is increasingly supplying proof that digital financial infrastructure can be built and owned locally.

The Cybersecurity Wager

The same leapfrogging that lets the region skip heavy industrialisation also creates the corridor’s sharpest vulnerability and its biggest opportunity. The U.S. International Trade Administration projects India’s cybersecurity market to grow from roughly $5.6 billion in 2025 to $12.9 billion by 2030, at an 18%+ annual rate, as banks, hospitals, and government platforms move online faster than their defences mature.

Two voices inside that industry capture the tension. Grant Bourzikas, Cloudflare’s chief security officer, expects 2026 to be defined by AI-powered attacks, with threat actors using AI to accelerate reconnaissance and exploit code written via low-effort “vibe coding” tools, a shift that rewards speed over sophistication. Arvind Subramanian, who runs Iron Mountain’s India operations, offers a quieter but more unsettling data point. He says roughly three-quarters of Indian organisations still manage some or most of their records in physical form, even as the AI narrative races ahead of them. 

The Thread

Taken together, these yield a single argument: South Asia’s corridor isn’t growing because it solved industrialisation differently. It is growing because it is betting that digital and security expertise can be exported faster than its own digital foundations can be secured. 

South Asia is not simply industrialising through software instead of factories. It is exporting risk management, cybersecurity, fintech infrastructure, and digital services for problems its own institutions are still working through at home. Whether that gap closes before it’s tested at scale is the real story here, and it’s a more interesting one than any growth percentage.

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