Unfortunately, I am not so enthusiastic about improvement of relationship, trades or otherwise, between us. At least not till some sort of agreement is reached/signed for the 75 year old dispute and both stop their respective covert divisionary tactics. And also Indian govt. will certainly keep a radioactive distance from CPEC, which will otherwise give some sort of legitimacy AJK and GB, which they, the present vociferously and the other govts in the past silently, claims as part of India.
This, I wholeheartedly agree. But, I don't see any quickfix between the trios, who are entangled in a web of border dispute so complex that I cannot foresee any plausible solution. So in the meanwhile China will keep growing fast, followed by, slowly but surely, India and BD. For Pakistan to jump in the bandwagon, hopefully after next election, some political stability comes and the Military power is cut back to actual required size. With too many power centres at the moment, it is truely unachievable at the moment, IMHO.
Indian government isn't looking out in the future in terms of India's economic growth. India's IT market will take a big hit in the next few years from all around post the 6G rollout. That's a significant source of revenue for India. In fact this tech boom helped create today's India by hard work that started back in 1995's. There is an expectation of a very significant recession that's already starting and will last for a while, welcoming the globe to the "Gig Economy" that's a work in progress for a few years now.
So how do you create 6-7% growth YOY? Well, one way is to find non-IT consumers to sell Indian products and services to. How do you find that? You connect with China, Pakistan and through them connect with Afghanistan and then use CPEC to expand your economic reach to Central Russians Estates and the EU. If you don't do it, the Chinese will take the pizza and the plate with them.
For any of the above to work, relations have to be improved. How do you do that? Easy fix, all 3 sit down and freeze the issue on today's lines (like India did to Jammu). There is no other way, period. I think India has smart business savvy people that when the time comes can force the government to shake hands (like they did a while ago with Modi when he visited Lahore for example).
Lastly, you are under estimating Pakistan. Take a look at us, our economy was in shambles recently, we've been sanctioned multiple times to have basic upgrades to our fighter jets, we were told "we'd break up into pieces", today we still exist, we manufacture advance weapons, export jets (ToT but that's fine, it's ours), we have the 3rd largest work force who is young (over 50% of Pakistanis are between 15-30 years, etc, etc) and created one of the largest free lancer force in the world. It's only a matter of 5 stable years and the graph would move 45 degrees!