Well I beg to differ. Instead of SAARC, we can change the nomenclature to mean something else.
If India doesn't want to play ball right now, then the rest of South Asia can. It will not be convenient, but it is not impossible.
It is Indian intransigence that hobbled the bright possibility of SAARC. Incompetent leadership over the years India that did not and still does not see the possibility of development through trade, just because of immature bullying Dadagiri attitude. Instead of cooperation, Indian attitude is that of a trade bully, and this is why its foreign relations with all nations, near and far - are a mess.
It will change in time though - just watch.
Trump would have hung India out to dry Tariff wise, but Modi's begging and clamoring at Trump's feet saved India this time.
How is India going to muscle the rest of South Asia (with the exception of Nepal and Bhutan)?
This is a reasonable assumption.
Most South Asian nations are not friendly to India anymore, and vice versa. They have (or will have, easily) found alternative countries to trade with, other than India.
Bangladesh mooted the idea of SAARC, and it will lead the organization this time as well for a change.