India and Its Neighbourhood Relations

India and Its Neighbourhood Relations

• India’s neighbourhood is the first and most immediate arena of its foreign policy.
• India shares land or maritime boundaries with Pakistan, China, Nepal, Bhutan, Bangladesh, Myanmar, Sri Lanka and Maldives; Afghanistan is also traditionally treated within India’s South Asian neighbourhood framework.
• India’s neighbourhood policy is shaped by:
  • Geography
  • Historical and civilisational links
  • National security
  • Economic interdependence
  • Connectivity
  • Regional stability
  • Competition with external powers
• India therefore combines bilateral diplomacy, regional/sub-regional cooperation, development partnerships and strategic balancing in dealing with its neighbours.
• The Ministry of External Affairs continues to describe a peaceful and prosperous neighbourhood as essential for India’s own development, giving neighbours high priority in foreign policy.

Immediate and Extended Neighbourhood

• India’s neighbourhood can broadly be classified into:
• Immediate Neighbourhood
  • Pakistan
  • Afghanistan
  • Nepal
  • Bhutan
  • Bangladesh
  • Sri Lanka
  • Maldives
  • Myanmar
  • China

• These countries are important because of:
  • Shared borders
  • Historical links
  • Cultural connections
  • Migration and people-to-people ties
  • Security interdependence
  • Trade and connectivity.
• Extended Neighbourhood
  • Indian Ocean Region
  • Southeast Asia
  • Central Asia
  • West Asia
  • Parts of the eastern African seaboard.
• India’s engagement with the extended neighbourhood operates through policies such as:
  • Act East Policy
  • Connect Central Asia Policy
  • Indo-Pacific Vision
  • SAGAR/MAHASAGAR
  • West Asian partnerships
  • Indian Ocean diplomacy.

Characteristics of India’s Neighbourhood

Strategic Location

• South Asia occupies an extremely important geopolitical location between:
  • Indian Ocean sea routes
  • West Asia
  • Central Asia
  • Southeast and East Asia.
• Important sea lanes carrying energy, commodities and manufactured goods pass through the wider Indian Ocean region.
• Therefore, the neighbourhood connects India’s continental and maritime security interests.

Huge Human and Economic Potential

• South Asia is one of the most densely populated regions of the world.
• It possesses significant:
  • Human resources
  • Agricultural resources
  • Hydropower potential
  • Mineral resources
  • Consumer markets.
• Greater regional economic integration can significantly increase trade, investment and connectivity.

Historical and Civilisational Connections

• Political borders often cut across historically connected:
  • Ethnic groups
  • Languages
  • Religions
  • River systems
  • Trade routes
  • Cultural regions.
• This creates both opportunities for cooperation and sources of political sensitivity.

Persistent Political and Security Challenges

• The region has experienced:
  • Interstate conflicts
  • Civil wars
  • Terrorism
  • Insurgencies
  • Military rule
  • Political instability
  • Drug trafficking
  • Human trafficking.
• India must therefore deal simultaneously with traditional and non-traditional security challenges.

New Non-Traditional Challenges

• Modern neighbourhood diplomacy increasingly involves:
  • Climate change
  • Natural disasters
  • Water security
  • Food security
  • Energy security
  • Migration
  • Pandemics
  • Cybersecurity
  • Critical infrastructure
  • Transnational crime.

India’s Broad Approach Towards Its Neighbours

• India’s objective is to create a stable, peaceful and economically interconnected neighbourhood.
• Important features include:

Constructive Engagement

• India generally prefers dialogue and diplomatic engagement to prolonged confrontation.
• Even where serious disputes exist, channels for:
  • Political dialogue
  • Military communication
  • Diplomatic negotiations
    are often maintained.

Respect for Sovereignty

• India officially emphasises:
  • Sovereign equality
  • Territorial integrity
  • Non-interference
  • Mutual respect.
• This is particularly important because smaller neighbours sometimes fear Indian predominance.

Development Partnership

• India increasingly presents development cooperation as demand-driven rather than prescriptive.
• Major instruments include:
  • Lines of Credit
  • Grant assistance
  • High Impact Community Development Projects
  • Technical assistance
  • Humanitarian assistance
  • ITEC capacity-building programmes.

Asymmetric Engagement

• Since India is considerably larger economically and geographically than most neighbours, it has at times followed an asymmetric or non-reciprocal approach.
• India may provide concessions without demanding equivalent concessions from smaller neighbours.
• This idea is closely associated with the Gujral Doctrine.

Significance of the Neighbourhood for India

National Security

• Instability in neighbouring countries can directly affect India through:
  • Terrorism
  • Insurgency
  • Illegal migration
  • Drug trafficking
  • Arms smuggling
  • Radicalisation.
• Therefore, India’s internal security is closely connected with developments beyond its borders.

Economic Development

• A peaceful neighbourhood facilitates:
  • Cross-border trade
  • Investment
  • Energy cooperation
  • Regional value chains
  • Infrastructure development.

Connectivity with India’s North-East

• Bangladesh and Myanmar are especially important for connecting India’s North-East with the rest of South and Southeast Asia.
• Projects involving ports, highways, railways and inland waterways can reduce the region’s geographical isolation.

Maritime Security

• Sri Lanka, Maldives, Bangladesh and Myanmar are strategically significant for India’s security in the:
  • Bay of Bengal
  • Arabian Sea
  • Indian Ocean Region.
• India seeks cooperation in:
  • Maritime Domain Awareness
  • Anti-piracy
  • Search and rescue
  • HADR
  • Coastal security.

Rise of China

• China’s expanding political, economic and strategic presence across South Asia has made neighbourhood diplomacy even more important for India.
• Chinese involvement includes:
  • Belt and Road Initiative
  • China-Pakistan Economic Corridor
  • Ports
  • Infrastructure financing
  • Defence cooperation.
• India particularly objects to CPEC because it passes through territory claimed by India, raising sovereignty concerns.

Global-Power Aspirations

• India cannot credibly emerge as a major global power without maintaining stable and productive relations in its immediate neighbourhood.

Neighbourhood First Policy

• Neighbourhood First gives India’s immediate neighbours high political and diplomatic priority.
• It is not best understood as a policy suddenly “created in 2008”; rather, prioritising neighbours has long existed in Indian foreign policy, while the Neighbourhood First formulation became particularly prominent after 2014.
• The policy seeks:
  • Political trust
  • Connectivity
  • Economic integration
  • Development cooperation
  • Security cooperation
  • People-to-people relations.
• India officially continues to place high priority on its neighbours under this framework.

Core Features

• Political and diplomatic priority to immediate neighbours.
• Development assistance according to partner-country priorities.
• Enhanced:
  • Road connectivity
  • Rail connectivity
  • Waterways
  • Air connectivity
  • Energy grids
  • Digital connectivity.
• Providing rapid assistance during:
  • Natural disasters
  • Economic crises
  • Health emergencies.
• Strengthening sub-regional institutions such as:
  • BIMSTEC
  • BBIN.

Objectives of Neighbourhood First Policy

Connectivity

• India seeks greater movement of:
  • Goods
  • People
  • Electricity
  • Services
  • Information
  • Capital.
• Regional connectivity is viewed as a force multiplier for economic development.

Peaceful Relations

• India requires peace and tranquillity around its borders to focus resources on domestic development.

Economic Cooperation

• India promotes:
  • Cross-border trade
  • Investment
  • Energy cooperation
  • Infrastructure connectivity.

Energy Integration

• Growing electricity trade links India with:
  • Bhutan
  • Nepal
  • Bangladesh.
• A more integrated regional electricity market can improve:
  • Energy security
  • Renewable-energy utilisation
  • Grid resilience.

Disaster Management

• India increasingly functions as a first responder during disasters in its neighbourhood.
• Cooperation includes:
  • HADR
  • Weather information
  • Emergency supplies
  • Medical assistance
  • Search and rescue.

Defence and Security Cooperation

• India conducts:
  • Joint exercises
  • Maritime surveillance
  • Defence training
  • Capacity building
  • Information sharing
    with several neighbouring countries.

Evolution of India’s Neighbourhood Policy

Pre-Independence Foundations

• India’s nationalist leadership strongly opposed:
  • Colonialism
  • Imperialism
  • Racism.
• The Asian Relations Conference was held in New Delhi in 1947, not 1948.
• It reflected India’s early ambition to promote Asian solidarity and post-colonial cooperation.

1950s–1960s: Nehruvian Idealism

• Major principles included:
  • Peaceful coexistence
  • Non-alignment
  • Anti-colonialism
  • Cooperation with Asian countries.
• Important developments included:
  • India-Bhutan Treaty of Friendship – 1949
  • India-Nepal Treaty – 1950
  • Panchsheel Agreement with China – 1954.
• However, the 1962 India-China War exposed the limitations of excessive strategic optimism.

1960s–1980s: Greater Security Orientation

• India’s approach became increasingly shaped by:
  • Security
  • Regional balance of power
  • External-power involvement.
• Major developments:
  • Bangladesh Liberation War – 1971
  • Shimla Agreement – 1972
  • Sikkim became an Indian state – 1975
  • Formation of SAARC – 1985
  • Indo-Sri Lanka Accord and IPKF deployment – 1987.

1990s: Gujral Doctrine and Economic Diplomacy

• Economic reforms after 1991 made regional economic integration more important.
• The Gujral Doctrine emphasised that India should make unilateral concessions to smaller neighbours where possible without insisting on strict reciprocity.
• This sought to reduce the perception of India as a regional hegemon.

2000s–2014: Connectivity and Economic Integration

• India increasingly emphasised:
  • Cross-border infrastructure
  • Energy cooperation
  • Trade
  • Development partnerships.
• China’s growing economic engagement in South Asia also increasingly affected India’s calculations.

2014 Onwards: Neighbourhood First

• Prime Minister Narendra Modi invited leaders from SAARC countries to his 2014 swearing-in ceremony, signalling political priority to the neighbourhood.
• Major areas of emphasis included:
  • Connectivity
  • Energy
  • Development assistance
  • Maritime security
  • Disaster response
  • Digital integration.

Important Examples of Neighbourhood Connectivity

Bangladesh

• Major initiatives have included:
  • Railway connections
  • Inland-waterway transit
  • Energy trade
  • Use of Chattogram and Mongla ports
  • India-Bangladesh Friendship Pipeline.
• The 2015 Land Boundary Agreement implementation removed a major long-standing bilateral problem.

Nepal

• Cooperation includes:
  • Cross-border electricity trade
  • Integrated Check Posts
  • Rail connectivity
  • Petroleum pipeline
  • Hydropower projects.

Bhutan

• Bhutan remains one of India’s most important development partners.
• Major cooperation centres on:
  • Hydropower
  • Trade
  • Education
  • Infrastructure
  • Security.

Myanmar

• Myanmar is India’s physical gateway to Southeast Asia.
• Key projects include:
  • Kaladan Multi-Modal Transit Transport Project
  • India-Myanmar-Thailand Trilateral Highway.
• Myanmar is also important for managing insurgency and security along India’s North-East frontier.

Shift from SAARC towards BIMSTEC and Sub-Regionalism

• SAARC remains institutionally alive, but high-level summit activity has remained stalled because of India-Pakistan tensions.
• India has consequently placed greater functional emphasis on:
  • BIMSTEC
  • BBIN
  • Bilateral connectivity mechanisms.
• BIMSTEC connects South Asia with Southeast Asia and includes Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand.
• MEA continues to maintain dedicated institutional engagement with both BIMSTEC and SAARC.

Recent Developments in India’s Neighbourhood Policy

Vaccine Maitri

• During the COVID-19 period India supplied vaccines and medical support to several neighbouring countries.
• This strengthened India’s image as a:
  • Health partner
  • First responder
  • Regional pharmaceutical hub.

Sri Lankan Economic Crisis

• During Sri Lanka’s severe economic crisis in 2022, India provided extensive assistance including:
  • Credit for petroleum
  • Essential commodities
  • Medicines
  • Food-related support.
• Official Indian figures showed assistance running into several billion US dollars, making India one of Sri Lanka’s most important immediate partners during the crisis.

Development Finance

• As of the latest MEA compilation, India had extended more than 300 Lines of Credit worth about US$32 billion to 68 countries.
• Important neighbourhood allocations included roughly:
  • Bangladesh – US$7.862 billion
  • Nepal – US$1.65 billion
  • Sri Lanka – more than US$2 billion
  • Myanmar – US$745 million
  • Maldives – US$1.43 billion.

Digital Public Infrastructure Diplomacy

• Digital cooperation has become a new instrument of diplomacy.
• India is promoting:
  • UPI connectivity
  • Digital payments
  • Digital public infrastructure
  • E-governance cooperation
    with partner countries.

Political Changes in the Neighbourhood

• India’s neighbourhood diplomacy increasingly has to manage frequent domestic political transitions in neighbouring countries.
• Bangladesh underwent significant political upheaval after 2024, and bilateral relations subsequently required careful recalibration.
• India and Bangladesh nevertheless continued official engagement; their foreign ministers met in New Delhi in April 2026.
• Similarly, India has continued active engagement with Maldives, including high-level bilateral exchanges following periods of political friction.

SAGAR and MAHASAGAR

SAGAR

• SAGAR – Security and Growth for All in the Region was announced in 2015 as India’s maritime vision.
• It emphasises:
  • Maritime security
  • Capacity building
  • Economic cooperation
  • Disaster response
  • Sustainable use of maritime resources.

MAHASAGAR – New Development

• In March 2025, India announced MAHASAGAR – Mutual and Holistic Advancement for Security and Growth Across Regions.
• MAHASAGAR expands the logic of SAGAR beyond the immediate maritime neighbourhood toward broader Global South cooperation.
• Its priorities include:
  • Trade for development
  • Capacity building
  • Sustainable growth
  • Mutual security
  • Technology sharing
  • Project-specific concessional finance and grants.

Extended Neighbourhood

Southeast Asia

• India’s Act East Policy places ASEAN at the core of India’s extended eastern neighbourhood.
• Objectives include:
  • Economic cooperation
  • Strategic relations
  • Cultural ties
  • Connectivity
  • People-to-people contacts.

Indo-Pacific

• India’s Indo-Pacific approach emphasises:
  • Open and inclusive regional order
  • ASEAN centrality
  • Freedom of navigation
  • Maritime security
  • Rules-based cooperation.
• Important mechanisms include:
  • Quad
  • ASEAN-led institutions
  • Malabar exercises
  • Maritime Domain Awareness initiatives.

Central Asia

• India’s Connect Central Asia Policy seeks stronger engagement in:
  • Energy
  • Security
  • Trade
  • Culture
  • Connectivity.
• Important initiatives include:
  • Chabahar Port
  • International North-South Transport Corridor
  • India-Central Asia dialogue mechanisms.

West Asia

• West Asia is crucial for India because of:
  • Energy imports
  • Indian diaspora
  • Remittances
  • Trade
  • Maritime routes
  • Security.
• Major recent initiatives include:
  • India-UAE CEPA
  • I2U2 cooperation
  • India-Middle East-Europe Economic Corridor (IMEC).

Western Indian Ocean and African Littoral

• Countries such as:
  • Mauritius
  • Seychelles
  • Madagascar
  • East African coastal states
    are increasingly important for:
  • Maritime security
  • Blue economy
  • Anti-piracy
  • Development cooperation.

Relevance of India’s Neighbourhood Policy

Geostrategic Significance

• Stable neighbourhood relations strengthen India’s ability to act as a major Indo-Pacific and Global South power.
• Stronger relations can limit excessive dependence of neighbouring countries on any single external power.

Security Significance

• Cooperation helps address:
  • Cross-border terrorism
  • Insurgency
  • Illegal trafficking
  • Maritime threats
  • Cyber threats.

Economic Significance

• Regional economic integration can:
  • Expand markets
  • Reduce transportation costs
  • Improve energy security
  • Develop India’s border regions.

Importance for the North-East

• Bangladesh and Myanmar provide India’s North-East with shorter access to:
  • Ports
  • International markets
  • Southeast Asia.
• Therefore, Neighbourhood First and Act East intersect strongly in Northeast India.

Soft-Power Significance

• India’s cultural influence derives from:
  • Buddhism
  • Hinduism
  • Language
  • Cinema
  • Education
  • Yoga
  • Historical migration
  • Diaspora networks.

Challenges to India’s Neighbourhood First Policy

India-Pakistan Relations

• Cross-border terrorism and persistent political hostility remain major obstacles to wider South Asian regional cooperation.
• India-Pakistan tensions have significantly weakened SAARC’s effectiveness.

Growing Chinese Presence

• China has significantly expanded:
  • Infrastructure financing
  • Trade
  • Defence cooperation
  • Political engagement
    throughout South Asia.
• India therefore faces a challenge of providing credible alternatives rather than merely opposing Chinese projects.

Perception of Indian Dominance

• Because of India’s:
  • Size
  • Economy
  • Military strength
    smaller neighbours sometimes fear excessive dependence or interference.
• India’s diplomacy therefore has to combine leadership with respect, consultation and sensitivity.

Domestic Political Instability in Neighbouring Countries

• Political transitions can rapidly alter foreign-policy orientations.
• This has been visible at different times in:
  • Bangladesh
  • Maldives
  • Nepal
  • Sri Lanka
  • Myanmar.

Cross-Border Terrorism and Insurgency

• Terrorism and militant networks continue to affect India’s relations with parts of its neighbourhood.

Border Disputes

• Major disputes include:
  • India-China boundary
  • Some outstanding India-Nepal boundary issues.
• Such disputes can generate wider political mistrust.

Water-Sharing Issues

• Transboundary rivers make cooperation essential.
• Important unresolved or sensitive questions include:
  • Teesta
  • Ganga basin management
  • Brahmaputra data and water cooperation.

Project Delays

• Indian infrastructure projects abroad have sometimes suffered from:
  • Slow implementation
  • Administrative delays
  • Cost escalation
  • Security conditions.
• Faster execution is essential because infrastructure delivery has become an important component of geopolitical competition.

Weak Regional Integration

• South Asia remains among the world’s least economically integrated regions.
• Barriers include:
  • Political distrust
  • Poor connectivity
  • Non-tariff barriers
  • Weak logistics
  • India-Pakistan hostility.

Climate Change

• South Asia is highly vulnerable to:
  • Floods
  • Cyclones
  • Sea-level rise
  • Glacial melting
  • Heat waves
  • Water stress.
• Climate change can increasingly trigger:
  • Food insecurity
  • Migration
  • Economic disruption
  • Humanitarian crises.

Way Forward

Respect and Sensitivity

• India’s relations with neighbours should be based on:
  • Mutual respect
  • Sovereignty
  • Consultation
  • Sensitivity to smaller states’ concerns.

Follow the Spirit of the Gujral Doctrine

• India should avoid demanding strict reciprocity from smaller neighbours where its own interests permit asymmetric concessions.

Deliver Projects Faster

• Greater emphasis should be placed on:
  • Time-bound execution
  • Local consultation
  • Transparent financing
  • High-impact projects.

Strengthen Regional Connectivity

• Priorities should include:
  • Railways
  • Roads
  • Ports
  • Inland waterways
  • Power grids
  • Digital infrastructure
  • Cross-border payment systems.

Promote BBIN and BIMSTEC

• Where SAARC remains constrained, India should deepen functional cooperation through:
  • BIMSTEC
  • BBIN
  • Bilateral mechanisms
  • Sector-specific minilateral initiatives.

Develop Regional Energy Markets

• India can promote:
  • Cross-border electricity trade
  • Hydropower development
  • Renewable-energy integration
  • Regional transmission grids.

Improve Border Infrastructure

• Border regions should evolve from being viewed merely as security frontiers to economic gateways.
• Integrated Check Posts, logistics hubs and transport corridors can accelerate regional integration.

Strengthen Maritime Cooperation

• Priorities should include:
  • Maritime Domain Awareness
  • Anti-piracy
  • Coast Guard cooperation
  • HADR
  • Search and rescue
  • Blue economy.

Expand Digital Diplomacy

• India’s experience with:
  • UPI
  • Digital identity
  • Digital public infrastructure
  • FinTech
    can become an important instrument of development partnership.

Become the First Responder

• India’s geography and capabilities allow it to function as the first responder during regional disasters and economic emergencies.
• This strengthens both national security and regional goodwill.

Compete Through Development, Not Coercion

• India’s most sustainable response to external competition is to become the preferred development and security partner by providing:
  • Reliable connectivity
  • Transparent financing
  • Technology
  • Capacity building
  • Rapid humanitarian assistance.

Conclusion

• India’s global ambitions are inseparable from the stability of its neighbourhood.
• The future of India’s neighbourhood policy lies in moving from merely managing crises to creating regional interdependence.
• A combination of Neighbourhood First + Act East + BIMSTEC/BBIN + SAGAR/MAHASAGAR + development partnerships can help India create a more connected, stable and prosperous regional order.
• The key principle should therefore be:

“A secure, connected and prosperous neighbourhood strengthens India’s own security, development and rise as a leading power.”