Revisiting Neighbourhood First Policy

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At a time when the rest of the world, starting with the UN, has been hailing India’s ‘Neighbourhood First Policy’ , it may be time for New Delhi to move forward, after revisiting the ground realities and strengthening the processes periodically, to make it work continuously.

Dr Suba Chandran, Professor, National Institute of Advanced Studies

There are four hypotheses to our neighbourhood first policy:

  • India doesn’t have a natural neighbour that will help us achieve our objectives.
  • India is not strong enough to change others, nor weak enough to be changed by others.
  • International actors both influence and undermine our neighbourhood policy—they undermine more than they influence.
  • Because of these three factors, India’s neighbourhood policy progress card is below par and we have not had spectacular success.

When we look at our geographic neighbours, we can see that our neighbourhood is not stable. Take, for example, Nepal, Pakistan, Afghanistan and Maldives. We need stable neighbours. We don’t have a trading neighbourhood like the ASEAN, EU or African Union. Our trade with SAARC countries is less than 4% of our trade. Though we have invested substantially in Afghanistan, not much trade is happening there. Trade gives us a constituency. We don’t have it significantly with our neighbours. We don’t have friendly neighbours too. What we have is a conflictual relationship with our neighbours. We have proxy neighbours. Pakistan was acting as a proxy to the US and now China is playing the role of the US.

We don’t have deep pockets. Even with shallow pockets, could we have done better is a question we need to ask. Could our political approach have been better to achieve what we want to achieve in the neighbourhood? To hold dialogue or not with Pakistan has been a dilemma for a long time. Of course, the present government is clear that there is not much of a positivity in this dialogue and we are clear in what we want to do with Pakistan. 

We put all our eggs in the Afghan basket when Hamid Karzai and Ashraf Ghani were in power. Perhaps we focussed much on the erstwhile Northern Alliance. When our friendly people go out of power, we face problems. Let’s see how it goes in Bangladesh. When we talk about neighbourhood first, are we looking at our neighbourhood as an end-game or as a pivot to another region? Are we looking at Afghanistan, Pakistan and Bangladesh, Myanmar as an end in itself or to reach out to the larger region? There is nothing wrong in thinking in terms of our immediate neighbourhood and extended neighbourhood. Bangladesh and Myanmar are the gateway to South East Asia; and Pakistan and Bangladesh are gateway to West Asia. 

We don’t strengthen our arms to deal with our neighbours. Our border states are stakeholders in our neighbourhood policy. For example, we can include West Bengal to strengthen our case with our north east and Bangladesh; Chennai to strengthen our case with Colombo; and Punjab and J&K to deal with Pakistan. Such an approach in which we give more power or elbow room to our own periphery, can result in more of cross-border trade. India must look at transactional relationship with our neighbours and there is nothing wrong in this approach.

The way we are moving from SAARC to BIMSTEC seems to suggest that we are trying to redefine our neighbourhood because of our frustrations with Pakistan and Afghanistan. To conclude, there are certain inherent problems, of which India could not do much. These prevent India from playing a larger role in the neighbourhood. At the same time, there are also issues within us that do not help us in our objectives.  

Mr P M Heblikar, Managing Trustee, ICSB & Fmr. Special Secretary, Government  of India

In 1991, when Narasimha Rao was the PM, our relations with SE Asia came to the fore. He came out with the ‘Look East Policy (LEP),’ whereby we can reach out to our neighbourhood in ASEAN and beyond the region. He didn’t want to invest much in the countries to the west and decided to engage with our neighbours in South East Asia which included countries like Japan, Vietnam, and South Korea. The second reason for his approach was that in 1967, when ASEAN was established, India decided not to join it and missed the bus. He wanted to catch up. That was our starting point in our journey in the north east and South East Asia. The PM then wanted that LEP should become a platform for political, economic and security cooperation. 

Between 1991 and 2014, the LEP had made some progress in the direction in which it was intended to be. Myanmar became the bridge to our connections in the north east. In strategic terms, India’s connection with the north east has international dimensions. The north east region sits in a geographical space which is home nearly to a billion people, comprising the populations of Myanmar, Bangladesh, Bhutan, South West China and Asia. Had it been for normal activities, this region could have become a game-changer for Asia.

In 2014, the Look East Policy was changed to Act East Policy (AEP). It became India’s new vehicle for the region. The government also added strategic and military aspects to it, so the AEP has become a strategic vehicle for India. Bangladesh has now become the second most important bridge for India in this region. 

In July 2022, our MoS for External Affairs said in Parliament that India had 37 Lines of Credit (LoC) worth 14 Bn dollars covering 162 projects in five neighbouring countries which included Bangladesh, Maldives, Myanmar, Nepal and Sri Lanka. He compared this to what India was doing in Africa. We had 222 lines of credit worth 14.07 billion dollars to cover 357 projects in 42 countries in Africa. There is clearly the intent that as a free trading economy, we share our developmental assistance with these countries.

India has several other multiple interactions with these neighbouring countries. Our PM Modi has made many suggestions in the Fifth BIMSTEC Summit. We also have the Mekong-Ganga Cooperation (MGC) which deals with Cambodia, Laos, Myanmar, Thailand and Vietnam. In 2016, India created a corpus of 500 crores to help these countries, to have access to Indian markets and access to information on India’s trade services to these countries. This was operated under the aegis of the Ministry of Commerce in India.  

As far the north east region is concerned, we are aware that since 1991, it has become less important than South East Asia. However, the Government of India is conscious that it needs to bring greater economic development, safety and stability in the north east. The support from Myanmar and Bangladesh is an important factor to achieve this objective and to help us keep the insurgency in the north east under control. Having established a semblance of peace in the region, we see a large number of developmental activities taking place—for instance, construction of railway lines in Tripura, Manipur and Mizoram. It is true that progress has been achieved and it in ongoing. However, we need the cooperation of our neighbouring countries. 

My own observation is that some of these neighbouring countries ought to settle down and look at India more as an opportunity than a threat. India does not constitute any threat to the neighbouring countries. However, India needs to protect itself from the activities of inimical forces. 

The Coup in Myanmar

Myanmar is suffering the after-effects of a coup in 2021 when the military ousted a democratic leader. The present Head of State believes that he has got people’s approbation for his action. However, the opposite has taken place and there is civil war. The military is not able to dominate the situation. India has shown a calibrated response to the developing situation there and expressed its intent for the democratic process to return to the country. India has also appealed to the international community to talk to the Generals in Myanmar.

Despite this, India’s relationship with Myanmar continues to be stable. Instability on the border will create more problems for both sides. India needs peace in the north east and along the 1600 km north east border with Myanmar. Last year, according to United Nations Commission for Trade, Myanmar’s exports to India were 858 million dollars, mostly coming in the form of raw materials. Myanmar has been a difficult country, right from 1966, for our diplomatic efforts to fructify. Between 2010 and 2020, when Myanmar had a democratic set-up, substantial progress was made. 

Going Good with Bangladesh

With Bangladesh, from 2009 onwards, our relationship has gone from strength to strength. Seven agreements were signed when Sheik Hasina, Prime Minister of Bangladesh, visited India in 2022. This relationship with Bangladesh is very important for India. It has helped us control insurgency in the north east region. But what we need to be wary of, is the revival of fundamentalism in Bangladesh and what it means for the future. The developments in India have also had their echo in Bangladesh, with violent incidents taking place there. 

Our vaccine diplomacy has had a good impact in strengthening our neighbourhood relations. The role of G20 and what India brings to its leadership will be significant. It has been supported by India’s own credentials in the region. We have made a large contribution to the individual countries in our neighbourhood. However, we need more of private sector interaction.

We need a greater understanding of our neighbours. Ignorance of them is also a threat. We need to work on capacity building and must focus on what our neighbours do, over and below the radar. To conclude, our ‘neighbourhood first,’ policy stands on strong foundations and there is no need to revisit it. Our policy is young. It requires sustenance. We need to bide our time.

Mr. N Sathiya Moorthy, Convenor, Policy Matters-Chennai

In Sri Lanka and Maldives, leaders have not changed in the last 27 years. Maybe the governments have changed but the core leadership is the same. Their domestic policy drives their foreign policy. We need to recognise this. Pakistan has made India the raison d’etre of its existence.

In Maldives, there is an open anti-India campaign by the opposition. India is becoming a factor there, for no fault of India. There is a perception that India is backing the present Maldives government by funding its development projects. India needs to make its stand a little clear that it is dealing only with the government and not the individual leaders. Both in Sri Lanka and Maldives, China was supporting a certain leadership. But in Sri Lanka, people drove that leadership out. 

In Sri Lanka, despite a great economic and political turmoil, the political system took over without any great difficulty. There was continuity with change or change with continuity. If economy will survive or thrive there is a matter to be watched closely. India has provided substantial help to Sri Lanka in their hour of crisis and Ranil Vikramasinghe, the President of Sri Lanka, has acknowledged India’s help. India has repeatedly said that it has done it for the people of Sri Lanka and such an approach alone will help in the long run. Just because, we have BRICS, we cannot ignore other nations in our geo-strategic approach. Of course, for inter-economic cooperation, we can depend on associations like BRICS and ASEAN. 

We are already doing a lot to our neighbours. We are protecting our neighbours Sri Lanka and Maldives and they have mainly the services sector. We are not China and we need not be like them reaching out to every corner of the world, though we have token commitments and representations in Africa and elsewhere. For securing the borders, there are only two ways—befriending the neighbours in the US way (except in their early years, when they had the Cuban missile crisis) or by putting a heavy foot down on every neighbour, the Soviet way. The Soviet strategy did not survive. We can only follow the US way.   

There is not much of scope to expand in trade with our neighbours. The balance of trade will always be in favour of India to a great extent, except with Myanmar and Afghanistan, to some extent.

We need to have permanent friends with our neighbours. We may have permanent friends elsewhere but in the neighbourhood, friendship is still on a sticky wicket and we need to do more.