India and its Neighbourhood Relations
- India, located in South Asia, is surrounded by Pakistan to the west, China, Nepal and Bhutan to the northeast, and Myanmar and Bangladesh to the east.
- The region includes South Asian neighbours (Pakistan, Afghanistan, Nepal, Bhutan, Bangladesh, Sri Lanka, Maldives) and extended neighbourhood (Myanmar, Central Asia, West Asia).
- India’s neighbourhood policy is a core pillar of its foreign policy, shaped by geography, history, and security imperatives. India follows a mix of bilateral engagement, regional cooperation, and strategic balancing.
- The region is not only complex and volatile, but also one of the most socially and politically divided regions of the world. The South Asian countries, individually as well as collectively, represent a world of historical links, shared legacies, commonalities as well as diversities which are elaborately reflected in their ethnic, linguistic, religious and political fabric.
- The South Asian region is also full of contradictions, disparities and paradoxes. In the post-colonial period, the South Asia has been a theatre of inter-state as well as civil wars; it has witnessed liberation movements, nuclear rivalry, military dictatorships and continues to suffer from insurgencies, religious fundamentalism and terrorism, besides serious problems associated with drugs and human trafficking.
- The South Asian Association for Regional Cooperation (SAARC) has remained in existence for over 33 years; yet South Asia is considered as the least integrated of the global regions this is despite the stipulation in its Charter that “bilateral and contentious issues shall be excluded” from its deliberations.
India’s neighbours
- Although there isn’t a single, universally accepted official definition of India’s neighbourhood, the concept of neighbourhood is often a matter of geopolitical interpretation and can vary based on historical, political, economic, and security considerations.
- Largely, the term neighbourhood includes:
- Immediate neighbours or countries in the South Asian Region with which India shares its geographical land/maritime boundaries. These include countries like Afghanistan, Bangladesh, Bhutan, China, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.
- With these countries, India enjoys civilizational relations characterised by shared history and culture and people-to-people contacts.
- These immediate neighbours have been India’s “first circle of priority” since Independence, provided they remain sensitive to India’s core security concerns.
- Extended neighbours or countries geographically located further away from India (such as in the Indian Ocean Region, Southeast Asia region or West Asian region) but still have significant political, economic, cultural and strategic interactions with India.
- Immediate neighbours or countries in the South Asian Region with which India shares its geographical land/maritime boundaries. These include countries like Afghanistan, Bangladesh, Bhutan, China, the Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.

Characteristics of India’s neighbourhood/South Asia:
- It is home to 1.89 billion people, more than 20 percent of the world population.
- It is a region that lies between the sea routes of the Indian Ocean (Persian Gulf and the Asia-Pacific) and the land routes of Central Asia connecting Europe to the East.
- It is a large reservoir of natural and human resources, making it a prime destination for financial capital, a lucrative market for trade, and a source of cheap raw material.
- It also sits at the confluence of the richest sources of oil, gas, rubber, manganese, copper, gold, tea, cotton, rice and jute, and is the transit point for most of the resources and manufactures that cris-cross the world.
- Moreover, it is the most heavily militarized and bureaucratized zone in the world and it has a variety of complex and violent primordial ethnic groups.
- The region has been registering a healthy growth (average of more than 6% per annum) during the past several years.
- Democratic forms of governance (howsoever flawed and feeble) are beginning to gain some ground in most parts of the region.
- The political, economic and social landscape in India’s immediate neighbourhood has changed significantly since the end of the Cold War.
- The centre of gravity of power is shifting towards the Asia-Pacific. The simultaneous rise of India and China is a development of great significance.
- The traditional concept of national security is being broadened gradually to include human non-military issues like climate change, energy security, competition for scarce resources, food and water security, pandemics, migrations, etc.
- India’s position in South Asia is unique as it shares borders with all other South Asian nations, whereas no other South Asian nation (except Afghanistan and Pakistan) shares borders with any other South Asian nation.
- Democracy and rule of law as instruments of political governance are well entrenched in India. Transfer of power has been more or less peaceful and transparent. In relative terms, India can be arguably considered as the most stable country in the region, moving ahead on the fast tracks of development.
India’s approach towards Neighbours
- India has consistently endeavoured for a stable and peaceful neighbourhood. Basic approaches followed by India are:
- India advocates the policy of constructive engagement, despite such serious provocations as have been in the past (attack on Parliament, Mumbai terrorist attacks, etc). It believes that violent retaliation and confrontation can only complicate matters. This applies in particular to Pakistan, the origin of State-sponsored terrorism targeted at India.
- India adheres to its benign and noble policy of non-interference into the internal affairs of other countries in the region.
- India does not believe in exporting democracy; rather, it helps in promoting democracy wherever potential exists; this is done by proactively providing assistance in capacity building and strengthening the institutions of democracy. Example: Nepal
- India has skilfully used its policy of non-prescriptive development assistance as its soft power since early 1950s. In return, India has sought “good will” and “friendship with India”.
Significance of South Asia to India
- This region sits above a vital sea line of communication along which significant amounts of world trade, including energy, travel from Southwest Asia, via the Malacca Strait, to industrial Northeast Asia.
- South Asia abuts both China and Central Asia, with both locations able to access the Indian Ocean via Afghanistan, Iran or Pakistan. China also seeks access to the Indian Ocean through its projects like OBOR and the Irrawady Corridor.
- South Asia is developing economically, hence, the developed nations want to reap the benefit of huge number of consumers and market.
- South Asia is considered by some to be a ‘nuclear flashpoint’ where an incident could escalate militarily to the point of nuclear weapons being used in a conflict.
- Indian Ocean as a major trade route is lifeline not only to India, but also to other littoral countries. Hence, peace and stability of the region is vital.
- String of Pearls (China) and Pivot to Asia (USA) have made Indian Ocean a theatre of conflict and differences.
- The political and socio-economic development of India is largely dependent on a stable, secure and peaceful neighbourhood.
- To achieve its objective of becoming one of the principal powers in Asia, India needs to maintain cordial relations with its neighbours.
- India can reap huge economic gains from the neighbours which are rich in variety of resources that are unearthed and unexplored till date.
In this context, it is necessary to have a brief look at the salient features of India’s neighbourhood first policy.
Neighbourhood First Policy
- The policy of Neighbourhood First has been an integral component of Indian foreign policy since 1947.
- It aims to foster stronger ties, enhance regional cooperation, and address mutual concerns with immediate neighbouring countries.
- The Policy is driven by India’s consultative, non-reciprocal and development-oriented approach.
- Under its ‘Neighbourhood First’ policy, India is committed to developing friendly and mutually beneficial relations with all its neighbours.
- It is aimed at pursuing vigorous regional diplomacy by engaging with neighbouring Nations and building political connectivity through dialogue.
- Deepening and strengthening the bilateral relations with the neighbours is an important feature of India’s neighbourhood-first policy.
- For example, an unprecedented diplomatic outreach was made by the Prime Minister of India in the swearing-in ceremony, when he invited the heads of government of the neighbours, including Pakistan.
- The day after the swearing-in ceremony, the PM held bilateral meetings with the leaders of the neighbouring countries and vowed to work towards making a strong regional bloc.
- India’s neighbourhood first policy has four aspects:
- Willingness to give political and diplomatic priority to its immediate neighbours and Indian ocean Island States.
- Providing them assistance and support in any and every form when required. This is evident when India became the first responder after the Nepal earthquake and provided considerable assistance both in terms of monetary help and physical assistance through the National Disaster Response Force (NDRF).
- Develop greater connectivity and deepening integration with neighbours.
- Promote a model of India-led regionalism with which its neighbours are comfortable.
Purpose:
- Connectivity:
- India has entered into MoU (Memorandum of Understanding) with members of the South Asian Association for Regional Cooperation (SAARC).
- These agreements ensure a free flow of resources, energy, goods, labour, and information across borders.
- India has entered into MoU (Memorandum of Understanding) with members of the South Asian Association for Regional Cooperation (SAARC).
- Improving Relations with Neighbours:
- Priority is to improve the relations with immediate neighbours as peace and tranquillity in South Asia is essential for realising development agenda.
- Dialogue:
- It focuses on vigorous regional diplomacy by engaging with neighbouring nations and building political connectivity through dialogue.
- Economic Cooperation:
- It focuses on enhancing trade ties with neighbours.
- India has participated and invested in SAARC as a vehicle for development in the region.
- One such example is the Bangladesh-Bhutan-India-Nepal (BBIN) grouping for energy development i.e. motor vehicles, waterpower management and inter-grid connectivity.
- It focuses on enhancing trade ties with neighbours.
- Disaster Management:
- The policy also focuses on cooperating on disaster response, resource management, weather forecasting and communication and also capabilities and expertise in disaster management for all South Asian citizens.
- Military and Defence Cooperation:
- India is also focusing on deepening security in the region through military cooperation by conducting as well as participating in various defence exercises.
Challenges to Neighbourhood First Policy
- The biggest roadblock to India’s neighbourhood policy has been Pakistan. It is a major impediment for India, and its role in deepening Regional integration and connectivity. For example, repeated cross-border terrorism from Pakistan led to the cancellation of the SAARC Summit.
- India’s deeper engagement with US becomes a matter of great concern for neighbours particularly Pakistan and they look for an alternative power in the region.
- There has also been criticism levied against India for using hard muscular policy, legitimizing certain political forces and ignoring others, and interfering in their internal affairs. This was witnessed in the relations with Nepal (Madhesi issue) and Maldives (cancellation of Prime Minister Modi’s visit to Maldives in 2015).
- The capacities of India towards its neighbours remain weak. For example, the Ministry of External Affairs simply does not have enough people to look after the complex dimensions that define each of our neighbours. India has a limited understanding of the internal political dynamics of these countries.
- The neighbourhood first strategy will continue to be buffeted by periodic derailment in the relationships if the capacity and infrastructure dynamics are not improved.
- For example, scholarships on these countries is sparse, and till date we do not have a dedicated think tank or centre of excellence to provide well-informed and well considered inputs to decision makers.
- Growing Chinese Pressure: It failed to take a meaningful direction, and growing Chinese pressure has prevented the country from winning allies in the region.
- On the maritime front, China is extending its influence across the Indo-Pacific region.
- Impact of India’s Tilt towards West: India draws closer to the West, particularly through the Quad and other multilateral and mini-lateral initiatives.
- But Sri Lanka’s connections with the West are not moving in a good direction as the country’s current government faces increasing criticism from Western capitals on human rights issues and freedoms.
- However, India has reached out to the countries in the region to overcome these challenges.
- This was seen in improving relations with Nepal, the absence of any public political statements that could be construed as interference in Bhutan and Bangladesh, where elections have taken place, reviewing the posture of refusing to engage with the Taliban (Afghanistan), the government’s support for the Kartarpur corridor (Pakistan) and the Wuhan summit (China).
Evolution of India’s Neighbourhood Policy
- India’s neighbourhood policy has gradually evolved from idealistic beginnings to a more pragmatic and strategic approach, balancing security, economic integration, and regional leadership.
- Colonial Phase (Pre-1947) – Anti-Colonialism, Anti-Imperialism, Anti-Racism
- India’s engagement with neighbours emerged from shared struggles against colonial domination.
- The Asian Relations Conference (1948) in New Delhi, even before full independence, symbolised solidarity with Asian neighbours against colonialism and racism.
- This laid the foundation of South-South cooperation in India’s foreign policy.
- 1950s–1960s: Idealism and Security-Oriented Bilateralism
- India’s policy was driven by Nehruvian idealism, focusing on peace, coexistence, and regional stability.
- Chose bilateral treaties over multilateral frameworks to engage neighbours.
- Key Developments:
- Treaty of Friendship with Bhutan (1949) and Nepal (1950).
- Panchsheel Agreement (1954) with China on peaceful coexistence.
- Liberation of Bangladesh (1971) with India’s support, followed by the Shimla Agreement (1972) with Pakistan.
- However, challenges arose:
- Sino-Indian War (1962) highlighted the limits of idealism.
- India’s focus increasingly shifted to security-driven neighbourhood policy.
- 1960s–1990s: Regional Assertion & Sub-Continental Hegemony
- Foreign policy inspired by a South Asian version of the Monroe Doctrine—to prevent external powers from influencing India’s neighbourhood.
- India asserted its position as the regional leader.
- Key Developments:
- Integration of Sikkim (1975) into India.
- Formation of SAARC (1985) to institutionalise regional cooperation.
- Military intervention in Sri Lanka (1987) under the India–Sri Lanka Accord.
- Limitations:
- SAARC remained largely ineffective due to Indo-Pak tensions.
- India was often seen as a dominant power, leading to suspicions among smaller neighbours.
- 1990s–2000s: Responsible Big Brother Approach
- Post–Cold War era saw a shift towards mutual trust and cooperation.
- Gujral Doctrine (1996): India provided unilateral concessions to neighbours without demanding reciprocity.
- Emphasis on regional economic integration, particularly after India’s 1991 economic reforms.
- Example: Free trade agreements with Sri Lanka (1998) and Nepal; connectivity projects with Bangladesh.
- 2008 onwards: Rise of China & Neighbourhood First Policy (NFP)
- Growing Chinese influence in South Asia (CPEC, BRI projects, Hambantota Port in Sri Lanka, Gwadar Port in Pakistan) compelled India to adopt a more structured neighbourhood policy.
- Neighbourhood First Policy (2008) introduced, emphasising 5Ss of engagement:
- Samman (Respect)
- Samvad (Dialogue)
- Shanti (Peace)
- Samriddhi (Prosperity)
- Sanskriti (Culture)
- This broadened India’s vision of neighbourhood from bilateral ties to regional cooperation.
- 2014 onwards: Revamped Neighbourhood First Policy under Modi
- PM Modi made NFP a central pillar of foreign policy, inviting SAARC leaders at his 2014 swearing-in ceremony.
- Focus Areas:
- Connectivity projects:
- India-Bangladesh energy grid, Agartala-Akhaura rail link.
- Kaladan Multimodal Transit Project (with Myanmar).
- Economic assistance: India became the largest development partner of Bhutan and major donor for Nepal post-2015 earthquake.
- Security Cooperation: maritime collaboration with the Maldives, Seychelles, and Mauritius.
- Regional forums revival: pushing BIMSTEC as an alternative to SAARC (due to Pakistan’s obstructionism).
- Connectivity projects:
- Outcomes:
- Boosted ties with Bangladesh (land boundary agreement, 2015), Nepal, Sri Lanka, Bhutan.
- However, relations with Pakistan remain strained due to cross-border terrorism.
Recent Developments (2020s–2026)
- Pandemic & Post-Pandemic Diplomacy:
- Vaccine Maitri (2021–22):
- Supplied COVID-19 vaccines to neighbours (Bangladesh, Nepal, Sri Lanka, Maldives, Bhutan)
- Reinforced India’s role as a first responder and regional health partner
- Post-pandemic cooperation (2023–26):
- Expansion into digital public infrastructure (DPI) sharing (UPI, Aadhaar stack) with neighbours
- Health cooperation through telemedicine, pharma supply chains
- Vaccine Maitri (2021–22):
- Crisis Response & Humanitarian Assistance:
- Sri Lanka Economic Crisis (2022–23):
- Over $4 billion assistance (fuel, food, currency support)
- Evacuation Operations:
- Afghanistan (2021), Ukraine – Operation Ganga (2022), Sudan – Operation Kaveri (2023)
- Recent Trend (2024–26):
- Continued HADR leadership in Indian Ocean Region
- Rapid assistance to neighbours during natural disasters and economic distress
- Sri Lanka Economic Crisis (2022–23):
- Geostrategic Balancing (China Factor):
- Countering China’s Belt and Road Initiative (BRI) through alternative connectivity
- India–Middle East–Europe Economic Corridor (IMEC) (G20, 2023)
- Strengthening Indo-Pacific partnerships:
- Active role in Quad (India, USA, Japan, Australia)
- Recent Developments (2024–26):
- Focus on supply chain resilience, maritime domain awareness, and defence cooperation
- Increased engagement with ASEAN and IOR countries
- Countering China’s Belt and Road Initiative (BRI) through alternative connectivity
- Regional Leadership & Multilateral Outreach:
- Voice of Global South Summit (2023 & follow-ups):
- Platform to amplify concerns of developing countries, especially neighbours
- Strengthening sub-regional cooperation:
- BBIN (Bangladesh, Bhutan, India, Nepal) initiatives for connectivity and energy
- Recent Push (2024–26):
- Revival of SAARC-minus-Pakistan engagements (functional cooperation)
- Emphasis on minilateralism (BBIN, BIMSTEC)
- Voice of Global South Summit (2023 & follow-ups):
- Connectivity & Infrastructure Diplomacy:
- Expansion of cross-border connectivity:
- Rail, road, and inland waterways with Bangladesh
- Kaladan Multimodal Project (Myanmar) nearing operationalisation
- Digital Connectivity (New Dimension):
- UPI linkage with countries like Nepal, UAE (extended neighbourhood)
- Expansion of cross-border connectivity:
- Energy & Economic Cooperation:
- Power Grid Integration:
- Electricity trade with Nepal, Bhutan, Bangladesh
- Hydropower Projects:
- Continued investments in Bhutan and Nepal
- Recent Trends (2024–26):
- Focus on regional energy market integration
- Cooperation in renewable energy and green grids
- Power Grid Integration:
- Neighbourhood Political Engagements (Recent Trends):
- Active diplomatic outreach amid political shifts in Maldives, Nepal, Sri Lanka
- Managing Taliban-led Afghanistan through humanitarian and strategic engagement
- Addressing growing China footprint in South Asia through development partnerships
Extended Neighbourhood: A Gateway to India’s Global Leadership
- As India aspires to become a regional power and global leader, it is pursuing robust relationships with its extended neighbourhood in addition to immediate neighbours.
- This approach reflects India’s vision of “Vasudhaiva Kutumbakam” (One Earth, One Family, One Future) and strengthens its role as the voice of the Global South.
- It reinforces India’s role as a leading voice of the Global South through inclusive diplomacy and development partnerships
- These extended neighbours include countries in the following regions:
- Asia-Pacific
- India’s Act East Policy promotes economic, strategic, and cultural ties with ASEAN and beyond, guided by four themes: Connectivity, Commerce, Culture, and Capacity-Building.
- Key platforms: ASEAN, ASEAN Regional Forum (ARF), East Asia Summit (EAS).
- Example: India–ASEAN trade crossing $131 billion (2023-24); enhanced maritime cooperation with Vietnam and Singapore.
- Focus:
- Focus on supply chain resilience and digital partnerships with ASEAN
- Expansion of defence cooperation and maritime security ties
- Indo-Pacific
- Guided by principles of inclusiveness, openness, and ASEAN centrality.
- India’s SAGAR (Security and Growth for All in the Region) doctrine promotes geopolitical, strategic, and economic interests on the seas.
- Example: Participation in QUAD with US, Japan, and Australia; naval exercises like Malabar to ensure a rules-based maritime order.
- Focus:
- Strengthening maritime domain awareness and naval partnerships
- Focus on critical technologies, resilient supply chains, and blue economy
- African Seaboard Countries
- Partnership based on the spirit of “developing together as equals”.
- Island nations like Seychelles and Mauritius host a large Indian diaspora and are key for India’s blue economy and maritime security.
- Example: Credit lines under the India–Africa Forum Summit (IAFS); cooperation in counter-piracy missions in the Indian Ocean.
- Focus:
- Increased cooperation in capacity building, digital infrastructure, and defence training
- Focus on Indian Ocean Region (IOR) security and anti-piracy efforts
- Central Asia
- Pursued through the Connect Central Asia Policy (2012) to establish deeper economic, cultural, and energy ties.
- India emphasizes the 4Cs: Commerce, Capacity Enhancement, Connectivity, and Contact.
- Example: Chabahar Port (Iran) and International North-South Transport Corridor (INSTC) for regional connectivity; hosting annual India–Central Asia Summit.
- Focus:
- Regular India–Central Asia Summits (virtual and in-person)
- Emphasis on energy security, counter-terrorism, and connectivity
- West Asia
- South Asian economies rely heavily on oil and gas imports from West Asia, making them vulnerable to supply disruptions.
- India’s policy evolved from “Look West” to “Link and Act West”.
- Focus on the GCC sub-region along with Iran, Israel, and Arab countries.
- Example:
- India–UAE CEPA (2022) to boost bilateral trade.
- Strategic partnerships with Israel in defence and technology.
- India-Middle East-Europe Economic Corridor (IMEC) launched in 2023 to strengthen connectivity and counter China’s BRI.
- Focus:
- Deepening strategic partnerships (energy, defence, technology)
- Increasing cooperation in fintech, food security, and infrastructure corridors
- Asia-Pacific
Implications of West Asia Conflict on India’s Neighbourhood Diplomacy
- Energy Disruptions: South Asian nations depend heavily on West Asian oil, and instability raises fuel prices and shortages in Sri Lanka, Bangladesh, and Nepal.
- Diaspora Risks: Nearly 25 million South Asians (over 9 million Indians) in West Asia face safety threats and potential remittance disruptions during conflict.
- Trade Disruptions: Tensions around the Strait of Hormuz, through which ~20% of global oil passes, threaten South Asia’s trade and supply chains.
- Regional Expectations: Neighbours increasingly expect India to provide fuel, humanitarian aid, and economic assistance during crises.
- Maritime Security Pressure: Naval tensions in the Indian Ocean challenge India’s role as a net security provider in the region.
Relevance of India’s Neighbourhood Policy in Today’s Geopolitical Landscape
- Geographically, the neighbourhood is India’s first point of diplomacy and a key to its economic, social, and geopolitical growth.
- Geostrategic Interests
- Regional leadership: Cooperation with neighbours in the Indian Ocean Region (IOR) reinforces India’s central position in South Asia.
- Countering China: Stronger ties help India balance Chinese influence and aim to become a net security provider in the IOR.
- Support in multilateral forums: Neighbourly cooperation boosts India’s role as a representative of the Global South in forums like the UNSC, WTO, and IMF.
- This introduces a regional/sub-regional dimension to bilateral ties and deepens understanding of the region.
- Security Interests
- Territorial integrity: India needs neighbours that respect its sovereignty and do not shelter insurgent groups.
- Example: Myanmar is a key partner in fighting insurgency in India’s North-East.
- Maritime security: Cooperation with countries like Maldives, Sri Lanka, Bangladesh, and Myanmar helps India police its waters and respond to threats such as the 2008 Mumbai terrorist attack.
- Territorial integrity: India needs neighbours that respect its sovereignty and do not shelter insurgent groups.
- Economic Interests
- Energy security:
- Nepal and Bhutan have vast hydropower potential.
- Cooperation with IOR nations prevents disruption in oil and gas imports (over 80% of India’s oil and 50% of its gas come via sea).
- Bridging the North-East deficit:
- Bangladesh allows use of Chattogram and Mongla ports for cargo transit and trans-shipment.
- Connectivity through Myanmar can link India’s North-East with Southeast Asia for trade and cooperation.
- Energy security:
- Soft Power Diplomacy
- India’s cultural and historical ties promote shared values and extend its soft power in the region.
- Example: The shared Buddhist heritage between India and Southeast Asia strengthens people-to-people ties and diplomatic goodwill.
Challenges India Faces in Pursuing its Neighbourhood First Policy
- Lack of a comprehensive policy
- India has focused more on managing relations rather than shaping them, leading to a perception of weak neighbourhood strategy.
- Strained bilateral relations
- At the last SAARC summit, out of three proposed agreements (energy, motor vehicle movement, railway cooperation), only the energy pact was signed, as Pakistan refused the others.
- Security risks
- Cross-border terrorism: Permeable borders, Pakistan’s support, and extremism in neighbouring countries contribute to terrorism in India.
- Drug trafficking: India’s proximity to the Golden Triangle and Golden Crescent makes it vulnerable.
- Piracy: Piracy off the coast of Somalia threatens maritime security and trade routes.
- China’s inroads in South Asia
- China’s trade with SAARC countries has grown rapidly due to OBOR.
- Neighbours like Sri Lanka, Maldives, and Nepal often play the China card.
- Example: Nepal turned to China during the India–Nepal border blockade for essential supplies.
- Suboptimal confidence building
- Neighbours feel India does not treat them as equals.
- India’s past military involvement in Bangladesh, Sri Lanka, and Maldives is still seen as interference.
- Economic crisis in the neighbourhood
- For example, Sri Lanka’s foreign exchange shortage has reduced India’s export market.
- Connectivity and border infrastructure gaps
- Border regions remain underdeveloped, limiting trade and investment.
- India had more railway links with East Pakistan in the 1960s than it has with Bangladesh today.
- The India–Nepal border is officially open, but poor infrastructure restricts smooth movement.
- Domestic politics and ethnic considerations
- Teesta Water Agreement delayed due to opposition from West Bengal.
- Support for Sri Lankan Tamils and Madhesis in Nepal influenced by India’s domestic political and ethnic factors.
- Delayed implementation of development projects
- India’s Line of Credit (LoC) programme has expanded significantly over time.
- It increased from about $3.3 billion (2014) to around $14.7 billion (2020), and further to over $27–32 billion by 2024–25 across multiple regions
- More than 300 LoCs have been extended to 60+ countries, especially in Africa, South Asia, and Latin America Despite expansion, implementation challenges persist, including:
- Project delays
- Cost overruns
- Capacity constraints in partner countries
- India’s Line of Credit (LoC) programme has expanded significantly over time.
- Climate change and natural disasters
- The region is highly vulnerable to environmental issues, which disrupt development and could trigger climate migration.
Way Forward
- India’s involvement in the internal affairs of its neighbours shall be avoided to the extent it does not harm India’s interest.
- The idea of the neighbourhood first policy need not include any irritant like Pakistan, which can be dealt with separately. There are other institutional mechanisms, such as BIMSTEC, Mekong Ganga cooperation, etc., where India can engage with its neighbours multilaterally. Even within SAARC, India must work on a SAARC minus one approach.
- Engage in deeper investment initiatives like the Bangladesh Bhutan India Nepal (BBIN) initiative to reap the benefits of connectivity, energy, security and water management.
- Energy Cooperation: Develop fuel-sharing arrangements, strategic reserves, and cross-border power grids to ensure energy security. E.g., India–Bangladesh and India–Nepal electricity trade.
- Trade Integration: Promote regional trade agreements, resilient supply chains, & connectivity projects to reduce dependency on disrupted routes.
- India’s neighbourhood policy should be based on the principles of the “Gujral Doctrine”. This would ensure India’s stature and strength cannot be isolated from the quality of its relations with its neighbours, and there can be regional growth as well.
- Integrating India’s regional economic and foreign policy remains a major challenge. Therefore, India should resist compromising bilateral relationships with neighbours for short-term economic interests.
- Regional connectivity must be pursued with greater vigour while security concerns are addressed through cost-effective, efficient and reliable technological measures which are in use in other parts of the world.


well and effecient