In the long run, India needs to adhere to its foundational principles as a pluralistic, representative, inclusive power that respects the rights of each citizen, the media, and civil society.

The essay 'India's Neighbourhood: A Maze of Hopes and Enigmas' highlights that India is a country which operates a system that is more open & free, with institutions being more rule-bound and society being more liberal and tolerant of diverse ideas, minorities and dissent. The relations of such a country with its neighbours are governed by developments in individual countries along with broader trends which shape the region as a whole. Several critical drivers such as demography, internal stability, economic growth, energy security, climate change, food and water security, terrorism and external powers influence this relationship.

For building ties of cooperation, the emphasis must be on inclusivity and regional cooperation. The rising population must be turned into an asset; demographic dividend must be exploited through the creation of educational and employment opportunities and energy shortages must be overcome through investment in renewable sources of energy.

If the security dilemmas faced by the neighbouring countries are not addressed, there will be a slowdown in economic growth leading to instability. India’s policies might be seen as interference leading to a rise in anti-India sentiments.

Thus, India will have to take the lead in forging closer links with its neighbours by tapping the full potential of its human, diplomatic and financial resources.

India's Neighbourhood: A Maze of Hopes and Enigmas

India with its geo-strategic location in the changing global order

India is increasing decisiveness and diplomatic capital

Rowing through the opportunities and uncertainty

India is working to forge with neighbours ties of security and prosperity

India as a geographical entity has a unique character. It shares its boundaries with nations greatly varying in their size, resources and strength such as Afghanistan, Bangladesh, Bhutan, China, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka. Seeking to become Vishva-guru, India’s interests extend beyond its borders. India’s extended neighbourhood, therefore comprises of South Asia, Indo-Pacific, South-East Asia, West Asia and Central Asia.

The dynamism of India’s relations with its neighbors has undergone six evolutionary phases as per Indian External Affairs Minister Dr S. Jaishankar:

  • 1946-62: Era of Optimistic Non-Alignment
  • 1962-70: Realism and discovery
  • 1971-1991: Regional assertion
  • 1991- 1999: Quest for strategic autonomy
  • 2000- 2013: Balancing power
  • 2014 to current: Phase of energetic diplomacy

India is tied together with its neighbourhood by the intricate civilizational bonds of history, culture, language, and geography. This creates opportunities while also making the region susceptible to peculiar threats and vulnerabilities.

Guiding Light of India’s Relations with its Neighbourhood

The foundational ethos of India’s relation with its neighbourhood is well manifested via its ‘Panchsheel’ and ‘Panchamrit’ principles.

  • The Panchsheel principles include mutual respect for each other’s territorial integrity & sovereignty; mutual non-aggression; mutual non-interference in each other’s internal affairs; equality and cooperation for mutual benefit and peaceful coexistence.
  • Panchamrit includes Samman (dignity of honor); samvad (greater engagement and dialogue); samriddhi (shared prosperity); suraksha (regional and global security) and sanskriti evam sabhyata (cultural and civilizational linkages).

Geographical Drivers

Geo-strategic location of India: India commands an important strategic position on the globe with respect to trade as well as social and cultural interaction. India is very strategically located at the crossroads of Asia where five ‘arcs’ intersect:

  • ‘Arc of growth and prosperity,’ extending from India through South East Asia to East Asia;
  • ‘Arc of instability and turbulence’ to India’s west extending from Pakistan to Afghanistan, the Persian Gulf, and the Arab world;
  • ‘Arc of energy’ extending from the Persian Gulf through the Caspian Sea to Russia’s Siberian and Arctic regions;
  • ‘Arc of communications’ comprising the trade and energy sea lines of communication in the northern Indian Ocean region;
  • ‘Arc of uncertainty,’ north of India, encompassing Nepal, Tibet, Xinjiang, and the Central Asian countries.

Disaster Resilience: India is the first responder to many humanitarian disasters in the neighbourhood. Indian Humanitarian Assistance Disaster Relief capacities were rapidly and effectively deployed in response to disasters ranging from the tsunami in Sri Lanka and the water crisis in Maldives to the earthquake in Nepal, to natural disasters and inflow of displaced persons in Bangladesh, to extreme weather events in Myanmar.

Energy Diplomacy: An energy-deficient India has deep energy and trade links with Middle East nations. Central Asia is important to India for its energy requirements and to have access to Afghanistan. The major complexity in equations with Central Asian Republics is the absence of a direct land route to these nations. Chabahar port and the Zaranj Delaram highway improve connectivity to landlocked Afghanistan and link South Asia to Central Asia

Ecological Security: Climate change, declining reserves of fossil fuel, rising sea levels, submerging coastal areas, and increasing spread of zoonotic diseases have given room to help its neighbours and forge bonds for sustainable ecological security. India’s initiatives such as the Coalition for Disaster Risk Reduction; International Solar Alliance; Indo - the German Green Hydrogen Task Force and the Green Strategic Partnership with Denmark encompassing Green Hydrogen, Renewable energy and wastewater management provide an opportunity to achieve ecological security in the region.

Political Drivers

Indian Diaspora: India has the largest diaspora population in the world, with over 13 million Indians living outside the country and 17 million people of Indian origin spread across 146 countries. Diasporas are symbols of a nation’s pride and represent their country internationally. They are recognised for contributing to innovation and entrepreneurship, competition, economic growth and job creation. They can help spread Indian soft power, lobby for India’s national interests, and contribute economically to India’s rise.

Global Platforms: At a time when India remains outside of major trade agreements, institutions like G20, SCO, and IPEF become important. In such a scenario, India’s Presidency of the Group of 20, UN Security Council in 2022 and Shanghai Cooperation Organization in 2023 when major powers of the world are at a deadlock and India alone, is interacting with each of them, presents a historic opportunity. It provides a platform to promote common interests, share burdens, address common problems, provide a common response to the challenges faced and seize common opportunities.

Global South: India became a non-permanent member of the UN Security Council for 2021-22 in which India won 184 votes out of 192 valid votes. India has a unique opportunity to consolidate and coordinate South-South cooperation and even make North-South dialogue effective. India can forge an agenda to introduce a substantial financing package for Global South.

Age-Old Relations: India can use its age-old relations with Iran, Russia, and the Central Asia Regions to confront and neutralize the China-Pakistan axis. It can use this opportunity to answer the I-2 diplomacy of Pakistan and China whereby there is infiltration from Pakistan and incursions from China.

Economic Drivers

China +1 Strategy: The China Plus One strategy involves diversifying business operations away from relying solely on manufacturing in China. Instead, companies opt to invest in manufacturing and production in other promising developing economies. India can capitalise on this strategy by building its capacity and strengthening bilateral relations with developed countries.

Friend Shoring: In addition to ushering in a new era of economic growth, integration, and connectivity, India is attempting to get rid of its outdated reservations. In recent years, it has become increasingly cooperative with other powers in the subcontinent, especially its QUAD partners—the United States, Japan, and Australia.

The intention is threefold: Push back against Chinese investments and influence in South Asia by offering genuine alternatives; take the lead in the subcontinent to establish itself as an undisputed leader in the region and beyond—this will help India find a place in the global high table, and promote its economic growth and trade by robustly engaging with its neighbours.

Trade and Investment: India has prioritised development partnerships with its neighbours through grants, loans, lines of credit, technical consultancy, disaster relief, scholarships, capacity-building programmes, etc. In the Maldives, India has initiated High Impact Community Development Projects. With Bhutan, India has decided to step up its support for its 13th five-year plan. India’s assistance to Sri Lanka during its economic crisis underscores its increasing role as a “development partner” and “first responder”.

Social and Historical Drivers

Human Capital: Education, health and skills are important determinants to creating a vast pool of human resources that can contribute to the development of a nation.

  1. India is the educational hub of the neighbourhood. India has signed an agreement with Maldives for connectivity between India’s National Knowledge Network and Maldives Higher Education Network; with Australia for higher education, research & student mobility, skill development and vocational training.
  2. India has global leadership in low-cost vaccine technology, effective health immunization delivery on scale, generic pharmaceutical manufacturing, etc. India can utilize the opportunity to make ‘Health for All’ successful beyond the boundaries of a particular nation, e.g.- India has adopted the project ‘Vaccine Maitri’ during COVID.

Colonial History and Ethnic Ties: Civilisational and historical links, political and emotional anti-colonial solidarity, and deep cultural and ethnic linkages with African nations act as an opportunity to strengthen political ties and enhance trade and investment.

Soft Power Diplomacy: The soft power of a country rests on three resources: its culture (in places where it is attractive to others); its political values (when it lives up to them at home and abroad) and its foreign policies (when they are seen as legitimate and having moral authority). India with its diverse culture and ideologies of vasudhaiva kutumbakam and Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayaas can harness the potential of its soft power.

Political Challenges

Rise of Undemocratic Government: The GSoD 2022 show that democracy is in decline, compounding a decade marked by more deterioration than democratization. First, between 2016 and 2021, the number of countries moving towards authoritarianism was more than double the number moving towards democracy. The rise of the Taliban in Afghanistan and the military coup in Myanmar are examples of the same. This democratic erosion is creating turmoil in India’s neighbourhood which is affecting its security and development.

Global Crisis: The world is trapped beneath the weight of a multitude of old and new problems. There are myriad causes of political and economic instability, including the spiking prices of food and energy, ballooning inflation and an impending recession. These phenomena are occurring in the background of continuing climate change, long unresolved inequality, the COVID-19 pandemic, declining standards of living, the Russian invasion of Ukraine and conflicts in Ethiopia, Myanmar, Syria and Yemen.

China Factor: China is the biggest threat to Indian interests by virtue of it being an economic powerhouse.

  1. Being the second-largest of India’s trade partners with highly distorted trade in favour of China it is harming Indian business interests. The dumping of cheap products in the Indian market has cost India dearly.
  2. China’s rise, belligerence, and aggression have been on display through its actions in the South China Sea, the Indo-Pacific region, and debt trap diplomacy.
  3. China blocked a joint India-US proposal at the UN to enlist Sajid Mir, a top Lashkar-e-Taiba (LeT) operative involved in directing the 2008 Mumbai attacks, as a ‘global terrorist.’
  4. Power confrontation by China in the form of object India’s entry to Nuclear Supplies Group (NSG) and UNSC.
  5. China’s Belt and Road initiative to increase its commercial presence in Central Asia, which is strategically situated at the intersection of Asia and Europe.

Civilian Unrest and Refugee Crisis: Large-scale refugee exodus due to violence, war, persecution or natural disasters not only disturbs the demographic balance of the destination nation but puts pressure on the physical and social infrastructure and strains bilateral relations.

  • When violence broke out in Sri Lanka in the 1980s, Tamil Nadu played host to Sri Lankan Tamil refugees. In the 1980s, India made a sincere effort to assist in finding a peaceful solution to the ethnic issue but succeeded only partially.
  • In both Afghanistan and Myanmar, civilian unrest is building against the hard-line rulers with a tight grip on power. Protracted conflicts and poor governance have left failing economies, weakened public health systems, food shortages, and a lack of public safety in both nations.
  • The Rohingya refugee crisis strained Indo-Bangladesh relations. Moreover, it raises security concerns, leads to human rights violations and supports human trafficking networks.

Inefficient Global Institutions: The UN is experiencing a crisis of confidence, legitimacy and credibility. The COVID-19 pandemic highlighted the UN’s institutional limitations when countries closed their borders, supply chains were interrupted and almost every country was in need of vaccines. U.N.-led multilateralism has been unable to provide strong mechanisms to prevent wars, e.g.: the Russia-Ukraine war.

Bretton Woods Institutions (BWI) - The World Bank and the International Monetary Fund- today operate on outdated political and economic foundations. BWI orthodoxy has not resolved the economic problems of borrowing countries. Also, they are incapable of effectively managing today’s international financial system—in particular the instability and volatility of exchange rates and capital flows.

Geographical Challenges

Border Conflicts: India faces territorial issues with many of its neighbours. India has disputed territories on both the eastern and western front with its neighbouring countries.

Water Wars: Water remains a politically contested issue in much of South Asia. The region is facing water shortage and agrarian difficulties, and it will continue to face increasing demands on energy and water with rapid industrialisation.

  • China’s dam-building and water division plans along the Brahmaputra are a source of tension between India and China.
  • Sharing the waters of the Teesta River is perhaps the most contentious issue between India and Bangladesh.
  • There have been numerous water cooperation agreements between Nepal and India essentially for large hydroelectric and irrigation projects by building dams or barrages but only one project has been completed yet.
  • India and Pakistan signed the Indus Waters Treaty in 1960, which clearly determined how the region’s rivers are to be divided. However, the flow of all of Pakistan’s rivers passes through India first, so this naturally provides India with an upper hand in controlling the outflow of these rivers. The Indian Government has many projects on the western rivers that have irked Pakistan.

Maritime Issues: China’s string of pearls is the biggest threat to Indian security. With ports in almost all the neighbours of India, i.e. Pakistan, Maldives, Bangladesh, Sri Lanka and Myanmar India is encircled by Chinese ports in the Indian Ocean.

Environmental Crisis: Island countries like Maldives are facing an existential threat. The sea level rise of up to 1 metre predicted in this century due to climate change can obliterate these countries.

Economic Challenges

Financial Crisis in the Neighbourhood: The island nation Sri Lanka has witnessed conditions of relative prosperity and stability to its worst economic crisis since its independence. It has defaulted on its fiscal and international monetary commitments, undergoing inflation and is left with little or no reserves to sustain the supply of food, fuel, electricity, and medicine. Nepal is also heading towards an economic crisis with the rise in Inflation, unproductive loans, trade imbalances, and a decline in foreign exchange earnings and overseas remittances.

Disruption of Supply Chains: The global supply chain is under disruption due to natural disasters, extreme weather events, political unrest, social conflicts, pandemics and epidemics, trade wars, rising incidents of coercive economic measures, such as import and export bans or restrictions, the imposition of discriminatory tariffs on imports, and stringent localisation requirements (especially for valuable intellectual property in technical processes and know-how). These obstacles in global supply chains hinder India’s development.

De-globalisation and Protectionism: Deglobalisation is the process of reducing interdependence and integration between nations around the world. It will lead to a reduction in the rate of economic growth of India and a rise in protectionism with reduced cooperation among countries that will hurt Indian trade and exports. It may also lead to a reduction in competition and a rise in general prices of goods and services.

Delay in Infrastructure Projects: Infrastructure projects being funded by India are facing delays. This results in cost escalations, which also disrupt the optimality of other related projects. This, in turn, is undermining the potential benefits of these projects.

Low Trade: The potential for cross-border trade between India and its neighbouring countries has not been fully realised. India’s formal cross-border trade with these countries was about US$2.48 billion in 2021 despite the US$115 billion trade potential. Only nine of India’s seventeen Border States are actively engaged in cross-border trade.

Security Challenges

India’s security environment faces a wide variety of traditional and transnational challenges.

  • The international borders of India run through diverse terrain including deserts, marshes, plains and mountains. This porosity of borders facilitates various illegal activities such as smuggling, trafficking of humans, drugs and arms and infiltration.
  • Borders with neighbouring countries are often not properly fenced and guarded, resulting in insurgency and illegal movement of goods and people.
  • India is vulnerable to narcotic drug trafficking as it is located between two largest Opium producing regions of the world i.e. Golden Crescent in the west and Golden Triangle in the east.
  • India faces terrorist activity emanating from Islamic radical groups based in Pakistan and insurgent activity stemming from Maoist and separatist groups.

In the long run

There is no denying that India has emerged as one of the “most important poles in the multipolar world order”. India’s growing importance in the world order is an outcome of how it has managed and interacted with its neighbourhood in the past decades. Five problem areas have been identified in India’s approach towards the neighbourhood:

  • the lack of a balanced political perspective;
  • the power differentials;
  • India’s economic clout;
  • extra-regional powers;
  • mindsets, diplomatic styles and personalities.

These challenges can only be overcome by promoting robust engagement, economic integration, partnerships, and connectivity in the region.

India cannot afford to ignore the evolving crisis in the neighbourhood. Many of the instability scenarios can be altered if India takes the initiative in crafting policies which put a premium on connectivity rather than separation.

The crisis is an opportunity for India to create mutually beneficial, people-oriented, regional frameworks for stability and prosperity. India, being the pre-eminent country, will have to take the lead in forging closer links with its neighbours. India will need not only a different policy outlook but also human, diplomatic and financial resources to put in place policies which secure India by forging closer links with her neighbours at different levels.

In the long run, India needs to adhere to its foundational principles as a pluralistic, representative, inclusive power that respects the rights of each citizen, the media, and civil society. India’s response to neighbourhood challenges must not portray India as “a victim of circumstance” but as an arbiter of its own destiny and the region’s. These relations have to be governed by 5Ps-People, Planet, Peace, Partnership and Prosperity. India has to set true the philosophy of Integration, Universality, Inclusiveness and Leaving No One Behind while dealing with its neighbours.

India needs to focus on the following:

  • Improve connectivity and integration
  • Political and diplomatic priority to the immediate neighbourhood
  • Provide neighbours with support as needed in the form of resources, equipment training and capacity building
  • Promote a model of India-led regionalism with which neighbours are comfortable

In the words of Indian External Affairs Minister Dr. S. Jaishankar:

“A nation that has the aspirations to become a leading power someday cannot continue with unsettled borders, unintegrated region and under-exploited opportunities.”

So, India has to forge convergences and manage divergences with its neighbours to progress on the path to Power.


[1] The Hindu

[2] Indian Express

[3] Committee on External Affairs, Available Here

[4] The Prime quest for the neighbourhood: India, Available Here

[5] Instability in India's Neighbourhood: A Multi-Perspective Analysis, Available Here

[6] India's Neighbourhood, Challenges in the Next Two Decades, Available Here

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Updated On 6 Oct 2023 4:55 PM GMT
Deepika Singla

Deepika Singla

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