India and its Troubled and Troubling Neighbourhood
by , , pp.,
March 2021, volume 45, No 3

India and its Troubled and Troubling Neighbourhood

By Shyam Saran

The Indian subcontinent is a single, coherent and interdependent geopolitical space sharing well-defined geography, historical and cultural affinity, strong economic complementarities and, as is becoming increasingly apparent, a deeply interconnected ecology. The subcontinent has traditionally included Afghanistan which is now a member of SAARC. Myanmar is considered part of South East Asia and is a member of ASEAN. Nevertheless, Myanmar is a very important neighbour of India and should be considered as a key component of any project for regional economic integration. For purposes of this article it is the Indian subcontinent, that includes all members of the South Asian Association for Regional Cooperation (SAARC), which will be the focus. Myanmar is considered separately wherever necessary, as a key neighbour but outside SAARC.

Despite having a singular regional identity based on significant complementarities, the reality is a region divided into several competing sovereign states which have no shared vision of the future nor an agreement on the security challenges confronting the region. The defining feature of the region is asymmetry. India is the largest and most powerful entity in virtually all metrics of power—area, population, economic and military capabilities. Being the largest and most important country, it is no surprise that India’s security perimeter extends across the subcontinent. However, from the perspective of India’s smaller neighbours, the uneven distribution of power creates anxieties about India’s domination of the regional space. Their response to this situation is to seek to countervail India by aligning, to varying degrees, with extra-regional powers. The entry of any hostile power within the subcontinent would inevitably threaten India’s interests. This becomes the touchstone of its relations with its neighbours. India can seek to align the security perceptions of its neighbours with its own through a Pax Indica. Alternatively, if the scale of power required to exercise Pax Indica is unavailable, then the alternative is neighbourhood diplomacy aimed at creating a web of interdependencies which, over time, smoothens the sharp edges of mutual distrust and even hostility, achieves a high degree of economic integration and creates a more congenial setting for shaping a shared security perspective. The compelling need for collaboration on region-wide challenges such as Climate Change, pandemics such as one we are confronting currently and natural disasters such as floods or a tsunami may engender newer habits of consultation and cooperation but this is not a given. As the largest country in the region the lead will have to be taken by India.

Getting the neighbourhood right will determine whether India is able to play an optimal role in the larger region of Asia and the world. This is the compelling logic behind India’s Neighbourhood First policy. A troubled neighbourhood beset with political or economic crises, as is often the case, becomes a frequent preoccupation. In a foreign policy with limited bandwidth, there is less space to concentrate on larger issues related to the extended neighbourhood of the Gulf and West Asia, South-East Asia and East Asia and the Central Asian region. This second order periphery is also critical to safeguarding and promoting India’s interests but often falls off India’s radar screen because the country is busy managing developments within the subcontinent. Relations with major powers in the larger geopolitical space are also impacted. The more troubled our neighbourhood the less credible our aspirations to play a global role.

There are two alternative trajectories possible over the coming decade and beyond. The subcontinental neighbourhood could continue to be a constraint on India’s engagement with the larger Asian theatre and beyond. It could, conversely, become a dynamic platform for establishing, sustaining and expanding concentric circles of regional economic integration and being able to negotiate the process of globalization with greater assurance. To enable this more hopeful trajectory, the serious pursuit of South Asian regional integration is indispensable. Here asymmetry is an asset instead of a liability since India can emerge as an engine of growth and prosperity for the entire region. Giving its neighbours a stake in its own prosperity can be a powerful driver of regional integration.

What is the current status of India’s neighbourhood policy?

One, while India remains the pre-eminent power in the subcontinent, it confronts an expanding political, security and economic profile of a more powerful China with which India’s own relations are becoming increasingly adversarial. A new element is China’s willingness to directly intervene in the domestic politics of South Asian countries to cultivate political leaders, opinion makers and business interests that enhance Chinese influence. We witness this in Nepal and Sri Lanka and had to contend with it earlier in the Maldives. With the recent military coup in Myanmar, it is likely that China will once again become the dominant influence in that country. India is unable to match the resources China is able to deploy in these countries. A counter strategy will need to look for other levers with which India can safeguard its position.

Two, in order to leverage its position as the largest and most dynamic economy of the subcontinent, which also has the advantage of proximity, India will need to open up its market to goods and services of its neighbours, improve connectivity and contribute to capacity building among their peoples. This may have to be pursued unilaterally and may need to take on the nature of extending ‘national treatment’ to our neighbours. This may involve giving access to neighbours to India’s transportation network, its port facilities, transit through its territory, harmonizing standards and norms and creating eventually a region-wide customs union. At present, while physical connectivity across borders has improved, the software of connectivity in terms of cross-border movement of both goods and peoples remains poor. Security concerns over-ride commercial imperatives. The adoption of ‘Atmanirbhar’ strategy of promoting economic self-reliance has created apprehensions about a more protectionist and insular approach. This may run counter to the goal of regional integration. Perhaps there should be a broader commitment to an Atmanirbhar South Asia promoting regional rather than national self-reliance.

Three, domestic politics both in India and in South Asian countries does influence relations among them. Standing upto India, alleging Indian political interference, pursuit of economic domination or even posing a security threat, can and have been used for political mobilization by various political parties and leaders in these countries. Recently we witnessed how Prime Minister Oli of Nepal went to the extent of changing the official map of Nepal through a constitutional amendment, to claim a large chunk of undisputed Indian territory in the Lipu Lekh area, in order to whip up nationalist sentiment. This helped him forestall, at least temporarily, a major rebellion within his party. This behaviour pattern is likely to persist in the future as it is inherent in the asymmetry of power alluded to earlier.

Indian domestic politics, too, is often influenced by developments in neighbouring countries. The Tamil issue in Sri Lanka is a good example. However, there has been an effort to keep Indian foreign policy insulated from domestic politics as much as possible and avoid a spill-over from domestic to external relations. This may be changing and is making neighbourhood policy more difficult and complex. Policy towards a neighbouring country dictated by careful calculations of national interest often gets undermined by domestic political considerations. We see this most clearly in the current posture towards Pakistan and its use as a toxic instrument to attack domestic political opposition. In the case of Bangladesh, a successful story of reducing mistrust, promoting connectivity and expanding economic and trade relations, has been put in jeopardy by domestic political rhetoric on the migrant issue and a hostile posture in the Rohingya crisis. In the case of Nepal, there is rhetoric in some quarters supporting the return of the monarchy and urging that the country declare itself to be a Hindu state again. The implications of this retrogression on Nepal’s domestic politics and on India’s interest in a stable and democratic Nepal, remain under-appreciated. If this trend of subordinating foreign policy to domestic political calculations continues, then India may find itself more isolated in its neighbourhood than ever before.

Four, India’s adoption of a Neighbourhood First policy has been linked to the significant change in its attitude to SAARC. SAARC is the only platform on which regional integration may be pursued. It is the only mechanism which enjoys consensus among all its members. When SAARC came into existence in 1985, India was a reluctant adherent. There were suspicions that the Association could lead to a ganging up of its smaller neighbours against its own interests; that it could become a forum for them to raise bilateral issues with India, notably the Kashmir issue with Pakistan or the river waters issue with Bangladesh. The prevailing sentiment bordered on a sense of siege, of facing a hostile periphery against which India had to maintain strong defensive walls. Despite the economic reform and liberalization programme adopted in the early 1990s, India was more interested in aligning itself with the dynamic economies of South-East and East Asia, looking upon its immediate neighbours more as an irritating distraction. The Look East policy announced in 1992 did not include South Asia. However, by the turn of the century, it had become clear that any credible process of economic integration with the larger Asian economy could not be pursued unless it was grounded in a parallel integration within the subcontinent itself and this change in perspective was reflected in a positive embrace of SAARC. It was during NDA-1 that India became a champion of SAARC. It will be recalled that the then Prime Minister of India, Atal Bihari Vajpayee, in a landmark speech at the 12th SAARC summit in Kathmandu in 2002, put forward a vision of a united South Asia on the European Union model, including a Customs Union, a Common Currency and even a directly elected South Asian Parliament. It is true that India’s encouragement of SAARC did not lead to any substantive progress in regional cooperation. However, sub-regional cooperation has advanced, reflected in Bangladesh-Bhutan-India and Nepal (BBIN) sub-regional cooperation, including in the power sector, rail, road and inland waterways transportation and more efficient cross-border movement through the setting up of Integrated Check Posts (ICP). The prolonged impasse in relations with Pakistan has meant that SAARC-wide cooperation has remained stalled. More recently there has been virtually no engagement between the two countries and the outlook for the foreseeable future looks grim. The present government has turned away from SAARC and the summit for which Islamabad is the host has been delayed because of Indian objection to its convening.

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) which includes India, Bangladesh, Bhutan, Nepal and Sri Lanka from the subcontinent  and two ASEAN members, Thailand and Myanmar, has become the new focus for promoting regional integration. BIMSTEC is being projected as a more promising instrument for regional cooperation, leaving out Pakistan and Afghanistan in the West. This implicit fragmentation of SAARC and with it of the subcontinent itself may not be in India’s long-term interest despite Pakistan’s negative posture on any collaborative project under SAARC. India needs to keep alive the idea of regional integration in the subcontinent and be prepared to revive it when the political environment is more propitious. After all, India is a member of another regional organization in the Shanghai Cooperation Organization (SCO) where it is obliged to participate along with Pakistan and take part in activities on the SCO agenda. If India indeed continues to sideline SAARC, it is conceivable that its other members may decide to go ahead with it without India. Worse, they may decide to invite China to become a full member. This may further marginalize India within the region and give China an even greater opportunity to entrench its presence and influence in the subcontinent. The Chinese Belt and Road Initiative (BRI) may emerge as the key instrument for weaving the subcontinent into a Chinese network of transport and communication links and transform the region into a component of the Chinese trading network. These possible developments must be factored into our policy with respect to SAARC.

BIMSTEC should be promoted for its own sake rather than as a substitute for SAARC. It can be a useful bridge between South Asia and South East Asia and offers a platform on which India can engage with Myanmar building cross-border infrastructure, expanding trade and investment and utilize it as a gateway to South-East Asia and southern China. The return of the Myanmar military to power is a matter of concern but should not be allowed to retard ongoing engagement in multiple areas built up over past several years. India has maintained its links with the Myanmar military and has supported the process of democratization in the country under Aung Sang Suu Kyi. It is in a unique position to promote political reconciliation between the opposing parties.

Against this background, India must remain committed to the objective of an integrated South Asia which ought to be the centre-piece of its Neighbourhood First policy. As the largest country in the region and with an economy whose size is larger than all its neighbours put together, it can take the lead in opening up its market to the free movement of goods and peoples. It should become the principal security provider and driver for prosperity for the region. It should offer its capabilities and experience in establishing universal identity systems. It could share maritime domain awareness and satellite imagery with its neighbours and thereby gradually gain trust. It could assist them in newer domains such as cyber security and in ensuring data privacy.  It has the capacity to mobilize region-wide efforts to deal with the growing challenge of Climate Change.

The Covid-19 pandemic has offered an opening for the revival of SAARC-wide cooperation. During the early weeks of the pandemic Prime Minister Modi took the initiative to convene a virtual summit of SAARC leaders to consider regional collaboration in dealing with the public health challenge. Only the Prime Minister of Pakistan did not participate but sent his health advisor instead. What followed is regular consultations and information sharing but no substantive cooperation. More recently, India has offered vaccines to its neighbours and again with the exception of Pakistan other SAARC members have gratefully accepted. These deliveries are on a bilateral basis. The Prime Minister has now announced another important initiative, that of an air ambulance pact and a special visa regime that would allow speedy movement of doctors and nurses among 10 countries, that is 8 members of SAARC and Mauritius and Seychelles in addition. Pakistan has responded positively. Even though this is not a SAARC initiative it could be another opening for the revival of SAARC. One hopes that these modest initiatives made possible by the  COVID-19 emergency will gain further momentum. This opportunity must not be lost.

The subcontinent is a single interconnected ecological space, rich in bio-diversity and natural resources. The mountains to the north, the river systems of the northern plains and the seas around the subcontinent are the shared assets of all the countries of the region. They can only be managed in a sustainable manner through joint and collaborative efforts of all the countries in the region. The ongoing pandemic is a reminder of how our fates are inter-linked. The vision of a regionally integrated Indian subcontinent must be upheld despite setbacks and frustrations because it is above all in India’s long term interests.

Shyam Saran, former Foreign Secretary of India, and Prime Minister’s Special Envoy For Nuclear Affairs and Climate Change, is a Senior Fellow at the Centre for Policy Research, New Delhi. He is the author of How India Sees the World: Kautilya to the 21st Century (Juggernaut Books, 2020).