India's Neighbourhood First Policy: Prospects and Challenges

(Preliminary Exam: Current events of national and international importance)
(Main Exam, General Studies Paper-2: India and its Neighboring Relations)


The heads of state and government of Bhutan, Bangladesh, Nepal, Sri Lanka, Maldives, Mauritius and Seychelles attended the swearing-in ceremony of Prime Minister Narendra Modi as special guests. This reflects the country's continued focus on its neighbourhood and the Indian Ocean region as part of India's foreign policy initiatives.

India's Neighboring Countries and Neighbourhood First Policy

  • India's 'Neighborhood First' policy reiterates India's philosophy of giving priority to its neighboring countries. Through this policy, India aspires to achieve the goal of lasting peace, stability and prosperity not only in the Indian subcontinent but also in the extended Indian Ocean region.
  • The policy of 'Neighborhood First' has been an integral part of Indian foreign policy since 1947. Its objective is to promote strong relations with its immediate neighbors, enhance regional cooperation and address common concerns.
    • This policy is inspired by India's consultative, non-reciprocal and development oriented approach.
    • Non-reciprocal relations imply a policy of selfless cooperation with neighbouring countries rather than a policy of equal exchange or reciprocity.

India's nearest neighbourhood

  • India shares its geographical boundaries with Afghanistan, Bhutan, Bangladesh, Maldives, Pakistan, Nepal, China and Sri Lanka.
    • India has civilizational relations with these countries. These relations are characterised by shared history, shared culture and people-to-people ties.
    • These closest neighbouring countries have been part of India's 'first circle of priority' since independence.

India's extended neighborhood

  • Some countries are geographically located far from India but they have important political, economic, cultural and strategic relations with India. These are identified as extended neighbouring countries.
  • These include countries in the Indian Ocean region, countries in South-East Asia or countries in West Asia.

India's Global Leadership and Extended Neighbourhood

In the last decade, India has not only emerged as a regional superpower but has also presented its strong claim as a global leader. To strengthen this role, India is building strong relations with its extended neighbouring countries on the lines of relations with its immediate neighbouring countries.

  • Asia-Pacific: India's 'Act East Policy' is a major diplomatic initiative. Its objective is to promote economic, strategic and cultural relations with the Asia-Pacific region at different levels.
    • The Act East Policy is based on four central themes (4Cs): Connectivity, Commerce, Culture and Capacity-Building.
    • The important role of key institutional forums such as ASEAN, ASEAN Regional Forum (ARF), East Asia Summit (EAS) can be seen in expanding India's bilateral relations in the region.
  • Indo-Pacific region: India's policy towards the region is based on the concept of 'inclusiveness, openness and ASEAN centrality'.
    • India's Security and Growth for All in the Region: SAGAR initiative aims to protect and promote India's geopolitical, strategic and economic interests in the maritime domain, particularly in the Indian Ocean Region.
  • Coastal African Countries: The spirit of ‘Developing Together As Equal’ defines this partnership.
    • A large number of Indian expatriates reside in island nations like Seychelles and Mauritius.
  • Middle Asia:India launched the 'Connect Central Asia Policy' in 2012, focusing on Central Asian countries.
    • To strengthen economic and cultural ties in the region, India has stressed the need to work on a 4C (Commerce, Capacity-Building, Connectivity and Contact) strategy.
  • West Asia: India has changed the 'Look Waste Policy' to 'Link and Act Waste' Policy.
    • This policy broadly covers important sub-regions of the Gulf Cooperation Council (GCC) countries, Iran, Israel and other Arab countries.
    • The proposed India-Middle East-Europe Economic Corridor and the attempt to access Afghanistan via Iran through Chabahar are evidence of India's growing position in the region.

India's neighbor Stages of policy development

Stage of idealism

  • After independence, India's foreign policy in the 1950s and 1960s, especially with neighbouring countries, was inspired by the ideology of idealism.
  • Under this, keeping its security interests in mind, India had chosen to improve relations with its neighbouring countries through bilateral talks and treaties instead of the 'regional structure'.
    • For example, signing of friendship treaties with Bhutan (1949) and Nepal (1950); Panchasheel Agreement between India and China (1954), etc.

Phase of regional dominance and sub-continental supremacy

  • In this phase, foreign policy was based on the 'Monroe Doctrine'. During 1960-1990, India emphasized on establishing regional dominance and sub-continental hegemony.
  • Under this, India's policy was focused on strengthening its position in the South Asian neighbourhood and not accepting foreign interference in the region.
  • The merger of Sikkim in 1975, the role in the creation of Bangladesh after the Liberation War of 1971, the entry of the Indian Peacekeeping Force in Sri Lanka in 1987, etc. are major examples of India's regional dominance and subcontinental supremacy.
    • Meanwhile, South Asian Association for Regional Cooperation (SAARC) was established in the year 1985 to strengthen cooperation with neighboring countries.

In the era of globalization

  • India's foreign policy towards neighbouring countries between 1990-2000 can be said to have behaved like a 'Big Brother'.
  • The focus in South Asia was on building trust to resolve disputes between countries rather than viewing security concerns as conflict.
    • India presented the 'Gujral Doctrine', providing unilateral concessions and assuring its support to the region.
    • Following the economic reforms of the 1990s, India also launched initiatives for economic integration of the region.

Phase after 2008

  • After the year 2008, China's influence started increasing in India's immediate neighbouring countries, in response to which India started following the 'Gujral Doctrine' more strictly.
  • The concept of Neighbourhood First Policy also came into existence in the year 2008. Under this, relations with neighbouring countries were outlined in the form of 5 Ss: Samman, Samvad, Shanti, Samriddhi and Culture.

During 2014-2024

  • Since 2014, New Delhi has focused on cooperation initiatives with its immediate neighbours (countries with which India shares terrestrial or maritime borders) and broader engagement with extended neighbours (countries in the Indian Ocean region, Southeast Asia, or West Asia).
  • The 'Neighbourhood First' policy was revamped to strengthen relations through 'economic cooperation', 'development assistance' and 'addressing common challenges' in the region.
    • India's geopolitical framework for the Indian Ocean Region (IOR) was formally recognised as 'SAGAR' (Security and Growth for All in the Region).

Gujral Doctrine

  • The Gujral Doctrine was propounded by former Foreign Minister of India Inder Kumar Gujral in the year 1996–1997.
  • It is about building trust between India and neighbouring countries, resolving bilateral issues through bilateral dialogue and strengthening diplomatic relations between India and its neighbouring countries.
  • This doctrine stressed the importance of unilateral concessions for friendly relations with India's neighbouring countries.
  • The important points of this theory are :
    • With neighbours like Bhutan, Bangladesh, Nepal, Maldives and Sri Lanka, India does not seek reciprocity but gives and accommodates whatever it can with goodwill and trust.
    • No South Asian country should allow its territory to be used against the interests of any other South Asian nation.
    • All South Asian countries should respect each other's territorial integrity and sovereignty.
    • Countries should not interfere in each other's internal affairs and they should resolve all their disputes through peaceful bilateral negotiations.

Relevance of India's Neighbourhood First Policy in the Current Geopolitical Scenario

Geostrategic importance

  • regional Leadership: The emergence of the Indian Ocean region as the centre of global strategic competition is important from India's perspective. In such a situation, it strengthens India's central position in South Asia in cooperation with neighboring countries.
  • China's response: India's relations with neighboring countries need to improve in order to reduce China's influence in the Indian Ocean region and create a secure environment in the region.
    • India being a 'Net Security Provider' in this region implies a country that, besides ensuring its own security, also takes care of the security concerns of other nations.
  • Multilateral Cooperation: Better relations with neighbouring countries strengthen India’s position as a representative of the Global South in various multilateral forums such as United Nations Security Council (UNSC), World Trade Organization (WTO), International Monetary Fund (IMF).
    • Cooperation with neighbouring countries in multilateral forums provides a regional/sub-regional dimension to bilateral relations for India.

internal and external security

  • Territorial integrity: There are often fears of India's separatist groups finding refuge across the border. India needs strong and stable relations with its neighbours to ensure its sovereignty and territorial integrity so that no neighbouring country allows any insurgent group to use its land against India.
    • Myanmar is seen as a key partner in ending insurgency in the northeastern states.
  • Maritime Security: Maritime borders have been used for terrorist attacks in India and the role of neighbouring countries can be important in dealing with any such challenge in future.
    • Cooperation with maritime neighbours like Maldives, Sri Lanka, Bangladesh and Myanmar will help India to effectively monitor its territorial waters.

Economic interests

  • Energy Security: Northern neighbouring countries (Nepal and Bhutan) have immense hydro-power potential. Apart from this, it is also important to get cooperation from the Indian Ocean littoral neighbours as well as the extended neighbourhood of the Middle East for uninterrupted supply of oil and gas.
  • Development of North-Eastern Region: Better relations with the neighbouring countries can prove helpful in the development of the North-Eastern states of India.
    • Facilities for transit and trans-shipment of cargo to the North-Eastern states of India are being developed through Chittagong and Mongla ports of Bangladesh and Sittwe port of Myanmar.
    • India's North-East region can also be linked with South-East Asia for trade and economic cooperation through Myanmar.

Soft power diplomacy

  • India's strong cultural ties with its neighboursAndThere are historical connections.
    • The spread of Buddhism in India and Southeast Asia served as a medium to strengthen people-to-people contacts and diplomatic ties.
  • Apart from this, India is the first country to provide quick help and support in case of any disaster in the neighbouring countries.
    • During the Covid-19 pandemic, India ensured the supply of essential medicines and vaccines to all neighbouring countries.

Policy towards neighbouring states in ancient India: Kautilya's Mandala theory

  • Inter-state relations and foreign policy have a prominent place in Kautilya's Arthashastra. He has tried to explain the dynamics of inter-state relations through his Mandala theory.
  • It is based on the principle of balance of power. It is depicted through concentric circles.
    • The country at the centre of the concentric circles is judged by how well it maintains a balance of power among other countries in the region to protect its sovereignty.
    • The closest neighbour of any country is most likely to be its actual or potential enemy. The country next to the closest neighbour is most likely to be the friend of the first country. This sequence continues.
  • Kautilya recommended a six-point foreign policy for establishing better relations with neighboring countries: 
    • Treaty or peace
    • rebellion or war
    • Posture/Neutrality/WaitingNoand seeNo
    • yana or Forcefully
    • composite or alliance
    • ambivalence or duplicity
  • To implement this, he has advised the king to adopt the methods of Sama (reconciliation), Daana (concession or gift), Danda (punishment) and Bhed (dispute).
  • According to Kauṭilya, a king should not hesitate to break any friendship or alliance that might prove detrimental to him in the future.

Challenges before the Neighbourhood First Policy

  • Breakdown with Pakistan: The strained relations between India and Pakistan are the biggest hurdle for India's Neighbor First policy. Persistent tensions between the two countries have limited the scope for meaningful cooperation within the region.
    • After the Uri terrorist attack in 2016, the 'South Asian Association for Regional Cooperation' (SAARC) summit could not be organised.
  • Security Risks: Inadequately secured borders, countries like Pakistan giving shelter to terrorists, increasing radicalism etc. encourage terrorist activities in India.
    • The problem of drug trafficking exists as a major challenge in India due to its location near smuggling areas like the Golden Triangle and Golden Crescent.
    • There is a risk of piracy off the coast of Somalia and use of the waterways by terrorists.
  • Rise of China: China's geopolitical ambitions, visible through infrastructure projects, investments and growing presence in neighbouring countries (such as the Maldives currently), have raised concerns for India's regional engagement.
  • Anti-India Sentiments: Anti-India sentiments are taking root in the minds of the people of the region due to the perceived perception of India as big brother attitude and economic dependence on India.
    • This perception often creates tensions in relations. In recent times, incidents such as the 'India Out' campaign in Maldives and the blockade of Nepal's border hinder deeper cooperation with these countries.
  • Impact of domestic politics: Domestic political compulsions and ethnic ideologies can also be seen to have an adverse impact on India's neighbourhood policy.
    • The Teesta water agreement with Bangladesh was delayed due to opposition from West Bengal.
    • India's support to the interests of the Madhesis in Nepal's Terai region has led to bitterness in relations with Nepal.
  • Lack of Uniformity: The performance of the Neighbourhood First policy has varied across different neighbouring countries.

Suggestions to make Neighbourhood First Policy more effective

  • Terrorism and illegal migration: India has always faced threats, tensions and fear of terrorist attacks from its immediate neighbourhood. Better security infrastructure is required on the borders to deal with the challenges of illegal migration and smuggling of arms and drugs.
    • The Ministry of External Affairs should work in collaboration with the Ministry of Home Affairs and state governments to monitor demographic changes caused by illegal migration in border areas and to prevent illegal migration.
  • Relations with China and Pakistan: India's bilateral relations with China and Pakistan have been plagued with controversial issues. Terrorism emanating from Pakistan is a major concern.
    • The option of dialogue with regional and multilateral organizations can be adopted to make them aware about Pakistan's role in promoting terrorism.
    • Efforts should be made to establish a common platform to combat terrorism under the Neighbourhood First policy.
  • Investment in border infrastructure: India needs to increase investment in infrastructure to stabilise and develop border areas.
    • Connectivity infrastructure such as cross-border roads, railways, inland waterways and ports needs to be improved to enhance engagement with India's neighbours.
    • The option of setting up a regional development fund for regional connectivity infrastructure may also be considered..
  • Monitoring India’s Line of Credit (LoC) Projects: India’s Line of Credit (LoC) to its neighbours has grown from US$ 3.3 billion in 2014 to US$ 14.7 billion in 2020.
    • 50% of India's global soft lending goes to its neighbours. In such a situation, the Ministry of External Affairs should take effective steps to ensure timely completion of such LOC projects through regular monitoring.
  • Development projects in neighbouring countries should be completed within time limits by strengthening joint project monitoring committees and inspection mechanisms.
  • Defence and Maritime Security: Defence cooperation is important to India's bilateral relations with its neighbours. Joint military exercises are conducted with various countries such as Maldives, Myanmar and Nepal.
    • There is a serious need to improve maritime domain security initiatives in India's extended neighbourhood.
  • Development in Northeast Region: The Act East Policy focuses on the extended neighbourhood in the Asia-Pacific region. India's Northeast region shares land borders with several neighbouring countries..
    • The economic development of the North-Eastern States is integral to the success of the Neighbourhood First Policy and Act East Policy.
    • There is a need to maintain synergy between these two policies. This can help in improving connectivity, economic development and security of the Northeast region.
  • Promotion of tourism: India is a major medical destination for neighboring countries. Many Indians also visit Nepal for religious tourism.
    • India should focus on promoting investment in tourism including medical tourism under its Neighbourhood First policy.
  • Multilateral Organisations: India's engagement with its neighbours is driven by multilateral and regional mechanisms. These include the South Asian Association for Regional Cooperation and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation.
    • There is a need to strengthen institutional and multilateral/regional mechanisms to make the impact of the Neighbourhood First policy felt more widely on the ground.
  • Learning from the EU model for regional integration: After the Second World War, the idea of ​​averting the horrors of war through mutual cooperation led to the establishment of the European Union (EU).
    • Member countries joined the EU by giving up some of their political and economic rights, which gives them benefits such as the 'single European market' and free movement of people, goods, services and capital.
    • This arrangement has promoted stability in European countries and also increased economic competitiveness. As a result, the European Union has become a unique governing body and the world's first supra-national organization.
    • Therefore, an organisation like SAARC has special importance for peace and stability in South Asia and for this, reconciliation between Pakistan and India is necessary.


It is clearly in India's interest that its immediate periphery is stable, secure and responsive. To ensure this in a competitive world, India must cover larger areas and invest in connectivity, cooperation and connectivity, making the geography more coherent. The core of the Neighbourhood First policy is that India convinces its immediate neighbours of the benefits of closer ties and then implements it on the ground.

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