In the recently announced Union Budget 2024-25, the (MEA) has outlined its development assistance plans with a focus on strategic partners and neighbouring countries.
It is designed to promote regional connectivity, cooperation and stability in line with India’s Neighbourhood First policy.
Distribution of development assistance to countries:
A large part of the expenditure of the Ministry of External Affairs, Rs 4,883 crore, has been earmarked for “assistance to countries.” It is allocated as follows:
Bhutan: It received the highest assistance of Rs 2, 068.56 crore, though it is slightly lower than last year’s Rs 2,400 crore.
Nepal: It has been allocated Rs 700 crore, up from Rs 550 crore last year.
Maldives: It retained an allocation of Rs 400 crore despite a revised amount of Rs 770.90 crore for the previous year.
Sri Lanka: It received Rs 245 crore, up from Rs 150 crore last year.
Afghanistan: Afghanistan received Rs 200 crore, reflecting India’s role in assisting the country’s stability and development amid current challenges.
Maldives: Maldives received Rs 400 crore despite anti-India protests and comments by its top leadership.
Iran: The Chabahar port project continues to get Rs 100 crore, unchanged for the last three years.
South Africa: The African countries collectively received Rs 200 crore, reflecting India’s growing influence and engagement with the continent.
Seychelles: It was increased from Rs 10 crore to Rs 40 crore.
Benefits of development assistance to neighbouring countries:
Strengthening Diplomatic Ties:
By providing assistance to neighbouring countries, India enhances diplomatic relations, fosters stronger political and economic ties.
Promoting regional stability:
Financial assistance helps stabilise neighbouring countries, leading to a more secure and stable region, which will benefit India’s strategic interests.
Supporting economic growth:
Contributes to infrastructure projects, development programs and other initiatives that can boost economic growth in recipient countries, leading to a more prosperous region. For example, the Chabahar port in Iran.
Promoting trade and investment:
Better infrastructure and economic conditions in neighbouring countries can enhance trade and investment opportunities for India, for example, the Agartala-Akhaura railway project between India and Bangladesh.
To enhance the strategic impact:
Providing assistance allows India to exert influence and build alliances, ensuring that neighbouring countries have a positive engagement with India and engage more closely with its interests.
For example, Bhutan siding with India on the Doklam issue.
In order to meet human needs:
Aid often addresses urgent humanitarian needs such as health care, education and disaster relief, thereby improving the quality of life in recipient countries.
For example, India launched “Operation Karuna” to provide humanitarian assistance to Myanmar during Cyclone Mocha.
Strengthening Soft Power:
By investing in the development of neighbouring countries, India strengthens its soft power and reputation as a responsible regional leader.
For example, it helps reduce the Big Brother syndrome among India’s smaller neighbours.
India’s Neighbourhood First Policy:
The concept of Neighbourhood First Policy came into existence in 2008.
India’s’ Neighbourhood First Policy ‘specifies its approach towards managing relations with its immediate neighbours, namely Afghanistan, Bangladesh, Bhutan, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka.
The Neighbourhood First policy, inter alia, aims at enhancing physical, digital and people-to-people coordination and connectivity as well as trade and commerce across the region.
This policy has evolved as an institutional priority for all relevant branches of government managing relations and policies with our neighbourhood.
India’s approach to engagement / coordination with its neighbouring countries is characterised by a focus on consultation, non-reciprocity and achieving tangible / tangible results. This approach gives priority to enhancing connectivity, infrastructure, development cooperation, security and further promoting people-to-people coordination.
Why Neighbourhood First Policy is important for India:
Terrorism and Illegal Migration:
India faces threats of terrorism and illegal migration, including smuggling of arms and drugs from its immediate neighbours.
Better relations can improve border security infrastructure and monitor demographic / demographic changes due to illegal migration.
Relations with China and Pakistan:
Relations with China and Pakistan are tense, especially due to Pakistan-linked terrorism.
Joining regional and multilateral organisations can highlight Pakistan’s role in terrorism and create a common platform to counter terrorism under the Neighbourhood First policy.
Investments in Border Security Infrastructure:
Border security infrastructure is lacking, and border areas need to be stabilized and developed.
Better connectivity infrastructure such as cross-border roads, railways and ports and explore a regional development fund for such infrastructure.
Monitoring of Loan Arrangement (LOC) Projects:
India’s LOCs to neighbouring countries have increased significantly, accounting for 50% of global soft lending.
It enhances India’s influence in the region, expands the presence of Indian firms and builds economic ties with recipient countries.
Defence and Maritime Security:
Defence cooperation is important in which joint military exercises are conducted with various neighbouring countries.
It helps in increasing Maritime Domain Awareness in the extended neighbourhood.
Development of Northeastern Region:
Development of Northeastern Region is important for policies like Neighbourhood First and Act East Policy.
Countries like Myanmar and Thailand can help improve connectivity, economic development and security in the Northeastern Region, such as the India-Myanmar-Thailand Trilateral Highway.
Promotion of Tourism:
India is a major source of tourists for Maldives and Bangladesh and a destination for Nepalese religious tourism.
Tourism promotes cultural exchange, which can lead to increased interest in Indian culture and businesses, which in turn can promote the export of Indian cultural products and services.
Multilateral Organizations:
India’s engagement with neighbours is driven by regional mechanisms such as SAARC and BIMSTEC.
Both help India establish its leadership role in South Asia and balance the influence of other major powers in the region.
Challenges in India’s relations with its neighbouring countries:
Border disputes: Differences over borders, especially with China and Pakistan, lead to tension and conflict.
China’s growing influence in the South Asian region and its close ties with Pakistan pose strategic challenges.
Terrorism:
Pakistan has provided continued support, safe haven and funding to various terrorist groups such as Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM), which have carried out attacks in India.
Illegal Migration:
The influx of illegal migrants from Bangladesh into India raises demographic and security concerns.
Trade imbalances:
Economic issues and trade barriers affect relations with neighbours such as Pakistan, Bangladesh and Nepal.
Issues related to trade restrictions and tariffs have often exacerbated diplomatic tensions.
Water disputes:
Disputes over river water treaties such as the Indus and Teesta rivers have been the cause of worsening relations with Pakistan and Bangladesh respectively.
Internal Conflicts:
Political instability or disputes in neighbouring countries such as Nepal and Bangladesh affect bilateral relations.
Diplomatic relations:
Issues such as the treatment of minorities in Sri Lanka and India’s stance on the Myanmar government create tensions.
For example, the issue of Free Movement Mechanism (FMR) with Myanmar.
The environmental issues:
Natural disasters and environmental problems (e.g. floods in Bangladesh) require joint efforts that can affect the relationship.
For example, concerns about Bhutan’s BBIN and the environmental impact of tourism on its fragile ecology.
Regional cooperation:
Differences within regional organizations such as SAARC and BIMSTEC can hinder effective cooperation.
India’s initiatives to improve relations with neighbours
Neighbourhood First Policy
Act East Policy
Security and Growth for All in the Region (SAGAR)
Project Mausam
BIMSTEC
Rejuvenation of SAARC
Gujral Doctrine
Suggestions:
Strengthening of diplomatic relations:
Establish and maintain regular diplomatic dialogue and high-level meetings to address and resolve issues.
Develop and institutionalize mechanisms such as joint committees and arbitration panels to resolve disputes.
Enhancing economic cooperation:
Negotiate and implement fair trade agreements that address imbalances and promote mutual benefit.
Cooperation on roads, railways and energy corridors to improve connectivity and economic integration.
Promoting Security and Stability:
Coordinate regional security initiatives to address common threats such as terrorism and illegal migration.
Establishing joint task forces and intelligence-sharing mechanisms.
Promoting people-to-people contact:
To enhance educational and tourism initiatives to build mutual understanding and goodwill among the people.
Addressing environmental and humanitarian issues:
Coordinating natural disasters and environmental problems using joint efforts and regional plans. To provide humanitarian assistance and support in times of crisis, promoting goodwill and cooperation.
Coordinate on natural disasters and environmental problems using joint efforts and regional plans.
Strengthening of Regional Organizations:
Actively participate in regional organizations such as SAARC and BIMSTEC to address regional issues and improve their mechanisms for decision-making and implementation.
Focus on internal and external factors:
Ensure that domestic policies do not adversely affect relations with neighbouring countries.
To strive for balanced policies that take into account both domestic and international implications in line with the Gujral Doctrine.
