India’s ‘Neighborhood First’ Policy On A Knife-Edge – OpEd

Recent developments in India’s neighborhood do not bode well for Delhi’s much-vaunted ‘Neighborhood First Policy.’ While India celebrates her newfound global stature as an economic powerhouse and a diplomatic heavyweight, ranking 11th in the Lowy Institute’s Global Diplomacy Index, with a total of 194 diplomatic missions worldwide, China has pulled far ahead of India with 274 diplomatic outposts, topping the Lowy rankings. However, it is heartening to note that New Delhi has emerged as a major diplomatic capital of the world with 64 embassies and consulates – higher than the number of missions in Berlin, Tokyo, Beijing, Moscow, Canberra, and Singapore. 

India has several foreign policies to widen its global outreach, but it has doggedly pursued the NFP to enhance connectivity and commerce along the country’s periphery. But due to India’s tangled relations with China, Beijing has increasingly played spoilsport with Delhi’s regional ambitions. While the Soviet Union and America had little interest in helping India’s entire neighborhood counter India, China had the willingness but not the capacity to do so. This has now changed. In China, India’s neighbors have an extra-regional power that is both capable and willing to use the neighborhood against India.

 The India-Bhutan relationship had strengthened owing to the threat from Communist China. In 1949, China invaded Tibet, which borders Bhutan. Through the 1950s, China unveiled maps claiming parts of Bhutanese territory. In 1959, it annexed 8 Bhutanese enclaves in Tibet. Bhutan felt threatened and turned to India. India sent a military team to the Haa Valley to set up The Indian Military Training Team (IMTRAT) mission to train Bhutanese soldiers shortly before the 1962 India-China war. Delhi also began funding Bhutan’s economic development. 70% of Bhutan’s exports come to India. However, Bhutan also has a quarter of its trade with China. Thimphu is engaged in border demarcation talks directly with Beijing, as China has made considerable inroads in infrastructure development in Bhutan’s northern valleys, particularly in the telecom sector and road building projects. Bhutan’s imports are capital-intensive with machine goods, durable items, and daily appliances, indicating that as Bhutan grows, so will its reliance on China. Therefore, Bhutan is trying to formalize diplomatic relations with China and resolve the boundary dispute bilaterally, keeping the negotiation details under wraps, as Bhutan’s Doklam plateau has a direct security bearing on India’s Siliguri Corridor. 

Only a few days back, Nepal’s two rival Communist parties – CPN (MC) and CPN (UM-L) – sprang a surprise by joining hands to form a new coalition government. PK Dahal forged an unexpected partnership with his arch rival, KPS Oli, to retain power. While breaking-off with the Nepali Congress – a pro-India party – Dahal reportedly conveyed to the NC chief, Sher Bahadur Deuba, that “external pressure forced him to align with the CPN UM-L.” if his claim is true, China emerges as the plausible external factor. Chinese prodding and a game of one-upmanship may have resurrected the Maoist coalition. Observers attribute the split between Dahal and Deuba to contentious governance issues and their inability to bridge those differences. The potential tilt in the geopolitical trajectory of Nepal has set off alarm bells in Delhi. 

India could only be hopeful of Dahal safeguarding India’s core interests. Of particular significance is the fate of the bilateral power agreement signed during Dahal’s Delhi visit in June 2023, aimed at importing 10,000 MW of power from Nepal to India over a decade. This agreement, a breakthrough after years of stalemate, holds immense economic benefit for both countries. However, the dominance of Oli’s faction in the new government poses a formidable challenge for Delhi, given his penchant for raking up territorial disputes and opposing strategic infrastructure projects with India. India’s Agnipath scheme has drawn considerable flak from successive governments in Kathmandu. Oli could give a mischievous spin to the controversial scheme as being inimical to the aspirations of hundreds of Nepali youths who look up to India for a rewarding career in the Indian armed forces, and turn a generation of Nepalis against India.

China’s attempts at driving a wedge between India and its neighbors are well known. Muizzu is being used by China, Pakistan and Turkey to corner India, while they prefer to hide behind the scenes. Maldives sits astride the major sea lanes of communications (SLOCs) of the Indian Ocean. As many as 15 ships pass through the Maldives Channel every minute. Moreover, Maldives is just 688 nautical miles away from the US base of Diego Garcia. China is wooing Malé for a naval base as the Maldives is geographically positioned like a “toll-gate” between the western Indian Ocean choke-points of the Gulf of Aden and the Strait of Hormuz on one hand, and on the other, it connects the Malacca Strait on the eastern Indian Ocean. China uses the economic vulnerability and political instability of small countries to bring them into its sphere of influence. China is the biggest debtor of Maldives. Male owes 20% of its external debt to China. The proposed bilateral Free Trade Agreement (FTA), enabling tariff-free entry of imports from China will make the Maldivian economy far more indebted to China. Beijing’s geopolitical stranglehold over Maldives under Muizzu will be a strategic challenge for India. In contrast, India’s concessional project and budgetary assistance to Maldives has not ensnared the island nation into a debt trap. However, Delhi must not lose sight of the fact that Maldives is an integral part of India’s regional security architecture.

India’s “Boycott Maldives” social media campaign has already backfired. Outright shunning, ostracizing, or marginalizing a strategically important neighbor is counter-productive, as was in the case of Nepal when India imposed an undeclared blockade on the Himalayan state in 2015. To reduce its reliance on India, Kathmandu pressed Nepal Oil Corporation to sign a fuel supply deal with Petro China, and encouraged trade with China through the Rasuwagadhi-Kerung route. The Nepali government looked the other way when a social media campaign called “Back-off India” was launched. Now, following Muizzu’s visit to China earlier this year, Chinese surveillance vessels were allowed to berth in Male. The island nation received a $ 130 million grant, and a $ 50 million commitment for housing units and a tourism zone. The MNDF will receive military assistance from the PLA gratis. While 88 Indian military personnel who were operating Dhruv choppers on medical rescue missions and a Dornier aircraft for surveillance of the Maldivian EEZ have been shunted out. Now, Turkish drones will monitor its vast EEZ. MNDF will have operational authority over the Indian civilian crew now flying the choppers, and Muizzu will also not renew the current hydrographic agreement with India due for renewal in June 2024. The future of the proposed Greater Male Connectivity Project – billed as Maldives’ biggest infrastructure development initiative – to be funded by India, now looks bleak.

In Bangladesh, India is faced with a situation similar to that of the Maldives even after the India-friendly Sheikh Hasina government retained power. Taking a cue from Muizzu’s “India Out” campaign, the Bangladeshi opposition is running a similar “India Out” campaign orchestrated by Tarique Rahman, a BNP scion based in London, and spearheaded by a Bengali Brahmin doctor-youtuber named Pinaki Bhattacharyya. Not a single India-friendly individual or journalist of prominence has spoken out against the “India Out” campaign. Hasina has addressed India’s security and connectivity concerns, but has ruthlessly weeded out, under the guidance of her investment advisor Salman F. Rahman, the secular India-friendly Bengali middle-class politicians from important portfolios in her party and government. 

India is waking up to the prospect of its influence pared down by the Awami League where pro-Pakistan Islamists and pro-China traders and defense contractors have been inducted into key positions in the party and the government. A lucrative power purchase deal from Adani’s Godda plant may endear Hasina to the power circles in Delhi, but this is poor compensation for the actual loss of Indian influence in Bangladesh. Meanwhile, China has proposed to augment Teesta river water flow owing to the logjam with India. China is now Bangladesh’s largest trade partner, with a bilateral trade running up to $ 25 billion a year, and almost 70% of Dhaka’s defense needs have been met with supplies from China. The China-built $1.2 bn BNS Sheikh Hasina at Pekua in Cox’s Bazar, which will accommodate 6 submarines and 8 warships, can change the security paradigm in the Bay of Bengal for India for years to come. Four Northeastern states share their borders with Bangladesh. With a growing Chinese presence in neighboring Bangladesh, we could see an uptick in militancy in the Northeast, particularly Assam. The ULFA had twice tried to land huge consignments of weapons sourced from China and Romania in Cox’s Bazar in 1995 (Operation Ambrosia) and Chittagong in 2004.  

In Myanmar, India finds itself in a rather odd situation of having to align with the military regime with which the Northeastern rebels have a tacit security understanding. Most Indian militant outfits camping in Myanmar had arrived at an agreement with the junta that in return for immunity from the Sit-Tat in Sagaing region, Indian insurgents would help them to quell the unrest following the Myanmar coup of February 2021. Whereas in Manipur, Indian security forces are confronting those very same rebel elements. India and China have comparable challenges in Myanmar. The fall of Sittwe town in Rakhine state and Paletwa in Chin state to the Arakan Army puts Indian investments, such as the $ 120 million Sittwe port and the $ 484 million Kaladan multi-modal transit transport project to connect the NE states with the Bay of Bengal, at great risk. China too has vast economic stakes in Rakhine with its deep sea port and SEZ in Kyaukphyu. Initially, like Delhi, Beijing too was supportive of the junta, but with the military losses mounting across the Kokang region in northern Shan state bordering China and the Rakhine state, China began playing a double game, lending tactical support to the resistance forces for safeguarding its investments there. The West has its own proxies to check China’s growing influence. Most advanced American small arms are reaching the anti-junta resistance through the Thai border, and may have seeped into India, particularly Manipur. Now, there are media reports of Wagner units operating in Myanmar, helping the Sit-Tat to regroup and rearm with drones, SAMs and anti-aircraft missiles in lieu of an air or naval base or oil and gas assets. Russian forays in Myanmar could turn it into a battlefield for great power contestation. 

A ‘globalized’ conflict on India’s doorstep raises the prospects of renewed insurgencies in the Northeast, and the volatile situation along the 1643-km-long Indo-Myanmar border raises new migration concerns. The decision to scrap the 16-km free movement regime and seal the Indo-Myanmar border was taken in view of these pressing concerns, but it flies in the face of the NFP, which was mooted to enhance commerce and connectivity with India’s immediate neighbors. China has neither sealed its border with Myanmar, nor stopped the cross-border movements of people and goods. Like China, India could have regulated the flow of people and goods through the border, instead of sealing it. By sealing the border, Delhi will only disrupt the age-old fraternal bonds between the Naga, and Kuki-Zo communities straddling the Indo-Myanmar border. One of the stated objectives of the NFP is to foster people-to-people relations.