Re-evaluating India's 'Neighbourhood First': Asymmetric Power, Uneven Influence

India's 'Neighbourhood First' Policy (NFP), marking a decade since its formal inception in 2014, was envisioned as a strategic recalibration to secure India's immediate periphery and leverage its rising economic and geopolitical stature. However, a critical examination reveals that the policy's implementation has often grappled with the inherent tension between aspirational multilateralism – fostering regional cooperation and shared prosperity – and transactional bilateralism, which prioritizes India's immediate strategic interests and frequently encounters the pitfalls of asymmetric power dynamics. While the NFP successfully asserted India's 'first responder' credentials during crises, it simultaneously struggled to overcome perceptions of interventionism and bureaucratic inertia, culminating in an uneven record that consistently tests the limits of India’s influence within its own concentric circles of engagement. The efficacy of the Neighbourhood First Policy directly impacts India's standing as a regional power, touching upon its foreign policy conduct, economic diplomacy, and geopolitical balancing act. Understanding its successes and failures is crucial for civil services aspirants to grasp the complexities of India's external relations.

UPSC Relevance

• GS Paper II: India and its neighbourhood relations, regional groupings (SAARC, BIMSTEC), foreign policy objectives, and challenges.
• GS Paper III: Economic diplomacy, cross-border connectivity initiatives, energy security, and implications of external policies on internal security.
• Essay: Themes surrounding India's regional leadership, soft power vs. hard power in foreign policy, and the balance between national interests and regional integration.
• Ethics (GS IV): Ethical considerations in foreign policy, managing sovereignty and humanitarian intervention.

Institutional Architecture of India's Neighbourhood Engagement

The execution of India's Neighbourhood First Policy is orchestrated through a complex interplay of governmental bodies, with the Ministry of External Affairs (MEA) serving as the principal architect and executor. Complementary institutions, however, play vital roles in economic, security, and strategic dimensions, often shaping the ground realities of bilateral relations. This multi-pronged institutional approach reflects an ambition to project comprehensive engagement, yet the effectiveness of these bodies often hinges on inter-agency coordination and agile decision-making, which have not always been optimal.

• Ministry of External Affairs (MEA): Primary custodian of the NFP, responsible for diplomatic engagement, policy formulation, and overall coordination of initiatives. This includes regular high-level visits, foreign secretary dialogues, and the management of Lines of Credit (LoCs) through dedicated divisions.
• Ministry of Finance (Department of Economic Affairs): Crucial in extending financial assistance, grants, and managing the modalities of Lines of Credit provided to neighbouring countries, often through the Export-Import Bank of India (EXIM Bank).
• Ministry of Home Affairs (MHA): Deals with border management, internal security cooperation, and managing cross-border migration issues, which can have significant diplomatic implications, as seen with discussions surrounding the National Register of Citizens (NRC).
• National Security Council Secretariat (NSCS): Provides strategic guidance and coordinates security-related aspects of bilateral relationships, particularly in counter-terrorism, maritime security, and border security.
• NITI Aayog: Involved in identifying potential areas for economic cooperation and regional integration, especially concerning connectivity projects and trade facilitation, feeding into policy recommendations for sustainable regional growth.
• Indian Council of World Affairs (ICWA): Engages in Track-II diplomacy, research, and intellectual exchanges, fostering public understanding and providing alternative channels for dialogue.

The Argument: Asymmetric Successes and Persistent Strategic Dilemmas

The declared intent of the Neighbourhood First Policy was to foster a stable, secure, and prosperous periphery, viewing India’s growth as inextricably linked to its neighbours. For a decade, India has invested considerable political capital and resources, leading to several notable achievements that underscore its regional commitment. However, these successes are frequently overshadowed by critical implementation deficits and a persistent inability to manage the inherent geopolitical complexities of its neighbourhood. Several initiatives stand out as clear demonstrations of India’s commitment:

• Humanitarian Leadership: India consistently emerged as a 'first responder' during regional crises. During the 2022 Sri Lankan economic crisis, India provided unprecedented financial assistance exceeding $4 billion, a critical lifeline that mitigated severe hardship, aligning with broader goals of India’s nutritional security push and humanitarian aid. Similarly, India's swift and extensive humanitarian aid following the 2015 Nepal earthquake underscored its reliability.
• Vaccine Diplomacy (Vaccine Maitri): Under the "Vaccine Maitri" initiative, India supplied COVID-19 vaccines to countries like Bhutan, Maldives, Bangladesh, and Nepal, often ahead of major global powers. This built significant goodwill and showcased India's pharmaceutical capabilities and empathetic leadership.
• Enhanced Connectivity and Energy Integration: Milestone agreements like the 2024 tripartite pact enabling Bangladesh to import hydropower from Nepal via Indian grids mark significant progress in regional energy security. Furthermore, India’s access to Mongla and Chattogram ports in Bangladesh, operational since 2024, has drastically reduced logistics costs for India's North-Eastern states, integrating vital economic arteries.
• Financial Outreach: India has extended over $15 billion in Lines of Credit (LoCs) to its neighbours, aiming to facilitate infrastructure development and economic growth, reflecting a substantial financial commitment to regional development.

Despite these commendable efforts, the policy has encountered significant headwinds, often attributed to both internal institutional shortcomings and external geopolitical pressures. These challenges have frequently undermined India's stated objectives and led to a growing perception of strategic underperformance.

• Perceived Interventionism: India is frequently viewed as interfering in the domestic politics of its neighbours. The 2015 Nepal blockade, triggered by dissatisfaction over Nepal’s constitution, significantly damaged bilateral trust and fostered anti-India sentiment. Similarly, perceived overt support for specific political factions, such as the Awami League in Bangladesh, led to resentment and complications after regime changes.
• Domestic Policy Spillover: Internal Indian policy decisions and their associated rhetoric often create diplomatic friction. The discourse surrounding the Citizenship Amendment Act (CAA) and National Register of Citizens (NRC) caused considerable unease and diplomatic challenges with Bangladesh, despite official assurances.
• "India Out" Campaigns: A visible manifestation of anti-India sentiment is the rise of nationalist campaigns, exemplified by the "India Out" movement in the Maldives under President Muizzu, which led to the withdrawal of Indian military personnel and questioned India’s long-standing security role in the archipelago.
• The China Factor and Project Execution: China’s Belt and Road Initiative (BRI) presents a formidable alternative for infrastructure development, often appealing due to its faster execution timelines and fewer conditionalities compared to India's Lines of Credit. While India's EXIM Bank extends LoCs, bureaucratic 'red tape' and multi-year delays in projects like the Kaladan Multi-modal Transit Transport Project in Myanmar starkly contrast with the speed of Chinese-led ventures. China's active bidding for projects, such as the Teesta River Management Project, directly challenges Indian strategic interests.
• Trust Deficit and Asymmetric Trade: India frequently pressures neighbours to reduce their economic engagements with China, citing security concerns or debt trap diplomacy. Paradoxically, India itself remains significantly reliant on Chinese imports, leading to accusations of hypocrisy and a trust deficit among its neighbours who face similar economic compulsions.
• Youth Alienation: Uprisings and political shifts in countries like Sri Lanka, Bangladesh, and Nepal have revealed a new "Gen Z" electorate that perceives India as aligning with "old guard" political establishments. This highlights a need for India to shift from traditional "Palace Diplomacy" to a more inclusive "People Diplomacy" that resonates with broader public sentiment.

A comparison of India's project implementation against its primary regional competitor, China, illustrates the operational challenges:

Engaging the Counter-Narrative

It is important to acknowledge that despite the cited shortcomings, the Neighbourhood First Policy has not been an abject failure. Its strategic necessity, given India’s geographical realities and aspirations, remains undeniable. The policy successfully reversed a period of relative neglect towards India's immediate neighbours, re-establishing India's commitment to regional stability. Critics often overlook that without India's consistent engagement, the strategic vacuum in the region could have been far more extensively exploited by external powers, fundamentally compromising India's security interests. Initiatives like establishing new cross-border railway lines with Bangladesh, increasing trade volumes with Nepal and Bhutan, and robust defence cooperation with Maldives and Sri Lanka, albeit with fluctuations, attest to a foundational commitment that has prevented complete strategic drift. The policy’s inherent challenge lies in balancing India's regional obligations with its domestic political compulsions and bureaucratic realities, a delicate act in an intensely competitive geopolitical landscape.

International Comparison: Lessons from Japan's Southeast Asia Strategy

Comparing India’s Neighbourhood First policy with Japan’s engagement in Southeast Asia offers valuable insights into managing regional influence and development assistance. Japan, similar to India, operates in a region where China exerts significant economic and strategic pressure. Japan's approach, often termed "quality infrastructure investment" or "ODA diplomacy," emphasizes long-term partnerships, high-standard projects, and local capacity building, fostering trust and sustainable development without the overt geopolitical overtones that often accompany China's BRI or sometimes India's NFP.

Japan's strategy highlights the importance of consistency, transparency, and a strong emphasis on delivering high-quality, sustainable outcomes that genuinely benefit the recipient nations, rather than merely projecting power. This approach cultivates deeper trust and reduces perceptions of strategic competition, even in a contested geopolitical space.

Structured Assessment of India's Neighbourhood First Policy

The decade-long journey of India’s Neighbourhood First Policy reveals a complex interplay of ambitious intent, operational challenges, and an evolving regional dynamic. A structured assessment helps delineate areas of strength and weakness across policy design, governance capacity, and broader behavioural and structural factors.

Policy Design Adequacy

• Strengths: The foundational principles of the Gujral Doctrine, emphasizing non-reciprocity for smaller neighbours, were conceptually sound and aimed at building goodwill. The initial articulation of NFP correctly identified connectivity, commerce, culture, and capacity building as pillars.
• Weaknesses: The policy design lacked robust mechanisms to insulate regional engagement from domestic political rhetoric and imperatives, leading to instances where internal debates (e.g., CAA/NRC) undermined external trust. It also underestimated the evolving nature of political legitimacy in neighbouring states, often relying on "Palace Diplomacy" with entrenched elites rather than cultivating broader public support.

Governance Capacity

• Strengths: The MEA and other line ministries demonstrated significant agility during crises, such as the Vaccine Maitri initiative, showcasing India's operational capability in emergency humanitarian response.
• Weaknesses: Bureaucratic inertia, 'red tape,' and insufficient inter-agency coordination consistently plague project implementation and LoC disbursement. The lack of an integrated "whole-of-government" approach often results in delays and underutilization of committed funds, leading to frustration among partner nations. There is a perceptible gap between policy announcement and efficient execution on the ground.

Behavioural/Structural Factors

• Strengths: India's inherent cultural linkages (Sanskriti) and shared heritage with many neighbours provide a strong basis for cultural diplomacy and people-to-people ties, often acting as a resilient foundation during periods of diplomatic strain.
• Weaknesses: The inherent asymmetry in power dynamics between India and its smaller neighbours consistently creates a trust deficit, where India's actions, however benign, can be perceived as heavy-handed. The pervasive 'China factor' introduces an intense competitive element, forcing India to operate under increased scrutiny and demands for comparable speed and scale. Furthermore, rising youth nationalism and evolving democratic aspirations in neighbouring countries demand a pivot from traditional state-centric diplomacy to more inclusive public engagement.

Ultimately, the Neighbourhood First Policy represents India's persistent struggle to translate its economic and demographic heft into undisputed regional leadership. Its future success hinges on India’s ability to "out-implement" rather than merely "out-argue" its competitors, to listen more acutely to the nuanced needs of its neighbours, and to evolve its diplomatic tools beyond traditional statecraft to engage directly with the aspirations of the region's diverse populations.

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