Current General Studies Magazine: "India’s Relations with its SAARC Neighbourhood" June 2016

Current General Studies Magazine (June 2016)

General Studies - II "International Relations Based Article" (India’s Relations with its SAARC Neighbourhood : Perceptions & Realities)

Origins of SAARC:

Seven countries, namely, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, comprise a distinct geographical identity described as South Asia, which accounts for 3% of world area and 23% of world’s population; these seven countries share a long history of geographic, ethnic, cultural, linguistic and religious links.

Sporadic efforts were made to bring South Asia under one regional umbrella and to impart a distinct South Asian identity. Eventually, at the initiative of the then President of Bangladesh Ziaur Rehman , supported by Bhutan, Maldives, Nepal and Sri Lanka, a regional organisation called South Asian Association for Regional Cooperation was launched in Dhaka on 8th December 1985, when its first Summit attended by Heads of State and Government from the seven member countries, was held. Subsequently, several years later, after prolonged deliberations, Afghanistan was admitted into SAARC as its eighth Member in April 2007. Interestingly, Initially, India and Pakistan- each for its own reasons- had reservations. The perception in India was that the small nations in the neighbourhood wanted to create a platform which they could use to gang –up against India. Whereas Pakistan thought India would use the forum to lobby its neighbours against her.

The primary objective of the SAARC, as ultimately agreed upon between the participating nations, was to promote regional economic, social and cultural cooperation as well as cooperation in the field of science and technology. It was consciously decided that "Bilateral and contentious issues shall be excluded from the deliberations”. (Article 10 of the SAARC Charter)

SAARC has now been in existence for three decades. Eighteen Summit Level meetings have been held. Some notable landmarks have been achieved; these include for instance SAARC Development Fund, South Asian University, SAARC Food Bank to supplement national efforts in times of crises, and SAARC Disaster Management Centre to assist each other in case of calamities and natural disasters. These by themselves are all laudable steps. Yet it is considered that there is a huge gap between the Declarations and Concrete action. This is true in particular on the issue of regional integration and economic union. In this context, It is pertinent to note that while South Asia may have made significant progress in integrating with the global economy, integration within the region has remained limited. South Asian countries have maintained a higher level of protection within the region than with the rest of the world. Restrictive policies within the region have neutralized to great extent the potential for benefits which could be derived from geographical proximity and common historical and cultural affinity. Despite SAFTA (South Asia Free Trade Agreement) signed in January 2004, the Intra-region trade is only 5% of total trade which is very low when compared with other regions such as Southeast Asia (25%) and East Asia (35%). There is little cross border investment within South Asia.

The South Asian region has been described as the least integrated region in the world. Reasons are many and varied. Primarily these include intra-region conflicts , including strained relations between India and Pakistan, overall trust deficit, lack of land, air and sea connectivity , unfounded fear that the intra-SAARC trade is about competition whereas in reality it is intended to complement.

India’s approach and attitude towards SAARC has evolved over a period of three decades. As mentioned earlier, India’s initial response to the idea of a South Asian regional body was marked by scepticism. It was viewed as "an attempt by the Lilliputs to tie down Gulliver”. Subsequently, particularly from 1990 onwards, several countries in the region undertook first generation reforms leading to a healthy spurt in economic growth in South Asia. India herself became a fast growing and emerging economy At this stage India had good reasons to adopt a more serious approach and to play an important role as a regional leader so as to push the SAARC in the right direction, moving away from an Organization of Intent and Lofty Declarations to an Organization of Concrete Actions.

At present India is committed to all-round cooperation within the region and its accelerated integration both physical and economic. Recently, unveiling India’s vision for the region at SAARC Summit in Kathmandu (26th November, 2014) PM Modi said "For India, our vision for the region rests on five pillars: trade and investment, assistance, cooperation in every area, contact between our people, and all through seamless connectivity”.

At the same time India is aware of the obstructionist tendencies on part of some of the members. Therefore, in an implied reference to those who are seemingly obstructing the progress, he said that there was a "new awakening” and the bonds between the SAARC member countries were bound to flow; he added: "this may happen either through SAARC or outside it, amongst all members of SAARC or between some of them”. A subtle message has thus gone around that in areas where there are difficulties for all members to work together, let the bilateral or sub-regional format be adopted so that at least the willing members could join hands and move forward. India-Sri Lanka Free Trade agreement and SAARC Motor Vehicles Agreement signed between India, Bhutan, Bangladesh and Nepal, despite resistance from Pakistan in June last year demonstrate India’s commitment to work towards greater integration of the region, be it through bilateral arrangements or through trilateral agreements or sub-regional cooperation.

India and Neighbourhood

Let me now switch over to India’s policy towards neighbourhood as a whole and toward individual countries in the region and have a look at the state of present relations and prospects for future.

India firmly believes that peace and security in the neighbourhood is an essential prerequisite for development of the region in the interest of all, including India. India adheres to five principles of peaceful coexistence and advocates resolution of all conflicts and disputes through negotiations and dialogue and by peaceful means. India is the largest country in the region-both in terms of area and population; India’s credentials as a responsible nuclear State are well established whereas Pakistan’s nuclear programme arouses serious doubts amongst the international community. India’s economy is sound and its growth rates are higher than those of others in the region. India’s stature as an important player in international affairs is growing. These asymmetries have caused historically a sense of trust deficit in the region vis-a-vis India. To address this trust deficit and build bridges of friendship and understanding thorough mutually beneficial cooperation is the core objective of India’s foreign policy for South Asia. In this context the ‘Neighbourhood First’ figures high on the list of Indian Government’s foreign policy priorities.

Neighbourhood First

In May 2014, a new Government led by BJP, came to power in India. The first initiative by the new Government to reach out neighbours was taken even before Mr Modi formally took over as Prime Minister. An invitation was sent out to all Heads of State and Government of SAARC Members to attend the swearing in ceremony of Prime Minister Modi on 26th May last year. The invitation sent a loud and clear message that the new political dispensation in India attached great importance to its relations with its neighbours in South Asia and in the integration of the region. The presence at the ceremony of all Heads of State and Government from the region confirmed the desire on their part to reciprocate India’s gesture. The occasion provided an excellent opportunity to establish initial contacts; these were followed up through exchange of visits or meetings on the side lines of regional and international conferences. By now PM has visited all SAARC countries (except Maldives due largely to political instability in that country when PM undertook a tour of other Indian Ocean/ blue economy countries in March 2015). The President of Maldives has, however, visited India thrice since he assumed office in January 2014and met PM Modi twice once during latter’s swearing-in ceremony and later during his visit to India in April this year.


India has serious stakes in the stability and friendship of Afghanistan, where the current security situation impinges upon its own security interests. India can ill-afford the return of Taliban or the emergence of a regime in Afghanistan which is a proxy of Pakistan and dominated by fundamentalists. Early stabilization of Afghanistan is therefore high on the priority list of India.

India’s relations with Afghanistan were cordial and without any irritants during the 10-year tenure of former President Karzai (2004-2014). As part of its contribution towards stabilization of Afghanistan, India committed over $ 2 billion assistance to Afghanistan for the development of its infrastructure, strengthening of the institutions of democracy, capacity building including training of Afghan armed forces. Afghanistan is the only country in the region with which India has entered into a strategic partnership agreement (4th October, 2011); India has supplied three multi-role Helicopters MI-35 which the Afghans have put to effective use in combating terrorists.

After a somewhat difficult political transition, Mohammad Ashraf Ghani, assumed charge as the new President of Afghanistan, in September 2014. Initially he created an impression that India figured relatively low in the list of his foreign policy priorities. His visit to India (April 28-29, 2015) came several months after assumption of charge; in between he visited two other countries in the region namely China and Pakistan, besides UK and Saudi Arabia. India was wise enough not to make any hue and cry, and instead allowed Afghan President enough time to realise that Pakistan could not be relied upon in bringing Afghanistan’s reconciliation with Taliban. During his visit to India, the Afghan President made attempts to correct the impression. In the Joint Statement of 28th April, 2015, the Afghan President " reiterated Afghanistan's perspective on the foundational nature of Afghanistan's ties with India, and the fact that India figured in four of the five 'circles' of Afghanistan's foreign policy priorities.”

Currently, India-Afghan relations, after a very brief hiatus, are back on track. PM Modi visited Kabul in December last year when he inaugurated the new Afghanistan Parliament building built with India’s assistance and also addressed the Parliamentarians of Afghanistan. PM Modi reiterated " India’s commitment to extend all possible support to the efforts of the Afghan people in building a peaceful, stable, prosperous, inclusive and democratic country. According to a recent ( Feb.1, 2016) statement by Dr Abdullah Abdullah, Chief Executive of Afghanistan in New Delhi, PM Modi’s visit has "reenergised the strategic partnership between the two countries”


Our relations with the Himalayan kingdom Bhutan have been nurtured carefully and can be described as exemplary. PM Modi’s first oversees visit as Prime Minster was to Bhutan (15-16 June, 2014); this speaks for itself. The idea was to reiterate the importance which India attaches to Bhutan as a trusted and reliable friend. India’s cooperation with Bhutan in hydro power sector and security serves as a model for other countries, particularly Nepal, to emulate. India has extended assistance in setting up power plants in Bhutan to exploit its enormous hydro potential; While India is buying power to meet its ever increasing energy needs, Bhutan is earning substantial revenue. In the past Bhutan flushed out anti-Indian insurgents from its territory in 2003 and India has its assurances that Bhutan will not allow its territories to be used for any activities which are inimical to national interests of India. The challenge to India- Bhutan relations is in being able to sustain the trust and goodwill for each other, particularly in the backdrop of Bhutan’s transition to Constitutional Monarchy.


Relations with Bangladesh have seen phases of ups and down, despite widespread acknowledgement of and appreciation for the role India played during the Bangladesh War of Liberation in 1971. From time to time, the irritants in our relations with Bangladesh have arisen out of the anti-India activities by the Indian insurgents from the Bangladesh soil, illegal migration from Bangladesh to India, causing social tensions in North East, smuggling across the borders, river water sharing etc.

Whereas the Awami League Party led by Sheikh Hasina is considered soft towards India, the political forces represented by Bangladesh National Party (BNP) led by Begum Khalida Zia, and Bangladesh Jamaat-E-Islami are known to have taken a hard line towards India . In recent years, Bangladesh was ruled either by BNP or Awami League Government which in turn influenced the progress or stagnation in relations. Relations with Sheikh Hasina’s Government are currently on the ascendancy. PM Modi’s visit to Dhaka in June 2015 provided a great impetus to bilateral relations. In particular, the operationalisation in June 2015 of the Land Boundary Agreement, (which was signed as early as 1974 but could not be ratified by India for a variety of reasons, including the reservations from the State Governments, particularly West Bengal and Assam)not only settles the 4096km of boundary between the two countries it also gives a new identity to over 50000 persons, living in Indian /Bangladesh Enclaves . It has several other positive fall outs as well, the most important being the effective border management to check activities of insurgents, human trafficking, illegal migration, smuggling etc.

A truly important outcome of the visit is the agreement on the part of Bangladesh to provide transit through its territory for trade and travel; this would provide significantly improved connectivity between the North East and other parts of India, hitherto dependent on narrow and vulnerable Silliguri Corridor, popularly known as ‘Chicken neck’. Dhaka-Shillong-Guwahati and Kolkata-Dhaka-Agartala Bus Services are the beginning of a new chapter in the area of land connectivity within the region. Similarly the Coastal Shipping Agreement will cut short significantly the shipping time for cargo movement, with all entailing benefits. Equally important is the MoU on the use of Chittagong and Mongla ports of Bangladesh by India.

The Special Indian Economic Zones in Bangladesh should encourage Indian investments in Bangladesh, addressing in turn the Bangladesh’s concern over trade deficit, besides employment generation. The second Line of Credit worth $2bn will help Bangladesh in undertaking various development projects, particularly in the area of public transport, roads, railways, inland waterways, ports, ICT, education, health etc., while also contributing to export of goods, projects and services from India.

Relations between India and Bangladesh have now arguably entered into a qualitatively new phase. The stability in relations stands confirmed. Also PM’s visit has set a loaded agenda for future bilateral as well as sub-regional cooperation in important areas such as sharing of water resources, power sector, (including civil nuclear energy), space, trade and investments including removal of remaining barriers in bilateral trade ,seamless multimodal connectivity and effective border management and so on. Above all, the visit has generated a good degree of confidence in Bangladesh in India’s ability to deliver.

Maldives is a tiny island country in Indian Ocean but of significant importance to India in the context of maritime security and blue/ocean economy due to its strategic location.

India has skill fully managed its relations with Maldives over several decades as it evolved from autocratic rule to troubled democracy. India enjoyed proximity with Maldives during the autocratic rule of President Gayoom from 1978 to 2008. In fact India intervened militarily in 1988 to foil a coup attempt against President Gayoom. India message for the first democratically elected President Nashhed in 2008 was guided by Real Politik; it was: "a prosperous, democratic and peaceful Maldives is in our mutual interests’’.

The political crisis in Maldives in 2012-13 adversely impacted upon the relations between the two countries. President Nasheed had to resign under pressure. In November 2013 elections Nasheed was defeated by Abdullah Yameen. President Nasheed’s departure was followed by a brief period when the relations touched very low. The Maldivian Government terminated the Indian company GMR contract of the Male airport on allegations of irregularity in awarding the project. India’s disapproval of the persecution of the former President Nasheed ( who had to take shelter in the Indian embassy in 2013 due to violent protests on the streets of Male) was the probable cause.

In January 2014, President Yameen’s visit to India was a clear indication of Maldives intention to repair its damaged relations with India. He profusely praised India for the assistance in times of difficulty for Maldives and sought India’s continued assistance in building its economy. He was present at the searing –in ceremony of PM Modi, and his most recent visit to India (April,2016) has further cemented the relations between the two countries.


Relations with Nepal are unique. India-Nepal Treaty of Peace and Friendship of 1950, forms the bedrock of the special relations that exist between India and Nepal. Under the provisions of this Treaty, the Nepalese citizens have enjoyed unparalleled advantages in India, availing facilities and opportunities at par with the Indian citizens. The Treaty has allowed Nepal to overcome the disadvantages of being a land–locked country. Nevertheless and for a variety of reasons, a certain degree of stagnation in relations with Nepal had set in during the past years. Nationalist elements in Nepal off and on demand the revision of Treaty of 1950. Vested interests in Nepal have managed to block India- Nepal hydro-power cooperation on the India-Bhutan model, as a result of which Nepal remains net importer of electricity despite enormous hydro-power resources and the bordering States in India continue to bear the brunt of floods in Nepal. Moreover, for over a decade now, Nepal has remained engaged in a difficult phase of political transition; it has witnessed the abolition of Monarchy, rise and decline of Maoist insurgency, the return of Maoists to mainstream, birth of democracy, and more recently the popular agitation by the Madhesi community against the newly adopted Constitution for the country.

The visit of Prime Minister Modi to Nepal in August 2014 was historic in more than one sense. It was the first visit by an Indian Prime Minister in seventeen years. PM undertook this visit within less than three months of assuming charge. The visit was preceded by the meeting of the India-Nepal Joint Commission, headed for the first time in twenty three years by the Foreign Ministers of two countries. PM Modi was the only foreigner extended the privilege of addressing Nepal’s Constituent Assembly and Legislature Parliament.

In response to the sensitivities of the Nepalese, it was agreed to "review, adjust and update the Treaty of Peace and Friendship of 1950” so that "the revised Treaty should better reflect the current realities and aim to further consolidate and expand the multifaceted and deep rooted relationships in a forward looking manner.” (Joint Press Statement on Prime Minister’s visit to Nepal dt.4th August 2014). Addressing the trust deficit in Nepal, PM also assured the Nepalese that India had no intention to interfere in Nepal’s internal affairs, and would like to cooperate with Nepal in bilateral and sub-regional formats. A $1 bn. soft line of credit for infrastructure development projects of Nepal’s priority was announced. The importance of power generation in Nepal for export to India for reducing Nepal’s trade deficit was also underlined.

On the whole the visit gave the much required push towards reinvigoration of India-Nepal relations, and while one could look forward to progress in bilateral ties, there were once again turbulences in relations; these were caused by the agitation launched by the ethnic communities, Madhesis and Tharus against the new Constitution adopted by Nepal on 20th September 2015, replacing the Interim Constitution of 2007. The agitations resulted in the disruption of essential supplies including food and fuel to Nepal. The shortages of essential goods thus caused in Nepal once again inflamed anti-India sentiment in Nepal. In view of the ethnic, cultural religious and geographic proximity of these communities with India the blockade was perceived as having India’s tacit backing.

The blockade was finally called off on 8th February, 2016 against the backdrop of announcement of Nepali PM’s visit to India and some amendments to the Constitution. The six-day long visit (19-24 February, 2016) - PM Olis’ first overseas visit- was indeed useful in restoration of mutual trust. On his return to Kathmandu, PM Oli said he had tried to clear the "misconception” about the new Constitution of Nepal while India described the two amendments as "positive developments and hoped that other outstanding issues would also be addressed similarly in a constructive spirit.”


Relations between India and Pakistan have remained less than normal ever since the partition of the country in 1947. The two countries have fought wars in 1948, 1965, 1971 and later there was Kargil in 1999. The war of terror against India from across the border continues unabated. Sporadic efforts have been made towards normalization of relations but most of the time it has been a case of back to square one.

Relations with Pakistan were at their lowest ebb when the new Government took charge in May 2014. The invitation to Heads of State/Government of SAARC countries, including Pakistan, to attend PM Modi’s swearing-in ceremony in May last year opened up an opportunity for breaking the ice; after initial hesitation, Prime Minister Nawaz Sharrif of Pakistan did come for the event and the two sides agreed to resume the dialogue. Since then the dialogue process has been in ‘now-on-now-off’ mode. The Foreign Secretary level talks were scheduled but cancelled in August 2014 as India did not approve Pakistan’s planned consultations with the separatist Hurriyat leaders in Delhi on the eve of bilateral talks. The atmosphere was further vitiated when Pakistan renewed its efforts to internationalize the Kashmir issue during the UN General assembly Session in September 2014.

The ice was broken once again in Ufa (Russia), when PM Modi and PM Nawaz Sharif met on the sidelines of the Shanghai Cooperation Organization (SCO) Summit. The joint declaration issued on 15th July 2015, spelt out the sequence in which the two sides had agreed to resume and hold dialogue; the first in the sequence was to be a meeting between the National Security Advisors of the two countries to discuss terror. The Ufa joint Statement, however, came under heavy attack in Pakistan as it did not contain an explicit reference to Kashmir. Pakistan therefore went back on the agreed sequence and insisted that it wanted a comprehensive dialogue including Kashmir. The scheduled meeting between the NSAs of the two countries , was called off by Pakistan in August 2015, after considerable verbal dual including through media conferences. India adhered to its ‘dialogue –on- terror- first’ stance whereas Pakistan kept harping on ‘comprehensive dialogue’. What followed from hereon, was a quiet diplomacy. After PM Modi and PM Nawaz Sharif met very briefly in Paris on the sidelines of Climate Change Summit on 30th November 2015, the delegations from India and Pakistan led by their respective NSAs met in Bangkok quietly on 7th December, 2015 far away from public glare and media scrutiny. According to the brief statement issued on this occasion, the two sides discussed peace and security, terrorism, Jammu and Kashmir and other issues including tranquillity along the LOC.

Meanwhile, acts of terror from across the border have continued. Two major attacks namely the Gurdaspur attack and Pathankot attack are noteworthy for their timing : Gurdas Pur attack on 27th July 2015 came within a fortnight of Ufa Declaration whereas the Pathankot was close on the heels of PM Modi’s unscheduled halt at Lahore on 25th December en-route to Delhi from Kabul. These attacks do raise questions about the sincerity of Pakistan. Yet this time around India has not cancelled the planned Foreign Secretary level talks and insists these have only been deferred. So does Pakistan.

It is apparent that India has climbed down from its earlier stated positions that talks and terror cannot go together or India will talk only on terror. At the same time India has let it be known that talk on terror remains top priority and Pakistan must take action against those who are responsible for acts of terrorism against India, and that there is no role for any third party in resolving India-Pakistan issues which are purely bilateral in nature. While it remains to be seen as to what lies in store, it must be mentioned that the roots of the problem with Pakistan do not lie in Kashmir; the roots are in the multiplicity of power centres in Pakistan: powerful army, influential ISI, fundamentalist forces and lobbies and a democratically elected but fragile Government in Pakistan. Unless there is a consensus amongst the power centres to mend ties with India, any tangible progress is only a wishful thinking. The current Pakistani NSA Nasir Khan Janjua is of army background which in turn makes at least some to hope that Army this time is on board. The best option for India at the moment therefore is to adhere to its policy of engagement through dialogue with the Pak Establishment on the one hand and the policy of containment of such forces as act against the interests of India, while operating from the Pakistani soil or Pak-occupied Kashmir.

Sri Lanka

India’ relations with Sri Lank have often been influenced by the so-called Tamil issue. After the liquidation of the LTTE in 2009, India had adopted a multi- pronged approach towards Sri Lanka; this policy had several components: i) to impress upon the Sri Lankan Government to abide by its commitments towards Sri Lankan Tamils particularly meaningful devolution of powers and the implementation of the 13th Amendment in a time bound manner; ii) reiteration of assurances from time to time to Sri Lankan Tamils that it would make every effort to ensure that the 13th amendment was not diluted and the future for the community was marked by equality, justice and self-respect; iii) investment into the reconstruction of Northern Sri Lanka badly affected by prolonged civil war; iv) accommodate the demands of the Tamil leadership in India to the extent feasible but ultimately exercise the prerogative of the Centre in the formulation of foreign policy taking broader national interests into account rather than being pushed by narrow regional priorities; v) to monitoring carefully the Chinese overtures in Sri Lanka and check the latter’s drift towards China. vi) address the fishermen’s issue.

Unfortunately, the former President of Sri Lanka, Mahinda Rajapakse, despite assurances, did not deliver on his promises of devolution of power to Sri Lankan Tamil minority, while also playing the China card. His decidedly pro-China policy allowed China to capture significant strategic space in Sri Lanka. India’s vote in 2012 and 2013 against Sri Lanka on the UN Human Rights Council Resolution on the issue of violation of human rights by the Government of Sri Lanka during its war against LTTE, was obviously not to the liking of Sri Lankans ; India’s decision to abstain in 2014 was taken as less than consolation.

Both India and Sri Lanka witnessed change of Government: Sri Lanka in January 2015 and India in May 2014. Four high level visits took place in quick succession and within short span of the change of guard in Sri Lanka in January 2015 (the visits of: Sri Lankan Foreign Minister to India, External Affairs Minister’s visit to Sri Lanka; Sri Lankan President’s visit to India and Indian PM’s visit to Sri Lanka); this by itself speaks volumes about the intentions of the leaderships of the two countries to reset their relations. In addition to the issues related to the devolution of powers to Sri Lankan Tamils through full implementation of 13th amendment to Sri Lanka’s Constitution, meaningful reconciliation in Sri Lanka, safety and security of fishermen, sensitivity to India’s security concerns, the new thrust has been added on promoting trade and commerce, maritime security, Ocean Economy etc. More importantly, there is a political will on both sides to make a new beginning and take their relations to newer heights.

In conclusion, the one and a half year of extensive and energetic diplomacy in South Asia has been productive in several ways: it has reduced considerably the trust deficit, enhanced faith in India’s capability to deliver on its promises, further consolidated the existing relations, reset relations in certain cases, addressed the current challenges and set the agenda for long-term engagement, reiterated forcefully the need for peaceful coexistence as prerequisite for development and prosperity and integration of the region, including physical and economic integration, through land, maritime and air connectivity and liberal trade and investment policies. The need now is for time-bound follow up to consolidate gains made so far, diligently deliver on the promises and assurances, and effectively address the unresolved matters.

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