Modi’s Neighbourhood First push is being pulled down by decades of policy stagnation

As the subcontinent’s hegemon, India severed most economic ties with its neighbours, while opposing their attempts to connect beyond the region.

Bangladesh PM Sheikh Hasina with PM Modi | @narendramodi/Twitter

Marked by a history of political divisions, economic differences, and geostrategic divergences, the Indian subcontinent remains deeply divided, with exceptionally low levels of integration. No other regional power is as disconnected from its immediate neighbourhood as India. Recognising this disconnect as a challenge to India’s economic and security interests, Prime Minister Narendra Modi made both intra- and inter-regional connectivity a policy priority in 2014.

Within South Asia, Modi government framed a Neighbourhood First policy to signal India’s commitment to regional connectivity. From a policy of strategic insulation and neglect during much of the Cold War, and a reluctant embrace of regionalism thereafter, India’s regional policy has now shifted irreversibly towards strengthening cross-border relations.

Progress has been significant, and even unprecedented. However, despite such extraordinary progress on various fronts, Delhi’s regional activism and ambition has also been a victim of its own success, exposing implementation deficits. After decades of regional introversion and policy stagnation, new government and private stakeholders struggle to flesh out connectivity on the ground, revealing challenges in coordination and execution. Most importantly, the impulse for connectivity requires quality data, inputs from different Indian government branches (both at the centre and the states), as well as engagement from the private sector, different domestic constituencies, and even neighbouring countries.

India least integrated

India today is arguably situated in the world’s least integrated region. Compared to the civilizational and colonial periods of integration, the Indian subcontinent is now a fragmented space, undermined by a history of partitions. While national borders are always the result of political engineering—even between Europe’s historical nation states—political lines of division are particularly problematic in South Asia, cutting across natural ecosystems, economic spaces, and ethnolinguistic groups.

Given the history of political, economic, and cultural fragmentation for more than half a century, since the 1950s, what sense of “regionness” still prevails and holds together Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Myanmar, Pakistan, and Sri Lanka? Reflecting on this challenge, India’s External Affairs Minister S. Jaishankar in 2019 conceded that while “regionalism has taken root in every corner of the world …. [if] we have lagged behind, it is because South Asia does not have the normal trade and connectivity that other regions do.” Indeed, “dis-connectivity” remains the default state of affairs between India and its neighbours.

Understanding (dis) connectivity

This sorry state of connectivity today reflects decades of geostrategic divergence, political nationalism, and economic protectionism.

In terms of transportation connectivity, there is no passenger rail link between India and Nepal or Myanmar. India-Bangladesh rail links decreased from around a dozen in the 1960s to just one in the mid-2000s. Besides flights into Sri Lanka’s capital Colombo, India discontinued all other passenger air, rail, and ship links to other parts of the island back in the 1980s.

With the end of the British Raj and the rise of newly independent states in South Asia, the region disintegrated after the 1950s. India played an important role in this partition: it embraced a strictly territorial definition of sovereignty and citizenship, a protectionist economic model based on autarchy, and a non-aligned foreign policy that insulated the neighbourhood from global developments.

As the region’s hegemon, India severed most economic ties with its neighbours, at the same time also opposing their attempts to connect beyond the region, whether with China (Nepal) or Southeast Asia (Sri Lanka). So, even while the world witnessed an unprecedented period of regionalism after the 1960s based on economic interdependence, India adopted a paradoxically divergent approach of disconnecting itself from the neighbourhood. During much of the Cold War, Delhi’s policy was one of erecting barriers to insulate itself and its neighbours from outside influences, cutting ties rather than forging new ones.

But what’s driving re-connectivity now?

The first and most important driver of the new connectivity policy is a geostrategic response to China and its unprecedented linkages across the subcontinent. Breaking into what was India’s sphere of influence, Beijing has massively expanded its diplomatic, economic, and political footprint across South Asia.

Beijing has taken a particular interest in infrastructure finance and development. With the sole exception of Bhutan, all of India’s other neighbours have joined the Belt and Road Initiative (BRI). The Hambantota port in Sri Lanka was formally signed over to a Chinese state-run company for a 99-year lease in return for $1.1 billion. With Nepal, on the other hand, Beijing has begun to operationalise the first optic fibre link, and is planning new roads and railways across the Himalayas.

The second driver of India’s connectivity policy is economic growth and the disproportionate size and centrality of its market in the region. Rising consumption levels and infrastructure modernisation are rapidly shrinking South Asia’s geography. Conversely, with decreasing time and cost to trade, there are also increasing incentives to deepen cross-border economic relations. South Asia remains the fastest growing region in the world. South Asia’s economic growth story and rising interdependence have increasingly put the onus on India to deliver more, better and faster connectivity.

The third and last driver of the post-2014 connectivity approach is shaped by a cultural vision that claims to reactivate India’s past centrality as a civilisational power. In his visits to Nepal, for example, Prime Minister Modi repeatedly emphasised cultural links and the shared history and Hindu heritage between both countries.

India’s implementation challenges

To achieve its objectives and enhance effectiveness, Neighbourhood First will have to address the seven challenges listed below.

An Indian connectivity strategy must be informed by new research, knowledge, and data on neighbouring countries and specific sectors. This will require investment in regional and cross-border studies.

The strategy will have to be implemented in coordination with new stakeholders, including sectoral ministries (e.g. power or shipping), state governments, and political parties (e.g. in Uttar Pradesh for Nepal, or Mizoram for Myanmar), private sector interests (infrastructure companies and industrial lobbies), civil society representatives (e.g. universities or environmental activists), and also multilateral organisations (e.g. the Asian Infrastructure Investment Bank [AIIB] or ADB).

India will have to focus on specific areas and projects that enhance its comparative advantage. Rather than blind competition with China on financing hard infrastructure projects, for example, Delhi should invest relatively more on the soft dimensions of connectivity, including capacity building.

India will also require economic openness, beyond all the investment in cross-border infrastructure. Ports, roads, railways, and airports will be useless barriers to trade and other forms of mobility persist.

An Indian connectivity strategy will have to deliver rather than deny. Delhi will have to stay focused, and be prepared to commit more, better and faster on connectivity initiatives that are sustainable.

India will have to consider the political, economic and cultural sensitivities of neighbouring countries. Regional connectivity may seem like a consensual and logical proposition to Delhi, but this desirability is not always shared in other capitals that are worried about relying on India and thus keener to connect beyond the region, especially with China.

Finally, India’s approach should refrain from excessive emphasis on cultural unity or alikeness in the region. In the cautionary observation of I. P. Khosla, a senior Indian diplomat who served across South Asia, “India’s neighbours find it difficult to endorse proposals that could in any sense hint at the recreation of past unity.”

The author is a Fellow in Foreign Policy Studies at Brookings India, New Delhi. Views are personal.

This is an edited extract of Brookings India Policy Brief, Sambandh as Strategy: India’s New Approach to Regional Connectivity. Read the full report here