India’s Neighbourhood First Policy

The Neighbourhood First Policy (NFP) has been a cornerstone of India’s foreign policy since 2014. It emphasizes building a stable, secure, and prosperous neighbourhood, recognizing that India’s growth is closely linked with the development of its immediate neighbours such as Afghanistan, Bangladesh, Bhutan, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka. After a decade, debates have emerged regarding whether the policy has strengthened India’s regional leadership or faced structural and geopolitical limitations.

Achievements of the Neighbourhood First Policy

1. Strengthening India’s Role as a First Responder

India has consistently acted as a reliable partner during crises in the region. During the 2022 economic crisis in Sri Lanka, India extended approximately $4 billion in financial assistance, including fuel, food, and credit support. Similarly, India played a crucial role in rescue and relief operations following the 2015 Nepal Earthquake, demonstrating humanitarian leadership.

2. Vaccine Diplomacy and Health Cooperation

Through the Vaccine Maitri initiative, India supplied COVID-19 vaccines to several neighbouring countries such as Bhutan, Maldives, and Nepal. This strengthened India’s soft power and goodwill in the region.

3. Regional Energy Integration

India has promoted cross-border electricity trade to enhance regional energy security. A landmark step was the 2024 agreement allowing Bangladesh to import hydropower from Nepal through Indian transmission grids, which laid the foundation for a regional power market.

4. Connectivity and Trade Expansion

Improved connectivity has strengthened economic integration in South Asia. Access for India to Mongla Port and Chattogram Port has reduced logistics costs and improved trade connectivity for India’s North-Eastern states.

Limitations and Criticism of the Policy

1. Perception of Intervention in Domestic Politics

India is often perceived as interfering in the internal affairs of neighbouring countries. For instance, the 2015 Nepal Blockade created significant resentment among the people of Nepal and damaged bilateral trust.

2. Rise of Anti-India Sentiments

Domestic political actors in neighbouring countries increasingly use anti-India narratives to mobilize public opinion. The “India Out” campaign in Maldives under President Mohamed Muizzu resulted in the withdrawal of Indian military personnel.

3. Impact of India’s Domestic Political Issues

India’s domestic policies sometimes create diplomatic friction with neighbours. Concerns related to the Citizenship Amendment Act and the proposed National Register of Citizens raised apprehensions in Bangladesh regarding potential migration pressures.

4. Strategic Competition from China

China’s growing influence through the Belt and Road Initiative has intensified strategic competition in South Asia. Chinese investments often appear more attractive due to faster project execution and large-scale financing, challenging India’s influence.

5. Delays in Infrastructure Projects

Many Indian-funded infrastructure projects face bureaucratic delays and slow implementation. The Kaladan Multi-Modal Transit Transport Project in Myanmar has experienced prolonged delays, which has affected India’s credibility as a development partner.

6. Trust Deficit in Regional Economic Engagement

Some neighbouring countries perceive inconsistencies in India’s economic approach, particularly when India discourages them from engaging with China while itself maintaining significant trade with China. This has contributed to a trust deficit in countries like Nepal and Bangladesh.

Emerging Regional Dynamics

1. Political Transitions in Neighbouring Countries

India’s reliance on specific political leaders, such as Sheikh Hasina in Bangladesh, has sometimes created challenges when political leadership changes, requiring India to rebuild relationships with new regimes.

2. Rise of Youth-Driven Politics

Political movements in countries such as Sri Lanka, Bangladesh, and Nepal indicate the emergence of a younger electorate that demands greater transparency and may view India as aligned with traditional political elites.

Way Forward: Towards “Neighbourhood First 2.0”

1. Institutionalized Engagement

India should build long-term relations with governments, opposition parties, civil society, and youth groups to ensure continuity in bilateral relations despite political transitions.

2. Faster Implementation of Development Projects

Reducing bureaucratic delays and prioritizing efficient execution of infrastructure projects will enhance India’s credibility and competitiveness.

3. Revival of Non-Reciprocal Cooperation

India can adopt principles similar to the Gujral Doctrine, offering asymmetric economic concessions to smaller neighbouring countries.

4. Strengthening Cultural and People-to-People Diplomacy

Promoting shared cultural heritage, educational exchanges, and tourism can deepen societal ties across South Asia.

5. Digital Public Infrastructure Cooperation

India can export its digital innovations such as the Unified Payments Interface to neighbouring countries to build a shared regional digital ecosystem.

Conclusion

After a decade, the Neighbourhood First Policy has produced notable achievements in humanitarian assistance, connectivity, and regional cooperation. However, persistent challenges such as perceptions of interventionism, Chinese strategic competition, and slow project implementation have limited its full potential. Moving forward, India must prioritize trust-building, faster delivery of projects, and broader people-centric engagement to strengthen its leadership in the South Asian region.