India and South Asia

India and South Asia: An Overview

South Asia is home to approximately 1.9 billion people and comprises eight nations: India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka, Maldives, and Afghanistan. India occupies a central and dominant position within this region by virtue of its size, population, economic weight, and geographic location. India shares land borders with Pakistan, Nepal, Bhutan, Bangladesh, Myanmar, and China, and maritime borders with Sri Lanka and Maldives. This centrality makes Indian foreign policy in South Asia a subject of particular importance in international relations. The region is simultaneously characterised by deep historical and cultural ties arising from a shared civilisational heritage and by persistent political tensions, territorial disputes, and asymmetric power relations that complicate regional cooperation.

South Asia is among the least integrated regions in the world. Intraregional trade accounts for barely five percent of South Asia's total trade, a figure that stands in sharp contrast to ASEAN where the figure is around twenty-five percent and the European Union where it exceeds sixty percent. The region also suffers from low connectivity, high tariff and non-tariff barriers, political mistrust especially between India and Pakistan, and the absence of functioning multilateral mechanisms. Despite these challenges, South Asia remains a priority in Indian foreign policy, and India has pursued a range of bilateral and multilateral strategies to deepen engagement with its neighbours.

India-Pakistan Relations

The relationship between India and Pakistan has been the most consequential and contentious bilateral relationship in South Asia since the two countries gained independence in 1947. The partition of British India along religious lines created two successor states that immediately came into conflict over the princely state of Jammu and Kashmir. The Kashmir dispute has remained the central source of tension in the relationship, generating multiple wars and decades of strategic competition.

India and Pakistan have fought four major wars: in 1947, 1965, 1971, and 1999 at Kargil. The 1971 war resulted in the creation of Bangladesh and was a decisive strategic setback for Pakistan. The Kargil conflict in 1999 was particularly significant because both states had by then conducted nuclear tests in 1998, making it the first armed conflict between two declared nuclear weapons states. Both countries maintain doctrines of deterrence but the stability of this deterrence remains a subject of debate. Pakistan maintains a policy of first use while India adheres officially to a no-first-use doctrine, though Indian officials have periodically signalled flexibility on this position.

Pakistan's support for cross-border terrorism has been a persistent and deeply destabilising factor. Major terrorist attacks attributed to Pakistan-based groups include the 2001 attack on the Indian Parliament, the 2008 Mumbai attacks which killed over 160 people and were carried out by Lashkar-e-Taiba, the 2016 Pathankot airbase attack, and the 2016 Uri attack which killed eighteen Indian soldiers. Following the Uri attack, India conducted surgical strikes across the Line of Control, marking a significant shift in India's willingness to use military force in response to cross-border terrorism. The 2019 Pulwama attack, in which forty Central Reserve Police Force personnel were killed, prompted India to conduct airstrikes at Balakot in Pakistan's Khyber Pakhtunkhwa province, the first such strike on Pakistani territory since 1971.

Trade and economic relations between the two countries remain far below their potential. According to estimates, bilateral trade which currently stands below three billion dollars annually could potentially reach twenty billion dollars or more if political conditions permitted normal commercial relations. However, both sides have imposed restrictions and Pakistan suspended bilateral trade formally after India revoked the special status of Jammu and Kashmir under Article 370 in August 2019. India had earlier withdrawn Pakistan's Most Favoured Nation status following the Pulwama attack.

Diplomatic relations have oscillated between periods of engagement and rupture. The Shimla Agreement of 1972 established the Line of Control and committed both sides to resolving disputes bilaterally. The Lahore Declaration of 1999 represented a moment of optimism under Prime Ministers Vajpayee and Nawaz Sharif, but was quickly overtaken by the Kargil conflict. The Composite Dialogue Process launched in 2004 covered eight baskets of issues including trade, cultural exchanges, confidence-building measures, and Kashmir but was suspended after the 2008 Mumbai attacks. Subsequent attempts at normalisation have repeatedly been derailed by terrorist incidents. The relationship as of recent years remains frozen, with no summit-level talks and the bilateral relationship managed mainly through back-channel communications.

India-Bangladesh Relations

India played a decisive role in the creation of Bangladesh during the 1971 Liberation War, intervening militarily to support the Bengali independence movement against Pakistani forces. This foundational moment created a strong basis for the relationship but also embedded certain asymmetries and sensitivities. Relations between the two countries have been shaped by issues of water sharing, cross-border migration, trade, connectivity, and border management.

The Ganga Waters Treaty signed in 1996 during the governments of H. D. Deve Gowda and Sheikh Hasina resolved the long-standing dispute over sharing of Ganga river waters at Farakka. The treaty was celebrated as a landmark in bilateral relations. However, the Teesta river water sharing dispute has remained unresolved. An agreement was nearly finalised in 2011 but was blocked by the objection of West Bengal Chief Minister Mamata Banerjee, reflecting the complication that subnational actors can introduce into bilateral diplomacy.

Cross-border migration from Bangladesh into India has been a sensitive domestic political issue, particularly in Assam and West Bengal. The National Register of Citizens exercise in Assam was partly directed at identifying illegal migrants from Bangladesh. Bangladesh has been concerned about the treatment of its nationals in India and the implications of the National Register of Citizens and the Citizenship Amendment Act.

Under the Awami League governments of Sheikh Hasina, India-Bangladesh relations reached historically high levels of cooperation. Bangladesh cracked down on anti-India insurgent groups operating from its territory, resolved the long-standing land boundary dispute through the ratification of the Land Boundary Agreement in 2015, and cooperated on connectivity projects including road and rail links. India extended lines of credit to Bangladesh for infrastructure development and the two countries expanded bilateral trade significantly. However, the political change in Bangladesh in 2024 following the ouster of Sheikh Hasina introduced uncertainty, as the interim government signalled a somewhat different orientation in bilateral relations.

India-Nepal Relations

Nepal and India share an open border and deep civilisational, cultural, and religious ties. The 1950 Treaty of Peace and Friendship governs the bilateral relationship and grants Nepalese citizens the right to live and work in India on terms equivalent to Indian citizens, a provision that has generated considerable Nepalese traffic to Indian cities. However, the treaty has also been a source of controversy within Nepal, where nationalist opinion views some of its provisions as infringing on Nepalese sovereignty.

Relations between India and Nepal have been periodically strained. India's perceived interference in Nepal's internal political affairs has generated resentment. A particularly damaging episode occurred in 2015 when India imposed an unofficial economic blockade in response to Nepal's new constitution, which the Madhesi community in Nepal's Terai region opposed. The blockade caused acute shortages of fuel and essential goods in landlocked Nepal and significantly damaged Indian standing. Nepal subsequently sought to deepen its engagement with China as an alternative partner, and China has invested substantially in infrastructure projects in Nepal including roads and cross-border connectivity.

Territorial disputes have also strained the relationship. Nepal claims the territories of Kalapani, Limpiyadhura, and Lipulekh, which India administers. The dispute became acute in 2020 when India inaugurated a road to Lipulekh pass without consulting Nepal, prompting Nepal to issue a new official map including these territories. The relationship has since been managed cautiously, with both sides recognising the deep interdependence that makes a sustained rupture costly for Nepal. India remains Nepal's largest trading partner and the primary source of remittances for Nepalese workers employed in India.

India-Sri Lanka Relations

India and Sri Lanka share maritime proximity and deep historical and cultural ties. The most difficult period in bilateral relations came during the Sri Lankan civil war, when India's relations with Sri Lanka were complicated by the Tamil ethnic conflict. India initially supported Tamil militant groups in the early 1980s but later shifted its position and signed the Indo-Sri Lanka Accord of 1987, which led to the deployment of the Indian Peace Keeping Force in the Northern and Eastern provinces of Sri Lanka. The IPKF mission was deeply controversial, became entangled in conflict with the Liberation Tigers of Tamil Eelam, and was withdrawn in 1990 without having resolved the conflict. The assassination of former Prime Minister Rajiv Gandhi by an LTTE suicide bomber in 1991 cast a long shadow over India's perception of the Tamil militancy.

The Sri Lankan civil war ended in 2009 with the military defeat of the LTTE by the Sri Lankan armed forces. The final phase of the conflict was accompanied by serious allegations of human rights violations and civilian casualties, which generated strong political pressure within Tamil Nadu on the Indian government to take a more critical stance towards Sri Lanka. India has navigated this tension carefully, balancing strategic interests with domestic political considerations arising from its Tamil population.

The economic relationship between the two countries has been strengthened through the India-Sri Lanka Free Trade Agreement of 2000, which significantly expanded bilateral trade. India has provided substantial economic assistance to Sri Lanka, particularly during Sri Lanka's severe economic crisis in 2022, when India provided credit lines, fuel assistance, and food aid amounting to nearly four billion dollars as Sri Lanka faced foreign exchange reserves depletion and widespread shortages.

The strategic dimension of the India-Sri Lanka relationship has been shaped by China's growing presence in the island. China financed the Hambantota port project and subsequently acquired a ninety-nine-year lease on the port in 2017, raising concerns in India and Western capitals about Chinese strategic intentions in the Indian Ocean. India has responded by deepening its own engagement with Sri Lanka on connectivity, development, and security cooperation.

India-Bhutan Relations

India and Bhutan share one of the closest bilateral relationships in South Asia. The India-Bhutan Friendship Treaty of 2007 replaced the earlier 1949 treaty and governs the relationship on the basis of sovereign equality while maintaining close cooperation on foreign policy and defence. India provides Bhutan with significant economic assistance and is the primary market for Bhutan's hydropower exports, which constitute the backbone of the Bhutanese economy. The two countries cooperate closely on security matters, and India has historically assisted Bhutan in dealing with insurgent groups operating from Bhutanese territory. The relationship is characterised by mutual trust and has remained largely insulated from the tensions that mark India's relations with other neighbours.

The principal complication in the India-Bhutan-China triangle arises from the unresolved Bhutan-China boundary dispute. China claims territories along the Bhutan border, and the Doklam standoff of 2017 brought India and China into a direct military confrontation at the trijunction of India, Bhutan, and China when Indian troops intervened to prevent China from extending a road in the disputed Doklam area. The standoff lasted seventy-three days before both sides disengaged. Bhutan's boundary negotiations with China have continued and India has watched these developments closely given the implications for its own security along the Siliguri corridor.

India-Maldives Relations

The Maldives holds significant strategic importance for India given its location in the Indian Ocean along major sea lanes of communication. India has traditionally been the first responder in Maldivian crises, as demonstrated by Operation Cactus in 1988 when India intervened militarily to foil a coup attempt. India has also provided substantial development assistance and medical support to the Maldives.

Relations have been subject to political fluctuations depending on the orientation of the Maldivian government. The administration of Mohamed Muizzu, which came to power in late 2023 running explicitly on an India Out platform, demanded the withdrawal of Indian military personnel present in the Maldives under bilateral agreements. This marked a significant shift in bilateral relations and reflected China's growing influence in the island nation. India navigated the situation carefully, withdrawing uniformed military personnel while maintaining civilian cooperation and development assistance. The episode highlighted how smaller South Asian neighbours can leverage the India-China competition to extract concessions or rebalance their external relationships.

SAARC: Origins, Structure, and Limitations

The South Asian Association for Regional Cooperation was founded in Dhaka on 8 December 1985 with the signing of the SAARC Charter. The organisation originally had seven members and Afghanistan was admitted as the eighth member in 2007. The SAARC Secretariat is located in Kathmandu, Nepal. Several countries including China, the United States, Japan, and the European Union hold observer status in SAARC.

The eight objectives of SAARC as outlined in its charter include promoting the welfare of the peoples of South Asia, accelerating economic growth and social progress, strengthening collective self-reliance, promoting mutual trust and understanding, encouraging active collaboration in economic, social, cultural, and technical fields, and cooperating with other developing countries and international organisations with similar objectives. Decisions within SAARC are taken on the basis of unanimity, and bilateral and contentious issues are explicitly excluded from the deliberations of the association. The highest decision-making forum is the biennial Summit of Heads of State or Government. The eighteenth SAARC Summit was held in Kathmandu in 2014. The nineteenth summit, scheduled to be hosted by Pakistan in 2016, was cancelled after India declined to participate following the Uri terrorist attack. No summit has been held since then, effectively freezing the organisation.

The South Asian Free Trade Area agreement known as SAFTA was signed in January 2004 during the twelfth SAARC Summit. The agreement entered into force in January 2006 and the trade liberalisation programme commenced from July the same year. Under SAFTA, member states committed to reducing duties progressively. However, the agreement has been undermined by the widespread use of sensitive lists, which are lists of goods exempted from tariff concessions, and by the persistence of non-tariff barriers. According to the World Bank, intraregional trade accounts for barely five percent of South Asia's total trade compared to ASEAN at twenty-five percent and the European Union at sixty percent. It is estimated to be twenty percent cheaper for India to trade with Brazil than with neighbouring Pakistan due to the combination of tariff barriers, circuitous trade routes, congested border crossings, and inadequate transportation infrastructure.

Scholars have identified multiple structural reasons for SAARC's failure to realise its potential. The idea of SAARC was partly conceived by smaller South Asian states as a platform to balance Indian dominance rather than purely for cooperative purposes, which undermined the spirit of regional solidarity from the outset. Unlike the European Union or ASEAN, SAARC lacked an external push factor in the form of a supportive great power or a shared external threat that could have driven greater integration. The region is marked by a profound power asymmetry in which India accounts for the overwhelming share of South Asia's land mass, population, and economic output, and smaller neighbours often perceive Indian engagement with ambivalence. Political instability in member countries including Pakistan, Afghanistan, Nepal, Bangladesh, and Sri Lanka has repeatedly disrupted the continuity of bilateral and multilateral engagement. The India-Pakistan rivalry has been the single most important obstacle to SAARC functioning, because virtually all meaningful regional integration requires Indian and Pakistani cooperation, which the unresolved Kashmir dispute and Pakistan's support for cross-border terrorism have made impossible.

Santosh Poudel, a Nepali scholar, has argued that India-Pakistan rivalry and India's isolation of Pakistan contributed to what he describes as the death of SAARC as a functioning regional organisation. Dr. Sanjay Baru suggests that historically regional organisations have been shaped by three factors: market-driven economies, movement of people across borders, and political will, and that in the case of SAARC all three are largely missing. Happymon Jacob has observed that India's attitude towards its neighbourhood has often been characterised by treating neighbours as irritants and challenges rather than opportunities, and draws lessons that India must deal with difficult situations more diplomatically, must follow up on its promises to neighbours, must avoid meddling in domestic politics, and must invest in institution building and soft power rather than competing with China in infrastructure domains where China has structural advantages.

BIMSTEC: Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation

BIMSTEC was originally founded as BIST-EC in 1997, comprising Bangladesh, India, Sri Lanka, and Thailand. Following the inclusion of Myanmar the same year the group was renamed BIMST-EC. Nepal and Bhutan joined in 2004, leading to the current name BIMSTEC. The organisation thus bridges South Asia and Southeast Asia through the shared geography of the Bay of Bengal. Its seven member states are Bangladesh, India, Myanmar, Sri Lanka, Thailand, Nepal, and Bhutan.

BIMSTEC has identified seven main sectors for cooperation with designated lead countries: Trade, Investment and Development led by Bangladesh; Environment and Climate Change led by Bhutan; Security including counter-terrorism and disaster management led by India; Agriculture and Food Security led by Myanmar; People-to-People Contact including culture and tourism led by Nepal; Science, Technology and Innovation led by Sri Lanka; and Connectivity led by Thailand. The organisation has a five-tiered structure comprising the Summit of Heads of State or Government, Ministerial Meetings, Sectoral Ministerial Meetings, Senior Officials' Meetings, and the BIMSTEC Permanent Working Committee.

India has increasingly prioritised BIMSTEC over SAARC as a platform for regional engagement. The BJP election manifesto of 2019 mentioned BIMSTEC but did not reference SAARC, reflecting this shift in strategic priorities. External Affairs Minister S. Jaishankar articulated this preference by noting that BIMSTEC has an appetite to grow and a will to cooperate in the absence of the kind of issues that have paralysed SAARC. C. Rajamohan has highlighted the geostrategic significance of BIMSTEC in bringing India closer to three strategic regions: the Bay of Bengal, the Mekong subregion, and the sub-Himalayan region. Since SAARC is effectively blocked by the India-Pakistan impasse, BIMSTEC allows India to consolidate relations with other South Asian countries while also deepening engagement with ASEAN members Thailand and Myanmar.

BIMSTEC also faces significant challenges. Only five summits have been held in nearly three decades of the organisation's existence, questioning the seriousness of member countries. The delay in adopting a Free Trade Agreement, agreed upon in 2004 but still unimplemented, casts doubt on the organisation's effectiveness. The political situation in Myanmar following the 2021 military coup has complicated engagement. Joyeeta Bhattacharjee has recommended strengthening BIMSTEC through greater consistency in the frequency of summits, improving the capacity of the secretariat, ensuring tangible benefits to motivate member countries, and empowering the organisation as a platform for dispute resolution.

SAARC and BIMSTEC differ in several important respects. SAARC operates entirely within South Asia while BIMSTEC extends to Southeast Asia making it an inter-regional organisation. SAARC was founded in 1985 as a product of Cold War dynamics while BIMSTEC was established in 1997 in a different strategic environment. SAARC member countries suffer from deep mistrust and suspicion, particularly between India and Pakistan, whereas relations among BIMSTEC members are relatively more cooperative. SAARC has an asymmetric power balance dominated by India, while the presence of both India and Thailand in BIMSTEC creates a somewhat more balanced power structure. Intraregional trade has stagnated in SAARC whereas it is on a growing trajectory in BIMSTEC. Indian officials have maintained that the intent is for these organisations to complement rather than replace each other.

Look East and Act East Policy

India's Look East Policy was initiated in 1991 under Prime Minister Narasimha Rao as a strategic reorientation towards Southeast Asia and the broader Asia-Pacific region. It was driven by the economic reforms of 1991 that sought to integrate India into the global economy, the strategic vacuum created by the end of the Cold War and the collapse of the Soviet Union, and recognition of the dynamic economic growth occurring in ASEAN economies. The policy aimed to expand trade and investment links with Southeast Asia, improve physical connectivity through the Northeast Indian states, and build strategic partnerships with ASEAN members.

Prime Minister Narendra Modi relaunched and upgraded this framework as the Act East Policy in 2014, signalling a shift from a reactive to a proactive posture. The Act East Policy deepens engagement not only with ASEAN but also with East Asian partners including Japan, South Korea, and Australia. It emphasises key connectivity corridors such as the India-Myanmar-Thailand Trilateral Highway, the Kaladan Multimodal Transit Transport Project connecting Kolkata to Myanmar's Sittwe port and onward to Mizoram, and broader maritime and digital connectivity with ASEAN. The policy also emphasises cultural and civilisational links, particularly India's historical ties with Southeast Asian Buddhist traditions, as a basis for soft power engagement.

River Water Disputes

Water sharing is among the most complex dimensions of India's relations with its South Asian neighbours. The Indus Waters Treaty of 1960 between India and Pakistan, brokered by the World Bank, allocated the western rivers of the Indus system to Pakistan and the eastern rivers to India. The treaty survived the 1965 and 1971 wars and is often cited as a model of successful water diplomacy. However, India's construction of hydroelectric projects on rivers allocated to Pakistan has led to recurring disputes, and India's signals following the 2019 Pulwama attack that it might reconsider the treaty introduced a new element of uncertainty into what had been a relatively stable arrangement.

The Ganga Waters Treaty with Bangladesh, signed in 1996, governs sharing of Ganga river waters at the Farakka Barrage and is renewable every thirty years. The Teesta water sharing agreement remains unresolved due to the objection of West Bengal's government, which controls infrastructure on the Indian side of the river. Other river disputes involve Nepal, with whom India has signed agreements on the Kosi and Gandak rivers, though the management of these agreements has sometimes been a source of tension, particularly after floods caused by Kosi barrage failures affected Bihar significantly.

India's Neighbourhood First Policy

The Neighbourhood First Policy was articulated explicitly by the Modi government after 2014, though its intellectual foundations draw on earlier frameworks. The policy asserts that India's immediate neighbourhood must be the primary focus of Indian foreign policy and that stable, prosperous, and friendly neighbours are essential to India's own development and security. Prime Minister Modi's first major symbolic gesture was inviting all SAARC heads of government to his inauguration in May 2014.

The policy encompasses deeper economic integration through connectivity infrastructure, lines of credit, and preferential trade arrangements; security cooperation including intelligence sharing, border management, and counter-terrorism; people-to-people ties through cultural exchanges, scholarships, and simplified visa regimes; and development partnership through Indian-financed projects in health, education, energy, and digital connectivity. India has extended significant lines of credit to Bangladesh, Nepal, Bhutan, Sri Lanka, and Maldives for infrastructure projects.

Critics of the Neighbourhood First Policy argue that the gap between stated intentions and actual outcomes has been large. India tends to treat neighbours as irritants and has a poor track record of following through on commitments. The manner in which India handled Nepal's 2015 constitutional crisis, the Maldivian reorientation under Muizzu, and the Bhutan-China boundary negotiations has raised questions about the consistency of India's neighbourhood approach. China's growing presence in South Asia through the Belt and Road Initiative's connectivity projects in Pakistan, Sri Lanka, Nepal, Bangladesh, and Maldives has added urgency to Indian engagement but also created the risk of India responding reactively rather than strategically. The fundamental challenge is that India's size and centrality, which make it the natural leader of South Asia, are also the source of smaller neighbours' anxieties about Indian hegemony, making the balance between leadership and dominance a persistent and unresolved tension in Indian regional policy.