India’s Neighbourhood Policy - Modi’s BIMSTEC Rationale to Replace SAARC
| Didhiti Ghosh, Bureau Chief, IOP, Kolkata - 16 Jun 2019

India’s Neighbourhood Policy - Modi’s BIMSTEC Rationale to Replace SAARC

By Didhiti Ghosh, Bureau Chief (Kolkata), IOP

Kolkata, June 16, 2019: Given the India-Pakistan bitter relations, India has been trying to isolate Pakistan not only at the world stage but also distancing itself from making any regional proximity with the latter. Even, in his recent swearing-in ceremony for commencing the second term as Indian Prime Minister, Modi had not invited Pakistan. Rather, he invited all the BIMSTEC countries as an indication of posing it as a substitute for the SAARC organization. Speculations are emerging about how India’s neighbourhood policy is going to have the effect of the Modi charisma and how it will serve as a better option than that of SAARC.

In a report published by Eurasia Review, Prof Sandeep Singh notes that in his first swearing-in ceremony with a thumping majority in 16th Lok Sabha elections (2014), Prime Minister Narendra Modi had invited all the SAARC leaders giving “Neighbourhood First” policy a top priority. With SAARC turning dysfunctional to regional connectivity and taking the Pakistan factor on a critical note, Modi moved to the BIMSTEC groupings when he invited all its members in the BRICS Summit (October 2016) at Goa. Again, the second Modi government had invited all the BIMSTEC leaders on 30th May 2019, the day of oath-taking. It clearly indicated that the Modi government’s foreign policy is likely to redefine its neighbourhood.

The BIMSTEC is commonly known as Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation which includes five SAARC members—Bangladesh, India, Sri Lanka, Nepal, Bhutan along with Myanmar and Thailand.

However, since 2011 particularly with the coming of the PM Narendra Modi regime (2014) in power, India has witnessed a dramatic change in its neighbourhood policy. An analysis by Sandeep Singh, Assistant Professor in the Department of Political Science, School of Humanities and Physical Education at CT University, Ludhiana, notes the intensity of the situation.

India’s Neighbourhood Policy

In the words of Prof Singh, regional politics has become a buzzword in the current international settings as every country is trying to seek good neighbourly relations with its bordered/adjacent country. In the era of the Asian century, China and India, the two big Asian powers, have been striving for securing strategic/diplomatic relations with their neighbours hailing new economic designs and developing new economic blocs. The role of neighbours has always been a determining factor in India’s foreign policy as it is well said—“Better is a neighbour who is near than a brother far away.” However, a bad neighbour, on the other hand, is a misfortune.

India also has developed a SAARC-like regional bloc to bring economic prosperity in the region. But it could not succeed due to the Pakistan puzzle—an arch-rival neighbour of India. Therefore, the Modi Government has decided to close the SAARC chapter.

Prime Minister Modi’s charismatic personality and diplomatic moves have revived the regional structuralism which has become a backbone of India’s foreign policy. Given its geopolitical position and the large size of the population in Asia, its economic development programmes have not been limited to its immediate neighbourhood consisting South Asia, rather has been stretched out to include the extended neighbourhood from Central Asia and West Asia to East Asia. Since independence, India has been striving for developing regional structures and SAARC is the first example as such which came into existence in 1985.

China’s growing and assertive influence on India’s immediate neighbourhood and New Delhi’s growing energy and security requirements compelled the Modi government to take crucial decisions in the backdrop of regional integration, peace and economic cooperation. Thus, the “Neighbourhood First” policy has become a cornerstone of Modi’s diplomatic and strategic approach, notes the report.

Redefining India’s Neighbourhood Policy: SAARC Averse

Since the Modi government’s coming into power, India’s regional policy has undergone dramatic twists in its traditional diplomatic stress on the “Neighbourhood First” agenda. Many incidents of unintelligible diplomacy and growing tensions between neighbours have plagued SAARC with internal problems and bilateral issues. The structural failures of SAARC have made South Asia a less connected region, notes Singh.

Apart from the above, terrorist activities on the part of Pakistan providing safe havens to militant groups have remained a stumbling block for Indo-Pak peaceful dialogue. The terrorist attack on the Indian Territory of Uri—an Army Brigade headquarters resulted in the cancellation of the 2016-SAARC Summit in Islamabad by the Indian government. It was backed by all the SAARC members. Since then, no movement has been observed on resuming the next SAARC Summit.

Moreover, Pakistan’s counter-India alliance with China to outmanoeuvre New Delhi has caused China’s geo-economic and geopolitical installations in the region.

Additionally, other South Asian nations along with Pakistan have started raising the demand for China’s inclusion in the SAARC framework. However, it is argued that the dysfunctionality of the SAARC groupings in terms of mutual rivalries slow down their intra-regional geopolitical and economic coherence.

Apart from this, the SAARC organization has experienced a controversial legacy over time. This has been one of the main reasons that India failed to define its demarcation of boundaries with neighbouring countries. India’s big land size and “Big Brother” status has remained susceptible for South Asian neighbours. With her aspiration to seek a permanent seat in the UN Security Council, India has been characterized as Asian power and economics leader since the introduction of national economic reforms.

India’s neighbours have always remained sensitive to Indian foreign policies vis-à-vis SAARC grouping. Consequently, they have started stepping towards developing sub-regional establishments such as the South Asia Subregional Economic Cooperation (SASEC), Economic Cooperation Organization (ECO), Mekong–Ganga Cooperation (MGC), Shanghai Cooperation Organization (SCO) and BIMSTEC, apart from others. Meanwhile, Pakistan has moved towards West Asia.

The SAARC Motor Vehicle Agreement (MVA) could not reach its conclusion because of being opposed by Pakistan. Consequently, India moved forward to the Bhutan-Bangladesh-India-Nepal (BBIN) Agreement in 2015. The South Asian nations including India have also started developing synergies between several interrelated bilateral and multilateral economic integration initiatives. These factors also caused to keep intra-regional trade and transit activities at the lowest ebb and led the Modi government to redefine India’s foreign policy towards South Asian neighbours which shifted the emphasis from SAARC to BIMSTEC to put South Asia integration on the track.

Furthermore, the report notes that new India’s neighbourhood policy also reads like extra-regional affairs when it became a permanent member of the SCO. It is implied that to enhance its outreach to the extended neighbourhood, India needs direct route-connectivity and Pakistan remained a hurdle to India’s connectivity projects such as TAPI, IPI, APTTA, South Asia Satellite and other energy projects.

The same has also impacted SAARC’s functionality. Pakistan, by refusing India to give the status of “Most Favoured Nation” resisted the idea of the South Asia Free Trade Area (SAFTA) Agreement. This rage reached its climax when India pulled out the MFN status from Pakistan after the Pulwama attack this year. Therefore, it appears understandable in the context of other regional groupings such as BIMSTEC and ASEAN-Regional Comprehensive Partnership (RCEP) with which India is trying to develop multilateral cooperation. These groupings can have also similar bottlenecks when it comes to the question of Indian investments and financial potentials of neighbouring countries.

India’s Shift towards BIMSTEC

BIMSTEC, earlier known as BISTEC was formed on 6th June 1997 that included Bangladesh, India, Sri Lanka and Thailand Economic Cooperation. It was renamed “BIMSTEC” in the same year when Myanmar joined the Bangkok Ministerial Meeting on 22 December. In February 2004, BIMSTEC was again renamed as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation when Bhutan and Nepal became a full member.

Transcending their national identities BIMSTEC has become a maritime group of countries located around the Bay of Bengal in order to make progress in technical areas of energy security, tourism, trade, transport, telecommunications and other agricultural-related activities. It has established its first Secretariat in Dhaka in 2014. It has held only four summits since its formation. Given its tense relations with Pakistan within SAARC over terrorism, India wants to do more on BIMSTEC to rediscover the regional organization which appears to be based on India’s Panchsheel objectives.

Many political pundits indicate that BIMSTEC is not a perfect substitution of SAARC by giving the account of its second principle—“Cooperation within BIMSTEC will constitute an addition to and not be a substitute for bilateral, regional or multilateral cooperation involving the Member States.”

Its official website lays down the claim that BIMSTEC manages to bridge a gap by providing a “platform for intra-regional cooperation between SAARC and ASEAN members” (Association of Southeast Asian Nations). On this, Sri Lanka and Nepal’s leadership during Modi’s second term swearing-in ceremony affirmed that BIMSTEC is important but “BIMSTEC would not replace SAARC as both are significant organizations.”

However, Modi’s stress on BIMSTEC is, in fact, to stimulate the trade-transit and economic related initiatives in the region which remained drowsy over the last two decades. In additions to boosting the blue economy, India also wants to cope with the maritime security issues through diplomatic engagements with all island and littoral nations. Indian PM Narendra Modi’s diplomatic visit to the Maldives and Sri Lanka is an indicator to get all these nations out of the Chinese debt-trap diplomacy.

Singh stresses the fact that it is important to mention here that except Bhutan and India, all the rim countries of the Bay of Bengal are participatory to China-led Belt Road Initiative (BRI). In his BIMSTEC strategy, Modi has urged for mutual cooperation against illegal migration and incidents of maritime piracy.

Also, India’s BIMSTEC engagement appears to be conforming to the Security and Growth for All in the Region (SAGAR) Initiatives which was outlined by PM Modi during his visit to Mauritius, Sri Lanka and Seychelles in 2015. It includes the objectives of economic potential, enhancing connectivity and accruing benefits from blue economies. It would also improve the trade scenario as FICCI’s knowledge paper “Reinvigorating BIMSTEC” has forecasted its intra-regional trade potential of US $250 billion which is currently at about US $40 billion. Given the current global trade dynamics, it appears understandable that India needs greater connectivity for smooth trade transactions and economic cooperation. BIMSTEC is, therefore, going be a key priority for India in its neighbourhood policy.

Impending Possibilities vis-à-vis SAARC

Indian leadership finds great potential in BIMSTEC groupings. The former Foreign Minister Kanwal Sibal reasoned for Pakistan not being invited in the oath-taking event that “the invitation to BIMSTEC leaders shows that India clearly believes that its interests are better served by this grouping than by SAARC. It implicitly conveys that there will be no move to engage Pakistan despite overtures by Prime Minister Imran Khan.”

A day before his first scheduled visit to Bhutan, the External Affairs Minister Mr S Jaishankar in his first public talk with the CII (Confederation of Indian Industry), expressed that “SAARC has certain problems which are known to all. Even if you put the terrorism issue aside, there are trade and connectivity issues.” He further added that reason behind inviting all BIMSTEC leaders for the swearing-in ceremony has great future perspectives as India “sees today energy and a possibility in BIMSTEC and a mindset which fits in with that very optimistic vision of economic cooperation that we want.”

India perceives strategic possibilities in the BIMSTEC in the backdrop of growing Chinese presence in the Indian Ocean. China’s debt-trap diplomacy has strategic implications for Indian security. Therefore, India is likely to enhance diplomatic as well as economic engagements with BIMSTEC countries which remained a distant dream being in SAARC given India-Pakistan skirmishes.

Singh says that it would be too early to comment on whether India’s BIMSTEC policy aims at isolating Pakistan. In fact, the Modi government wants to build more on BIMSTEC as it would give significant voice to India’s Act East policy and boost up India’s quad relations with Australia, Japan and the USA. It provides for a transitional gateway to integrate the Indian market with the ASEAN economies.

Will it be important to see how India might help the BIMSTEC nations to rebuild their economies? How does the shift in the regional balance of power make India a trust-winner among the BIMSTEC countries because they have also been struggling over several issues such as migration/refugees, human-trafficking, scarcity of financial wherewithal? Singh confirms that returning to SAARC’s failure, it is more important that than just imprecating Pakistan, India must improve its suspicious status in the eyes of its neighbours.

Verily, relationships with India’s big as well as small neighbours need constant diplomatic attention amid the emerging regional dynamics.

Image Courtesy: Nikkei Asian Review, The Statesman

(DIDHITI GHOSH is an India Columnist at La Agencia Mundial de Prensa, USA, and is the Bureau Chief of Indian Observer Post based in Kolkata. E-mail: | LinkedIn:

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