India’s NFP in the Himalayan States
Geography places India in the front and centre of this region, forcing upon it a special role and responsibility.
Synergia Research Team
India's Neighbourhood First Policy (NFP) is a strategic initiative focused on strengthening India's relations with its neighbouring countries through enhanced connectivity, infrastructure development, and security cooperation.
It reflects India's unique geographical position in the South Asian and Indian Ocean region. India is the only country that shares a land and/or maritime border with every other country in this sub-region. This connectivity places India at the front and centre of regional affairs, a responsibility that is both an opportunity and a challenge.
The Concept of NFP
The concept of the Neighbourhood First Policy came into being in 2008. It was conceived to bolster relations with certain priority countries such as Afghanistan, Bangladesh, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka. The concept specifically targeted certain Key Result Areas.
Terrorism and Illegal Migration: Challenges of illegal migration and smuggling of weapons and drugs required improved security infrastructure at borders and monitoring of demographic changes.
Relations with China and Pakistan: India's bilateral relations with China and Pakistan have been plagued by contentious issues. Terrorism emanating from Pakistan is a core concern. Efforts to establish a common platform for countering terrorism were to be made under the Neighbourhood First Policy.
Investment In Border Infrastructure: For engagement with India's neighbours, connectivity infrastructure such as cross-border roads, railways, and inland waterways and ports needs improvement. This could be done through a regional development fund for connectivity infrastructure under regional frameworks.
Monitoring India’s Line of Credit (LOC) Projects: India's LOC to its neighbours increased from USD 3.3 billion in 2014 to USD 14.7 billion in 2020; 50 per cent of India's global soft lending goes to its neighbours. Development projects in neighbouring countries should be completed within a certain timeframe by strengthening the Joint Project Monitoring Committees and oversight mechanisms.
Defence and Maritime Security: Defence cooperation is key to India's bilateral relationship with neighbouring countries.
Development in the Northeastern Region: The Act East policy focuses on the extended neighbourhood in the Asia-Pacific region. India's northeastern region shares land borders with many neighbouring countries. The economic development of northeastern states is integral to the success of the Neighbourhood First Policy and the Act East Policy.
Tourism Promotion: Since 2020, India has been the largest source of tourist arrivals to Maldives. A large number of visitors come to India from Bangladesh for medical treatment. Many Indians also visit Nepal for religious tourism. Enhanced investment in tourism, including medical tourism, was envisaged under the Neighbourhood First Policy.
Multilateral organisations: India's engagement with its neighbours is driven by multilateral and regional mechanisms. This includes the South Asian Association for Regional Cooperation and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation. If the impact of the Neighbourhood First Policy is to be felt extensively on the ground, strengthening institutional and multilateral/regional mechanisms is a prerequisite.
NFP in Operation
This article will attempt to highlight the achievements and challenges faced by the NFP in all its dimensions, taking the best practices in Indian exchanges with Nepal and Bhutan. This could also be taken as a template for Indian policy towards other neighbours.
Why Nepal and Bhutan? India’s relationships with these Himalayan nations are unique due to specific historical, geographical, and economic factors that distinguish them from India's relationships with other neighbours. These two countries are "sui generis" being the only landlocked countries in our neighbourhood, each with only one other neighbour apart from India. Nepal and Bhutan's topography descends from the heights of the Himalayas into the hills and foothills, forming a natural north-south flow of goods and people that reinforces their reliance on India.
Economic and Cultural Interdependence
This geographical connection also makes Nepal and Bhutan dependent on India for essential resources, such as food items, fuel supplies, transit access for third-country trade, and internet gateways. India shares extensive land borders with both nations. This land border traverses five states in India along the India-Nepal border and four states along the India-Bhutan border, creating a direct connection with large and populous states like Uttar Pradesh and Bihar.
The deep ties of marriage, kinship, and livelihood that exist across these borders are encapsulated by the term "roti-beti sambhandh." These connections are so intricate and intertwined that, in some places, the border is practically indistinguishable. This complex web of cultural, economic, and familial ties demands a policy approach sensitive to their distinct needs.
The religious ties between India, Nepal, and Bhutan are profound. For instance, the Pashupatinath Temple in Kathmandu has strong cultural and religious links to the Kashi Vishwanath Temple in India. It is said that if you visit Pashupatinath, you are expected to visit Kashi Vishwanath as well. Additionally, few are aware of the connection between the Pashupatinath Temple and Karnataka; the priests within the temple's sanctum sanctorum come from Karnataka, as only they are permitted to serve there. India is working on initiatives like the Ramayana Circuit and the Buddhist Circuit to deepen these cultural and religious bonds, connecting pilgrimage sites such as Ayodhya, Janakpur, Lumbini, and Bodh Gaya.
Trade, Infrastructure, and Connectivity Initiatives
In operational terms, India is Nepal and Bhutan's largest trade and investment partner, striving to maintain a balanced and equitable trade relationship. In line with the policy of non-reciprocity, India provides unilateral duty-free access for goods from Nepal and Bhutan while opening seaports, land ports, and soon railways and inland waterways for their transit needs. For instance, two-thirds of Nepal's third-country trade and almost the entire third-country trade for Bhutan pass through these transit points.
To support trade infrastructure, "integrated check posts" (ICPs) have been established along the India-Nepal border, with more under development. Plans are underway to introduce similar facilities on the India-Bhutan border. This infrastructure, including multimodal connectivity points, is designed to streamline and boost trade volumes, reducing wait times and fostering economic growth.
Mutual Access and Open Borders
In addition to economic connections, India has unique arrangements with Nepal and Bhutan that facilitate a seamless flow of people. Across the 1800-kilometre-long India-Nepal border, an open border policy is in place, allowing free movement of individuals. There is a no passport, no visa regime, which is followed in Bhutan as well. This open border is supported by a treaty relationship that provides for "national treatment" in terms of employment and residence. Very few people know that a Nepali citizen or a citizen of Bhutan is eligible for government employment in India and that they can also appear for the UPSC exam. They can join any service other than three specified services if they qualify. This arrangement means they can own property in India and hold government jobs. At any given time, we have about 8 to 10 million Nepali nationals working in India. Similarly, many Indians reside in Nepal and Bhutan, creating a reciprocal presence that strengthens our shared cultural and economic ties.
Defence and Educational Cooperation
India's defence relationship with Nepal is deep-rooted. Approximately 30,000 Nepali nationals, referred to as "Nepali domiciled" individuals, are employed in the Indian army. Around 100,000 retired pensioners from this group reside in Nepal, where they receive pension and healthcare benefits through pension-paying offices set up by the Indian government in Nepal. This close defence relationship strengthens ties and ensures support and stability for these veterans and their families.
On the educational front, India remains a preferred destination for Nepali and Bhutanese students. Beyond the 3,500 scholarships India offers to nationals from these countries, a significant number of students from Nepal and Bhutan study in India on a self-financing basis. As a result, Nepal is the largest source country for foreign students in India.
The Harvard-educated Prime Minister of Bhutan, Mr Tshering Tobgay, dramatically revealed the impact of India-based education when he sentimentally recalled his student days in India during a TV interview (NDTV World 22 Oct 24).
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"What moulded me to serve my king, my country, and my people would have been not necessarily Pittsburgh and Harvard, but Dr Graham's homes in Kalim pong in West Bengal. I studied 11 years in India, and you asked me how 4 years in America has moulded me!" Mr Tshering Tobgay, Prime Minister of Bhutan |
Technological Links
India is creating a cross-border payment system based on the UPI system that will soon be operational. Bypassing the restrictions imposed by conventional banking institutions and remittance channels will enable the roughly 10 million Nepalese nationals employed in India to transfer money home using their mobile phones. This method is anticipated to be a "game changer by making cross-border money transfers easier."
Enhancing connectivity is the overall theme of all these activities, which stems from a common assumption that increased connectivity and interconnections will promote regional prosperity.
Key Takeaways
Both relationships are unique. Bhutan is
India’s
closest bilateral partner. The relationship has flourished over the last five decades
as i
t rests on a bedrock of mutual trust and mutual respect
, underscored by the desire
to respect each other's sensitivities.
With Nepal, India
has its
share of perceptional issues
, However,
a
combination of positive forces over the last few years has put the relationship on an upward positive trajectory. This has been made possible because, first, there is a high-level emphasis on completion of projects. And two, that there is a common shared determination in the political leadership of both countries to move ahead while addressing any
niggling
issues through dialogue
.
Both relationships embody the core elements of
India’s
general policy approach to
its
neighbourhood
.
India believes that
the security of
its
borders
is best
served
by having prosperous people living on both sides of it.
Tag
#India-Nepal, #India -Bhutan, #Neighbourhood First Policy, #South Asia, #Indian Foreign Policy
Reference
(Compiled from discussions held at Synergia Foundation with Mr Anurag Srivastava, Joint Secretary, North and Former Spokesperson for India's Ministry of External in October 2024)
