Context:
In the recently announced Union Budget 2024-25, the Ministry of External Affairs (MEA) has outlined its development assistance plans, focusing on strategic partners and neighbouring countries. This initiative aims to promote regional connectivity, cooperation, and stability in line with India’s Neighbourhood First Policy.
Relevance:
GS III: Indian Economy
Dimensions of the Article:
- Distribution of Development Aid Among Countries:
- Benefits of Development Aid Granted to Neighbouring Countries
- India’s Neighbourhood First Policy
- Challenges in India’s Relationship with Neighbouring Countries
- Way Forward
Distribution of Development Aid Among Countries:
- Bhutan: ₹2,068.56 crore (highest allocation, though slightly reduced from ₹2,400 crore last year)
- Nepal: ₹700 crore (increase from ₹550 crore last year)
- Maldives: ₹400 crore (consistent allocation despite previous year’s higher revised amount of ₹770.90 crore)
- Sri Lanka: ₹245 crore (increase from ₹150 crore last year)
- Afghanistan: ₹200 crore (for aiding stability and development amidst challenges)
- Iran: ₹100 crore (for the Chabahar Port Project, consistent allocation for the past three years)
- Africa: ₹200 crore (for collective aid to African countries, reflecting India’s expanding engagement)
- Seychelles: ₹40 crore (increase from ₹10 crore)
Benefits of Development Aid Granted to Neighbouring Countries:
- Enhanced Diplomatic Ties:
- Development aid strengthens political and economic relationships, fostering closer ties with recipient countries. For example, Bhutan’s support on the Doklam issue highlights this diplomatic benefit.
- Regional Stability:
- Financial support helps stabilize neighboring countries, contributing to regional security. Stability in countries like Afghanistan can benefit India’s strategic interests by reducing regional volatility.
- Economic Growth:
- Aid contributes to infrastructure projects and development programs, boosting economic growth in recipient countries. For instance, the Chabahar Port Project in Iran supports regional connectivity and trade.
- Increased Trade and Investment Opportunities:
- Improved infrastructure and economic conditions in neighboring countries can lead to increased trade and investment opportunities for India. The Agartala-Akhaura railway project between India and Bangladesh exemplifies such benefits.
- Influence and Alliances:
- Aid allows India to build alliances and exert influence, ensuring neighboring countries align more closely with Indian interests. Bhutan’s favorable stance on the Doklam issue demonstrates the impact of strategic aid.
- Humanitarian Assistance:
- Aid addresses urgent humanitarian needs such as healthcare, education, and disaster relief, improving the quality of life in recipient countries. India’s “Operation Karuna” for Myanmar during Cyclone Mocha is a prime example.
- Soft Power and Regional Leadership:
- Investing in the development of neighboring countries enhances India’s soft power and reputation as a responsible regional leader. It helps alleviate perceptions of India as a “Big Brother” among its smaller neighbors.
India’s Neighbourhood First Policy
Overview:
- Inception: The Neighbourhood First Policy was established in 2008.
- Scope: It focuses on managing relationships with India’s immediate neighbours: Afghanistan, Bangladesh, Bhutan, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka.
- Objectives: Enhance physical, digital, and people-to-people connectivity; boost trade and commerce; and develop an institutional approach to manage relations with neighbouring countries.
Importance of the Neighbourhood First Policy:
- Security Concerns:
- Addresses threats from terrorism and illegal migration, including smuggling of weapons and drugs.
- Enhances border security and monitors demographic changes due to illegal migration.
- Regional Relations:
- Engages with regional and multilateral organisations to counter terrorism, particularly focusing on Pakistan’s role.
- Builds infrastructure and stabilises border regions through improved connectivity and development projects.
- Economic and Strategic Benefits:
- Expands India’s influence and builds economic linkages with neighbouring countries.
- Facilitates defense cooperation and maritime domain awareness.
- Supports the development of the North-Eastern region and regional connectivity projects, such as the India-Myanmar-Thailand Trilateral Highway.
- Cultural and Tourism Initiatives:
- Promotes tourism, which fosters cultural exchange and increases interest in Indian culture and businesses.
- Regional Mechanisms:
- Engages in regional organisations like SAARC and BIMSTEC to assert leadership and counterbalance other major powers’ influence.
Challenges in India’s Relationship with Neighbouring Countries:
- Border Disputes:
- Disagreements over borders, especially with China and Pakistan, lead to tensions.
- China’s growing influence and ties with Pakistan pose strategic challenges.
- Militant Groups:
- Pakistan’s support to militant groups like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM) that target India.
- Illegal Migration:
- Influx of illegal migrants from Bangladesh raises demographic and security concerns.
- Economic and Trade Barriers:
- Economic issues and trade barriers with countries like Pakistan, Bangladesh, and Nepal affect relations.
- Trade restrictions and tariffs exacerbate diplomatic tensions.
- Water Disputes:
- Conflicts over river waters, such as the Indus and Teesta rivers, strain relations with Pakistan and Bangladesh.
- Political Instability:
- Political instability in countries like Nepal and Bangladesh impacts bilateral relations.
- Humanitarian and Environmental Issues:
- Disputes over minority treatment and environmental impacts, such as flooding in Bangladesh and concerns over Bhutan’s ecology.
- Regional Organisation Disagreements:
- Internal disagreements within SAARC and BIMSTEC can hinder effective cooperation.
Way Forward:
- Diplomatic Engagement:
- Maintain regular diplomatic dialogues and high-level meetings to resolve issues.
- Dispute Resolution:
- Develop mechanisms for resolving disputes, such as joint committees and arbitration panels.
- Trade Agreements:
- Negotiate fair trade agreements to address imbalances and promote mutual benefits.
- Infrastructure Development:
- Collaborate on improving connectivity through roads, railways, and energy corridors.
- Regional Security:
- Coordinate on security initiatives to address common threats, including terrorism and illegal migration.
- Educational and Tourism Initiatives:
- Increase initiatives to build mutual understanding and goodwill.
- Disaster and Environmental Management:
- Collaborate on managing natural disasters and environmental problems through joint efforts and regional plans.
- Active Participation:
- Participate actively in regional organisations to address issues and improve decision-making.
- Balanced Policies:
- Ensure domestic policies align with international implications and adhere to the principles of the Gujral Doctrine.
-Source: Indian Express
