Neighbourhood First: Recalibrating India’s Regional Grand Strategy

India’s “Neighbourhood First” policy, initiated in 2014, fundamentally re-prioritised engagement with immediate neighbours, acknowledging that India’s rise is intrinsically linked to the stability and prosperity of its periphery. As of April 2026, this policy continues to evolve amidst a complex geopolitical landscape, demanding proactive and nuanced diplomatic efforts. The core principle revolves around fostering connectivity, commerce, and cultural ties, while addressing shared challenges like climate change, terrorism, and cross-border issues. This approach is not merely transactional but aims at building trust and interdependence.

A stable and prosperous neighbourhood is a prerequisite for India’s strategic autonomy and its role as a responsible global stakeholder.

India’s engagement is increasingly characterised by Multi-vector Diplomacy, balancing traditional ties with emerging strategic imperatives.

The efficacy of “Neighbourhood First” is continually tested by several structural drivers and root causes of instability. China’s growing economic and strategic footprint, particularly through the Belt and Road Initiative (BRI), remains a significant challenge, often creating debt traps and geopolitical leverage in India’s backyard. Internal political instability, democratic backsliding, and economic fragility in several neighbouring countries (e.g., Pakistan, Sri Lanka, Nepal, Myanmar) complicate bilateral relations and hinder regional cooperation. Cross-border terrorism, illicit trafficking, and refugee flows, exacerbated by porous borders and ongoing conflicts, pose direct security threats. Furthermore, the asymmetry in size and economic power between India and its smaller neighbours sometimes breeds suspicion, perceived as big-brotherly dominance rather than benevolent leadership, despite India’s efforts for equitable partnerships.

The success or failure of “Neighbourhood First” has profound implications for India’s strategic interests and its standing in the evolving global order. A volatile neighbourhood diverts India’s resources and attention from broader strategic objectives, impacting its ability to project power and influence beyond South Asia. Conversely, a stable, cooperative region enhances India’s economic growth, provides vital trade routes, and creates a secure periphery for its burgeoning economy and population. Regionally, continued Chinese inroads could marginalise India’s influence, leading to a more fragmented and competitive South Asian order. Globally, India’s inability to foster regional cohesion undermines its credibility as a responsible power capable of managing its immediate sphere, potentially impacting its aspirations for a permanent UNSC seat and its leadership role in forums like the Quad or G20.

India has rolled out a suite of initiatives under the “Neighbourhood First” banner. These include enhanced connectivity projects (roads, railways, waterways, digital links), significant development assistance (grants, credit lines), and humanitarian aid, often being the first responder in regional crises. Specific examples include the Trilateral Highway linking India, Myanmar, and Thailand, and various power grid interconnections. Security cooperation, including capacity building and joint exercises, is a growing focus, particularly in maritime domain awareness through the SAGAR doctrine. India actively promotes regional platforms like BIMSTEC, given SAARC’s dormancy, to foster economic integration and counter-terrorism efforts. Cultural diplomacy and people-to-people exchanges also play a crucial role in building goodwill and understanding.

To invigorate “Neighbourhood First,” India must innovate its approach. This includes moving beyond traditional aid models towards co-development partnerships that address specific local needs and foster self-reliance. Leveraging digital technologies for governance, education, and healthcare can offer a unique, non-debt-trap alternative to Chinese offerings. A more robust public diplomacy strategy is needed to counter misinformation and highlight India’s genuine commitment to regional prosperity. Furthermore, India should explore “mini-lateral” initiatives with like-minded neighbours on specific issues, such as climate resilience or disaster management, rather than solely relying on broader regional groupings. Developing a coherent “South Asia Growth Corridor” vision could synergise various connectivity and economic projects for greater impact.

India’s strategic interests dictate a robust “Neighbourhood First” policy. A secure periphery is paramount for managing external threats and ensuring internal stability. Economic integration with neighbours opens new markets, secures supply chains, and boosts regional trade, contributing to India’s goal of becoming a $5 trillion economy. Maintaining strategic autonomy in its foreign policy requires India to manage regional dynamics effectively, preventing any single external power from dominating its immediate vicinity. By fostering strong bilateral ties and promoting regional cooperation, India strengthens its bargaining power on the global stage, asserting its independent foreign policy choices without being constrained by regional vulnerabilities. This also includes strengthening border management efforts to deter illicit activities.

The “Neighbourhood First” policy is not insular; it has significant regional and global dimensions. Regionally, it seeks to create a zone of peace and prosperity, countering the influence of revisionist powers and promoting a rules-based order. India’s leadership in disaster relief, such as during the 2025 Nepal floods or 2024 Bangladesh cyclone, showcases its commitment. Globally, a successful “Neighbourhood First” policy strengthens India’s credentials as a responsible regional hegemon and a credible partner for global powers interested in Indo-Pacific stability. It allows India to project soft power and demonstrate its development model as a viable alternative. Moreover, addressing transnational challenges like climate change and pandemics within the region aligns with global sustainable development goals and multilateral cooperation frameworks.

As of April 2026, the “Neighbourhood First” policy continues to navigate complex developments. The ongoing political instability in Myanmar, following the 2021 coup, presents a humanitarian crisis and border security challenge for India, necessitating delicate diplomatic balancing. In Sri Lanka, post-debt restructuring efforts see India playing a vital role in economic recovery and infrastructure development, while balancing Chinese influence. Maldives has seen a new government consolidate power, leading to a recalibration of bilateral ties after initial strains, with India focusing on maritime security and people-to-people links. Bangladesh’s post-election scenario, though stable, requires sustained engagement on connectivity and Rohingya repatriation. Nepal continues its political churn, with India reinforcing energy cooperation and cultural ties amidst varying political alignments.

1. Critically analyse the successes and failures of India’s “Neighbourhood First” policy since its inception. What structural challenges continue to impede its effectiveness?
2. In what ways does China’s growing influence in South Asia impact India’s “Neighbourhood First” policy? Suggest innovative strategies for India to counter this influence.
3. Discuss the role of connectivity projects and development assistance in strengthening India’s “Neighbourhood First” approach. Provide contemporary examples.
4. “A stable and prosperous neighbourhood is a prerequisite for India’s strategic autonomy.” Elaborate on this statement in the context of India’s foreign policy objectives.
5. How can India leverage multi-vector diplomacy and regional groupings like BIMSTEC to revitalise its engagement with neighbours, especially in light of SAARC’s limitations?

This topic directly maps to GS-II: India and its neighbourhood- relations. Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests. Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

5 Key Ideas:
1. Proactive Engagement: Moving beyond crisis response to sustained, positive engagement.
2. Asymmetry Management: Addressing the “big brother” perception through equitable partnerships.
3. Connectivity as Core: Physical, digital, and people-to-people links.
4. Multi-vector Diplomacy: Balancing diverse interests and global partners.
5. Soft Power Projection: Cultural diplomacy and shared heritage leverage.

5 Key IR Terms:
1. Strategic Autonomy: Ability to pursue national interests independently.
2. Debt-Trap Diplomacy: Using loans to gain political leverage.
3. Regional Hegemon: Dominant power in a geographical area.
4. Sub-regional Cooperation: Focused collaboration among a subset of regional states.
5. Geoeconomics: Interplay of economic and geopolitical strategies.

5 Key Issues:
1. Chinese Influence (BRI, debt).
2. Internal Political Instability in Neighbours.
3. Cross-border Terrorism & Illicit Trafficking.
4. Climate Change & Disaster Management.
5. Trust Deficit and Perceived Dominance.

5 Key Examples:
1. India’s “Vaccine Maitri” initiative during COVID-19.
2. Trilateral Highway (India-Myanmar-Thailand).
3. Hydropower projects with Bhutan and Nepal.
4. SAGAR doctrine for maritime security cooperation.
5. Emergency relief operations during Nepal earthquake (2015) and Sri Lankan economic crisis (2022).

5 Key Facts:
1. India shares land borders with 7 countries.
2. BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) has 7 member states.
3. India is the largest economy in South Asia.
4. Approximately 20% of the world’s population resides in South Asia.
5. India provides significant grants and Lines of Credit (LoC) to neighbours, totaling billions of dollars.