MODI S ENGAGEMENT WITH INDIA S NEIGHBORS

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1 policy q&a August 2014 Produced by The National Bureau of Asian Research for the Senate India Caucus india in a south asian context MODI S ENGAGEMENT WITH INDIA S NEIGHBORS India s new prime minister Narendra Modi invited all the heads of the member countries of the South Asian Association for Regional Cooperation (SAARC) to his swearing-in ceremony and chose Bhutan for his first official foreign visit. These moves, along with Modi s recent visit to Nepal, are part of an effort to bolster India s ties with its neighbors. This emphasis on regional engagement is in keeping with the election manifesto of the Bharatiya Janata Party (BJP), which highlighted the need for India to strengthen relations with its neighbors. The significant margin by which the BJP won the national elections has given Modi enormous leeway in spearheading this effort. To better understand Modi s emphasis on regional engagement, NBR interviewed Nilanthi Samaranayake, a strategic studies analyst at CNA Corporation. Ms. Samaranayake provides insights on the significance of Modi s outreach to other South Asian leaders, discusses key issues for the new government in this engagement, and explains how India s regional efforts are viewed by other countries in Asia, particularly China. In an unprecedented move, Narendra Modi invited all the heads of the SAARC member countries to his swearing-in ceremony at Rashtrapati Bhavan, with nearly all attending. (Bangladesh s prime minister was absent because of a previously scheduled trip to Japan.) Could you please speak to the significance of this, and also describe what differences you expect to see in Modi s approach to India s neighborhood? As we near the three-month mark since Prime Minister Modi assumed office, it s a good time to reflect on his engagement with India s neighborhood so far. The invitation for all SAARC heads of state to attend his swearing-in was about re-establishing India s commitment to positive ties with its neighbors and projecting an image of leadership in India s backyard. One could interpret the move as an homage to the Gujral Doctrine, meaning the approach by former prime minister and minister of external affairs I.K. Gujral, who sought to improve India s relations with its neighbors. With the drawdown of coalition forces in Afghanistan and the lack of clarity about how India-Pakistan relations will adjust to this new reality, I think the ceremony was an effective move to

2 shift the discussion about India s often difficult relations with its neighbors to one that emphasizes the country s geographic and ideational centrality in South Asia. The attendance of SAARC country leaders at this ceremony was equally important because it showed their desire for a new era of Indian foreign policy that values positive, respectful relations with its neighbors. Even in the case of Pakistan, Prime Minister Nawaz Sharif s presence conveyed support for the promise of Modi and Sharif to re-envision the bilateral relationship. The election manifesto of the BJP affirmed the importance of India s relations with its neighbors and accused the former United Progressive Alliance (UPA) government of falling short. So it appears that Modi is trying to follow through on what his The election manifesto of the BJP affirmed the importance of India s relations with its neighbors and accused the former United Progressive Alliance (UPA) government of falling short. So it appears that Modi is trying to follow through on what his party promised. party promised. However, I think there are also structural forces of continuity at work that began under Manmohan Singh s leadership, such as the successful trilateral maritime security dialogue with Maldives and Sri Lanka and the pursuit of the Teesta River water-sharing and land-boundary agreements with Bangladesh, even though the latter have not been finalized. Still, the BJP s majority in the Lok Sabha (India s lower house) might enable Modi to take this approach further than Singh Nilanthi Samaranayake Strategic Studies Analyst CNA Corporation Nilanthi Samaranayake is a strategic studies analyst at CNA Corporation, a non-profit research and analysis organization located in Arlington, Virginia. Much of her research focuses on South Asia and the Indian Ocean region. Prior to joining CNA Corporation, Ms. Samaranayake completed a fellowship at the National Bureau of Asian Research (NBR) in Seattle, where she investigated Sri Lanka s deepening economic, military, and diplomatic ties with China. Her findings were published in the peer-reviewed journal, Asian Security. Ms. Samaranayake also analyzed public opinion for a decade at Pew Research Center in Washington, D.C. The views expressed are solely those of the author and not of any organization with which she is affiliated.

3 could, given his domestic political limitations, and conduct foreign policy with a freer hand. What are the top issues the new Modi government should focus on in its early engagement with other South Asian states? Each of the SAARC countries has unique engagement needs from India, and vice versa. But on the whole, Modi s new government should first focus on resolving ongoing sources of contention, such as by finding a way to conclude the Teesta water-sharing accord and ratify the land-boundary agreement with Bangladesh. In addition, it should work to synchronize the central government s and the state of Tamil Nadu s policies regarding recurrent fishing disputes with Sri Lanka. Second, the government should become more proactive in its economic and military engagement. Delivering more funds for infrastructure development in neighboring countries and quickly implementing projects to which New Delhi has already committed would be concrete ways for India to express interest in the future success of its neighbors. For example, Sri Lanka s president Mahinda Rajapaksa first approached India when seeking to construct a port in southern Sri Lanka, and India s foreign office acknowledges that it did not pursue the request which China subsequently accepted. Modi s announcement of a new $1 billion line of credit to Nepal, similar to the loan and credit line offered to Bangladesh, is hopefully a sign of change. Military cooperation could also be expanded through exercises, port visits, and regular senior defense official exchanges. Finally, I think Modi should visit all SAARC member countries. There aren t that many of them eight, including India. An impression exists among the smaller countries of South Asia that India expects neighboring leaders to visit New Delhi but does not reciprocate. For example, Singh took seven years to visit Maldives, and that was for the broader purpose of attending the SAARC Summit in Yet Modi has already visited Bhutan within his first month of office and Nepal in early August a country that an Indian prime minister had not visited for seventeen years. Making the trek to each of the SAARC countries after leaders from the neighborhood visited India for his inauguration will reinforce the image that Modi is serious about improving ties with India s neighbors. The government should become more proactive in its economic and military engagement. Delivering more funds for infrastructure development in neighboring countries and quickly implementing projects to which New Delhi has already committed would be concrete ways for India to express interest in the future success of its neighbors. Why did Modi select Bhutan for his first official foreign visit? What does this indicate about how Modi views India s role within South Asia and in the world? Visiting Bhutan first was an elegant choice. Many analysts, including myself, were guessing from a long list of other countries. In hindsight, Bhutan makes sense because choosing any other South Asian state would have been politically challenging and placed undue attention on a particular country. A trip to Pakistan would have required too much planning time and legwork to coordinate for a first foreign visit, while visiting Afghanistan first could have been interpreted as a challenge to Islamabad. Sri Lanka, Bangladesh, and Nepal all have had complicated and difficult relations with India over the years. In the case of Sri Lanka and Bangladesh, Modi would have needed to quickly navigate competing demands from Indian states run by chief ministers with whom he must carefully manage relations. Maldives would certainly have been an acceptable choice, given its close bilateral ties with India. But of all the South Asian countries, Bhutan has the strongest relations with

4 New Delhi. Being heavily dependent on Indian Army and Air Force assistance and training, Bhutan is often seen as almost a protectorate of India and does not possess the room to maneuver that even Maldives has. Plus, India needs hydropower from Bhutan. (On the latter point, it s worth noting that Modi s second foreign trip was to Nepal, another state from which India seeks hydropower, although Nepal s prime minister Sushil Koirala was unable to conclude a hydropower trade agreement during Modi s visit as had been anticipated.) There was a feeling that India had taken Bhutan s loyalty for granted in 2012 when the previous Bhutanese prime minister, Jigme Thinley, had a meeting with Chinese premier Wen Jiabao on the sidelines of the Rio+20 UN summit. New Delhi was reportedly nervous about the prospect of closer Bhutan-China relations and denied fuel subsidies for a month seemingly in retaliation when they came up for review in Under current Bhutanese prime minister Tshering Tobgay, relations are back to normal and have been strengthened by Modi s visit. Summoning the spirit of the Gujral Doctrine, the two leaders agreed neither would use his territory for interests inimical to the other. (Indian foreign secretary Sujatha Singh used the same expression to characterize the consensus between Modi and visiting Maldivian president Abdulla Yameen during their meeting after Modi s inauguration.) This language is reminiscent of an understanding reached in the 1980s between Indian prime minister Rajiv Gandhi and Sri Lankan president J.R. Jayawardene about neither country using its territory for activities prejudicial to the other. As with China in the current era, the context then was India s concern over Sri Lanka s outreach to extraregional countries, mostly in the West. It s worth mentioning that, the day before his first official foreign visit to Bhutan, Modi toured the new INS Vikramaditya aircraft carrier and sat in the cockpit of a MiG29K naval combat aircraft. I think with these back-to-back activities, Modi is signaling the importance that he places on India s position in the region through the full spectrum of its military and diplomatic capabilities. How might other countries in Asia, particularly China, be viewing Modi s outreach in South Asia? I think China is more concerned with Modi s intentions with regard to their bilateral relationship than his outreach to India s neighborhood. Save Pakistan, with which bilateral relations have been tight for decades, China does not carry the strategic weight that India does with regional countries. China also has a border dispute with Bhutan, with which it does not even have formal diplomatic ties and engages in interminable rounds of boundary talks without resolution. On the other hand, China s strength over India in South Asia is that Beijing is seen as lending more money and implementing infrastructure development projects much faster. As a result, Modi will face considerable challenges China s strength over India in South Asia is that Beijing is seen as lending more money and implementing infrastructure development projects much faster. As a result, Modi will face considerable challenges in establishing India as the leading investor in advancing South Asian connectivity. in establishing India as the leading investor in advancing South Asian connectivity. The port, airport, and power projects that China is funding and constructing in South Asia complement development efforts by the World Bank and other organizations. Ironically, these projects also hold the potential to benefit India as well as its neighbors, since South Asia is considered among the least integrated regions in the world. For example, Indian companies are already

5 using the Chinese-built Hambantota port in Sri Lanka for transshipping automobiles to east Africa. On balance, I think the potential economic benefits of China s infrastructure projects will outweigh the potential strategic costs to India s standing in the region. Modi, of course, will have to maintain that standing and appears intent on doing so. Looking elsewhere in Asia, I think Japan will support Modi s outreach in South Asia. Tokyo has pursued deeper ties with New Delhi through high-profile visits by Emperor Akihito and Prime Minister Shinzo Abe, its offer to sell India the ShinMaywa US-2 amphibious aircraft, and its participation in the traditionally U.S.-India MALABAR naval exercise in July. Japanese leaders likely see India s regional outreach as complementing their own efforts to respond to the spread of Chinese activities more broadly. Like China, Japan is actively engaged in development assistance in South Asia and the Indian Ocean. For example, Bangladesh s prime minister, Sheikh Hasina, did not attend Modi s inauguration because she was busy securing nearly $6 billion in loans from the Abe government. Japan is also pursuing greater maritime security cooperation with Sri Lanka and Maldives. Do you have anything else to add? It will be important to track how Modi will balance a desire to craft a neighborhood foreign policy of his own design with the demands from the chief ministers of West Bengal and Tamil Nadu regarding foreign relations with Bangladesh and Sri Lanka, respectively. Some saw Modi s inauguration invitation to Sri Lanka s president and the nonparticipation of Tamil Nadu s chief minister J. Jayalalithaa as evidence that Modi will not defer to internal objections (as Singh s government did) since he enjoys a parliamentary majority. Depending on Modi s domestic popularity and parliamentary needs in the coming years, we will see if this assumption holds up. Modi s attention to the neighborhood has so far been good news for the smaller countries of South Asia, which seek improved ties with India. He is still riding the wave of praise in these countries following his inauguration invitation, although at some point local populations will expect his government to deliver more tangible results. In general, the smaller countries of South Asia warrant greater analytical attention as a discrete grouping due to their often challenging relations with India, China s activities with them, and their burgeoning economies. These countries are worth understanding better, especially when U.S. policies toward them diverge from those of India, as has been the case recently in Bangladesh, Sri Lanka, and Maldives. U.S. policymakers will need to decide to what extent they are comfortable with U.S. policy positions on these countries not aligning with New Delhi s goals in its neighborhood and whether they are willing to alter these positions in the hope of furthering the U.S. strategic partnership with India. ABOUT THE NATIONAL BUREAU OF ASIAN RESEARCH Founded in the legacy of Senator Henry M. Jackson, NBR provides Members of Congress and their staff with the highest-quality Asia expertise through policy-relevant research and private and public briefings with our network of experts. NBR is a non-profit, non-partisan research institution headquartered in Seattle, Washington, with a second office in Washington, D.C. More information on NBR can be found at For information on NBR s programs on Capitol Hill, please contact Meredith Miller, Senior Vice President of Trade, Economic, and Energy Affairs and Outreach; Director of NBR s Washington, D.C., Office, at NBRdc@nbr.org or (202) the national bureau of asian research seattle and washington, d.c. nbr@nbr.org, ne 42nd street, suite 300 seattle, washington usa phone , fax pennsylvania avenue nw, suite 305 washington, d.c usa phone , fax