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The Neighbourhood First Policy at 12: Has It Worked?

Sri Lanka: success. Maldives: reversed. Bangladesh: ruptured. Nepal: independent. Bhutan: quiet success. Pakistan: structural failure. Twelve years — enough for an honest audit.

Sachin Aggarwal profile image
by Sachin Aggarwal
The Neighbourhood First Policy at 12: Has It Worked?

When Narendra Modi took office in May 2014, his first diplomatic signal was an invitation to the heads of government of all SAARC member states to attend his swearing-in ceremony. The gesture was deliberate and symbolically powerful — a statement that the new government's foreign policy would begin at home, with the neighbourhood that India had historically managed reactively, inconsistently, and with an ambivalence born of the assumption that smaller neighbours would remain within India's strategic orbit by default.

The Neighbourhood First policy that Modi's government subsequently articulated promised a different approach: proactive engagement, economic integration, development partnerships, and the kind of sustained political attention from the top that India's neighbourhood had rarely received. Twelve years later, an honest audit of what the policy has delivered — and where it has fallen short — is both necessary and uncomfortable.


The Scorecard

Sri Lanka: The most unambiguous Neighbourhood First success. India's $4 billion crisis response in 2022 — credit lines, currency swaps, deferred payments — was delivered with speed and without the conditionality that would have complicated Colombo's domestic politics. The relationship survived a change of government, with AKD's first foreign visit as president going to New Delhi. The Trincomalee energy hub, the CEPA upgrade, and the UPI-LankaPay integration are building economic ties with structural depth. This is Neighbourhood First working as intended.

Bangladesh: The most significant Neighbourhood First setback. India's close identification with Sheikh Hasina's Awami League government — which delivered on India's security interests but governed with increasing authoritarianism — left India exposed when the student uprising toppled her in August 2024. Mohammad Yunus's interim government inherited a bilateral relationship burdened by India's perceived partisanship and the sanctuary India provided to the former PM. The relationship is recovering — but from a position significantly weaker than it was in 2023.

Nepal: Complicated. Balen Shah's rise to the prime ministership on a Gen Z anti-establishment platform includes a strand of Nepal nationalism that is neither Sino-centric nor India-dependent. His "active bridge" foreign policy — positioning Nepal between India and China as a connector rather than a buffer — is more sophisticated than India's traditional neighbourhood management assumed. India's response has been measured engagement — but Nepal's political direction is being shaped by internal dynamics that Neighbourhood First's bilateral focus has limited capacity to influence.

Maldives: The most dramatic reversal. President Mohamed Muizzu's election in November 2023 on an explicit "India Out" platform, the demand for withdrawal of Indian military personnel, and the pivot toward China for infrastructure financing and budget support represented a near-complete Neighbourhood First failure in India's most strategically located maritime neighbour. The relationship has partially stabilised — economic necessity limits how far Male can distance itself from India — but the political trust deficit with Muizzu's government remains real.

Bhutan: The quiet success. The India-Bhutan relationship — built on hydropower, economic integration, and security cooperation — has deepened steadily. The boundary agreement between Bhutan and China, under negotiation since 2020, is the most significant complication — Bhutanese territory in the Doklam area is the most sensitive sector for India — but the bilateral relationship has managed this complexity without rupture.

Pakistan: Not a Neighbourhood First success story by any measure. The Ufa meeting in 2015, the Lahore visit in 2015, and the subsequent collapse into the Pathankot and Uri attacks, the Uri surgical strikes, the Balakot airstrikes, and ultimately Operation Sindoor in 2025 trace a trajectory in which Neighbourhood First's engagement impulse has been overwhelmed by the structural realities of Pakistan's deep state support for cross-border terrorism.


What the Audit Reveals

Three structural conclusions emerge from twelve years of Neighbourhood First.

The first is that the policy has been better at bilateral relationships than at regional architecture. SAARC — the institutional vehicle through which South Asian regional integration should operate — has been effectively paralysed by India-Pakistan tensions since 2016, when India boycotted the Islamabad summit. The absence of a functioning regional multilateral framework has left Neighbourhood First as a collection of bilateral policies without the regional economic integration that would give India's neighbours structural reasons to maintain pro-India orientation regardless of domestic political change.

The second is that China's presence in every India neighbourhood relationship has intensified, not diminished, over the twelve years of Neighbourhood First. China has deepened its presence in Sri Lanka, Bangladesh, Nepal, the Maldives, and Pakistan simultaneously — through infrastructure financing, political relationships, and the patient accumulation of strategic assets that India's bilateral relationship management has not consistently countered.

The third is that the policy has not resolved the fundamental tension between India's security interests and its neighbours' sovereignty sensitivities. Every neighbour that receives India's security-motivated attention — military presence in the Maldives, intelligence cooperation with Bangladesh, transit arrangements in Nepal — also experiences that attention as a form of pressure that domestic politics can mobilise against. Neighbourhood First needs a model that delivers India's security interests through economic integration rather than through the security relationships that generate political backlash.

Twelve years is enough time to assess what works and what does not. The policy's successes — Sri Lanka, Bhutan — are the template. Its failures — the Maldives, Bangladesh's 2024 rupture — are the warnings. The next twelve years must build on one and learn from the other.


The Hind covers policy, power, and strategic affairs from India's perspective. Views expressed are analytical and editorial.

Sachin Aggarwal profile image
by Sachin Aggarwal

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