Context: In the Union budget 2025, the Ministry of External Affairs has been allocated a sum of 20,516 crores, with an emphasis on Neighbourhood First Policy (NFP).
Relevance of the Topic: Prelims: Key facts about Neighbourhood First Policy (NFP).
Key allocations in the MEA budget for 2025-26
- Emphasis on Neighbourhood First Policy (NFP):
- Immediate neighbours of India have been allocated Rs 4,320 crore, or 64% of the total scheme portfolio, for large infrastructure projects (hydroelectric plants, power transmission lines, housing, roads, bridges, integrated check-posts).
- The allocations highlight India's continued focus on regional diplomacy.
- Major changes in Foreign Aid Allocations**: (**Just for understanding, no need to remember the allocated amounts)
- Bhutan: Increased to Rs 2,150 crore (from Rs 2,068 crore in last year’s budget estimate).
- Maldives: Increased to Rs 600 crore (from Rs 400 crore in budget estimate).
- Afghanistan: Reduced to Rs 100 crore (from Rs 200 crore in budget estimate).
- Myanmar: Increased to Rs 350 crore (from Rs 250 crore in budget estimate).
- Nepal: Maintained at Rs 700 crore.
- Sri Lanka: Increased to Rs 300 crore (from Rs 245 crore in budget estimate).
- Bangladesh: Unchanged at Rs 120 crore.
- Other regions**:
- African Nations: Increased to Rs 225 crore (from Rs 200 crore).
- Latin America: Reduced to Rs 60 crore (from Rs 90 crore in revised estimate).
- Chabahar Port (Iran): Unchanged at Rs 100 crore.
About Neighborhood First Policy (NFP)
- India’s ‘Neighbourhood First policy’ guides its approach towards the management of relations with countries in its immediate neighbourhood: Afghanistan, Bangladesh, Bhutan, Maldives, Myanmar, Nepal, Pakistan, and Sri Lanka. It officially came to being in 2008.
- Aim: To enhance physical, digital and people to people connectivity across the region, as well as augmenting trade and commerce.
- Focus:
- To create mutually beneficial, people-oriented, regional frameworks for stability and prosperity.
- India engages with these countries on a consultative, non-reciprocal and outcome-oriented basis, driven by the principles of Samman (respect), Samvad (dialogue), Shanti (peace), and Samriddhi (prosperity).
- This policy has evolved into an institutional priority for all the relevant arms of the Government managing relations and policies with our neighbourhood.
Importance of Neighbourhood First Policy
- Countering Chinese influence: By collaborating closely with neighbouring countries, India can counterbalance Chinese influence in the Indian Ocean region.
- Support in multilateral forums: Working with neighbouring partners strengthens India's leadership role in representing the interests of the Global South at international forums. This fosters better understanding and cooperation on global issues.
- Ensuring territorial integrity: Collaboration with neighbouring countries is essential for India to protect its territorial integrity and tackle separatist threats effectively.
- Increasing maritime security: Effective cooperation with neighbours is key to bolstering maritime security, which enables India to tackle transnational security challenges more effectively.
- Addressing energy security: Close cooperation with neighbouring countries is critical for India's energy security, particularly concerning the import of oil and gas through sea routes.
- Bridging development deficits: Actively engaging with neighbouring countries helps in the development of India's northeastern states, thus narrowing development disparities in the region.
- Leveraging soft power diplomacy: India's deep cultural and historical connections with its neighbours strengthen people-to-people ties, solidifying India's influence in the region through soft power diplomacy.
Challenges:
- Geopolitical tensions: Issues like border disputes and political disagreements can complicate relationships.
- Implementation issues: Difficulties in executing cross-border projects due to logistical and bureaucratic challenges.
- Economic differences: Different levels of economic development among neighbouring countries can affect the balance and effectiveness of cooperation.
Initiatives taken as a part of NFP
- Under NFP, India has been assisting neighbouring countries on development of infrastructure projects, augmentation of capabilities and extending financial, budgetary, and humanitarian assistance.
- Some important examples include:
1. Afghanistan:
- Humanitarian Assistance- Supply of Wheat, medical aid, vaccines, scholarship schemes for Afghan students.
- Salma Dam- Major hydroelectric & irrigation project
- Zaranj-Delram Highway- 218 km long road project connecting Delaram district in Afghanistan to the border of Iran.
2. Bangladesh:
- Maitree Thermal Power project- 1320MW coal-fired power station under construction in Rampal, Bangladesh.
- India-Bangladesh Friendship Pipeline- 131.5 km long oil pipeline connecting Siliguri in North Bengal to Parbatipur in Bangladesh's Dinajpur province.
- Agartala-Akhaura rail link- Spanning 12.24 km and costing Rs 972 crores, designed to enhance trade between India's North-East and Bangladesh.
3. Bhutan:
- Expansion of Paro International Airport.
- Introduction of RuPay card in Bhutan as a cross-border payment initiative.
- India-Bhutan SAT (jointly developed by India and Bhutan) launched by ISRO in 2022.
- Hydropower projects- key collaboration in Mangdechhu, Chukha, Tala Project, Kuricchu hydro projects.
- Aid in building Gelephu Mindfulness City.
4. Maldives:
- Greater Male Connectivity Project- 6.7 km long bridge connects the capital city Male with the nearby islands.
- Grant Assistance of USD 100 million to ease financial challenges- 2022.
- Coastal Surveillance Radar System comprising 10 radar stations handed over to Maldives.
- Indira Gandhi Memorial Hospital in Maldives (gifted by India)
5. Myanmar:
- Kaladan Multi-Modal Transit Transport Project- Enhancing connectivity to Mizoram & NE India from ports through Sittwe port in Myanmar.
- Sittwe port- deepwater port constructed by India at Sittwe, Rakhine State in Myanmar.
- Border Area Development Program- multifaceted development in the international border to bridge physical and social infrastructure gaps.
- India-Myanmar-Thailand Trilateral Highway Project- connect India's Northeast region with Thailand via Myanmar,
- Humanitarian assistance- supply of vaccines during COVID-19 and medical aid.
6. Nepal:
- Jayanagar-Kurtha line- 35 kms long cross-border railway line between India and Nepal to enhance connectivity.
- Motihari-Amlekhgunj pipeline- 69 km long trans-border petroleum pipeline between Amlekhgunj Oil Depot in Parsa, Nepal and Motihari, Bihar.
- Hydropower projects- key collaboration in Sapta Kosi dam project, Upper Karnali Project, Arun - III project etc.
- High Impact Community Development Projects (HICDP) to build hospitals, colleges, drinking water facilities, sanitation, drainage, rural electrification etc.
7. Sri Lanka:
- Colombo Port Terminal project- expansion of Colombo Port.
- Jaffna Cultural Centre- promoting cultural ties.
- Solar Energy Projects- 135-MW solar power plant in Trincomalee, Sri Lanka.
- $1 billion credit line to Sri Lanka for financial assistance.
Other Major Initiatives:
Major Infrastructure Projects
- BBIN Initiative (Bangladesh, Bhutan, India, Nepal): Improving Road and rail connectivity.
- Kaladan Multi-Modal Transit Transport Project: Connecting India with Myanmar and further with Southeast Asia.
- Chabahar Port: Developing a strategic port in Iran to improve connectivity with Afghanistan and Central Asia.
Regional Forums
- SAARC (South Asian Association for Regional Cooperation) aimed at promoting regional cooperation. However, the effectiveness of SAARC has been limited due to political differences, particularly between India and Pakistan.
- BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) has gained prominence as an alternative to SAARC, focusing on economic cooperation, security, and cultural exchange among countries bordering the Bay of Bengal.
India’s comprehensive and longstanding ties with its neighbouring countries also stand on their own footing and are independent of the relations of these countries with third countries.