India’s Extended Neighbourhood: Prospects and Challenges

Imea-wadhwandia’s extended neighbourhood has an added resonance at this particular junction in time when the country’s economic and strategic interests are becoming increasingly intertwined with the larger Asian hemisphere, much beyond our immediate South Asia neighbourhood. Clearly, our immediate neighbourhood, South Asia, remains vitally critical to our national interests, but given India’s growing economy, its rising diplomatic profile and multilayered interests in the larger ambient region, India is today much more integrated in the intricate web of trade, investment and strategic concerns that are integral to burgeoning engagement with its immediate neighbourhood. In pursuit of our national interests, India is not just looking east – clearly, Look East policy has been a resounding success, and is crossing new milestones every passing year – but is also looking north, looking west and looking south, all within the compass of its extended neighbourhood and beyond.

In a seminal sense, India’s foreign policy is becoming multidimensional and omnidirectional – a sort of 360-degree vision demanded by a rapidly changing world order – which emanates from the surging aspirations of its 1.2 billion-plus people and is responding adroitly to an unprecedented flux in the world order. In this community of experts, the seismic shift of economic power from the west to the east and from the west to the rest – a defining trend of the first decade of the 21st centuryand one which is continuing apace – needs to be hardly overstated. But this world-historical shift of power provides a fitting context to a steadily increasing emphasis on “extended neighbourhood” in India’s foreign policy practice and projection.

Putting first things first, let me briefly enunciate the concept of what India sees as its extended neighbourhood, before going on to amplify challenges and opportunities in this circumambient region. There are some scholars and experts who have tended to project the concept of “extended neighbourhood” as a relatively new injection into India’s foreign policy practice and discourse. While it’s true that the term extended neighbourhood has found pronounced emphasis in the articulation of India’s foreign policy interests in the last decade and a half or so, the concept of extended neighbourhood has been subliminally shaping India’s foreign policy right since independence. Philosophically, the term extended neighbourhood is inextricably interwoven into the ancient Vedic ideal of “vasundhara kutumbakam,” which means the whole world is one big family. The ethos of vasundhara kutumbakam was perhaps one of the earliest enunciations of the globalist view of foreign affairs and was a pithy condensation of the ideal of one world where developments in one part of the world invariably impact on the other polar end, however tangentially. This sense of interconnectedness of the world and the humanity, with its human-all-too-human aspirations is what animates India’s engagement with the world, and specially its extended neighburhood.

The closer you are – geographically, economically and culturally — the greater the need for closer interaction and reconfiguration of foreign policy and strategic interests. Days before India’s independence, the country’s first Prime Minister Jawaharlal Nehru spoke eloquently about a rising Asia at the Asian Relations Conference in New Delhi in March 1947. Warmly welcoming delegations from China, Egypt and the Arab world, Iran, Indonesia & Indo-China, Turkey, Korea, Mongolia, Thailand (Siam), Malaya, Philippines, Central Asia, all our neighbours, including Australia and New Zealand, he unveiled his vision of an interconnected Asia and spoke on the need to map out new pathways of cooperation among countries of this re-emerging continent. In Nehru’s vision of a renascent Asia was embedded the concept of the extended neighbourhood, much before the term became overtly a part of India’s foreign policy lexicon.

The launch of India’s economic reforms in the early 1990s coincided with the Look East policy and set the stage for a multi-pronged acceleration of economic and strategic engagement with East and South-East Asia, home to some of the most vibrant economies and hubs of innovation in the region. In the next decade or so, India’s economy grew steadily and so did its hunger for hydrocarbons, bringing it closer to the energy-rich West Asia and Central Asia. The expansion of economic and energy interests also necessitated a reassessment and remapping of India’s security and strategic capabilities to safeguard its enhanced engagement in what came to be known as India’s extended neighbourhood. Therefore, the way we see it, India’s extended neighbourhood can be said to stretch from the Suez Canal to the South China Sea. This comprises interconnected regions with distinct profiles and includes West Asia/the Gulf, Central Asia, Southeast Asia and the Indian Ocean Region. India’s growing engagement with its extended neighbourhood is being driven by a host of geo-economic and geo-strategic imperatives. The geo-economic imperative entails closer economic integration through trade and investment, technology transfer and innovation. It also involves shaping a series of concentric and interlinked free trade area arrangements in the region. The geo-strategic imperative entails closer consultation and collaboration to deal with a host of cross-cutting challenges, including terrorism, maritime piracy, trans-national crime, disaster mitigation and combating trans-national pandemics.

The conference will explore in detail many of these issues related with the concept of India’s extended neighbourhood and its ramifications, but let me just briefly outline how we in the Ministry of External Affairs (MEA) see prospects and challenges in the three regions, which are of pivotal to India’s ongoing transformation and its place in the world, namely Southeast Asia/East Asia, West Asia and Central Asia.

Southeast Asia: Look East

The blossoming of India’s multi-faceted relations with the ASEAN and the larger East Asian region is a diplomatic tour de force for India and contains in a miniature our priorities, interests and concerns in enhancing engagement with our extended neighburhood. The 10-nation ASEAN is pivotal to India’s Look East policy and India has relentlessly affirmed and reaffirmed the centrality of ASEAN in fostering an Asian Economic Community by 2015. What underpins India’s overarching vision of its Look East policy is its belief in the ASEAN’s role as “the bridge to the East,” a role that is rooted in India’s centuries-old cultural association with the region that harks back to the times of ancient Indian epics, Ramayana and Mahabharata.

The evolution of the region as the home of rapidly growing economies, cutting-edge innovation and enterprise has reinforced this sense of cultural affinity and brought India and the ASEAN in a symbiotic web of win-win opportunities. Backed by the implementation of the India-ASEAN trade in goods agreement, India and the ASEAN are on course to achieve the target of scaling up bilateral trade from $80 billion to $100 billion by 2015. In fact, the ASEAN-India trade has grown 10 times in the last 11 years at an impressive Compound Annual Growth Rate (CAGR) of 23%. The ASEAN-India Trade in Services and Investment Agreements are also now ready for signature and we hope to achieve the aspirational figures of USD 100 billion trade by 2015 and USD 200 billion by 2022. If mutual enthusiasm on the economic front is anything to go by, the sky is the limit for economic relations between India and ASEAN, home to around 1.8 billion people, most of them overwhelmingly young and restless to remake their lives. There are new milestones on the way: India has begun discussions on a separate ASEAN-India Trade & Investment Centre. We are also trying to strengthen the ASEAN-India Business Council to ensure larger participation of the private sector from both sides.

The economic content of the relationship is now being vigorously complemented by ongoing initiatives to impart strategic depth and orientation to India-ASEAN relations and India-East Asia relations. With ASEAN concerned about shielding their growth dynamism from a host of transnational non-traditional security threats including drug trafficking, transnational crime, maritime security, disaster management and mitigation and non- proliferation, there is considerable scope for expanding India-ASEAN partnership in these areas. In the broader East Asian region, political-security issues have gained greater salience – a trend that has been reflected in the agenda of the East Asia Summit, specially since Russia and the US joined the EAS in 2011. In their typical pragmatism, ASEAN countries are keen to insulate themselves from elements of great power politics in the restructuring of the political, economic and security architecture now underway in East Asia.

This emerging scenario opens up new opportunities for India to expand the canvas of its strategic partnership with ASEAN and ASEAN-plus mechanisms like East Asia Summit and ADMM Plus. With the rise of threats like piracy and new notes of assertion and contestation seen in the maritime domain, maritime security has emerged as a fertile area of cooperation. Over the past few years, one can discern that ASEAN also wishes India to play a more active role in maritime security and related issues. Ensuring maritime security and freedom of navigation in the sea lanes of communication (SLOC) is an imperative for the growing economies in the region given its interface with energy and economic security. Considering that India is strategically located overlooking vital trade arteries, it is a natural corollary that India should play a greater role in maritime security in the region. The agenda for maritime cooperation could include combating piracy, dealing with maritime emergencies, establishing a collaborative early warning system and providing prompt and effective disaster relief. Against this backdrop, India has consistently pitched for freedom of navigation, which has garnered across-the-board endorsement from ASEAN nations and East Asia. The vision document issued at the end of the India-ASEAN commemorative summit in New Delhi in 2012 underscored the need for India and the ASEAN leaders to “strengthen cooperation to ensure maritime security and freedom of navigation, and safety of sea lanes of communication for unfettered movement of trade in accordance with international law.”

Broadly speaking, what underpins India’s burgeoning engagement with ASEAN and East Asia region is what our Prime Minister has called creating and sustaining “an arc of prosperity” across the region. This invariably entails proactively collaborating to create an inclusive, pluralistic and balanced regional architecture that ensures that no single power gets to set the agenda. The quest for a genuinely multi-polar Asia conjoined by shared values and win-win opportunities in both the economic and security realms is a core long-term strategic objective of India’s foreign policy and its engagement with this crucial part of its extended neighbourhood.

West Asia

This confluence of economic and strategic interests has also marked India’s engagement with West Asia. West Asia is an integral part of India’s extended neighbourhood, and it’s more than geography that has made the region pivotal to India’s overarching national interests. The region’s importance can be gauged by some bare facts: West Asia accounts for nearly 60 per cent of India’s imports of hydrocarbons, making the region an indispensable pillar of our energy security. The region is home to around 7 million-strong Indian diaspora, which sends home over $30 billion, accounting for over 40% of our total inward remittances of US$ 70 billion a year.

Being energy-rich and blessed with surplus investible capital, India has been relentlessly pushing the envelope for expanding economic relationship with the West Asia and the Gulf region. As a region, West Asia is India’s largest trading partner, with bilateral trade increasing to over US$ 180 billion in 2012-13. Clearly, oil forms the single biggest item of imports from the region, but recent trends show the bilateral trade basket becoming more diverse. India’s exports to Saudi Arabia, for example, have surged by over 70 per cent and are now said to be over $10 billion. The relationship of India with the Gulf region is bristling with rich possibilities, specially in the area of investment. With India’s burgeoning appetite for infrastructure, investments from the region could potentially be a game-changer for our country’s developmental aspirations. This multi-layered and relationship is also reflected in the relentless two-way flow of people between the two sides. Travel and tourism are growing by the day – there are 700 flights a week between India and the UAE alone!

While economic and energy imperatives are the driving factor, the strategic content of the relationship has also been growing in the past few years. India and Saudi Arabia signed a landmark strategic partnership during the historic visit of King Abdullah in 2006, which set the stage for increasing counter-terror cooperation between the two countries. In fact, security cooperation is acquiring greater salience with the Gulf States. This is reflected in increasing cooperation in areas like counter-terrorism, money laundering, organized crime and anti-piracy. In the realm of defence, we have been having friendly visits of naval ships. Our security interests are becoming increasingly intertwined in other areas.

Given the sheer depth of our engagement and our multifarious stakes in peace, stability and prosperity of West Asia, we have been closely tracking winds of change blowing across the region and are trying to unravel the aftereffects of the so-called Arab Spring on the countries and societies in the Arabian peninsula. We are not in the business of exporting democracy. Being the world’s largest and most populous democracy moored in a pluralistic and syncretic culture, we would be happy to see the flowering of the democratic spirit and institutions anywhere in the world. Let me make a subtle but vital distinction: though India is a robust practitioner of democratic pluralism and religious moderation, we don’t believe in intrusive prescriptive diktats. On the contrary, we have always maintained and said that it is up to the people of the region to decide the pace and the means to achieve those goals, keeping in mind their traditions and history. This is why we oppose armed conflict or external intervention as a way of resolving political issues in the region or elsewhere in the world.

In Syria, for example, we have consistently condemned violence by all sides and have supported a broad-based inclusive Syrian-led national reconciliation process. We have backed dialogue and negotiations between the government and the insurgents, leading to the formation of a Transitional Governing Body, followed by elections, as envisaged under the Geneva Communique of June 2012. In the Geneva II meeting last month, we forcefully reiterated this stance as we believe that any external military intervention will adversely impact not just Syria but will have spillover effects on regional peace and stability. In this context, I am happy to share with this distinguished audience India’s decision to provide 1 million USD as well as experts and training for the destruction of Syria’s chemical weapons.

The recent developments in the region have vindicated India’s belief that diplomacy and dialogue alone can resolve stubbornly intractable diplomatic crises. We, therefore, promptly welcomed the agreement in Geneva reached on 24 November between Iran and the E3+3. We also welcome the agreement reached on November 11 between Iran and the IAEA, which we regard as the competent technical agency to verify the exclusively peaceful nature of Iran’s nuclear activities. Looking ahead, we sincerely hope that the interim steps that have been agreed in Geneva would build trust and confidence between Iran and the international community and lead to a durable and long-term settlement of the Iranian nuclear issue.

Central Asia

Now, let me focus briefly on India’s burgeoning engagement with Central Asia, a vital part of India’s extended neighbourhood, suffused with centuries-old cultural ties and enormous goodwill for India. The region has moved closer to the centre of the strategic canvas, with the eruption of security threats in and around Afghanistan.While for India,the geo-strategic position of the region is salient, of no less importance are the emotional bonds between us that stem from our civilizational links.Energy security is also acrucial driver of India’s relationship, with ambitious projects like TAPI on the table.Tostrengthen our engagement, India launched the Connect Central Asia policy in 2012. This includes an all-embracing template to diversify and deepen our relationship with the region that includes increasing the frequency ofhigh-level visits, forging strategic partnerships, comprehensive economic engagement, innovative solutions in connectivity, and partnership in the development of energy and natural resources. The plan also includes a proposal to set up an e-network on the lines of pan-Africa e-network that will bring the benefits of tele-education and telemedicine to around 60 million people of Central Asia.

The historic transition in Afghanistan in 2014 imbues the region with special strategic significance for India in the months and years ahead. In this context, India has been consistently pushing an Afghan-led and Afghan-owned national reconciliation process in Afghanistan. India has also backed a regional stakeholding approach to stabilize Afghanistan. In this context, India has vigorously supported a greater role for the SCO-led initiative for Afghanistan. India currently enjoys the role of an observer at the SCO, but is keen to join it as a full-fledged member in view of its multifarious interlocking interests in the region, including peace and stability in Central Asia.

Given vast energy resources of the Central Asia region and their hunger for development and infrastructure, India, with its proven prowess in capacity building and training, is uniquely equipped to play an important role in the transformation of the region. But this benevolent intent has been constrained by the lack of direct land connectivity to the Central Asia region. The instability in Afghanistan and the reluctance of Pakistan to grant overland access to India have come in the way of fructifying the potential of India’s relationship with the region. In this context, India’s relations with Iran and the actualisation of key connectivity projects could play a critical role in turning around the situation. India is keen with construction of the Chabahar port, which will provide a new access point for India to Central Asia. The speedy completion of the Chabahar port could be just the game-changer India needs to transform its relations with the region. The fructification of Turkmenistan-Afghanistan-Pakistan-India Pipeline (TAPI), as and when it happens, would be another big step forward in bringing Indi closer to the region and opening doors of myriad win-win opportunities.

The Way Ahead

Having outlined the broad canvas of India’s evolving relationship with its extensive neighbourhood, let me sketch out some key markers for the future trajectory of this critical relationship in the months and years ahead. Also, in summing up, I would like to highlight some problematic issues and challenges which this distinguished galaxy of IR scholars and thinkers may like to consider for discussion over the next two days.

First and foremost, it needs underlining that despite myriad challenges and the ongoing flux in the ambient region, given multifarious and interlocking interests, India’s relationship with its extended neighbourhood is going to only deepen and diversify in days to come.

Secondly, the geo-economic facet of the relationship and win-win outcomes in the economic arena will become more visible in the years to come.

Thirdly, while economics will be a key driver, India’s relationship with its extended neighbourhood will acquire greater strategic depth, which will manifest itself in increasing defence and security cooperation. This is logical and inevitable as the expansion of economic interests will entail a concomitant increase in consultation and collaboration to deal with a host of cross-cutting challenges ranging from terrorism and piracy to cyber-crime and nuclear proliferation.

Fourth, in engaging with its extended neighbourhood, India will have to factor in the role of other Asian players like China and Japan on the one hand, and the role of non-resident powers like the US and the ramifications of the US’ rebalancing policy. The multiplicity of external powers in the region could open up new avenues of cooperation, if not handled with tact and foresight.

Fifth, how we handle our relationship with our extended neighbourhood as well as immediate neighbours will have a vital bearing on the continued emergence of India as a power and a global player. We seek to be a catalyst and an enabler to realise the collective destiny of an emerging Asia and an emerging Asian century.

I am not a crystal ball-gazer or a futuristic scenario-painter. Being a practitioner and diplomat, I have outlined a broad conceptual framework to elucidate how we in the ministry of external affairs see opportunities and challenges in our extended neighbourhood, a vast swathe of region that looks set to see an accretion of economic power and geo-strategic clout in the years ahead. I have no doubt that you will have wide-ranging discussions, bristling with insights and originality; and come out with doable recommendations/suggestions that will not only enlarge the compass of our understanding of this crucial region, but will also help us to deepen and refine our engagement with India’s extended neighbourhood.

(This is the edited version of the keynote address by Mr Anil Wadhwa, Secretary (East) in India’s Ministry of External Affairs, at 6th IISS-MEA Dialogue on India’s extended neighbourhood: Prospects and Challenges’ at IDSA, New Delhi March 4)


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