India & Its Neighbours — Bilateral Relations, Disputes & Cooperation

Overview — India's Neighbourhood Policy

India shares land or maritime borders with seven neighbours — Pakistan, China, Nepal, Bhutan, Bangladesh, Myanmar, and Sri Lanka — plus Afghanistan and the Maldives as extended neighbours. Managing these relationships is central to India's foreign policy and a high-priority topic for UPSC GS Paper 2.

Neighbourhood First Policy

Launched as a formal doctrinal approach in 2008 and elevated after 2014, the Neighbourhood First Policy is guided by the principles of respect, dialogue, peace, and prosperity. It is consultative, non-reciprocal, and outcome-focused, aiming to enhance physical, digital, and people-to-people connectivity, augment trade, and build a secure and stable neighbourhood.

Gujral Doctrine (1996)

Articulated by I.K. Gujral at Chatham House, London, in September 1996, this doctrine laid down five principles for relations with India's smaller neighbours:

1. India does not ask for reciprocity from neighbours like Nepal, Bangladesh, Bhutan, Maldives, and Sri Lanka — it gives in good faith and trust.
2. No South Asian country will allow its territory to be used against the interest of another.
3. None will interfere in the internal affairs of another.
4. All will respect each other's territorial integrity and sovereignty.
5. All disputes will be settled through peaceful bilateral negotiations.

Exam Tip: The Gujral Doctrine explicitly excluded Pakistan and China from its non-reciprocal framework. UPSC has asked about the doctrine's relevance — always note this critical exclusion and contrast it with the broader Neighbourhood First Policy which includes all neighbours.

India-China Relations

The Boundary Question

India and China share a ~3,488 km border (the LAC) that has never been formally demarcated. The dispute spans three sectors:

The Line of Actual Control (LAC) gained legal recognition in Sino-Indian agreements signed in 1993 and 1996. Unlike the LoC with Pakistan, the LAC is not demarcated on the ground, leading to differing perceptions of where it lies.

Key Events Timeline

Trade and Strategic Competition

India's trade deficit with China reached USD 99.2 billion in FY 2024-25 (imports: $113.5 billion; exports: $14.3 billion), driven by electronics, machinery, organic chemicals, and plastics. This makes China India's largest trading partner by volume but also a source of strategic vulnerability.

String of Pearls vs Necklace of Diamonds:

• String of Pearls (coined 2004, US researchers) — China's network of military and commercial facilities along sea lines from Chinese mainland to the Horn of Africa, including ports at Gwadar (Pakistan), Hambantota (Sri Lanka), and Chittagong (Bangladesh).
• Necklace of Diamonds — India's counter-strategy involving port access and military partnerships at Chabahar (Iran), Duqm (Oman), Assumption Island (Seychelles), Agalega (Mauritius), and Changi Naval Base (Singapore).

India-Pakistan Relations

Kashmir — The Core Dispute

The Kashmir issue has defined India-Pakistan relations since Partition (1947). India holds it as an integral part of its territory (accession by Maharaja Hari Singh on 26 October 1947), while Pakistan terms it a disputed territory pending a UN plebiscite (UNSC Resolutions 39 and 47 of 1948).

Landmark Agreements

Indus Waters Treaty (1960)

Brokered by the World Bank, signed on 19 September 1960 in Karachi by PM Nehru and President Ayub Khan. It allocated the three eastern rivers (Ravi, Beas, Sutlej) to India and three western rivers (Indus, Jhelum, Chenab) to Pakistan. India issued modification notices in 2023 and 2024 citing demographic and environmental changes.

Following the Pahalgam terror attack in April 2025, India suspended the treaty, citing national security and state-sponsored terrorism. India halted water flow on the Chenab from the Baglihar Dam. This marked the first suspension of a treaty that had survived four wars over 60+ years.

Trade Suspension

Pakistan formally suspended bilateral trade with India on 9 August 2019 in response to the revocation of Article 370 on 5 August 2019. Prior to suspension, India's exports to Pakistan stood at ~$2 billion (FY 2018-19). Limited exceptions exist for pharmaceuticals and essential items.

Key Distinction: The Shimla Agreement (1972) established the principle of bilateralism — disputes to be settled bilaterally, not through third-party mediation. India cites this to reject any international or UN mediation on Kashmir. Pakistan, however, invokes pre-Shimla UNSC resolutions. This is a frequently tested distinction in UPSC Mains.

India-Bangladesh Relations

Land Boundary Agreement (2015) — 100th Constitutional Amendment

The India-Bangladesh LBA, originally signed in 1974, was ratified through the 100th Constitutional Amendment Act (28 May 2015). Under it:

• India received 51 Bangladeshi enclaves (7,110 acres) inside Indian mainland
• Bangladesh received 111 Indian enclaves (17,160 acres) inside Bangladesh
• The remaining 6.1 km of undemarcated border was settled
• Enclave exchange executed at midnight on 31 July 2015
• The First Schedule of the Constitution was amended to adjust territories of Assam, West Bengal, Meghalaya, and Tripura

Water Disputes

Other Key Issues

• Rohingya crisis — Over 1 million Rohingya refugees in Bangladesh; India has provided humanitarian aid but opposes taking refugees citing security concerns
• Connectivity — Maitri Setu (1.9 km bridge over Feni River) inaugurated 9 March 2021, linking Sabroom (Tripura) to Ramgarh (Bangladesh), reducing Agartala-Kolkata logistics cost by ~80%
• Political shift (2024) — PM Sheikh Hasina's resignation; interim government under Muhammad Yunus prioritised Teesta talks with India

India-Sri Lanka Relations

Ethnic Conflict Legacy

The 1983-2009 Sri Lankan civil war between the government and LTTE had deep implications for India. India's IPKF (Indian Peace Keeping Force, 1987-90) and the assassination of PM Rajiv Gandhi (1991) remain sensitive legacies.

Key Bilateral Issues

India-Nepal Relations

1950 Treaty of Peace and Friendship

Signed on 31 July 1950, this treaty established an open border regime allowing free movement of people and goods, and granted Nepali nationals the right to work in India and vice versa. Nepal has repeatedly sought its revision, viewing it as unequal.

Kalapani-Lipulekh-Limpiyadhura Dispute

The border dispute centres on the origin of the Kali (Mahakali) River, which defines Nepal's western boundary per the Sugauli Treaty of 1815:

• India's position: Kali originates at Lipulekh; Kalapani is Indian territory
• Nepal's position: Kali originates at Limpiyadhura, further northwest; all territory east of it (including Kalapani and Lipulekh) is Nepali

In May 2020, after India inaugurated a road to Lipulekh Pass (for Kailash Mansarovar pilgrimage), Nepal released a new political map claiming Kalapani, Lipulekh, and Limpiyadhura. Nepal's parliament passed a constitutional amendment to formalise the new map, leading to a temporary diplomatic breakdown.

Other Issues

• Hydropower cooperation — Joint projects on Mahakali River; Upper Karnali and Arun-III under development
• Agnipath Scheme — Nepal raised concerns about the impact on Gorkha recruitment into the Indian Army
• India remains Nepal's largest trading partner and source of FDI

India-Bhutan Relations — The Model Partnership

India-Bhutan relations are often cited as a model bilateral relationship in South Asia.

Treaty Evolution

The 1949 Treaty of Friendship and Cooperation guided Bhutan's foreign relations through India. It was replaced by the 2007 India-Bhutan Friendship Treaty, which gave Bhutan full autonomy in foreign policy while maintaining close bilateral cooperation — a modernisation ahead of Bhutan's transition to democracy in 2008.

Hydropower — The Backbone

Bhutan does not have formal diplomatic relations with China. India remains Bhutan's largest aid donor and trading partner. The Doklam standoff (2017) underscored India's security commitment to Bhutan.

Mnemonic: Remember Bhutan hydropower projects in order of commissioning — "CKT-MP" — Chhukha (1986), Kurichhu (2001), Tala (2006), Mangdechhu (2019), Punatsangchhu (under construction). This covers the entire arc of India-Bhutan hydropower cooperation.

India-Myanmar Relations

Act East Gateway

Myanmar is India's only ASEAN neighbour sharing a land border (1,643 km), making it the gateway for India's Act East Policy. The Kaladan Multi-Modal Transit Transport Project aims to connect Kolkata to Sittwe port (Myanmar) and onward to Mizoram via inland waterway and highway. However, the 68-mile highway stretch from Paletwa to Zorinpui remains incomplete, stalled by Myanmar's civil war since the February 2021 military coup.

Free Movement Regime (FMR) — Scrapped 2024

The FMR, established in 1968, allowed border tribes to travel up to 16 km inside the other country without a visa. On 8 February 2024, India scrapped the FMR, citing internal security and the need to maintain demographic structure of northeastern states. India simultaneously decided to fence the entire 1,643 km border.

Other Issues

• Chin refugees — Thousands of Chin people from Myanmar have sought refuge in Mizoram since the 2021 coup; India has provided humanitarian assistance
• NE insurgent camps — Myanmar-based insurgent groups (NSCN, ULFA) have historically operated from Myanmar territory; India conducts cross-border operations with Myanmar's consent

India-Maldives Relations

The "India Out" Campaign and Political Shift

President Mohamed Muizzu won the 2023 presidential election on a platform heavily influenced by the "India Out" campaign. Upon taking office (November 2023), he cancelled the hydrographic survey agreement with India (signed 2019, expired June 2024), asked India to withdraw its military personnel, and made China his first major bilateral partner.

2025 Reset

By 2025, relations underwent a significant course correction. India extended a $400 million currency swap facility and rolled over a treasury bill (May 2025). PM Modi's visit in July 2025, marking 60 years of diplomatic ties, resulted in multiple agreements. Muizzu acknowledged India's pivotal role in managing economic and liquidity challenges — a marked departure from his campaign rhetoric.

Common Mistake: Students often describe India-Maldives relations as permanently damaged post-2023. In reality, small-island economies have structural dependencies on India (proximity, trade, security). The 2025 reset demonstrates that geopolitics is cyclical, not linear. Always present both the friction and the reset in your answers for a balanced perspective.

India-Afghanistan Relations

Development Partnership

India invested over $3 billion in Afghanistan across major projects:

Post-Taliban 2021

After the Taliban takeover in August 2021, India adopted a "people-first diplomacy" approach:

• Sent ~50,000 MT of wheat, 300+ tonnes of medicines, COVID-19 vaccines, and earthquake relief
• Redeployed a technical team to the Kabul embassy in June 2022 to coordinate humanitarian aid
• Engaged Taliban officials diplomatically but has not formally recognised the Taliban government

Important for UPSC

Prelims Focus Areas

• Treaty years and provisions (Shimla 1972, Lahore 1999, Indus Waters 1960, Ganga Waters 1996, LBA 2015)
• Constitutional Amendments (100th — LBA with Bangladesh)
• Border disputes — Doklam, Galwan, Kalapani, McMahon Line, LAC
• Projects — Kaladan, Maitri Setu, Salma Dam, Mangdechhu

Mains Dimensions

• Analytical: Evaluate the effectiveness of India's Neighbourhood First Policy
• Comparative: Contrast India's approach to China vs Pakistan vs smaller neighbours
• Current affairs integration: Indus Waters suspension 2025, India-China October 2024 patrolling agreement, Maldives reset
• Multi-dimensional: Combine security, economic, cultural, and diaspora angles

Interview Angles

• "Is India losing its neighbourhood to China?" — discuss debt-trap diplomacy, BRI, and India's counter-strategy
• "Can India afford non-reciprocity with neighbours?" — link to Gujral Doctrine's continuing relevance
• "How should India handle regime changes in neighbours?" — Bangladesh 2024, Maldives 2023, Myanmar 2021

Vocabulary

Bilateral

• Pronunciation: /ˌbaɪˈlæt.ər.əl/
• Definition: Involving or affecting two parties or sides, especially two nations, in a mutual agreement or negotiation.
• Origin: From Latin bi- ("two") + lateralis ("of or belonging to the side"), from latus ("side"); first used in English in the late 18th century.

Diplomacy

• Pronunciation: /dɪˈploʊ.mə.si/
• Definition: The art and practice of conducting negotiations and managing relations between nations through dialogue, treaties, and agreements.
• Origin: From French diplomatie, a back-formation from diplomatique, ultimately from Latin diploma ("a letter of recommendation or authority"), from Greek diploma ("folded document"); first used in English in 1792.

Sovereignty

• Pronunciation: /ˈsɒv.rən.ti/
• Definition: The supreme and independent authority of a state to govern itself without external interference.
• Origin: From Old French soverainete, from soverain ("supreme"), based on Latin super ("above"); recorded in English from the 14th century.

Key Terms

Look East Policy

• Pronunciation: /lʊk iːst ˈpɒl.ɪ.si/
• Definition: India's foreign policy initiative launched in 1991 under Prime Minister P.V. Narasimha Rao to cultivate extensive economic and strategic relations with Southeast Asian nations, serving as the foundation for deeper engagement that was later upgraded to the action-oriented Act East Policy in 2014 under Prime Minister Narendra Modi. The policy marked India's strategic pivot towards the Asia-Pacific after decades of focus on South Asia and the non-aligned world.
• Context: Launched in 1991 as a strategic response to the post-Cold War economic landscape, the collapse of the Soviet Union (India's traditional partner and largest trading partner), and the need to integrate with the dynamic economies of Southeast Asia following India's own economic liberalisation. Under the Look East Policy, India became an ASEAN Sectoral Dialogue Partner (1992), joined the ASEAN Regional Forum (1996), gained Summit-level partnership status with ASEAN (2002), and acceded to the Treaty of Amity and Cooperation in Southeast Asia (2003). The policy was further developed under PM Atal Bihari Vajpayee (1998-2004) before being rebranded as the Act East Policy in November 2014.
• UPSC Relevance: GS2 International Relations — Prelims tests the launch year (1991), PM (Narasimha Rao), ASEAN milestones (Sectoral Dialogue Partner 1992, Summit Partner 2002), and upgrade to Act East (2014). Mains 2016 asked candidates to "evaluate the economic and strategic dimensions of India's Look East Policy." The Look East to Act East evolution is a standard framework for IR answer writing — use it to demonstrate India's shift from passive economic engagement to proactive strategic, security, and connectivity-driven diplomacy.

SAARC

• Pronunciation: /sɑːrk/
• Definition: The South Asian Association for Regional Cooperation, an intergovernmental organisation of eight sovereign South Asian nations — India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives, and Afghanistan — founded to promote socio-economic development, regional stability, and collective self-reliance. Its member states collectively represent approximately 21% of the world's population and 5.21% (USD 4.47 trillion) of the global economy.
• Context: Established on 8 December 1985 in Dhaka, Bangladesh, through the Dhaka Charter, with seven founding members; the initiative was first proposed by Bangladesh's President Ziaur Rahman in 1980. Afghanistan joined as the eighth member in April 2007. Headquartered in Kathmandu, Nepal, SAARC also has nine observer states (Australia, China, EU, Iran, Japan, Mauritius, Myanmar, South Korea, USA). The organisation has been effectively dormant since the 19th SAARC Summit in Kathmandu (2014); the 2016 Islamabad summit was cancelled after the Uri attack, and no summit has been held since, with India-Pakistan tensions being the primary cause of paralysis.
• UPSC Relevance: GS2 International Relations — Prelims tests founding year (1985), members (8), HQ (Kathmandu), and the distinction between SAARC and BIMSTEC. Mains frequently asks "Compare SAARC and BIMSTEC as regional cooperation platforms" and "Why has SAARC become dormant?" Always note: (1) India-Pakistan tensions as the structural cause of SAARC's paralysis, (2) India's shift to BIMSTEC (excludes Pakistan) and sub-regional groupings like BBIN as functional alternatives, and (3) China's observer status and its growing influence in the region as a complicating factor.

Current Affairs Connect

For the latest developments on India's neighbourhood relations — including the Indus Waters Treaty suspension (2025), India-China patrolling arrangements, Bangladesh political transition, and Maldives diplomatic reset — visit Ujiyari.com for daily current affairs analysis and UPSC integration.

Sources: MEA bilateral documents (mea.gov.in), PIB press releases (pib.gov.in), PRS Legislative Research (prsindia.org), Carnegie Endowment for International Peace, ORF research papers, Library of Congress legal analyses, World Food Programme reports.