Can Modi Bring South Asia Together?

Indian Prime Minister Narendra Modi had an eventful five-day state visit to the U.S. last week, skillfully designed to portray his foreign policy ambitions and his vision of securing a larger, global role for India.

One rather significant event, however, was overshadowed by the crowded itinerary: Modi’s meetings with India’s neighbors. During his trip, Modi met with Sri Lanka’s President Mahinda Rajapakse, Bangladeshi Prime Minister Sheikh Hasina, and Nepal’s Prime Minister Sushil Koirala. At these meetings, Modi pitched the idea of strengthening the South Asian Association for Regional Cooperation (SAARC) as a regional coalition, and even garnered support for the International Yoga Day that he had earlier proposed in his U.N. General Assembly speech.

Modi’s foreign policy, like that of many of his predecessors, is greatly reliant on South Asia. India’s role in the larger world has often been constrained by turmoil in its neighborhood. Last month, India called off talks with Pakistan after the latter’s High Commissioner in New Delhi called upon separatists in Kashmir while supposedly preparing for the talks. Through much of Prime Minister Manmohan Singh’s tenure, New Delhi had troubles with Sri Lanka over the rights of Indian fishermen in the Palk Strait. With Bangladesh, a border agreement and a water sharing treaty were held up due to regional political concerns in West Bengal.

The only neighborhood relations that have been relatively trouble-free for New Delhi are those with Bhutan and Maldives, although even the latter ran into difficulties after a coup overthrew the more friendly government of President Mohammed Waheed Hassan. In Nepal, relations are improving following the revolution that turned the erstwhile kingdom into a democracy. Yet Kathmandu bickered with New Delhi just recently over India’s subsidized fuel supply to Nepal.

Why does India often face regional opposition when the larger world outside hails its soft power?

Most countries tend to be wary of a larger power. This is true of the U.S., which has often had to deal with dissent from its smaller neighbors in Central America. It is also true of Germany, a country that has become a dominant power within the European Union. And it is true of China, which is embroiled in territorial disputes with ASEAN members.

But New Delhi’s problem is larger: It has often been isolated from its neighborhood. Modi remarked at Madison Square Garden last weekend that “there is no corner of the earth where you can’t find Indians.” This is true – except in India’s immediate neighborhood. Bangladesh for example exempts citizens of 24 countries from needing a visa to visit. It further grants a visa on arrival to every other country except a list of 23 – which includes India, Pakistan, Sri Lanka and Nepal.

India is no different. In February this year, New Delhi expanded its visa-on-arrival program to 180 countries in a bid to boost tourism. But the list of those excluded contained the usual suspects – Afghanistan, Pakistan and Sri Lanka.

If people-to-people contact is strictly monitored and kept at a minimum, trade can’t be much better. And it isn’t. India is the world’s third largest economy in terms of purchasing power parity. Its neighbors are eager to share in its growth and prosperity. Yet in the list of trading partners released by the Indian government for 2012-13, no South Asian country featured in the top 15 – a list that features Switzerland in fifth spot, and Singapore and Hong Kong in eighth and ninth respectively. On Pakistan’s list, India – its nearest neighbor – doesn’t even feature in the top five. And Bangladesh’s exports to India form a mere four percent of its total.

There are obvious reasons for South Asian nations’ reticence towards their neighbors. For the better part of their existence, Pakistan and Bangladesh have had difficult border issues to tackle with India – including cross-border infiltration by terrorists and illegal immigration. Over time, this limited interaction has created a climate of distrust between the people of these nations. And with each of them all but closing their economies to the other, growth in South Asia is not shared but exclusive – more so in India’s case, creating further suspicion in the eyes of India’s neighbors.

This is a lose-lose situation for all involved. While India’s neighbors badly need to benefit from its huge and growing economy, India needs better relations with its neighbors in order to create a friendly climate for domestic growth, and to be able to devote substantive time to its foreign policy ambitions beyond the region. The only way to do this is for Modi to embrace the region, and build a framework of cooperation that increases people-to-people contact and creates a sentiment of shared prosperity in South Asia.

Modi has set the ball rolling in his meetings with South Asian leaders in New York, but New Delhi has to make a more significant effort in the days to come. A free trade zone for example, would foster an atmosphere of shared prosperity, allowing Indian companies to invest in neighboring markets more freely, and permit India’s neighbors to benefit from the opportunities granted by the Indian corporate sector. Joint action on terrorism would permit greater cooperation and accountability in fighting militants who destabilize the region – a major irritant to better regional relations.

However, these goals will require regional leaders to demonstrate some increased political will.

(c) 2014, The Diplomat