India’s clout among neighbours declining due to missteps

An analyst attributed India’s dipping clout among its neighbours to its flagging economic growth
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First Published: Sun, Feb 24 2013. 11 29 PM IST
Tensions between the India and Maldives rose again earlier this month when Nasheed sought shelter in the Indian high commission in the Maldives. Photo: AFP
Tensions between the India and Maldives rose again earlier this month when Nasheed sought shelter in the Indian high commission in the Maldives. Photo: AFP
New Delhi: Although Prime Minister Manmohan Singh has repeatedly pushed for mutually beneficial ties with India’s neighbours, a close look at the government’s neighbourhood policy shows a pattern of missteps, say analysts.
“It looks as if the vision that the Prime Minister had for the neighbourhood has frayed,” said C.U. Bhaskar, analyst with the South Asia Monitor think tank. “If you look at ties with the big powers—the US, Britain, France—India seems to have done well. But in terms of its neighbourhood policy, it would seem that India has been less effective or less successful.”
A recent example is India’s handling of matters in the Maldives, the Indian Ocean atoll nation that sits astride some of the busiest sea lanes connecting Asia, Africa and West Asia and which India has considered within its sphere of influence.
The Maldives has been buffeted by political crisis since the resignation of former president Mohammed Nasheed last February. India almost immediately recognised the new administration headed by Mohammed Waheed.
But ties soured in November when the Maldives government terminated a pact with India’s GMR Infrastructure Ltd and Malaysia Airports Holdings Bhd to operate and modernize the Ibrahim Nasir International Airport in Male, citing irregularities in the award of the $511 million contract.
The largest Indian foreign direct investment in the Maldives had huge symbolic importance for India’s profile in the atoll nation.
Tensions between the two countries rose again earlier this month when Nasheed sought shelter in the Indian high commission in the Maldives on 13 February fearing arrest following an arrest warrant issued by a court.
On Saturday, 10 days later, Nasheed walked out after a team of Indian officials brokered peace among the Maldives government and Nasheed.
“It seems clear now that India was not able to arrive at the right assessment on the ground in the Maldives and this, in turn, led to India being unable to influence subsequent outcomes in its favour,” said Bhaskar.
Charan Wadhva, economist with the Centre of Policy Research in New Delhi, attributed India’s dipping clout among its neighbours to its flagging economic growth and seeming policy paralysis.
“At 5% economic growth, no one takes India very seriously,” he said. This and the series of corruption allegations that have swamped the Congress-led United Progressive Alliance government since 2010 “seems to have cast a shadow over the entire process of decision-making, upsetting the government’s calculations” regarding foreign policy, he said.
With Sri Lanka, the Indian government has been vulnerable to the opinions of Tamil regional parties—the All India Anna Dravida Munnetra Kazhagam (AIADMK) and the Dravida Munnetra Kazhagam (DMK).
Last year, India voted in favour of a resolution censuring Sri Lanka at the United Nations Human Rights Council in Geneva over alleged atrocities committed on Sri Lanka’s minority Tamils during the last stages of a three-decade old civil war that ended in 2009. This led to a strain in ties. A senior Indian official later acknowledged that India’s vote was influenced by the DMK, a partner in the ruling coalition.
“Foreign policy should be seen as bipartisan,” said Bhaskar, noting that sometimes relations with neighbours had become a function of coalition politics.
Wadhva said that “potentially” such moves by India could affect the political climate for business investments. “There are sometimes direct or indirect consequences of such decisions,” he said.
It may be difficult to link the recent problems that Indian businesses have had in Sri Lanka with the strain in ties, but Indian auto makers have been hit by the Sri Lankan government’s decision last year to increase import duty and then to hike excise duties on cars. Sri Lanka has said the move was aimed at correcting a balance of payments crisis but there aren’t many takers for the reasoning, especially since India is the largest exporter of small cars to the island nation.
Last week, a news report said India’s state-run NTPC Ltd was considering an exit from a 500MW project in Sri Lanka after the Ceylon Electricity Board set new terms for the project agreed to in 2011. The Rs.4,000 crore project was to come up in Trincomalee, in the northeast, one of the main theatres of the civil war.
Elsewhere, pressure from allies played a part in India being unable to keep its promise of arriving at an agreement to share waters of the river Teesta with Bangladesh. The pact was expected to be signed in September 2011 during Singh’s visit to Dhaka but could not be initialled due to last-minute opposition from West Bengal chief minister Mamata Banerjee. Banerjee’s Trinamool Congress Party was a constituent of the UPA till September when it quit the coalition over differences over allowing 100% foreign direct investment in multi-brand retail.
“Bangladesh was handled very, very badly,” said Radha Kumar, who heads the Delhi Policy Group think-tank. “This after the Bangladeshis tried to take steps to improve relations with us,” she said, referring to the Sheikh Hasina government handing over militants wanted for attacks in India’s northeast.
Wadhva said if India could not keep assurances given by the Prime Minister, “the country is seen as stingy in terms of implementation even if good at heart.”
He was referring to the Teesta agreement and an assurance by Singh on solving the boundary issue between India and Bangladesh. To implement the protocol on land boundary issues, the government has to get opposition backing in Parliament, which seems difficult to accomplish.
With Nepal, too, India has been unable to be ahead of the curve to anticipate and influence events to its advantage, said analyst Bhaskar. The country, sandwiched between India and China, has been in political ferment for years with political parties unable to decide on a new constitution for the republic that abolished monarchy and came into existence in 2008.
The only country with which ties seem “stable” is Pakistan, Bhaskar said. “When compared to Sri Lanka and the Maldives, I would say so,” he said.
India and Pakistan relaunched peace talks in 2011 after dialogue was interrupted by the 2008 attacks on Mumbai. Trade has been the major driver of the peace process with both sides agreeing to liberalized visa norms. However, tensions on the border following the deaths of two Indian and two Pakistani soldiers in January have tamped down expectations of any great progress before national polls in Pakistan in May.
According to Bhaskar, a review of India’s neighbourhood policy is the need of the hour. “There have been some reports of some ambassadors being high handed, etc. I think our neighbourhood policy merits a review to see how it can be made more effective,” he said.
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First Published: Sun, Feb 24 2013. 11 29 PM IST
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