The country's Neighbourhood First Policy determines its engagement
neighbouring nations, including Afghanistan, Bangladesh, Bhutan, Maldives,
Myanmar, Nepal, Pakistan and Sri Lanka.
responsible for managing relations and policies with our neighbours.
Countering Chinese influence
Addressing energy security
SAARC (South Asian Association for Regional Cooperation): India has played a
major role in SAARC, aimed at promoting regional cooperation. However, the
effectiveness of SAARC has been limited due to political differences, particularly
between India and Pakistan
BANGLADESH
On August 5, the former Prime Minister of Bangladesh, Sheikh Hasina, was
ousted from her country and power, ending her rule since January 2009. This
event was seen as a massive escalation, with what initially started as student’s
protests and resulted in a major crisis in Bangladesh
India and Bangladesh work with each other on various
fronts, most importantly in their fight against
terrorism. Her leadership fostered bilateral relations
among the countries, and both nations were able to
work together on security issues.
India might have Lost a Trusted Ally: There is no doubt that under the Sheikh
Hasina leadership, IndiaBangladesh relations had only improved. With her
resignation as the Prime Minister of Bangladesh and a political flux in our
neighborhood, India might have lost a trusted ally
Bangladesh became India's leading trading partner with USD 13 billion in
commerce with Bangladesh under her rule. The SAFTA agreement provided duty-
free access on the majority of tariff lines.
25% textile units owned by Indians
8b dollars of loans provided
The next administration could not be as friendly toward India, especially when it
comes to delicate matters like trade and security.
STRAIT OF HORMUZ
The Iran-Israel conflict has heightened concerns within the global maritime
industry, leading to significant supply chain disruptions and a 40-50% surge in
shipping container rates compared to last year.
India's heavy reliance on oil imports makes it especially susceptible to
disruptions in the Strait of Hormuz.
This critical waterway, situated between the Persian Gulf and the Gulf of Oman
and controlled by Iran, is vital for global oil shipments.
India imported around 232 million metric tonnes (MMT) crude oil during April to
March 2023-24, per a Reuters report
that quoted provisional government data released on April 18.
global oil and gas prices, especially LNG prices would rocket if Iran were to halt
traffic through the Strait of Hormuz.
CHABAHAR PORT
India’s new contract with Iran plans on investing around $120 million to develop
and operate the Shahid Beheshti Port in Chabahar besides offering a credit
window of $250 million for infrastructure upgradation, a plan which has been in
the pipeline for more than a decade.
The deal is extremely critical to India’s national interests, as it opens up a faster
route to lucrative world markets.
The Chabahar port’s unique location, just about 550 nautical miles from Kandla
port in Gujarat, gives India easy access to Afghanistan, Central Asian countries
and Europe.
Also, from a strategic point of view, India will be able to monitor China’s activities
in the Persian Gulf through its Chabahar footprint. With the Adani group already
operating the Haifa port in Israel, Chabahar will strengthen India’s presence on
this route.
India’s takeover of the Chabahar port is seen as a counter to China’s String of
Pearls—a network of military and commercial facilities along the Indian Ocean to
encircle and trap [Link] mitigate the Chinese threat, India has also taken some
steps, including military and strategic deals with several countries like Iran,
Vietnam, Japan, the Philippines, South Korea, Indonesia, Singapore and Thailand.
This has come in light of recent developments that China and Iran put into
motion a 25-year development plan. The details of the agreement have not been
made public but according to Iranian media, the opening of the first Chinese
consulate in the port city of Bandar Abbas, which handles around 85% of Iran’s
seaborne trade, in December 2022 was the first step of implementing the pact.
Estimates are that the Chabahar Port will bring about a 60% reduction in
shipping costs and will halve shipping time from India to Central Asia. In addition,
the port will enable India’s trade with Russia to be 30% faster and cheaper than
the traditional Suez Canal route, which is expected to increase trade between
India and Russia