Strategic Partnerships of South Asia: India and Its Neighbourhood

Introduction

South Asia occupies a central position in India’s foreign policy imagination, not merely because of geographic proximity, but due to deep historical, cultural, economic, and security interdependencies. India’s rise as a regional and global power has been accompanied by persistent challenges in its immediate neighbourhood, where political instability, contested borders, weak institutions, and external interventions continue to shape bilateral relations. Despite repeated efforts through frameworks such as SAARC, BIMSTEC, and the ‘Neighbourhood First’ policy, India’s relations with its neighbours remain uneven and, at times, deeply contentious.

In recent years, the regional environment has become more volatile. The political collapse of long-standing regimes, resurgence of nationalist narratives, increased cross-border terrorism, and growing Chinese influence have complicated India’s neighbourhood diplomacy. Events such as the ouster of Sheikh Hasina in Bangladesh, renewed militancy linked to Pakistan-based networks, Nepal’s assertion of its constitutional map, and Sri Lanka’s post-crisis economic realignment underscore the fragile nature of South Asian geopolitics.

Pakistan: Enduring Hostility and the Persistence of Cross-Border Terrorism

India-Pakistan relations remain the most conflictual axis in South Asia, defined by unresolved territorial disputes, particularly over Jammu and Kashmir, and a long history of military confrontation and diplomatic hostility. Despite occasional attempts at dialogue, bilateral engagement has largely stagnated, especially following the revocation of Article 370 in 2019 and Pakistan’s subsequent diplomatic downgrade of relations with India.

A central pillar of India’s Pakistan policy continues to be the issue of cross-border terrorism. Pakistan has consistently been providing sanctuary and support to militant groups operating across the Line of Control and beyond. Recent intelligence and security assessments suggest that Pakistan-linked extremist networks have sought to diversify their operational geography, with spillover effects observed in parts of eastern India and Bangladesh. This transnationalisation of militant activity reflects both Pakistan’s internal security challenges and its continued reliance on non-state actors as instruments of asymmetric warfare.

Pakistan’s internal political instability, marked by civil–military tensions and economic crises, has further constrained the prospects for meaningful engagement. While the return of a civilian government under Shehbaz Sharif has raised limited hopes of stabilisation, the overarching influence of the military establishment continues to shape Pakistan’s India policy. Moreover, Pakistan’s deepening strategic partnership with China, encompassing military cooperation and infrastructure development, reinforces India’s perception of a hostile alignment in the region.

For India, engagement with Pakistan is increasingly framed within a deterrence-centric security doctrine rather than confidence-building or regional integration. Diplomatic isolation, international pressure on terrorism financing, and robust border management have emerged as preferred tools, underscoring the limits of bilateralism in the absence of fundamental shifts in Pakistan’s strategic behaviour.

Bangladesh: From Strategic Convergence to Political Uncertainty

For much of the last decade, India–Bangladesh relations were widely regarded as a model of neighbourhood cooperation. Under Sheikh Hasina’s leadership, the two countries achieved notable progress in resolving land boundary disputes, enhancing connectivity, expanding trade, and deepening cooperation on counter-terrorism. However, the dramatic political upheaval in Bangladesh in 2024 marked a turning point in bilateral relations.

The fall of Sheikh Hasina following mass protests and political unrest disrupted the carefully cultivated partnership with India. Her subsequent exile in India and the formation of an interim government under Muhammad Yunus introduced new diplomatic sensitivities. Dhaka’s request for Hasina’s extradition and the banning of the Awami League under anti-terror legislation strained bilateral trust, placing India in a delicate position between legal constraints and strategic considerations.

The political transition in Bangladesh has also raised security concerns for India. The weakening of state authority and the re-emergence of Islamist political forces have heightened fears of radicalisation and cross-border militancy, particularly along India’s eastern frontier. These developments have revived older anxieties about insurgent safe havens and illegal migration, issues that had been relatively contained during the Hasina era.

At the same time, Bangladesh’s evolving foreign policy signals a recalibration of its external alignments. While economic interdependence with India remains substantial, Dhaka has shown greater openness to diversifying partnerships, including deeper engagement with China. This strategic hedging complicates India’s efforts to maintain its influence in the eastern subcontinent.

The India–Bangladesh relationship thus stands at a crossroads, where past achievements coexist with emerging uncertainties. India’s challenge lies in engaging a politically fluid Bangladesh without appearing interventionist, while safeguarding its security and economic interests.

Nepal: Cartographic Nationalism and Strategic Balancing

India and Nepal share one of the most intimate relationships in South Asia, characterised by an open border, deep socio-cultural ties, and extensive economic interdependence. Yet, this closeness has not insulated the relationship from political friction. In recent years, boundary disputes and nationalist rhetoric have strained bilateral ties, reflecting broader shifts in Nepal’s domestic and foreign policy orientations.

The dispute over Kalapani, Lipulekh, and Limpiyadhura has emerged as a symbolic and substantive challenge in India–Nepal relations. Nepal’s adoption of a constitutional map incorporating these territories and its issuance of currency notes depicting the disputed areas represent assertions of sovereignty that resonate strongly in domestic politics. India, however, has rejected Nepal’s claims, emphasising historical administrative arrangements and long-standing usage patterns.

These tensions were further exacerbated by India–China agreements to reopen traditional trade routes via Lipulekh Pass, which Kathmandu viewed as undermining its territorial claims. Nepal’s diplomatic protests against both India and China highlight its strategic discomfort at being sidelined in regional arrangements affecting Himalayan connectivity.

Beyond border disputes, Nepal’s foreign policy reflects a broader strategy of balancing between India and China. While India remains Nepal’s largest trade partner and a key source of energy cooperation, Chinese investments in infrastructure and connectivity have expanded Nepal’s strategic options. This balancing act, however, also increases Nepal’s vulnerability to geopolitical competition.

For India, managing relations with Nepal requires sensitivity to nationalist sentiments while sustaining economic and people-to-people ties. The challenge lies in preventing boundary issues from overshadowing long-term cooperation in energy, trade, and regional stability.

Bhutan: Stability, Trust, and Emerging Pressures

Bhutan represents one of India’s most stable and trusted partnerships in South Asia. The relationship is underpinned by close political coordination, economic assistance, and cooperation in hydropower development, which forms the backbone of Bhutan’s economy. India’s support has been instrumental in Bhutan’s development planning and infrastructure expansion.

However, Bhutan’s strategic environment is not immune to external pressures. Ongoing boundary negotiations with China and concerns over Chinese activities near Bhutanese territory introduce new variables into the bilateral equation. Bhutan’s cautious diplomatic engagement with China reflects its desire to safeguard sovereignty while avoiding strategic entanglements.

India’s role as Bhutan’s principal security and development partner remains largely uncontested, yet New Delhi must adapt to Bhutan’s evolving economic aspirations and regional context. Sustaining this partnership requires continued sensitivity to Bhutan’s domestic priorities and strategic autonomy.

Sri Lanka: Post-Crisis Realignment and Indian Ocean Geopolitics

India–Sri Lanka relations have gained renewed momentum in the aftermath of Sri Lanka’s severe economic crisis. India’s financial assistance, credit lines, and humanitarian support during the crisis enhanced its credibility as a reliable partner. In the post-crisis phase, Sri Lanka has sought to rebalance its external relations while reaffirming its commitment to regional security.

Economic integration has deepened through initiatives such as the adoption of India’s digital payment infrastructure and expanded connectivity in energy and tourism. At the same time, India remains attentive to Sri Lanka’s engagement with extra-regional powers, particularly China, given the strategic importance of the Indian Ocean.

Sri Lanka’s assurances that its territory will not be used in ways detrimental to India’s security reflect an awareness of India’s core concerns. For New Delhi, the challenge lies in sustaining influence through economic statecraft while avoiding perceptions of dominance.

Conclusion

India’s strategic partnerships in South Asia reveal a complex interplay of cooperation, conflict, and competition. While historical ties and economic interdependence provide a foundation for engagement, recent political upheavals, security challenges, and geopolitical rivalries have reshaped the regional landscape. India’s neighbourhood policy increasingly reflects pragmatic realism, prioritising stability, sovereignty, and strategic autonomy.

The cases of Pakistan, Bangladesh, Nepal, Bhutan, and Sri Lanka demonstrate that India’s regional leadership is neither uncontested nor assured. Success will depend on New Delhi’s ability to adapt to changing political contexts, manage asymmetries sensitively, and balance security imperatives with inclusive regional engagement.