Why would a single, uniform 'neighbourhood policy' fail across India's smaller neighbours like Bhutan and Afghanistan?

Their core concerns differ so sharply, from Bhutan's cautious assertiveness to Afghanistan's ongoing security crisis, that a uniform approach cannot address both. The sheer diversity of these neighbours requires different strategies for each. A single 'neighbourhood policy' applied uniformly would fail most of these relationships, since their core concerns differ so sharply. Read more: India's Relations with Myanmar, Afghanistan, Bangladesh, Nepal, Bhutan and Sri Lanka.

India’s Relations with Myanmar, Afghanistan, Bangladesh, Nepal, Bhutan and Sri Lanka

Beyond Pakistan and China, India shares complex relationships with several smaller neighbours. This article covers the key issues in each.

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International Relations · IntlRel0003

India’s Smaller-Neighbour Relations

Myanmar

Democratic Transition

Shaped by Suu Kyi’s pro-democracy path

Afghanistan

Reconstruction

Engagement complicated by Taliban’s presence

Bangladesh

Migration

Cross-border movement, a sensitive ongoing issue

Nepal

Post-Maoist Politics

Insurgency’s legacy still shapes ties

Bhutan

Cautious Assertion

Balances closeness to India with independence

Sri Lanka

Post-War Questions

Ongoing human rights, reconciliation issues

No single neighbourhood policy fits all

Even close neighbours seek balanced relationships, not dependence on any one power — India has to actively earn continued goodwill, not assume it.

📑 Contents

1Must Know
2Good to Know
3Test Yourself
4Great to Know
5Previous Year Questions
6Current Affairs

Must Know.

✊ Must Know

Myanmar: Border Policy and a Stalled Project

BackgroundMyanmar’s path toward democracy has shaped India’s engagement with its eastern neighbour, though a 2021 military coup reversed that transition.
A border policy changeIndia is fencing its roughly 1,643-km Myanmar border and ending the Free Movement Regime, which had let border residents cross visa-free up to 16 km.
Why that’s controversialMizoram’s Chief Minister has publicly objected, since the policy cuts across shared Chin-Mizo ethnic ties that predate the modern border.
A stalled projectThe Kaladan Multi-Modal Transit Project, meant to link Kolkata to Mizoram via Myanmar’s Sittwe port, remains delayed by armed conflict inside Myanmar.

Afghanistan: Engaging the Taliban Without Recognising It

BackgroundIndia has played a role in Afghanistan’s reconstruction, though the 2021 Taliban takeover complicated that engagement significantly.
A real diplomatic shiftOn 10 October 2025, External Affairs Minister Jaishankar met Taliban Foreign Minister Amir Khan Muttaqi in New Delhi, the first high-level bilateral meeting since 2021.
A concrete upgradeIndia’s Kabul technical mission, running since June 2022, was upgraded to a full embassy on 21 October 2025.
Why nowIndia still doesn’t officially recognise the Taliban government, but wants to counter Pakistan and China’s influence, especially after tensions closed the Attari-Wagah border in 2025.

Bangladesh: A Political Shift Since 2024

BackgroundBangladesh migration issues, including cross-border movement, remain a sensitive, ongoing part of the bilateral relationship.
A real political shiftSince Sheikh Hasina’s ouster in August 2024, the interim Yunus government has pushed to restart Teesta river water-sharing talks, even threatening international arbitration.
A concrete worry for IndiaBangladesh-Pakistan ties have warmed under the new government, read in New Delhi as a strategic shift away from India’s traditional influence.
What’s comingThe Ganges Waters Treaty comes up for renewal in 2026, adding fresh pressure alongside the unresolved Teesta dispute.

Nepal: An Old Border Dispute, New Cooperation

BackgroundNepal’s Maoist insurgency significantly shaped its internal politics, with lasting effects on how India-Nepal relations later developed.
A live border disputeThe Kalapani-Lipulekh-Limpiyadhura dispute persists, since both countries cite the 1816 Sugauli Treaty but disagree on the Mahakali River’s actual source.
A recent flashpointNepal formally protested India routing the Kailash Mansarovar Yatra through Lipulekh Pass in 2026, keeping the dispute active.
Cooperation despite the disputeNepal and India still agreed to a 10,000 MW hydropower export target over the next decade, prioritising economic cooperation alongside the unresolved border question.

Bhutan: Balancing Closeness to India with Independence

BackgroundBhutan’s desire to assert itself reflects a small state’s balancing act between a close relationship with India and its own independent interests.
The real concernBhutan-China boundary talks continue over disputed pockets of territory. Reports suggest China may offer Bhutan land in exchange for access near Doklam.
Why India caresDoklam sits close to India’s narrow Siliguri Corridor. Any Chinese access there is a genuine strategic red line for India, not just a Bhutan-China matter.
Real cooperation continuesIn February 2026, Bhutan’s and India’s power ministers met to advance the 1,020 MW Punatsangchhu-II hydropower project and discuss a new Sankosh project.

Sri Lanka: Recovery, a Setback, and an Old Dispute

BackgroundSri Lanka’s post-war period has raised ongoing human rights and reconciliation questions, distinct from the earlier IPKF-era conflict itself.
Recovery, with India’s helpSri Lanka’s economy grew after its 2022 crisis, and President Dissanayake publicly credited India’s support in its debt-restructuring deal.
A real setbackIn February 2025, the Adani Group withdrew from a wind-power deal after Sri Lanka’s government demanded a lower tariff than originally agreed.
An old dispute continuesFishermen tensions continue, with Sri Lanka’s navy enforcing bans on Indian bottom-trawling in shared waters.

Good to Know.

📘 Good to Know

Trade Is Real, but Bangladesh Leads It

Trade Textile and textile articles form an important item of India-Bangladesh trade, and Bangladesh, not Nepal, is India’s largest South Asian trading partner. Indo-Sri Lanka trade has not risen consistently.

Three Overlapping Strands of Engagement

Relationship Mix India’s relationships with these smaller neighbours combine security cooperation, economic assistance, and cultural ties, in varying mixes for each country.

Test Yourself

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Great to Know.

🏆 Great to Know

1. Why one uniform policy would fail

Analysis These neighbours range from Bhutan’s cautious assertiveness to Afghanistan’s ongoing security crisis. Their core concerns differ too sharply for one uniform policy.

2. Internal politics next door shape India’s options

Analysis Myanmar’s democratic transition and Nepal’s post-Maoist settlement both show that neighbours’ internal politics directly shape India’s own foreign-policy options.

3. Goodwill must be earned, not assumed

Analysis Bhutan’s independent streak, and Bangladesh and Nepal engaging more with China, show even close neighbours seek balance, not dependence on one power.

Previous Year Questions.

📝 Previous Year Questions

UPSC CSP 2020, GS Paper I, Q64: Trade with Sri Lanka, Bangladesh and Nepal

Prelims PYQ Asked which trade-related statements on Sri Lanka, Bangladesh, and Nepal are correct. Only the Bangladesh-textile statement holds up.
View this question →

Current Affairs.

📰 Current Affairs

Recent Moves Across the Neighbourhood

Nepal, August 2026Indian Army Chief General Dhiraj Seth visited Nepal and received the Honorary Rank of General of the Nepali Army, a long-standing bilateral tradition.
Afghanistan, October 2025India upgraded its Kabul technical mission to a full embassy on 21 October 2025, following the first high-level Taliban meeting in New Delhi since 2021.
Bhutan, February 2026India’s and Bhutan’s power ministers met to advance the 1,020 MW Punatsangchhu-II hydropower project and discuss a new Sankosh project.
SourcePIB; Al Jazeera; All India Radio News.