Delhi should reset neighbourhood policy, ease trade barriers with Dhaka: Indian foreign policy expert

As Foreign Minister Khalilur Rahman prepares to visit New Delhi next week for the first political contact between India and Bangladesh since Tarique Rahman assumed office as prime minister in February, an Indian foreign policy analyst has said the moment offers an opportunity to reboot India's neighbourhood policy amid shifting political dynamics in South Asia.

Analyst C Raja Mohan has urged India to approach its ties with Bangladesh with a "changed mindset" and to dismantle trade protectionist barriers with neighbouring countries.

"The India-Bangladesh relationship now needs fresh political impetus," he said in an article published in The Indian Express.

Raja Mohan argued that Tarique Rahman's emphasis on "Bangladesh First" opens the door for a mature, unsentimental, interest-based relationship with Dhaka.

Stressing the need for a shift in India's approach to its neighbours, the analyst noted, "For too long, India's neighbourhood policy has rested on the implicit assumption that what India offers is a favour, and that smaller neighbours should respond with gratitude and political deference."

"That assumption has produced precisely the political resentment in the neighbourhood."

"The new governments in Dhaka, Kathmandu, and Colombo represent electorates that have rejected old forms of dependency and clientelism. They are not looking for patrons; they are looking for partners," he added.

Raja Mohan said, "Agreements must produce visible, measurable benefits on both sides. Connectivity must improve, markets must open, and economic cooperation must translate into jobs, exports, and growth for India's neighbours and for itself."

The analyst said the rapidly changing international context makes early action on South Asian neighbourhood trade urgent as "global uncertainty creates a new regional logic."

He added that the adverse impact of the West Asia war on South Asian economies is another reason to deepen cooperation.

"This is a moment to consider deeper cooperation on economic and energy security with Bangladesh, Bhutan and Nepal in the east and Sri Lanka and the Maldives in the south," the analyst added.

Such engagement would serve as a solid anchor against "politically driven instability" in bilateral relations, he said, adding that getting there requires only political will, policy innovation, and institutional agility.

He noted that India has entered into ambitious trade agreements with the United Kingdom, the European Union, the United States and others, "shedding many past shibboleths of trade policy."

"The same reforming instinct must now be extended to the neighbourhood," he added.

Mentioning that India's regional trade policy has been hobbled by self-defeating protectionism for decades, Mohan said, it has taken a peculiarly perverse trade policy in Delhi to defeat India's natural advantages of geography and economic history.

"Despite the 4,000-kilometre border with Bangladesh and a narrow Palk Strait separating peninsular India from Sri Lanka, the West remains the main destination for their exports while China is the dominant source of imports," the analyst wrote.

According to him, India has systematically neutralised the extraordinary legacy of an open border through "poor infrastructure" and countless "non-tariff barriers."

"The Indian trade negotiators who rail against Western protectionism become its staunchest defenders when it comes to neighbours," he said.

Raja Mohan said, "Despite ambitious rhetoric on regional cooperation and neighbourhood-first, Delhi's trade policy towards the region has remained hidebound and out of step with India's own national interests."

The analyst pointed out that while India objects to its massive trade deficit with China, it runs substantial surpluses with Bangladesh, Nepal and Sri Lanka.

"Delhi finds it difficult to offer its neighbours the very market access it demands from Beijing," he said, adding that the answer is not for India to export less but to import more and to do so through stronger investment ties, trade facilitation and modernised border infrastructure.

For Bangladesh, Nepal, and Sri Lanka, the Indian market offers scale and proximity that no distant partner can match, according to Raja Mohan.

Arguing that a genuine transformation of connectivity between India, Bangladesh and Nepal would provide a major boost to South Asia's poorest parts in the eastern subcontinent, he said, "This transformation will require both unilateral steps by Delhi and negotiated give-and-take."

However, he said, "It will involve guardrails, for example, on rules of origin. Trade policy cannot rest on generosity; it must rest on the recognition of shared benefits and political ownership."