Enhancing regional integration will bode well for India as a rising power, a key tenet of which is a stable neighbourhood
.png)
As the NDA government enters its third term, 10 years of foreign policy have found continuity into the future. Key foreign policy initiatives such as the Neighbourhood First, Act East and Act West are already building on where they left off before the June 2024 Indian General Elections. India’s Neighbourhood First initiative, which guides its policy towards cooperation with its immediate neighbours in South Asia and the extended neighbourhood in the Middle East, aims at bolstering digital, transport, and oceanic and trade connectivity with its neighbours alongside enhancing people-to-people ties.
India’s Neighbourhood First initiative, which guides its policy towards cooperation with its immediate neighbours in South Asia and the extended neighbourhood in the Middle East, aims at bolstering digital, transport, and oceanic and trade connectivity with its neighbours alongside enhancing people-to-people ties.
Regional integration through connectivity enhancement in South Asia has been a continually evolving paradigm. Over the past 10 years, the Indian government has focused on enhancing transport connectivity and facilitating a cross-border energy trade in South Asia. A key initiative in India’s South Asian connectivity strategy is the Bangladesh-Bhutan-India-Nepal (BBIN) multimodal corridor. The corridor aims to enhance trade, cross-border movement and people-to-people ties while linking landlocked Nepal and Bhutan to Indian and Bangladeshi ports. The corridor also envisages interconnected grids for regional energy security.
Map 1: The BBIN Corridor
Source: The Daily Star
The Indian government’s initiatives in energy trade, regional transport and connectivity are works aimed at physically manifesting the corridor in the long-term scenario. This article analyses India’s regional cooperation with its neighbours, Bhutan, Bangladesh and Nepal, in the transport sector of the BBIN corridor and the developments therein. It also looks at the geopolitical rationale behind this corridor.
The past decade has brought about a significant shift in how India has reached out to its neighbours and how it perceives regional integration and connectivity. For the longest time, any attempt to enhance cooperation within the region was stymied by the differences between India and Pakistan. These differences plagued the successful functioning of the South Asian Association for Regional Cooperation (SAARC) as well, rendering it defunct. When the NDA government first came to power in 2014, there was some signalling from the Indian side to work with Pakistan or to collectively look at the issues plaguing the relationship. At the 18th SAARC summit in November 2014 in Nepal, the member countries introduced a proposal for a Motor Vehicle Agreement in order to streamline connectivity. At that time, the proposal couldn’t go forward because of objections from Pakistan. But unlike previous disagreements, this time a sub-regional approach was adopted with Bhutan, Bangladesh, India and Nepal agreeing to sign a separate agreement on Motor Vehicle Agreement for the Regulation of Passenger and Cargo Vehicular Traffic (MVA) in 2015. This was veritably seen as the beginning of India’s efforts to leverage the prospects for sub-regional connectivity in the region to expand cooperation in the subcontinent. The agreement was deemed as an ‘overarching framework’ for furthering regional connectivity and listed 30 priority transport connectivity projects. For India, the idea was to utilise the transport corridors and transform them into economic corridors.
The past decade has brought about a significant shift in how India has reached out to its neighbours and how it perceives regional integration and connectivity.
But even as India’s preoccupation with Pakistan in its strategic thinking has reduced over the last decade, the growing Chinese presence within the region has been a cause of concern for New Delhi. Both in the western and eastern sectors, Beijing has gradually expanded its influence. Through the conceptualisation of its Belt and Road Initiative (BRI), it has been able to expand its investment in infrastructure, increase political and security cooperation, get access to ports, etc. While the BRI is at different stages in different countries, Beijing’s attempts to entrench its influence in the region have continued unabated. Besides regional integration, developing the BBIN is also a strategic consideration for India. China has border disputes with Bhutan, Nepal and India and increasingly flexes muscle at the border regions.
To push back against China’s growing presence, New Delhi has refocused attention on areas of mutual convergences with its neighbours and attempted to position itself as a positive conduit to further expand ties between the different South Asian countries. The power trade deal between Nepal and Bangladesh, under which the former will export 40 megawatts of power to the latter, will be facilitated through the Indian power grid, with the power boards of both countries agreeing to move forward with the agreement. This is a testament to India’s ability to act as a bridge between its neighbours. This prioritisation of sub-regional initiatives with like-minded countries, where there is a political will to work with India, will create positive externalities in the short term, which could also help chart a framework for long-term regional cooperation. One such regional initiative is the BBIN transport corridor with Bangladesh, Bhutan and Nepal.
Transport connectivity in any region is crucial for regional integration and intra-regional trade. Due to political ill will in the region and fragile regional security, lack of transport infrastructure remains a major gap in the regional integration of South Asia. To remedy this issue, the Indian government has undertaken a slew of cross-border transport projects around connectivity in South Asia, for ultimately enhancing trade, commerce, people-to-people ties, and overall development in the region.
Transport connectivity in any region is crucial for regional integration and intra-regional trade. Due to political ill will in the region and fragile regional security, lack of transport infrastructure remains a major gap in the regional integration of South Asia.
In Bangladesh, India built and financed five railway links, connecting various regions of the country and connecting Bangladesh to India through West Bengal. India’s railway finance in Bangladesh enhances Bangladesh’s transport infrastructure and also connects the Mongla Port in Bangladesh to India through West Bengal. Notably, India is also financing the development of Mongla Port. India-Bhutan development cooperation in transport connectivity is also quite extensive. India is building two railway corridors (Kokrajhar-Gelupu and Banarsat-Jhambe) in Bhutan, which will not only connect India and Bhutan but also envisions further oceanic connectivity for landlocked Bhutan by linking the Ghelepu region with the Mongla port in Bangladesh. This connectivity corridor is made possible by linking Bangladesh’s Khulna rail terminal with the Mongla port, which is connected to the Agartala-Akhaura rail line. From Akhaura, Indian rail lines will link the corridor to Kokrajhar, taking it to Gelephu. In Nepal, India is building the 171-kilometre-long Kathmandu-Raxaul railway line, which will be further integrated into the Indian railway network through the existing India-Nepal railway lines through Kathmandu.
Together, these projects can form a continuous transport corridor between Bangladesh, Bhutan, India and Nepal. India has also coordinated policy action with corridor partners through the BBIN Motor Vehicle Agreement for the Regulation of Passenger, Personal and Cargo Vehicular Traffic (BBIN-MVA). The BBIN-MVA aims to remove barriers, regulations and checks for bolstering intraregional trade and people-to-people ties. While the agreement has been in limbo since 2014, Nepal, India and Bangladesh ratified the BBIN-MVA Memorandum of Understanding in 2022. While Bhutan did not sign the agreement in 2022 because of its environmental concerns and lack of infrastructure, in March 2024, Thimphu signalled a willingness to work towards filling the policy gaps because of which the BBIN-MVA was not ratified by the Bhutanese government.
Yet, progressing rail connectivity and delayed and incomplete agreements are not enough to realise the full potential of this corridor. The corridor’s rail development needs to be complemented by swift, holistic and coordinated policy implementation and free trade agreements (FTAs), and must be augmented by cross-border roads and highways for bolstering regional integration. The countries’ borders face massive infrastructure gaps in road transport, which hampers transit of goods and services, as evidenced by the region’s low rate of interregional trade, at 5 percent of total trade. South Asian borders are plagued by poor road infrastructure, detouring border routes, excessive and crowded check-posts, overlapping governance structures, and multiple bureaucratic approvals. Similarly, the corridor partners need to work on bilateral and minilateral FTAs. While the South Asia Free Trade Area has existed since 2005, it has been ineffective for many reasons such as political ill-will among partner nations, a wide-ranging sensitive list, and para-tariffs by member countries for goods exempted under the preferential tariff regime among other issues.
India’s goals for developing the BBIN corridor are strategic as well as economic. Enhancing regional integration will bode well for India as a rising power, a key tenet of which is a stable neighbourhood. Moreover, resilient bilateral ties with its neighbours are critical for India’s territorial integrity, especially in the Northeast region, where China contests New Delhi’s sovereignty over Arunachal Pradesh. The BBIN is a major step in providing much-needed infrastructure development in the partner countries and linking their growth trajectories with India. However, New Delhi also needs to facilitate multifaceted development across sectors such as finance, energy, digitisation and social development to thwart Chinese presence in the region and successfully execute large-scale projects, for which most South Asian countries still depend on China, while maintaining the momentum for regional connectivity in South Asia.
Prithvi Gupta is a Junior Fellow with the Strategic Studies Programme at the Observer Research Foundation.
Shivam Shekhawat is a Junior Fellow with the Strategic Studies Programme at the Observer Research Foundation.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Prithvi works as a Junior Fellow in the Strategic Studies Programme. His research primarily focuses on analysing the geoeconomic and strategic trends in international relations. ...
Read More +
Shivam Shekhawat is a Junior Fellow with ORF’s Strategic Studies Programme. Her research focuses primarily on India’s neighbourhood- particularly tracking the security, political and economic ...
Read More +
PREV
