The world is eagerly watching the fulfillment of the Modi government’s assurances to its neighbourhood and to the developing world. And also the new emphasis in the country’s foreign policy of maintaining friendly relations with countries for attracting investments and boosting trade so as to make India a new growth engine for the world. India is also slated to emerge as a security provider in the region.

Prime Minister Modi on assuming office said his foremost priority is South Asia and then the extended neighbourhood. The leaders of South Asia were present at his swearing-in ceremony as a gesture of goodwill. In fact this was the first occasion when other world leaders were present at the oath-taking ceremony of any Indian prime minister.

In the extended neighbourhood, Modi diplomacy made its debut by changing the ‘Look East Policy’ to ‘Act East Policy’ and roping in the remote Pacific Islands Forum to the level of summit-level talks with India. In the ASEAN bloc, the less developed countries like Cambodia, Myanmar, Laos and Vietnam (CMLV) have been accorded priority for deepening development cooperation.

The Union Budget presented by Finance Minister Arun Jaitley last week amply focused on making India an attractive destination for investment and to make the ‘Make in India’ programme a success. However, the budgetary proposals have also gone beyond to make the CMLV countries as “manufacturing hubs.” With a view to catalyze investments from the Indian private sector, a project development company through separate special purpose vehicles (SPVs) will set up manufacturing hubs in CMLV countries. Thus, this new approach may be called ‘Make by India’ in contrast to ‘Make in India’.

India has been helping the CMLV countries through various development programmes. But this time the attempt is to be a partner in their industrialization process in a defined and dedicated manner. India has also promised to extend the visa-on-arrival facility to the citizens of as many as 150 countries.

Vietnam is a friendly country having a strategic relationship with India. It has allotted oil exploration blocks to an Indian public sector company in the South China Sea, much to the displeasure of the Chinese. Cambodia and Laos took a different view over China’s claim over South China Sea at the ASEAN meeting. India has rightly embarked on development cooperation with these two countries at this juncture.

Myanmar is India’s immediate neighbour and the gateway to South-East Asia. Plans are afoot for ensuring land, rail and maritime connectivity through this country to other regions of ASEAN. 

This is the right time to deepen ties with Myanmar as democracy is taking roots in that country. The setting up of manufacturing hubs in Myanmar will greatly help the remote north-eastern states of India when full-fledged connectivity is established with that country and more trading points are opened at the border. India has assured Rs 270 crore as aid to Myanmar in the current fiscal year.

Earlier, President Pranab Mukherjee in his opening address to the joint session of Parliament expressed the government’s intention to seek greater integration in South Asia and developing relations with South East Asia; he lauded recent attempts to deepen relationships with Russia, China, US, Japan, Australia and Pacific Islands with the implicit intention of boosting trade, investment and security. The President’s address particularly mentioned deepening ties with Europe, West Asia, Central Asia, Africa and South America.

Among India’s immediate neighbours, Bhutan would be the largest recipient of aid. This was the first country Prime Minister Modi chose to visit after assuming office. India had, under the previous UPA regime, promised Rs 4,500 crore for Bhutan’s 11th five-year plan (2013-18) and Rs 500 crore towards economic stimulus package. India has the onus of funding Bhutan’s five-year plans. Under the new Modi regime the budgetary proposals for the year 2015-16 have scaled up the total corpus of aid to Bhutan to Rs 6160.20 crore.

In terms of aid package, next comes war ravaged Afghanistan with a total of Rs 676 crore. This has been done keeping in view the aid flow from other countries in the consortium. India’s engagement with Afghanistan is crucial. As Pakistan has denied land route access to Afghanistan, India has planned to reached Afghanistan by using the Chabahar port in Iran and by using the rail and road connectivity as proposed to connect to Afghanistan and beyond to the Central Asian republics.

In the current fiscal, India has committed aid of Rs 500 crore to Sri Lanka. This will also take into account the rehabilitation of the war displaced Tamils in the northern and northeastern provinces. The Indian public sector, IRCON is executing five projects in the Northern Province which includes reconstruction of railway lines from Omanthai to Pallai, Madhu Road to Talai Mannar, Medawachchiya to Madhu Road and Pallai to Kankesanthurai in the Northern Province of the country at an estimated total investment of $550 million.

India has assured Rs 250 crore as aid to Bangladesh in the current fiscal year. IRCON is executing projects for construction of the second Bhairab Railway Bridge with approach rail links at an estimated investment of $40.10 million. This project is scheduled to be completed in 2016.

IRCON is also currently executing two prestigious projects for construction of new broad gauge railway line between Jogbani in India and Biratnagar in Nepal and between Jayanagar in India and Bardibas in Nepal. It has also been entrusted the work of designing and construction of Akhaura (Bangladesh) – Agartala (India) rail link. India has scaled up its aid assistance to Nepal to Rs 420 crore in the current fiscal year.

IRCON has recently completed a double tracking railway project of 98 km between Seremban and Gemas in Malaysia on turnkey basis including electrification, signalling and telecommunication works at an investment of more than $1 billion.

Total aid assistance to Maldives has been hiked to Rs 183 crore, while aid assistance to distant Mongolia is Rs 2.50 crore and to Eurasian countries it is Rs 20 crore.

India has also hiked its aid assistance to Africa to Rs 200 crore in the current fiscal year. India is rendering development assistance through Indian Technical and Economic Cooperation (ITEC) programme. Apart from Africa being a major beneficiary, the ITEC is also extended to countries in Central Asia, South-East Asia and Latin America. India has pegged its aid to Latin American countries to Rs 15 crore in the current fiscal year. For ITEC programme, Rs 180 crore has been earmarked.

In Algeria on the African continent, IRCON is executing a 93 km double line railway project between Oued Sly and Yellel at an estimated investment of $353 million. The work involves construction of second line and upgradation of existing line and is slated to be completed by March 2016.

India also assists developing countries through the Colombo Plan; India’s contribution to this fund in the current year is Rs 8.60 crore. India’s aid to other developing countries is pegged at Rs 83.44 crore. Aid for disaster relief is earmarked at Rs 25 crore. The budget for total technical and economic cooperation with other countries and advances to foreign governments has been pegged at Rs 9107.02 crore. With these plans in place, the Modi government wants to begin building goodwill and influence in the neighbourhood and in the developing world.