India and its neighbours

Do economic interests have the potential to build peace?

Until a decade ago, India was regarded largely as a poor developing country with low visibility on the global political and economic front. A multitude of factors, most prominently its emerging global economic strength, have led India not only to redefine its self-image but also to adopt a new political role both internationally and within its immediate neighbourhood. The aim of this report is to conduct a preliminary investigation into the linkages between India’s growing economic and political clout and its correlation, if any, to peacebuilding in South Asia, with particular emphasis on conflicts in Sri Lanka and Nepal. The report examines in detail India’s spectacular economic performance, its strengthening position in the global order and its evolving special relationship with the United States. It lays down the larger landscape within which the ‘new India’ views the world and the region and examines India’s broader foreign policy concerns as its increasing financial muscle triggers a shift from moralpolitik to realpolitik. The report aims to generate ideas for discussion and research and its findings should not be regarded as definitive. It should be regarded, rather, as a first step towards exploring the possibilities of using economic interests as a positive lever for peace-building.