Indias relations with its neighbours has been acrimonious since independence. Leaving aside Pakistan and China for obvious reasons, India has had issues with its smaller neighbors too with Bangladesh, Sri Lanka and to some extent Nepal.
India was the reason why Bangladesh came into being but we could not have a friendly neighbour on our east. Part of the reason is the sharing of water resources, particularly the Ganga waters. The other reasons are illegal immigrants and terrorist camps which are trained against India especially the HuJI which has been responsible for several terror attacks in India.
With Sri Lanka, India’s relations have been guided by the Tamil issue. This has been exasperated by the Indian Tamil sensitivity towards the issue.
Although all these issues cannot be solved easily, one thing India should strive to do is make these countries economically depended on India which will give India a lot of leverage to settle many of the issues.
India should open credit lines to all these countries including Maldives and Myanmar for their industries. We should help their local industries like jute in Bangladesh, tea in Sri Lanka and also become the largest buyers for such goods. India should start projects in those countries using local vendors and labour which will earn India goodwill by directly connecting with the local population. Compare this with projects undertaken by China in countries like Sri Lanka where they get everything from screws and screwdrivers to heavy machinery and labour which has left a feeling of resentment among local population which has not been able to prosper in spite of some major projects being executed. India should also work out free trade and free movement of people for business purpose.
India will be then able to develop some leverage with these countries which will be economically depended on India and use it to resolve various issues that have been troubling bilateral relations. India does not much leverage right now especially with Bangladesh and Sri Lanka playing the China card which is a shame considering the size and power of India next to their doorstep. If India economically takes over these countries, we will be able to stop the Chinese from making similar gains and encircling India and using them in a potential future conflict.