INDIA AND ITS NEIGHBORS: COOPERATION OR CONFRONTATION?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83S00854R000200130001-0
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 28
• Document Creation Date: December 22, 2016
• Document Release Date: January 19, 2011
• Sequence Number: 1
• Publication Date: December 1, 1982
• Content Type: REPORT

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STAT
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Directorate of Secret
Intelligence
India and Its Neighbors:
Cooperation or Confrontation?
Secret
NESA 82-10617
December 1982
Copy 2 91
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Directorate of
Intelligence
India and Its Neighbors:
Cooperation or Confrontation?
contributions from
This paper was prepared by
NESA. Comments and queries are welcome
Division, NESA,
Operations.
This paper was coordinated with the National
Intelligence Council and the Directorate of
Secret
NESA 82-10617
December 1982
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India and Its Neighbors:
Cooperation or Confrontation?I 25X1
Key Judgments India's fundamental policy goal in South Asia is to preserve and strengthen
Information available its dominance of a region that it would like to see peaceful, stable,
as of 1 November 1982 relatively prosperous, and free of superpower influence. Although it
was used in this report.
publicly claims to respect the sovereignty and independence of its smaller
and far weaker neighbors, India has often pursued its policy of hegemony
at the expense of good relations with them.
The persistence of interstate tensions in South Asia has significant
implications for US interests. Indo-Pakistani animosity has led to three
wars since independence and complicates US relations with both countries.
Pakistan's determined pursuit of a nuclear weapon could launch a nuclear
arms race in the region and is unlikely to be abandoned in the interests of
better Indo-Pakistani relations. A fourth Indo-Pakistani war could result in
the dismemberment of Pakistan and further Soviet encroachment in South
Asia.
Despite the region's history of conflict and disharmony, we believe that
near-term prospects for stability are generally good. Relations between
India and its neighbors are better than they have been for years. In the
three years since the Soviet invasion of Afghanistan and Indira Gandhi's
return to power:
? Both India and Pakistan have begun bilateral discussions aimed at some
form of nonaggression pact. Although serious substantive differences
remain, we believe that these talks have reduced tensions appreciably and
could help prevent another war.
? India has moderated its traditional hardline policies toward its neighbors
and has softened its opposition to greater interstate cooperation. After
initial reluctance both India and Pakistan are participating in the process
of building a regional organization that is being spearheaded by the
smaller states.
Progress in reducing substantive differences, however, will depend signifi-
cantly on the attitudes and leadership of Prime Minister Indira Gandhi,
and we believe that the South Asian countries can achieve only limited
cooperation as long as she remains in power. Gandhi, in almost complete
control of Indian foreign policy, is a staunch nationalist who has often been
insensitive to the concerns of the smaller states. In our view, she considers
Secret
NESA 82-10617
December 1982
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independent action by them as a challenge to India's regional supremacy
and to her own personal authority. We believe that her recent sympathetic
treatment of the smaller states is largely tactical and that she would revert
to tougher policies if she believed India would benefit.
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India and Its Neighbors:
Cooperation or Confrontation?
India's stated objective in South Asia is to pursue
friendly relations with its neighbors. An official Indi-
an foreign policy planning document published in
early 1982 states that India respects the territorial
integrity of its neighbors and intends to work for
mutual cooperation on a bilateral basis. The docu-
ment noted, however, that the pace of such coopera-
tion cannot be "artificially forced."
New Delhi's record of building solid and constructive
relationships with its neighbors has been spotty at
best. Since independence in 1947, India's relentless
and often heavyhanded pursuit of leverage over its far
weaker neighbors and its insistence on a benign
hegemony over the subcontinent, in our view, have
created a series of adversarial bilateral relationships
and have poisoned the atmosphere for a regional
approach to common problems.
New Delhi's fundamental policy goal in the region is
to preserve and strengthen Indian dominance in a
peaceful, stable, and relatively prosperous subconti-
nent that is free of superpower influence. As the
area's strongest military and economic power, India
traditionally has presumed to be the arbiter of region-
al interests, which it generally equates with its own. In
our judgment, New Delhi expects its neighbors to
accommodate its concerns and defer to India's lead,
especially on matters of direct concern to the region.
We believe, however, that India's fundamental preoc-
cupation with preserving regional stability somewhat
limits New Delhi's ability to force the smaller states
into line
South Asian Relations Since 1971
The war with Pakistan in 1971 strengthened India's
position as by far the most powerful state in South
Asia. By intervening militarily in the Pakistani civil
war, it helped split its principal adversary and assisted
in the birth of an independent and initially pro-India
Bangladesh. In August 1971 New Delhi signed a
friendship treaty with the Soviet Union to buttress its
position in the face of alleged Sino-Pakistani-US
collusion to prevent the breakup of Pakistan. Six
months after the cessation of hostilities, India and 25X1
Pakistan signed a peace agreement at Simla that
institutionalized the principle of bilateralism in their
relations.
Reports from embassies indicate that the smaller
states viewed India's victory and its treaty relation-
ship with the Soviet Union with considerable alarm.
India mounted a diplomatic campaign to assuage
these fears, but subsequent Indian actions-the
"peaceful" nuclear explosion of 1974, the absorption
of Sikkim in 1974-75, and Gandhi's emergency rule
during 1975-77-rekindled them. Nepal and Sri Lan-
ka saw the partition of Pakistan as an example for
themselves and feared that India might use its en-
hanced power against them at some future date. The
war destroyed Sri Lanka's former policy of balancing
between India and Pakistan and sparked fears that
India might support the Sri Lankan Tamil minority's
movement for autonomy. We believe that both Bhu-
tan and Nepal continue to worry that Sikkim's fate
may someday be their own.
During 1977-79, the Janata Party government of
Morarji Desai and the successor caretaker regime of
Charan Singh adopted a more sympathetic approach
toward the neighboring states and tried to establish a
more constructive climate in the region. Desai public-
ly accepted President Zia's assurances that Pakistan's
nuclear program was only for peaceful purposes. In
addition, New Delhi catered to Nepalese sensitivities
by signing separate trade and transit agreements with
Kathmandu in 1978 and negotiated a five-year water-
sharing agreement with Bangladesh in 1977
The dramatic election victory of Indira Gandhi in
January 1980 was an unpleasant surprise to the
neighboring states. During the campaign she castigat-
ed the moribund Janata regime for its soft line toward
these countries and had publicly alluded to "adjust-
ments" she planned to make in Indo-Bangladesh and
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 Figure 1
India and Its Subcontinent Neighbors
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International boundary
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----Island-
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Union Territory of Goa, Daman, and
Diu is administered from Panaji in Goa.
Boundary representation is
not necessarily authoritative.
Andaman
and >o-
~: 6a
Islands NICOBAR
ISLANDS
(India)
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Figure 2
India: Share of Trade of Neighboring Countries
Bhutan
Nepal
Pakistan
Sri Lanka
Bangladesh
Bhutan
Nepal
Sri Lanka
Bangladesh
Pakistan a
Indo-Nepalese relations. In meetings with the rulers
of Bangladesh, Nepal, and Bhutan shortly after her
return to power, Gandhi left little doubt that her
government would be less conciliatory toward them,
Her ambivalent attitude
toward the Soviet invasion of Afghanistan coupled
with her known proclivity for close relations with
Moscow increased nervousness among the smaller
The smaller states have been generally surprised by
Gandhi's increased sensitivity toward them since her
return to power. Embassy reporting indicates that
Nepal and Bangladesh are relieved that she has not
carried out her campaign threats to "adjust" India's
relations with them. Although specific complaints
against New Delhi's behavior remain, we believe that
Gandhi has made a conscious effort to allay the fears
of neighboring states. India has shown a generally
constructive attitude toward participating in a region-
al cooperation scheme, a concession to neighbor-state
interests that Gandhi would probably not have made
in earlier years. In addition, India adhered to a 1977
water-sharing agreement with Bangladesh at some
cost to its own economic interests
The neighboring states, however, are finding it hard
to grapple with the foreign policy drift of Gandhi's
second administration. What had once been a well-
structured and institutionalized foreign policy appara-
tus has been seriously weakened by her unpredictabil-
ity and highly personalized decisionmaking style. We
believe that New Delhi's inconsistencies have left its
neighbors with a growing uncertainty about how to
formulate their own policies in response
Perceived Threats to Indian Interests
Superpower Intrusion. In our view, India's paramount
goal in the region is to oppose any superpower intru-
sion in South Asia. New Delhi views its various
neighbors as integral parts of the Indian security
screen. We believe New Delhi fears that superpower
penetration of these states could lead to great power
confrontation, which would be beyond India's control.
Although there are currently no superpower basing
arrangements anywhere in the region, India, in our
view, is concerned that one of the neighboring states
might grant base rights as a lever against India. New
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Figure 3
India: Population and GNP in Regional Context
India
Pakistan
Bangladesh
Sri Lanka
Nepal
Bhutan
Delhi remembers the secret US air facility at Pesha-
war and has publicly voiced its suspicion that the new
US security relationship with Pakistan provides simi-
lar privileges
The recent Sri Lankan decision not to conclude an
agreement to lease surplus oil tanks at the port of
Trincomalee to a large American firm was in part due
to Indian pressure after New Delhi discovered that
some of the oil would have been for the exclusive use
Since the invasion of Afghanistan, India has been
deeply concerned about Soviet activities in the region,
although direct criticism is muted in the interests of
overall Indo-Soviet relations.
Moscow's apparent refusal to comply with In-
dia's longstanding request for a token troop withdraw-
al from Afghanistan has angered and disappointed
New Delhi. According to Embassy reporting, Indian
officials have displayed some embarrassment over
New Delhi's apparent inability to prevent Moscow
from pursuing its own interests in the neighboring
India
Pakistan
Bangladesh
Sri Lanka
Nepal
Bhutan
states when they differ from India's. In this context,
New Delhi is especially concerned about growing
Soviet influence in Nepal, where Moscow maintains a
large diplomatic presence, finances and advises the
pro-Soviet factions of the Communist Party, and
disseminates pro-Soviet propaganda through a Soviet-
controlled Nepalese newspaper.
Pakistan: The Military and Nuclear Threat. Among
the various neighbors, Pakistan is a special case in
that it alone has the power to threaten Indian securi-
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ty. Traditional frictions between the two, in our
estimation, are the principal near-term threat to
regional stability. Mutual distrust and lingering hos-
tility have provoked three wars since 1947, and each
side is obsessively suspicious about the other's inten-
tions. Our assessment is that Gandhi views the Paki-
stanis as inherently irrational and Zia's regime as
narrowly based and potentially unstable.
Although Pakistan, in our view, cannot challenge
India's overall superiority in troops and weapons for
the foreseeable future, statements by Gandhi and her
Foreign Minister indicate that the Indian leadership
regards Pakistan's acquisition of sophisticated weap-
onry-including F-16 aircraft-as exceeding Paki-
stan's legitimate defense needs and therefore a threat
to Indian security. She and many Indians have public-
ly stated that US-supplied arms will be used against
India, not the Soviets. As proof of Islamabad's inten-
tions toward New Delhi, Indians point to heavy
Pakistani troop concentrations along their common
border. India would prefer that Pakistan remain a
weak buffer state within the Indian security system.
Indians reject any references to parity between India
and Pakistan, arguing that in size, population, indus-
trial base, and other respects, India is the dominant
power in the region. We believe that a major source of
Indo-Pakistani disharmony is New Delhi's belief that
Islamabad refuses to accept its inferior military status
and is seeking foreign support to "artificially" attain
parity with India
The major stumblingblock to a long-term improve-
ment in Indo-Pakistani relations, in our view, is
Kashmir. Although the state was partitioned follow-
ing the 1947-48 war, New Delhi continues to claim
publicly that all of Kashmir is constitutionally and
legally part of India. Pakistan, on the other hand,
maintains that Kashmir is a disputed territory whose
final status must be determined through a UN-
sponsored plebiscite. We believe neither side will
agree to a settlement based on the status quo for the
foreseeable future.
Serious political instability in Nepal or Bangladesh
could invite outside intervention and increase the
possibility of a sharp rise in Sino-Indian tensions,
even though we do not anticipate that a second Sino--
Indian war is likely to result from Indian military
action south of the Himalayas. Instability or severe
famine in politically fragile Bangladesh would proba-
bly send millions of refugees into adjoining areas of
India, inflicting an immense economic and humani-
tarian burden on New Delhi and international relief
agencies.
India is also deeply concerned about Pakistani prog-
ress toward developing a nuclear weapons program,
which Islamabad regards as the ultimate guarantor of
its security. India has considered two basic strategies
We believe that the persistence of interstate frictions
in South Asia has significant implicationsfor US
strategic and humanitarian interests. Three wars
between India and Pakistan during the past 35 years
have left a legacy of suspicion and distrust that
complicates US relations with both countries. Paki-
stan's headlong pursuit of a nuclear weapons capabil-
ity and recent developments in India's nuclear pro-
gram increase the danger of a fourth war and the
possibility of a nuclear arms race in the subcontinent
that would cripple US nuclear nonproliferation poli-
ciesJ
The threat of renewed Indo-Pakistani conflict diverts
Pakistan's attention from its western border and
inhibits Islamabad's ability to deal with the Soviet
presence in Afghanistan. We believe that another
Indo-Pakistani war:
? Would be won by India in a matter of days.
? Would probably result in at least a short-term
extension of Indian hegemony over a severely weak-
ened Pakistan, with the strong likelihood of chronic
anti-Indian violence and persistent instability there.
? Could bring about the dismemberment of Pakistan
by Soviet and Indian forces and give the Soviets
direct access to the Arabian Sea through western
Pakistan, with serious consequences for US policy.
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in responding to the Pakistani program-preemptive
military action and nuclear deterrence.
We estimate that over the next year, India will mark
time while waiting for Pakistan to conduct a nuclear
test, with the intention of exploding an Indian device
in response. In our view, an Indian preemptive strike
in advance of a Pakistani test is unlikely because of
adverse international reaction, the poor prospects for
permanently crippling the Pakistani program, and the
possibility that such a strike could lead to a larger
conflict. We believe that Zia, for his part, is likely to
delay a nuclear test so as not to jeopardize Pakistan's
arms supply relationship with the United States, but
we doubt that the prospect of improved Indo-Paki-
stani relations will deter him from his overall pursuit
of a nuclear weapon.
Despite the traditional animosities, Indo-Pakistani
tensions have eased somewhat in recent months. Both
appear genuinely interested in improving ties, but we
do not expect them to exorcise all the ghosts that have
haunted past relations. According to Embassy report-
ing, senior officials on both sides have been pleased
with the positive atmosphere surrounding the current
talks-including a brief but cordial meeting between
Gandhi and Zia on 1 November-but many differ-
ences remain. Whereas Pakistan seeks a pact that
would simply abjure the use of force, India wants a
more comprehensive treaty of friendship. In addition
to the nuclear issue, key obstacles to normalization, in
our view, include Gandhi's visceral distrust of Zia and
his regime and India's insistence on bilateral settle-
ment of disputes, notably the Kashmir issue
The China Factor: Relations With Nepal and Bhutan.
India's view of China as its principal long-term threat,
in our view, is the basis for the approach taken in New
Delhi's relations with the two Himalayan kingdoms,
Nepal and Bhutan.' New Delhi's treaty relationships
with Bhutan (1949) and Nepal (1950)-updated ver-
sions of similar pacts concluded by British India-
provide for Indian involvement in their affairs. Indian
prime ministers have routinely emphasized that In-
dia's legitimate security concerns begin at the Hima-
layas and have steadfastly resisted any attempts by
these countries to dilute New Delhi's influence. Chi-
na's military invasion and tightened control of Tibet
and its border war with India have reinforced New
Delhi's policy of preserving its dominance in both
countries.
Indian influence in both countries is pervasive. India
and Nepal are inextricably linked by highly complex
historical, cultural, religious, and economic factors.
Ethnically, most Nepalese (including the royal family)
are of Indian stock and followers of Hinduism, and
the Nepalese language is Sanskrit based. In contrast,
most Bhutanese are of Tibetan lineage and are Bud-
dhists, and they speak a language similar to Tibetan.
Although India nominally recognizes both states as
sovereign, Bhutan is in effect an Indian protectorate.
Under the terms of its 1949 treaty, Bhutan agrees to
' A third kingdom-Sikkim-was a semi-independent Indian pro-
tectorate until 1974 when political instability largely engineered by
India gave New Delhi the pretext to absorb it as India's 22nd state.
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Indira Gandhi is in
almost absolute control of Indian foreign policy and
sets the tone for relations with India's neighbors. Her
popularity and large parliamentary majority give her
a free hand to define India's interests, and she
reserves all important decisions to herself We believe
that a number of senior diplomats and policymakers
do not share her hardline attitudes toward the neigh-
boring states and have tried with mixed results to
temper her views and decisions.
In our view, Gandhi's personality and reactive leader-
ship style have contributed substantially to percep-
tions of her among India's neighbors as a strict and
unsympathetic parent. A staunch nationalist, she has
stated publicly that Indian interests must not be
sacrificed merely to improve relations with the other
South Asian states, and she probably believes that
the smaller countries will take advantage of lenient
treatment to seize room for maneuver. We believe
that Gandhi is temperamentally inclined to deal
sternly with those who disagree with her and that she
views independent action by the neighboring states as
not only a challenge to India's regional supremacy
but to her own personal authority.
Personality conflicts with Gandhi have also played a
significant role in India's relations with its neighbors.
New Delhi's relations with Islamabad are colored by
be "guided by Indian advice" in the conduct of its
foreign relations. In our view, India has traditionally
interpreted this provision as authority to prevent
Bhutan from establishing direct relations with other
states and to ensure that Thimphu follows New
Delhi's lead on issues of importance to India.
According to US diplomats, New Delhi's large mis-
sion in Thimphu acts as a shadow government. India
also controls Bhutan's postal and telegraph service, its
Gandhi's visceral dislike for and distrust of President
Zia and her deep personal suspicion of Pakistani
motives, She
also has no great affection for President J. R.
Jayewardene of Sri Lanka because of derogatory
statements he made about her when she was out of
power and because she had a close personal relation-
Sirimavo Bandaranaike.
ship with his predecessor
,
Other regional leaders understand well that running 25X1
afoul of Gandhi is not in their best interest.
We believe that Gandhi's view of India's neighbors in
terms of narrow self-interest has in the past prevented
India from exercising true leadership toward greater
cooperation. She is generally disinterested in closer
relations with the neighboring states because they
have little of substance-with the recent exception of
water-to offer India, with its broader resource base
and industrial economy. As a result, Gandhi's poli-
cies toward the smaller states have depended on the
needs of the moment, varying from hardline pressure
to an occasional willingness to accommodate neigh-
bor sensitivities and interests.
Since her return to power in 1980, Gandhi has
demonstrated a more accommodating attitude to-
ward the neighbors, but we believe that this posture is
mostly tactical and is rooted more in political cau-
tion than in a genuine change of heart. In our view,
Gandhi remains committed to India's regional hege-
mony and would revert to tougher policies if she
needed to. We conclude that there are limits to
substantive improvements in relations as long as she
remains in power.
police (through a police adviser), and its military
(through a military training team that is larger than
the Bhutanese armed forces). In addition, the only
road into Bhutan passes through India, which re-
quires, and frequently denies, permits to travel there.
After stalling for several years, New Delhi only
recently approved air service into Bhutan
andhi has made clear
on several occasions that India will not permit Bhutan
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Figure 4
The Kashmir Area
, M_ lwi 11 i
: , Alrfr Chinese line
"0, XA,3kIfikIIR
f Srinagar 'Leh
ISLAMABAD f.kashm . vale of
Kashmir
C
Boundary reF&santation is
not necessarily -aothoritative>
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to negotiate with the Chinese without New Delhi's
involvement-which Beijing refuses to accept. Bhutan
has no formal relations with Beijing. In 1978 the
Bhutanese national assembly passed a resolution
against establishing ties,
The Indians have traditionally considered Nepal criti-
cally important as a barrier to Chinese invasion.
Because of the open Indo-Nepalese border, a Chinese
penetration of the Himalayan shield would leave
northern India vulnerable to Chinese occupation. We
believe that India interprets secret clauses in letters of
exchange that accompanied the 1950 treaty as giving
India the right to enter Nepal in force if its security is
threatened, with or without Nepalese invitation or
concurrence. We believe that India is largely resigned
to the close relations Nepal has established with
China over the years and is willing to accept a
moderate level of Chinese influence there. Nepalese
officials have commented, however, that India has
recently been pressing Nepal to reject the favorable
Chinese bid on a World Bank-financed irrigation
project in southern Nepal because New Delhi does not
want a significant Chinese presence in the areaF_
Secessionist Demands and Regional Strains. Ethnic-
based movements for autonomy and the decentraliza-
tiorr of power in India complicate New Delhi's rela-
tions with the neighboring states. According to Indian
press analyses, regional parties have gained strength
in India as resistance to Gandhi's increasingly cen-
tralized one-woman rule has grown and as her Con-
gress Party has become weak and factionalized. The
growth of these various regional movements, which
are based predominantly in the outer fringes of the
country, has intensified Gandhi's preoccupation with
internal security and added to her fears that the
neighboring states could aid dissident Indian groups
as a means of pressing New Delhi. In July 1980 she
stated publicly that Indian security is weakened by
any form of domestic unrest, especially if it occurs in
border areas, which can provide a cover for "all kinds
of dangerous elements."
India and would prefer to be part of Pakistan.
In our view, India faces potential security problems in
Kashmir-the only Indian state with a Muslim ma-
jority (about 75 percent) and which also happens to be
ruled by political elements opposed to Gandhi and her
party. According to Embassy reporting, the Indians
claim that the Pakistanis are meddling in Kashmiri
affairs. Indian worries are compounded by long-held
suspicions that Kashmiri Muslims are disloyal to
Politically Kashmir enjoys substantial autonomy un-
der the Indian constitution and receives special finan-
cial assistance from New Delhi. In general, we believe
Kashmiris want maximum autonomy, not union with
either India or Pakistan. Many of them suspect,
however, that Gandhi's government is intent on erod-
ing the state's special status
The death in early September of Kashmir's strong-
willed Chief Minister, Sheikh Abdullah, who clashed
frequently with Gandhi, may mark the beginning of a
period of instability. Although Abdullah provided for
his son Farooq to succeed him, Farooq faces serious
challenges from within his own party and his hold on
power may be tenuous. The US Embassy reports that
Gandhi is willing to work through Farooq to keep
Kashmir peaceful, but we believe that Gandhi will
probably begin maneuvering to help her own party
win control of the state when elections are held next
year.
We doubt that Islamabad wishes to create problems
for India in Kashmir. Because of internal difficulties
elsewhere in India, however, New Delhi will he alert
for signs that the delicate political situation in Kash-
mir is being exploited by Pakistan for propaganda
purposes.
We believe Bangladesh is of major strategic concern
in New Delhi because it separates the Hindi-speaking
heartland of India from the isolated and unstable
fringe areas in the northeast. The Chinese invasion of
the area in 1962 highlighted its strategic vulnerabili-
ty, and Beijing still claims'a large portion of Aruna-
chal Pradesh. In addition, these states are economical-
ly less developed than the rest of the country, and for
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many years they have been the site of tribal insurgen-
cies and ethnic agitation against control from New
Delhi. Bangladesh in
the past has assisted some of these insurgencies,
mostly by granting sanctuary to groups like the Mizo
National Front, which stages cross-border raids into
India
More critical for New Delhi, in our judgment, has
been a three-year nonviolent agitation in Assam
against an influx of foreigners-mainly Banglade-
shis-who threaten to make the Assamese a minority
in their own state. Agitating students have been trying
to force New Delhi to deport all foreigners who
entered the state during the past three decades, but no
agreement has been reached with Gandhi's govern-
ment. Aside from its strategic location, Assam is
important for economic reasons. In 1981 the state
provided almost one-third of India's domestic oil-15
percent of national consumption-most of which
flows from Assam to the Indian heartland by means
of a vulnerable pipeline. Agitators stopped this oil
flow for 13 months during 1980-81, creating a signifi-
cant burden on the Indian economy
We believe that India's willingness to exert pressure
on Bangladesh is sharply reduced by New Delhi's
concern with maintaining political and economic sta-
bility in a generally fragile area. A major political
upheaval or economic catastrophe in overpopulated
Bangladesh could send waves of refugees into neigh-
boring regions of India, and there are no natural
barriers to stop them. During the 1971 war almost 10
million refugees fled to India, posing a substantial
economic burden. Many did not return home when
the war ended. We believe that New Delhi would
regard any new refugee movement as profoundly
destabilizing
In our view, India's noninterference in Bangladesh's
presidential election last fall and New Delhi's low-key
response to the recent military coup in Dacca were
intended to reassure the Bangladeshis and thus pre-
clude further instability. For the same basic reasons,
India would be inclined to assist Bangladesh with food
shipments as it did in 1972 to prevent widespread
famine, even at the cost of significantly depriving
itself.
The movement among Sri Lankan Tamils for the
creation of a separate Tamil state on the island has
had some political repercussions among India's own
troublesome Tamil minority in the southern state of
Tamil Nadu-a state that has been led by regionally
based Tamil parties since 1967 and which has long
resisted control by New Delhi. We believe that
Gandhi may have some latent sympathy for the Tamil
separatist movement in Sri Lanka but that, unlike
some Indians, she probably has no interest in support-
ing it. Tamil separatism in Sri Lanka has been a cause
celebre among some political elements in Tamil Nadu
who have long used it as a weapon against New Delhi
and each other. In our view, Gandhi believes that
increased Tamil separatist activity in Sri Lanka can
only harm the interests of both countries. Moreover,
Gandhi's well-established policy of nonsupport for
Tamil separatism suggests that she is eager to prevent
this issue from damaging her relations with the state
government in Madras as well as with Colombo.
Indian Leverage
Bilateralism: "Winning Through Intimidation. " In-
dia insists on dealing with each of its neighbors on a
bilateral basis-a form of "divide and rule." This
policy enables New Delhi to enjoy the benefits of its
size and power without the risk of being chastised or
outvoted at multilateral regional meetings. In theory
at least, it is also meant to discourage the smaller
states from working in concert against Indian inter-
ests, a tactic the Indians term "encirclement." The
principle of bilateralism was institutionalized in the
1972 Simla Accord between India and Pakistan that
formally ended the 1971 war and established a frame-
work for future Indo-Pakistani relations.
We believe that India's narrow definition of bilateral-
ism is not generally shared by its neighbors and has
been a major stumblingblock between India and
Pakistan in their recent negotiations on a nonaggres-
sion pact. In New Delhi's view, bilateral disputes are
to be discussed only by the two concerned parties.
Pakistan and India's other neighbors believe that
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adherence to bilateralism should not prevent them
from raising contentious issues in international fo-
rums.
India is unlikely to give up its bilateral approach to
the sharing and harnessing of Ganges and Brahmapu-
tra River water-the region's most vital resource. A
comprehensive treatment of the issue, including stor-
age reservoirs in Nepal and downstream works in
India and Bangladesh, should necessarily involve all
three countries. Bangladesh and Nepal favor a trilat-
eral approach because of the regional nature of the
problem and the desire for each other's support
against India. New Delhi, however, continues to insist
on dealing with each of them separately, at some cost
to the common good, in order to maximize its benefits
and minimize its competition (see appendix).
within the region. Examples include the forcible
"liberation" of Goa in 1961, the absorption of Sikkim
in 1974, and the invasion of East Pakistan in 1971.
India's naval confrontation with Bangladesh over a
disputed offshore island in 1981 created a storm of
anti-Indian protest in Dacca, where the action was
seen as an attempt to destabilize President Zia's
government.
Economic Policies: Aid, Trade, and Transit. India
has a long history of applying economic pressure to
achieve political ends, particularly against the land-
locked Himalayan kingdoms, where New Delhi's le-
verage is greatest. India employs a carrot-and-stick
approach-consisting of assorted sanctions and in-
ducements-in its economic policies toward Nepal
and Bhutan, both of. which heavily depend on India
for their survival. In both cases, India is a major aid
donor and trading partner as well as the only practical
Military Muscle. We believe that the pattern of
India's military deployments directly reflects Gan-
dhi's primary concern with defending the country
against what she views as an unstable and militarily
threatening regime in Pakistan. The placements of
military units-mainly along India's northern and
western borders-also reflect a long-held Indian fear
that it may be forced to fight a two-front war against
simultaneous attacks by both Pakistan and China.
India's military might, however, is superior to the
combined power of its immediate neighbors, and in
our judgment, New Delhi could easily repel a coordi-
nated attack by all of them, assuming China did not
intervene.
The neighboring states view India's troop deploy-
ments and growing military strength with consider-
able suspicion. They mutter in private that India is
building its military muscle to overawe them and to
serve as a bargaining lever in bilateral negotiations.
The neighbors also worry about where India plans to
use the sophisticated weaponry it continues to obtain
from the Soviet Union and Western Europe in
amounts that appear to exceed its defensive needs.
India's professed assurances of good neighborly rela-
tions, noninterference, and absence of territorial am-
bitions do not obscure the fact that New Delhi has in
the past used armed force as an instrument of policy
outlet to the sea.
When Indian actions cause economic hardships in the
smaller states, however, we believe it is not always the
result of deliberate foreign policy. Rather, it is often
the accidental outcome of Indian internal policies,
scarcity, or bureaucratic inefficiency compounded by
a lack of sensitivity. Because of the tremendous
disparities in size between India and the mountain
kingdoms, for example, bilateral trade and transit
difficulties can have a major impact on the smaller
states while hardly affecting the much larger Indian
economy. Indian competition in the world jute and tea
markets limits export opportunities for Bangladesh
and Sri Lanka, but it has no political motivation.
Gandhi and her predecessors have long tried to per- 25X1
suade Nepal to acknowledge that a special relation-
ship exists with India and that it is in Kathmandu's
economic interest to deal with New Delhi on a
preferential basis. In our judgment, Nepal rejects this
notion as an uncomfortable dependency brought
about by unacceptable Indian paternalism. Under
New Delhi's definition of the relationship, India 25X1
grants Nepal economic "concessions," notably in
trade and transit arrangements. In return, Nepal is
expected to support India's foreign policy positions
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Figure 5
Deployment of Indian Air and Ground Forces
China
a
%KATHMAND
q- Ahmadabad
ANDAMAN
ISLANDS
(India)
Armored division
Infantry division
Mountain division
4 Fighter base
Bomber base
NICOBAR
ISLANDS o
(India)
Boundary representation is
not necessarily authoritative.
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and not to rely on extraregional ties to help safeguard
its independence and extract further concessions from
New Delhi.
We believe that the Nepalese fully understand that
they, have no choice but to give in to India's economic
and commercial pressures, but that for political rea-
sons they cannot afford to appear subservient. Kath-
mandu depends heavily on the port of Calcutta as a
transit facility for its exports and third-country im-
ports. India has been able to influence Nepalese
import and export policies by imposing bureaucratic
impediments-such as inadequate allocations of
freight cars or imposing massive security deposits on
transit trade. India has sometimes held up imports
deemed in excess..of Nepal's domestic needs or refused
permission to export Nepalese goods that New Delhi
past willingly supplied most of Bhutan's military and
economic development assistance to dissuade the Bhu-
tanese from seeking greater independence through the
growth of outside ties, particularly with China and the
West.
In the past Gandhi has used subtle pressures to
discourage unauthorized Bhutanese overtures
New Delhi in
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suspected were of Indian origin.
For several years India has been complaining to
Kathmandu about the import of third-country luxury
goods into Nepal and their subsequent smuggling into
India. In 1980 the Indian Embassy in Kathmandu
estimated this illicit trade at $3.9 million per year.
The smuggling provided the Nepalese Government
with badly needed revenues (in the form of import
duties) but violated the Indian ban on imports of
consumer goods. Under substantial pressure from
New Delhi, Nepal curtailed issuing licenses for the
import of luxury items early this year. In return, India
made a number of concessions, releasing needed
imports that had been accumulating in Calcutta for
several months and significantly expanding the facili-
ties (and cutting the red tape) involved in transship-
ment
India's economic leverage can work to Nepal's bene-
fit. Occasionally, New Delhi permits Nepal to buy a
quota of Indian goods, such as coal, cement, or steel,
even when supplies are inadequate to meet India's
own economic needs, but Kathmandu contends that
India often restricts this "concession" for political
purposes.
India has even greater leverage over Bhutan.
Thimphu conducts over 90 percent of its foreign trade
with India, which is by far the largest single aid
donor. India has in the
October 1980 urged Bhutan not to sign trade and
transit agreements with Bangladesh and offered to
compensate Thimphu for whatever gains the treaties
would afford. Bhutan signed, however, to assert its
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sovereignty, but India-through which the trade had25X1
to pass-ha`s prevented the agreement from being
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Political Subversion
over the years, India has occasionally financed and
sheltered several expatriate democratic groups seek-
ing to overthrow repressive neighboring regimes and
less to overthrow these governments than to keep
them off balance and to build influence with demo-
cratic groups should they come to power later.
India supported Nepali Congress Party elements for
several years after the royal coup of 1960
ble to Indian influence.
Delhi's penetration of the Nepalese Government is
considerable and that the Prime Minister is suscepti-
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India's long and close relationship with the Awami
League in Bangladesh has led many Bangladeshis to
regard the League-the party of independence-as
India's agent in place. Gandhi would almost certainly 25X1
regard a pro-India Awami League government as
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We believe that Gandhi would prefer to deal with a
popularly elected Pakistan People's Party government
in Islamabad instead of President Zia but realizes
that overt Indian support to the PPP would be
counterproductive.
"Indophobia"-Coping With the Indian Colossus
In our judgment, India is the dominant foreign policy
concern of the smaller South Asian states, which view
their giant neighbor as both protector and threat.
They generally believe that the key to peace and
regional stability lies with Indian decisions and ac-
tions, and they recognize that good relations with
New Delhi are necessary for their survival. On the
other hand, the neighboring states resent India's big
brother attitude and its insistence on intimidating
them in bilateral contacts.
Shared apprehensions about India's regional ambi-
tions have led to fundamental differences in regional
security perceptions on such issues as the South Asia
Nuclear-Weapons-Free Zone and the demilitarization
of the Indian Ocean. For a number of years Pakistan
has advocated establishing a nuclear- free zone, a
concept that has received support in principle from
the other neighbors. India, however, rejects it as
meaningless unless China somehow becomes involved.
Because of their common adherence to nonalignment,
all of the South Asian states would favor some form of
an Indian Ocean Zone of Peace, but there are impor-
tant differences between India and the others. The
Indian Ocean policies of Bangladesh, Sri Lanka, and
Pakistan in particular are colored by fears of India's
growing naval strength. Although these states see
value in preventing a superpower arms race in the
Indian Ocean, they have told US diplomats that they
are equally concerned that powerful littoral states
such as India also exercise restraint in naval deploy-
Protecting Sovereignty. With the possible exception
of Pakistan, all of the smaller states recognize they
regional dominance.
are defenseless against India and depend on their own
diplomatic skills and Indian good will for stable
relations. Problems occur, we believe, when the need
to accommodate Indian policies and sensitivities di-
rectly conflicts with the obligation to protect and
assert sovereignty. Leaders in neighboring states must
perform a balancing act-privately assuring India of
loyalty while avoiding public statements or positions
that could be construed as endorsements of India's
The sovereignty issue, in our view, is of major concern
in the Himalayan kingdoms. Since 1975 King Biren-
dra has been seeking international recognition of
Nepal as a zone of peace, a concept that has become a
guiding principle of Nepalese foreign policy. The core
provision of this concept is that Nepal will not permit
its territory to be used for hostile action against any
other state and expects reciprocal treatment. The
proposal helps boost Nepalese nationalism by assert-
ing its sovereignty and right of political self-determi-
nation. Ostensibly the King claims that acceptance of
the zone-of-peace idea by other powers will help
immunize Nepal against spillover from great power
rivalry in the region and from deterioration in rela-
tions between its neighbors. We believe that in reality
the zone-of-peace proposal is aimed squarely at dilut-
ing certain security aspects of the 1950 treaty with
India and easing Nepal's discomfort with its vulnera-
bility to Indian pressure.
Although about 30 countries, including China and all
of the smaller South Asian states, have endorsed the
zone of peace idea at least in principle, India has not,
and the USSR-presumably at India's behest-has
also withheld its endorsement. India was put off by
China's rapid endorsement in 1975 and believes the
proposal is a Nepalese attempt to lessen New Delhi's
security options. We believe that New Delhi's refusal
has only intensified Nepalese fears that India intends
to dominate Nepal.
We doubt, however, that
India will formally endorse the concept, at least in the
near term, except in the unlikely event that Nepal
makes specific concessions to India's security inter-
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Bhutan is actively looking for ways to loosen India's
grip. During the past year, according to press reports,
Thimphu has significantly expanded its participation
in international organizations-including the Asian
Development Bank, the World Bank and Internation-
al Monetary Fund, the World Health Organization,
and the Food and Agriculture Organization. To New
Delhi's discomfort, Bhutan has also begun to ap-
DIA proach donors other than India, such as Kuwait and
Japan, for assistance with development projects. F_
External Ties. Both the larger and smaller neighbor-
ing states seek to counter India's influence by forging
extraregional ties to individual powers, such as China
or the United States, or to multilateral organizations,
such as the United Nations, the Nonaligned Move-
ment, or the Islamic Conference Organization. Paki-
stan in particular has a long history of looking outside
the region for support in its disputes with India and
was a member of both the Central Treaty Organiza-
tion and the Southeast Asia Treaty Organization. The
Maldives recently was granted a special membership
in the British Commonwealth-a move symbolizing
not only Male's need for development assistance but
also its desire to forge links with the outside world.
In our view, the search for new ties is both an attempt
to diversify trading partners and sources of aid as the
growing Bhutanese economy progresses beyond sub-
sistence agriculture and a cautious attempt to test
India's tolerance for Thimphu's independent actions.
The King's call in late 1979 for a revision of the 1949
treaty was hastily withdrawn when it became appar-
ent that Gandhi would probably return to power. In
December 1979, however, Thimphu took advantage of
political drift in New Delhi to quickly exchange
resident ambassadors with Dacca-without prior In-
dian concurrence-in order to present the new Gan-
plans for creating a regional cooperation organization.
Sri Lankan officials claimed publicly that they saw no
conflict in joining both groups. We believe, however,
that Jayewardene was motivated by a lack of confi-
dence in the South Asia forum's possibilities-given
India's expected dominance-and a desire for politi-
cal support from outside the region for Colombo's
positions on Afghanistan and Kampuchea. The bid
was finally rejected by the ASEAN members on the
basis of geographic proximity
South Asia's Islamic states-Pakistan, Bangladesh,
and the Maldives-play active roles in the Islamic
Conference Organization both to accentuate their
separate identities from Hindu India and to cement
ties to the wealthy Muslim countries of the Middle
East. Both Pakistan and Bangladesh maintain close
relations with Saudi Arabia and depend on large
amounts of Saudi financial assistance. Pakistan has
also been at pains to strengthen relations with Iran,
and President Zia has personally played an active role
in efforts to mediate the Iran-Iraq war.
dhi government with a fait accompli
India's neighbors look to China for both moral and
material support, accordin to Embassy
The are a 'number of foreign
policy views with Beijing, such as an opposition to
Indian dominance of the subcontinent and a fear of
Soviet expansionism as evidenced by the situations in
Afghanistan and Kampuchea. Embassy and press
analyses indicate that China has good relations with
all of India's neighbors (except Bhutan), especially
with Nepal and Pakistan. Wedged between two Asian
giants, Nepal has traditionally preserved its freedom
of action by maintaining good relations with both
India and China-and occasionally by playing one off
against the other-a policy that Kathmandu calls
"equidistance." Beijing's close relations with Islam-
abad date from the 1962 Sino-Indian war and have
long fueled fears in New Delhi of a Pakistan-China-
US axis aligned against Indian interests.
In 1981 Sri Lanka announced that it was interested in
joining the Association of Southeast Asian Nations
(ASEAN) only days after Colombo was host to a
meeting of South Asian Foreign Secretaries to discuss
Since the Soviet invasion of Afghanistan, the Chinese
have intensified their efforts to block further Soviet
inroads in the region. The Chinese have encouraged
closer Indo-Pakistani ties and have also supported the
smaller states' enthusiasm for a South Asia regional
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India's somewhat uncritical acceptance of the inva-
sions of both Afghanistan and Kampuchea-out-
growths of Gandhi's close relations with the USSR-
differs dramatically from reactions of its smaller
neighbors and has led to an unprecedented divergence
in regional foreign policy perspectives. We believe
that for the first time New Delhi has found itself
seriously isolated in the region it purports to lead on
issues directly affecting its security, while its influ-
ence and prestige are being eroded simultaneously by
increasing superpower involvement in the subconti-
nent.
The neighboring states reacted to the invasion of
Afghanistan with considerable alarm, and initially
they looked to India for protection.
IIn March 1980 King Birendra of Nepal
toured India, Sri Lanka, and Bangladesh to explore
the possibility of a common approach to Afghanistan
and told US officials that Nepal wanted India to take
the initiative. Both Sri Lanka and Bangladesh em-
phasized to India the need of small countries for
protection from such invasions and expressed concern
about the direct Soviet threat to Pakistan. The
apparent paralysis of Gandhi's new government was
both disappointing and disquieting. According to
Embassy reporting, President Jayewardene of Sri
Lanka was concerned about India's lack of resolve
and failure to initiate a regional response to the
invasion. On the other hand, India's mild response
rekindled feelings of vulnerability to a predatory
organization, which China believes would enhance the
collective economic security of the area and diminish
great power influence. The Chinese have also long
supplied Pakistan and Bangladesh with needed mili-
tary equipment and training as well as a limited
quantity of economic assistance.
We believe that China has come to regard India as an
essential element in containing Soviet expansionism in
South Asia,'and in recent years, Beijing has been
India among the smaller states. Bangladesh ex-
pressed a commonly held fear that India might see
the Soviet action as an acceptable precedent for itself
ing Security Council action on Afghanistan.
By taking an ambivalent position on the issue, we
believe that New Delhi provided the smaller states
with new means to challenge India's regional leader-
ship. New Delhi's isolation was readily apparent
when India became the only South Asian state to
abstain on the UN resolution condemning the Soviet
action and callingfor a complete troop withdrawal.
With the exception of Bhutan, which was convenient-
ly absent from the voting, all the other states voted in
favor. Pakistan immediately began organizing a con-
ference of Islamic foreign ministers. Islamabad was
supported by Dacca, which was also active in promot-
India became further isolated in July 1980 when New
Delhi formally recognized the Soviet- and Vietnam-
backed Heng Samrin government in Kampuchea.
recognition of the Heng Samrin regime had contribut-
ed significantly to India's pro-Soviet image in the
region, which in turn prompted India to withdraw its
Charge from Phnom Penh after only six months to
deemphasize the post's importance. Even tiny Bhutan
broke ranks with New Delhi on the Kampuchea issue.
At the Havana Summit conference of the Nonaligned
Movement in September 1979 Thimphu voted to seat
representatives of Kampuchea's Pol Pot regime while
India abstained.
actively pursuing closer ties with New Delhi. At the
same time, China has moved to assure Pakistan and
the smaller neighboring states that an improvement in
Sino-Indian ties will not be at their expense. Chinese
Foreign Minister Huang Hua's visit in June 1981 to
New Delhi was followed by similar calls in Sri Lanka
and the Maldives. Premier Zhao Ziyang also made a
successful goodwill tour through Pakistan, Nepal, and
Bangladesh in May and June of last year
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Nonalignment. All of the South Asian countries are
members of the Nonaligned Movement and generally
share its views. India has generally welcomed its
neighbors' membership in the movement and support-
ed Pakistan's entry in September 1979. We believe
that New Delhi views their adherence as a hedge
against great power intrusion into the region-specifi-
cally through the granting of base rights-and has
used its principles as a foreign policy lever by consist-
ently warning neighbors against damaging their non-
aligned credentials through close association with
power blocs.
As a leader of the Nonaligned Movement, India views
it as an organization where it can count on neighbor
support even though, in our judgment, the smaller
states following more moderate, pro-West policies in
movement gatherings resent India's presumption to
speak for the movement and to dictate policies to
them. Ironically, in practice the movement provides a
forum in which the smaller states can disagree with
India with relative impunity in the name of non-
aligned solidarity.
Regional Cooperation
The South Asian states are cautiously inching toward
the establishment of a South Asia Regional Forum, a
concept that was originally proposed in May 1980 by
the former President of Bangladesh, Ziaur Rahman.
He had envisaged a meeting of all South Asian
foreign ministers with a short-term goal of formulat-
ing a common position on Afghanistan but hoped that
such a conference might lay the groundwork for a
permanent regional organization
Initially, the cooperation concept received strong en-
dorsement from the smaller states, which believed it
could provide significant economic benefits, as well as
an opportunity to be treated by India on the basis of
equality. India and Pakistan, however, were not en-
thusiastic, according to Embassy reporting. India
feared confrontation with a united front consisting of
Pakistan and the smaller states over its position on
Afghanistan and other bilateral issues. Pakistan be-
lieved that the association would only institutionalize
India's dominance and provide New Delhi with a
handy means of keeping the smaller states in line.
Pakistan also feared that membership in a formal
regional organization would undermine their valued
ties to the Persian Gulf states. Neither India nor
Pakistan wanted to be held responsible for blocking
the forum concept, however, so both went along with
the idea and hoped it would die a natural death.
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The forum proposal survived Ziaur Rahman's assassi-
nation in May 1981; and three meetings at the foreign
secretary level have taken place-in Colombo (April
1981), Kathmandu (November 1981), and Islamabad
(August 1982). Contentious political issues and bilat-
eral disputes have been scrupulously avoided in favor
of noncontroversial topics of a technical nature. At
the initial meeting in Colombo groups were set up to
study regional cooperation in five areas: agriculture,
rural development, telecommunications, meteorology,
and health and family planning. Three additional
fields-transport, postal services, and science and
technology-were added at the Kathmandu meeting,
and another group on sports, arts, and culture was
Prerequisites for progress will be the continued partic-
ipation of India and Pakistan and at least stable
relations between them. We believe that New Delhi
would probably withdraw from the forum if it began
to sense any anti-India collaboration among the
neighboring states, and we expect India will block or
oppose any decision that is detrimental to its interests
or discussion of any issue such as water sharing that it
considers sensitive or bilateral in nature.
Outlook
We believe that prospects for near-term stability in 25X1
the subcontinent are generally good. India's reap-
praisal of its regional interests and its attempts to
counter its pro-Soviet image are positive signs that
New Delhi is seeking to play a more constructive role
in the region. India's more relaxed attitude toward its
neighbors in recent months could be further rein-
forced by closer relations with China, which is known
to favor regional cooperation and better Indo-Paki-
stani ties, and by India's anticipated assumption of
the Nonaligned Movement chairmanship in 1983,
which we believe may cool Gandhi's known penchant
for heavyhandedness in relations with the smaller
states.
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Tension between India and Pakistan remains the most
serious threat to peace. A key danger is that if
Pakistan manufactures a nuclear weapon, India may
find itself forced to pursue its own nuclear weapons
program and thus begin a nuclear arms race in the
subcontinent. Although we believe that hostilities are
unlikely in the near term, a fourth Indo-Pakistani war
would most likely start as a result of Pakistan's
nuclear policies.
Both New Delhi and Islamabad have exhibited some
sincerity in their desire to normalize relations. We
would have judged bilateral talks on a nonaggression
pact unlikely less than a year ago. Athough we do not
expect dramatic progress in the near future, we
believe that the prolonged Soviet military presence in
Afghanistan will continue to provide a stimulus for
talks. If a constructive dialogue continues, an under-
standing may result which falls short of complete
rapprochement but which may help prevent an out-
break of hostilities that neither government wants.
In our view, the South Asian states will probably
make steady but unspectacular progress toward for-
mal regional cooperation. The longer regional meet-
ings continue, the harder it will be for any participant
to back out or try to scuttle the effort. We believe that
the forum's success, however, will depend on the
ability of the smaller states to make India feel
comfortable in dealing substantively with them in a
regional context.
We believe that the South Asian states can expect
only limited cooperation, however, as long as Gandhi
remains in power. Her narrow definition of India's
national interests-which may not be shared by some
of her professional diplomats-will ultimately deter-
mine which issues India is willing to discuss in a
multilateral setting. In particular, we see little pros-
pect that India will give up much of its leverage on
sensitive matters that vitally affect its economic well-
being in the interests of better relations with its
neighbors. Water-related disputes, in our view, will
probably continue as a major constraint on improved
regional relations for the remainder of this century.F
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Appendix
Water Sharing
Water is South Asia's largest economic resource and
is the lifeblood of the region, and we believe that
water sharing is likely to be the most pressing regional
issue for at least the next two decades. The civilization
of the subcontinent has been totally dependent on the
seasonal monsoon rains for agriculture since prehis-
tory. The lack of any comprehensive program to
harness this resource, however, leaves the region
vulnerable to crop failure from insufficient rains,
devastating floods in years of strong monsoons, and in
any case too little water during the dry season (March
to May) to grow crops, resulting in the limited use of
agricultural land. Controlling water flows from the
Ganges and Brahmaputra Rivers through some re-
gional arrangement would:
? Reduce the subcontinent's vulnerability to flooding,
soil erosion, and silting.
? Greatly improve agricultural production by allowing
the irrigation of dry season crops and preserving
arable land.
? Improve internal transportation networks.
? Provide many thousands of megawatts of hydroelec-
tric power.'
Bangladesh and Nepal favor a regional approach to
cooperation on water issues because of the multilater-
al nature of the problem and the desire for each
other's support against India, which insists on treating
the issue with each neighbor separately. For several
years, Bangladesh has advocated including Nepal in
its discussions with India, but this has been consistent-
ly vetoed by New Delhi. Nepal has recently kept a low
profile on the issue of trilateral cooperation out of
concern for overall Indo-Nepalese relations, but Nep-
alese officials have indicated their willingness to
participate if invited by both Dacca and New Delhi.
India was highly displeased when King Birendra
called for regional development of water resources at
' Nepal's hydroelectric potential is enormous. Some estimates are as
high as 86,000 megawatts-about six times that of the United
States and Canada combined-though vulnerability to earthquakes
and the high cost of investment in distribution systems will prevent
full exploitation. By the mid-1990s Nepal will have developed less
the Colombo Plan meeting in December 1977. Among
its other objections, India believes that a cooperative
approach could divert some benefits India wishes for
itself.
The water issue is particularly acute for Bangladesh
because India is increasing its upstream use of Ganges
River water and also has the power to divert the flow
of the river during the critical dry season. In 1975
India began operation of its controversial Farakka
barrage, a dam located 11 miles upstream from the
Indo-Bangladesh border that is designed to shunt
water via a canal to the Hooghly River in order to
flush silt from Calcutta port. Bangladesh's attempts
to secure a greater portion of the dry season flow for
its own use have been consistently stymied by India.
Major results have been:
? A reduced supply of irrigation water necessary for
growing new high-yield varieties of rice.
? Increased salinity and reduced supplies of fresh
water for both industrial and domestic use.
? Reduced river depths, which hinder navigation.
? A drop in ground water levels, which impedes the
planting of crops.
Bangladesh and India's Janata government signed a
five-year, short-term water-sharing agreement in No-
vember 1977 that provided Bangladesh with a guar-
anteed portion of the dry season flow and assigned the
bilateral Joint Rivers Commission the task of seeking
a long-term solution to the problem. The JRC, howev-
er, has not done so. Although India has scrupulously
adhered to the 1977 agreement, Gandhi has consist-
ently criticized it as a sellout to Bangladesh that is not
In October 1982 India-and Bangladesh extended most
of the provisions in their 1977 water-sharing agree-
ment through an informal understanding that will
expire in 18 months. Although the new arrangement
does not include a key clause that protected Bangla-
desh's share of water during the severest droughts, it
is far more generous to Dacca than some observers
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Figure 6
Ganges and Brahmaputra Drainage Basins
China
Bm~B' AKAnpur '.ig9iSej$ C
a
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India
ges _ atna
Farakka
Farakka Barrage At
Berhampore
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Burdwan
Howrah'Ca
had predicted. We believe that Gandhi's more sympa-
thetic attitude was motivated by a genuine concern
for political stability in Bangladesh, where water.
sharing is a sensitive and potentially explosive issue.
A continuation of favorable water-sharing terms be-
yond the next 18 months, however, is contingent on
the two sides finding a solution to the long-term
problem of increasing the supply of usable water.
Because Bangladesh is too flat for dams, India favors
construction of a massive link canal connecting the
mightier Brahmaputra with the Ganges. As a price
for the new arrangement, Dacca had to agree to
examine this proposal but may not be able to sell it to
the Bangladesh people. They fear that a canal would
involve the loss of valuable agricultural land and the
displacement of population, as well as the possibility
that, depending on the canal's location, India might
still control the flow of water. Although India tradi-
tionally has rejected Dacca's counterproposal for a
system of storage reservoirs in Nepal, whose rivers
account for the bulk of the Ganges' flow, New Delhi
Boundary representation is
90 ( not necessarily authoritative.
es o,e
./ 1 v
ills Chittaggong
' (Ulo
Bay of Bengal
so
has agreed to include it in prefeasibility studies.
Either approach would require immense expenditures
lasting more than a decade.'
India has an immense stake in controlling the waters
flowing out of Nepal. Soil erosion caused by defores-
tation in Nepal's hills has greatly exacerbated flood
damage downstream in India and has hampered the
abilities of both countries to increase agricultural
production.
As a potentially vulnerable lower riparian in its own
right, India is intent on reducing Nepal's leverage by
insisting on joint control of hydroelectric projects in
Nepal if they are located on rivers that ultimately
flow into India. In an attempt to break the logjam on
major hydroelectric projects that have been stalled for
years, India has relaxed its earlier insistence on a
comprehensive plan for the development of Nepalese
3 Preliminary cost estimates range from a minimum of $7 billion to
more than $100 billion for comprehensive development of the river
systems over 35 years.
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Secret
rivers and is now prepared to push ahead on a few
major projects such as the Karnali dam. (c)
According to Embassy reporting, Nepal is eager to
develop its water resources but is moving slowly and
carefully in its negotiations with India in order to
protect its interests and derive maximum benefit. For
example, Kathmandu does not agree with India's plan
to place a series of high dams wherever the rivers
come out of the hills because much of Nepal's best
land in the hill areas would be submerged. Nepal
needs Indian assistance for its hydroelectric projects
but is wary of Indian intentions. According to press
analyses, the Nepalese are somewhat chagrined that
they allowed India to help develop smaller hydroelec-
tric projects, such as Kosi, in ways that almost
exclusively benefited New Delhi. In implementing its
larger projects such as Karnali Nepal plans to ensure
that the benefits are more equally shared and will
probably seek guarantees that India will purchase all
the electric power generated that Nepal cannot use.
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