The 18th SAARC summit in Kathmandu has given a clear idea of PM Narendra Modi’s three-pronged strategy with regard to India’s immediate neighbours.

The ongoing 18th SAARC summit in Kathmandu has given a clear idea of Prime Minister Narendra Modi’s three-pronged strategy with regard to India’s immediate neighbours.

The strategy is this:

i Ignore Pakistan to the hilt,

ii Deepen India’s ties with the rest of SAARC countries, and

iii Counter China’s influence in SAARC quietly but decisively by improving connectivity with all SAARC countries except Pakistan.

On the first point, PM Modi’s speech at the SAARC summit on 26 November needs to be read between the lines. It is a speech with deep political implications which is important not only for what is being said but also for what has been left unsaid.

In his speech Modi specifically mentioned by name leaders of Nepal, Bangladesh, Sri Lanka and Afghanistan but avoided any reference to his Pakistani counterpart Nawaz Sharif who is also attending the summit. He mentioned Pakistan just once and that too in the developmental context.

This is how Modi made a reference to Pakistan: “South Asia is slowly coming together. India and Bangladesh have deepened their links through rail, road, power and transit. India and Nepal have started a new era of cooperation in energy; and, India and Bhutan are making those ties stronger by the day. With Sri Lanka, we have transformed trade through a Free Trade Agreement. We will soon launch a new arrangement to meet Maldives' need for oil. Distance and difficulties have not held back India and Afghanistan. And, bus and train sustain contacts between people in India and Pakistan.” (Emphasis added.)

This quote also emphasizes Modi’s SAARC strategy, point number two of the three points mentioned above.

What PM Modi has conveyed through his speech and specifically the above-mentioned quote is that he wants SAARC to focus on developmental and connectivity issues and not allow the nearly three-decade-old regional grouping to degenerate into the hitherto familiar India-Pakistan spat anymore.

Modi’s stress on infrastructural connectivity and connectivity of all kinds, including people-to-people contacts, is discernible in his bilateral parleys with leaders of the host country Nepal. At least seven of the 16 concrete outcomes in Modi’s talks with Nepalese leadership pertain to connectivity and infrastructural development.

Two of these outcomes deserve to be discussed in some detail: (i) India extending a Line of Credit of $1 billion to Nepal and (ii) MoU on Motor Vehicle Agreement and flag off of Kathmandu-Delhi bus service ‘Pashupatinath Express’.

The Line of Credit of $1 billion to Nepal from EXIM Bank, announced by Modi in his bilateral visit to Nepal in August this year, will be utilized for hydropower, irrigation and infrastructural development projects. The LoC will be at a concessional rate of interest of one percent and will, in case of civil works, allow joint ventures. It will also reduce Indian content requirement of 50%.

The India-Nepal Bilateral Motor Vehicle Agreement for Passenger Traffic aims at regular bus services between the two countries as per agreed routes, trips and time-table and simplifies the procedure for movement of private and non-regular vehicles across the India-Nepal border. This agreement would facilitate seamless and hassle-free movement of people of both countries and would give a huge boost to tourism.

Initially, bus services will commence on the following three routes: Kathmandu-Bhairhawa-Sunauli-Gorakhpur-Lucknow-New Delhi; Kathmandu-Bhairhawa-Sunauli-Azamgarh-Varanasi; and Pokhara-Bhairhawa-Sunauli-Gorakhpur-Lucknow- New Delhi. During the visit, Modi also flagged off the Kathmandu-Delhi Passenger Bus Service ‘Pashupatinath Express’.

The objective is to operate the bus service on either daily or on alternate day basis once all the necessary modalities are in place.

What Modi has done with Nepal is modeled on a similar SAARC agreement. This is what Modi wants to replicate with all SAARC nations except Pakistan.

PM Modi highlighted what is plaguing SAARC the most: “Today, less than 5% of the region's global trade takes place between us. Even at this modest level, less than 10% of the region's internal trade takes place under SAARC Free Trade Area. Indian companies are investing billions abroad, but less than 1% flow into our region. It is still harder to travel within our region than to Bangkok or Singapore; and, more expensive to speak to each other. How much have we done in SAARC to turn our natural wealth into shared prosperity; or, our borders into bridgeheads to a shared future?”

This leads us to the point number three mentioned upfront: Modi’s strategy of countering China’s influence in SAARC.

Pakistan has steadfastly blocked efforts to seamless travel and trade within the entire SAARC region and will always continue to do so. SAARC cannot emulate EU till India-Pakistan relations are normalized, the chances of which are bleak.

It is this behavior of Pakistan which has helped China a great deal in enlarging its strategic footprints in South Asia. China has taken advantage of this and waded into South Asia in a big way in an attempt to project itself as a South Asian power which it isn't geographically.

Modi wants to lead the infrastructural connectivity push in SAARC to reduce China’s influence. Understandably from Pakistan’s perspective this is a big no-no and that’s why China’s all-weather friend is opposing seamless travel plans in SAARC.

China has poured billions of dollars in South Asia. But India is doing no less. Modi’s specific comment of India providing assistance of nearly $8 billion in the last one decade needs to be read in this context.