The challenge for Indian diplomacy lies in "convincing our neighbours that India is an opportunity, not a threat, that far from being besieged by India, they have a vast, productive hinterland that would give their economies far greater opportunities for growth than if they were to rely on their domestic markets alone", Foreign Secretary Shaym Saran said in a speech arranged by Institute of Defence Studies and Analysis and India International Centre in New Delhi on Monday.

It is a widely held view that India needs to show its willingness to take the lead for the overall economic growth of South Asia.

India's latest thinking on Nepal, Bangladesh and Nepal was defined today.

In view of many expert assertions that it is time for India to think beyond Pakistan and Bangladesh, Saran's speech assumes significance.

The foreign secretary described the basis on which India defines its neighbourhood policy. He also explained India's decision to seek postponement of the South Asian Association for Regional Cooperation summit.

"Countries across the globe are beginning to see India as an indispensable economic partner and seeking mutually rewarding economic and commercial links with our emerging economy," he said. "Should not our neighbours also seek to share in the prospects for mutual prosperity India offers to them? Do countries in our neighbourhood envisage their own security and development in cooperation with India or in hostility to India or by seeking to isolate themselves from India against the logic of our geography?"

Saran said India's sympathies would always be with the secular and democratic forces of its neighbouring countries.

Saran mentioned from a public platform something that till now was said behind closed doors.

"We must also recognise, regrettable though this may be, that the countries of South Asia, while occupying the same geographical space, do not have a shared security perception and, hence, a common security doctrine. This is different from the EU or ASEAN. In South Asia, at least some of the states perceive security threats as arising from within the region."

He reminded the audience that twenty years back SAARC was born keeping aside differing political and security perceptions of South Asian countries and to focus attention on economic cooperation.

But he said that even on economic cooperation, "the record of SAARC in this respect has been hardly inspiring. The fact is that SAARC is still largely a consultative body, which has shied away from undertaking even a single collaborative project in its 20 years of existence. In fact, there is deep resistance to doing anything that could be collaborative.

"On the other hand, some members of SAARC actively seek association with countries outside the region or with regional or international organisations, in a barely disguised effort to 'counterbalance' India within the Association or to project SAARC as some kind of a regional dispute settlement mechanism."

He also set the terms for SAARC and said, "It should be clear to any observer that India would not like to see a SAARC in which some of its members perceive it as a vehicle primarily to countervail India or to seek to limit its room for manoeuvre.

"If the thrust of initiatives of some of the members is seen to be patently hostile to India or motivated by a desire to contain India in some way, SAARC would continue to lack substance and energy."

Saran assured that the creation of a free market of 1.3 billion people, with rising purchasing power, could be a significant addition for all SAARC members. Currently, intraregional trade accounts for only 5% of SAARC's total foreign trade and this needs to be addressed.

He said, "Transit routes, which would have created mutual dependencies and mutual benefit, have fallen prey to narrow political calculations. Unless we are ready to restore these crossborder linkages and transportation arteries throughout our region, SAFTA (South Asian Free Trade Agreement) would remain a limping shadow of its true potential."

He said being the largest and economically strongest country in the region, India was prepared to open its markets for neighbouring countries.

"We are prepared to make our neighbours full stakeholders in India's economic destiny and, through such cooperation, in creating a truly vibrant and globally competitive South Asian economic community."

In view of the developments in Nepal and Bangladesh and India's ongoing issues with Pakistan, he stressed, "However, while we are ready and willing to accept this regional economic partnership and open up our markets to all our neighbours, we do expect that they demonstrate sensitivity to our vital concerns. These vital concerns relate to allowing the use of their territories for crossborder terrorism and hostile activity against India, for example, by insurgent and secessionist groups."

He made it clear that India wouldn't ignore such conduct and would take necessary steps to safeguard its interests.

Saran didn't fail to send a clear message that India was aware of the realities surrounding it. "India is fully aware that its destiny is inseparable from what happens in its neighbourhood."

He concluded by saying that the 1.3 billion South Asians were the most talented people, "Let us exorcize the ghosts of the past and join hands across our borders, to unleash the immense energies of our peoples in a shared pursuit of collective prosperity. Our peoples deserve nothing less."

It was the speech befitting the nation on move, said a serving diplomat of one of the neighbouring countries.