The benefits of a big deal with Bangladesh's Sheikh Hasina government are obvious: India gets land transit through Bangladesh's territory - bringing the northeastern states closer to the rest of the country - in return for sharing the waters of the Teesta river with Bangladesh. Such a deal will strengthen the pro-India forces in Bangladesh's politics and help counter militancy and terrorism directed against India.
New Delhi wants the deal. Sheikh Hasina wants it too. The window of opportunity, however, is fast closing and the chances of success, unfortunately, look rather bleak. That's because Mamata Banerjee, the chief minister of West Bengal, the upper riparian border state, is squarely against water sharing. She also opposes the land border agreement that would settle the vexed question of enclaves each country has in the other's territory.
It is easy to see Ms Banerjee's actions as unreasonable, dogmatic and uncaring of the overall national interest. Yet, as chief minister of her state, she is discharging her primary responsibility in promoting (her perception of) the interests of the people of West Bengal. This is, no doubt, coming in the way of a foreign policy breakthrough whose overall benefits are undeniable. Yet if some people in West Bengal must bear the costs of this, then surely their concerns ought to be factored in. The processes to accomplish this have failed or are non-existent.
The stalled deal with Bangladesh is just another manifestation of a relatively new development in India's relations with the outside world: the role of states in foreign policy, especially concerning the subcontinental neighbourhood. This has introduced new tensions in federal relations because foreign policy is the exclusive domain of the Union government.
Consider a few examples of engagements our states have had with neighbouring countries in recent months. In March, the Tamil Nadu Assembly moved a resolution demanding New Delhi intervene diplomatically on behalf of the Tamil minority, and even table a resolution at the UN Security Council seeking a referendum to carve out a Tamil Eelam state. Last week, Tamil Nadu Chief Minister J Jayalalithaa called for coercive diplomacy against Sri Lanka to address attacks against Indian fishermen.
Pakistan has announced its readiness to buy power from Gujarat. In July, Salman Bashir, its high commissioner, said that the purchase process could start once the dialogue process between the two countries resumed.
In the last three weeks, Bihar Chief Minister Nitish Kumar hosted two Nepali politicians - Nepali Congress President Sushil Koirala and former prime minister Madhav Kumar Nepal - for dinner and lunch respectively. Among the topics they discussed were suppression of criminal activities along the border and the importance of political stability for economic development.
In May, a thoroughbred buffalo arrived from Pakistan at the Attari border crossing and spent around a month in quarantine in New Delhi before being housed at a veterinary university back in Punjab. The university hopes to revive the indigenous buffalo in the state and boost the dairy industry. The said buffalo is a gift from Shahbaz Sharif, the chief minister of Pakistan's Punjab province and the result of Sukhbir Singh Badal's visit to Pakistan last year.
Globalisation, economic liberalisation, growth and geopolitics have thrust many traditional foreign policy issues onto the plates of state governments. States, though, lack the mandate, outlook and competency to deal with them. More importantly, beyond politics, our states lack a formal mechanism to negotiate these issues with the Union government.
After independence, it was politics that lubricated New Delhi's relationship with the states on foreign policy matters. That was relatively simple - though never quite easy - when a single party was in power in New Delhi and in most of the states. It became increasingly complicated when non-Congress parties came to power in the states, and then when Union governments came to be run by coalitions. In today's competitive political landscape, partisan posturing often replaces genuine differences on substantive issues.
We can no longer rely on politics as the sole mechanism to balance the states' interests with those of the Union. For when there is a breakdown in politics - as in the case of the United Progressive Alliance government and the Trinamool Congress in West Bengal - things fall apart, opportunities are lost and grievances perpetuated.
We need to constitute a Subcontinental Relations Council, headed by the prime minister and comprising the external affairs minister and chief ministers of all states that have an external border. Such a structure would both provide a formal platform for negotiating the states' interests vis-a-vis the Union and encourage states to develop foreign policy competencies in areas that concern them.
To be sure, a council like this will not be a silver bullet, but its deliberations will provide a better basis for negotiations between political leaders. It will also provide them useful cover when unpopular decisions have to be made.
We should stop seeing states as spoilsports and start seeing them as legitimate stakeholders. Foreign policy is and should remain a subject on the Union list. This does not preclude setting up mechanisms that would make India's foreign policy more effective by including the legitimate stakeholders.