From a fringe player with its dominance confined to South Asia during the Cold War and most of the 90s, India is moving steadily to be among the top global players. India therefore requires a pragmatic neighborhood policy which will secure its economic and strategic objectives both at the regional and global level. India has a lot of potential stakes in its neighborhood. India�s neighborhood (China included) offers a huge market for Indian products, services and also for investment. India�s familiarity with the overall culture of these countries can provide India an edge over other competing countries. India needs a steady supply of  power and energy to sustain its growth.  Nepal and Bhutan�s huge hydropower potential, if properly exploited, can  remedy  India�s power crisis to a large extent.  For importing gas, oil and hydropower from Central Asia, India needs transit facilities through Pakistan. On the eastern front, India requires transit facilities through Bangladesh for rapid transportation of goods to India�s isolated and  underdeveloped North �East region.. Myanmar, apart from having vast natural gas reserves, can be of great strategic importance for two reasons. Firstly, Myanmar can provide road or rail access to other ASEAN countries. Secondly, Myanmar can give India�s landlocked North-East region the required access to the Bay of Bengal. In this way, Myanmar can play an instrumental role in bolstering India�s Look East policy. India needs cooperation from Sri Lanka and Maldives to protect India�s interest in the Indian Ocean region. In spite of being a strategic competitor, China offers a huge opportunity to India because of its vibrant economy. India can benefit from better connectivity and trade with China through proposed Kolkata-Gangtok-Lhasa road and Guwahati-Kunming road. Lastly, India has to keep the reality in mind that its neighboring countries are of immense strategic importance to the countries who are inimical to India�s rise as a major power. This factor leaves India having no choice other than nurturing friendly relation with its neighbors even if they offered no economic opportunity to India.India can adopt a Panchsheel or five-fold approach in its  neighborhood policy . Firstly, India has to expand its economic engagement in its neighborhood countries. Most importantly, India has to participate in the growth of its smaller neighborhood countries by increasing investment, trade and aid. Special care has to be taken for countries which suffer from a chronic trade deficit with India such as Bangladesh. Secondly, India has to modernize and streamline its military capability.  Economic might, high level of economic engagement and  military capability will provide India the requisite power to maximize its gains in any bargain with its neighbors. Thirdly, if solutions cannot be reached bilaterally, India has to leverage its relationship with the major powers of the world to solve pending problems with its neighbors. Fourthly, India has to adopt a generous and cooperative  approach towards solving the relatively minor  problems  with its  smaller neighbors. This may allay the smaller neighboring countries� fear of facing a hegemonic India fueled by its economic resurgence. Fifthly, India has to promote its culture, literature and movies in its neighborhood countries to establish its soft power in the neighborhood. In this way, India can expect a new generation in the neighborhood countries who will have a better understanding of   India and may provide enough popular impetus to build a friendly neighborhood around India.