I would say that one of the most significant issues that holds implications both domestically and internationally is the relationship it has with Pakistan. Without a doubt, so much of India's foreign policy is crafted with Pakistan in mind. From Jammu- Kashmir issues to the control of terrorism within the country, the relationship with Pakistan is extremely important to Indian foreign policy. Additionally, I think that the issue of nuclear weapon use, something that both nations possess, still becomes an issue that is extremely important to Indian foreign policy. Interestingly enough, relationships with Afghanistan could be a key to this. If India is able to facilitate smooth and prosperous relationships with Afghanistan, it would help to thwart or at least neutralize the issue of a tumultuous relationship with Pakistan. The flip side of this coin is also valid. If Afghanistan does become hostile to India, forging a relationship with a Pakistan that is already in flux except for its dislike for India, the international calamity for India is pressing with Chinese threats to its East and a potential Pakistan- Afghanistan alliance to its West:
Stability in Afghanistan forms the pivot of India’s political, economic and strategic policy in Central Asia. Any constraints on Indian policy in the region will ease the path of fundamentalist influence...The establishment of intercultural contacts, strong diplomatic interaction, and aid in the form of food and vehicles are meant to not only promote good will and help a troubled neighbor, but also are a stepping stone to mutually lucrative trade corridor extending into the interior of Asia.
This becomes a pressing international issue for India and one that can be addressed with a long term vision about its place in the region. As previously stated, China is a foreign policy threat and an economic policy issue. The reality is that there has to be some level of diplomatic understanding and less in way of militaristic sabre rattling with China. A China- Indian alliance could do wonders for both nations, creating an economic and political "dynamic duo" that could really bolster and solidify South East Asia. Again, long term focus and not succumbing to short term political advantage through use of China as a proverbial threat could help India tremendously. A pressing international wild card is actually Nepal. The Maoist movement and insurrection in Nepal can play into Indian stability if it spills over. Some level of focus, again preferably through diplomatic and economic means, might be needed to ensure that another "hot spot" does not spill over into Indian borders. The same type of political finesse is needed in Bangladesh, a nation that has untapped potential in terms of consumers and potential for markets. If India is able to solidify its economic base and develop a plan for sustainable and long term growth, India will be able to make inroads in a nations such as Bangladesh, Nepal, and Afghanistan, and turn potential "hot spots" into areas of economic refuge and sources of strength, which undoubtedly would be able to help India in its dealings with Pakistan.
The first and most recent international dispute of India is her dispute with Pakistan regarding the Jammu and Kashmir issue. The other is her dispute with China regarding the Dalai Lama issue.