Talking Points on Foreign Policy
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Prime Minister Modi has imparted remarkable dynamism and energy to India’s foreign policy in the past eight years. He has visited a large number of countries, interacted with global leaders multiple times and infused new ideas in Indian foreign policy. Backed by active diplomacy, foreign policy has been instrumental in raising India’s global profile. The foreign policy has been used as an instrument for meeting India’s domestic priorities like Make-in-India and Atamnirbhar Bharat. India has emerged as ‘First Responder’ in the region in the times of natural crises. The motto of ‘Vasudhaiva Kutumbkam’- world is a family - has sought to project India’s rise as a “force for global good.” ‘Act Far East’ and ‘Security and Growth for All’ (SAGAR) and ‘Neighbourhood First’ have redefined India’s engagement with India’s immediate as well as strategic neighbourhood. There are signs of fundamental shift in India’s security policy as reflected in India’s growing defence and security engagement with major countries.

The Vivekananda International Foundation has been tracking India’s national security and foreign policy closely. The enclosed “Talking Points” outline India’s position in brief on various issues. They capture the main trends in India’s foreign policy.

The Talking Points have been researched and written by the VIF’s scholars and cover bilateral relations as well as thematic issues like climate change, environment, new education policy, Atamnirbhar Bharat, technology and others. They also cover important international issues such as AUKUS, the Quad, maritime security, cybersecurity, terrorism etc. It is hoped that the present compilation of the ‘Talking Points’ will be useful for students, researchers as well as those who are interested in India’s foreign policy.

Dr Arvind Gupta
Director, VIF


Part 1: India’s Immediate Neighbourhood
  1. India-China Relations- Kota Gupta
  2. India-Pakistan Relations- Aakriti Vinayak
  3. India-Bangladesh Relations- Sarada Subhash
  4. India-Nepal Relations- Rishi Gupta
  5. India-Bhutan Relations- Aakriti Vinayak
  6. India-Sri Lanka Relations- Anushka Saraswat
  7. IIndia-Maldives Relations- Cchavi Vasisht
  8. India-Myanmar Relations- Cchavi Vasisht
Part 2: India’s Larger Nerighbourhood
  1. India-West Asia Relations- Hirak Das
  2. India-Central Asia Relations- Pravesh Gupta
  3. India-Africa Relations- Samir Bhattacharya
  4. India-Afghanistan Relations- Aakriti Vinayak
  5. India-Australia Relations- Amruta Karambelkar
  6. India-Japan Relations- Prerna Gandhi
Part 3: Maritime Issues
  1. Maritime Security- Amruta Karambelkar
  2. Indo-Pacific and Quad- Amruta Karambelkar
Part 4: Security Issues
  1. Counter-Terrorism Cooperation- Anurag Sharma
  2. Insurgency in North East- Cchavi Vasisht
  3. Rohingya Crises- Cchavi Vasisht
  4. Cybersecurity Cooperation- Anurag Sharma
  5. Terrorism, CAA and Article 370
  6. India-France Relations- Amruta Karambelkar
  7. AUKUS- Amruta Karambelkar
Part 5: International Cooperation
  1. India and Multilateralism- Prerna Gandhi
  2. BIMSTEC- Rishi Gupta
  3. Vaccine Maitri- Prerna Gandhi
  4. Climate Change- PK Hangzo
  5. International Solar Alliance- Heena Samant
  6. India’s Cultural Narrative on Environment- Arpita Mitra
Part 6: Domestic Initiatives
  1. Renewable Energy- Heena Samant
  2. New Education Policy- Anushka Saraswat
  3. Aatmanirbhar Bharat Programme- Prerna Gandhi
  4. PLI Scheme- Prerna Gandhi
  5. Technology- Aayush Mohanty

India-China Relations

History of the Bilateral Relations

Written records of contacts between India and China date back to at least 2nd century B.C. Such contacts at the level of people through commerce got a fillip with the advent of Buddhism from India into China in the first century A.D. under imperial patronage. Kumarajiva, a great Indian scholar in Vedas as well as Buddhist Sutras, spent about 23 years in China in 4th century AD both as a prisoner and as a most revered scholar. He was instrumental in translating Buddhist sutras into Chinese language during his stay in China over 2,000 years ago Kumarajiva was the first among the numerous scholars who laid a firm foundation for civilisational links between the two countries. He was born in an Indian Kashmiri Brahmin family – son of a Kashmiri father and a Central Asian mother from a princely family in Kucha. During the fourth century Kuchā was a major Central Asian Buddhist centre with close trade and cultural contact with India. It lay along the trade route connecting India with China. Many of the monks who introduced Buddhist teachings into China from the 3rd to the 7th century CE were from Kucha. (It is currently located in Aksu Prefecture in Xinjiang. His translations of Sanskrit sutras into Chinese are valued even today.

A Chinese monk, Fa Xian (Fa-Hsien, AD 399-414), visited India in AD 402, stayed for 10 years, and after his return translated many Sanskrit, Buddhist texts into Chinese. His record of journeys Fo Guo Ji (Record of Buddhist Kingdoms) is an important historical source. His translations of Sanskrit sutras into Chinese are valued even today. In the 5th Century AD Bodhidharma, a South Indian monk, became the first patriarch of the Shaolin Monastery in China. Xuan Zang (Hiuen Tsang) visited India during Harsha Vardhana's reign in the 7th Century AD, in search of Buddhist scriptures. His journey became part of traditional Chinese lore when narrated in a later period book called "A Journey to the West".

The decline of Buddhism in India and spread of colonialism in both the countries resulted in diminished cultural exchanges. However, when people of both the countries started searching for new answers to new questions in the modern era intellectual ties revived. The respective national struggles for freedom saw resumption of contacts, and feelings of solidarity. Landmark events of this period are Kang Youwei's stay in India (1890s), Tagore's visit to China (1924), setting up of Cheena Bhawan in Viswabharati University by Professor Tan Yunshan under Tagore's guidance (1937), sending of the Aid China Medical Mission, which included Dr. Dwarakanath Kotnis, by the Indian National Congress to China (1938), and famous painter Xu Beihong's visit to Shantiniketan (1939-40).

The early fifties and the ‘Hindi-Chini Bhai Bhai‘phase of 1950s witnessed a further strengthening of these ties. Indian films like Awaara, Caravan and Do Bigha Zameen as well as stars like Raj Kapoor and Nargis left a lasting impression on Chinese audiences. The resumption of political relations in 1980s has provided an impetus to cultural exchanges. [1]

Boundary Question

The conflict stretches back to at least 1914, when representatives from Britain, the Republic of China and Tibet gathered in Shimla, India, to negotiate a treaty that would determine the status of Tibet and effectively settle the borders between China and British India. The Chinese, balking at proposed terms that would have allowed Tibet to be autonomous and remain under Chinese control, refused to sign the deal. But Britain and Tibet signed a treaty establishing what would be called the McMahon Line, named after a British colonial official, Henry McMahon, who proposed the border. [2]

China had not raised any border question in 1954 when bilateral negotiations were being held for the agreement on Trade. In 1959, the Chinese side had claimed that conditions were not yet ripe for boundary settlement with India and had no time to study the boundary question. [3]

India maintains that the McMahon Line, a 550-mile frontier that extends through the Himalayas, is the legal border between China and India and the Line of Actual Control (LAC) was a flawed concept without any proper delineation of maps and demarcation on the ground. China is insistent on its maximalist position of 1959.
In the eastern sector, China claims approximately 90,000 sq. km of Indian Territory in the state of Arunachal Pradesh. Indian Territory under the occupation of China in J&K and Ladakh is approximately 38,000 In addition, under the China-Pakistan “Boundary Agreement” signed on March 2nd, 1963, Pakistan illegally ceded 5180 of Indian territory in Pakistan occupied Kashmir (PoK) to China. Indian side has clearly conveyed to Chinese side on several occasions including at the highest level that Arunachal Pradesh and J&K and Ladakh are inalienable parts of India. [4]

China was unwilling to settle the boundary question based on ground realities. China also halted the LAC clarification exercise in 2003 when concern arose over its rapid infrastructure buildup along the LAC and in Tibet after 2000; it made no basic adjustments in its position on the issue of Jammu and Kashmir. [5]

China has passed a new “Land Boundary Law” on October 23rd, 2021. This law states that China abides by treaties concluded with or jointly acceded to by foreign countries on land boundary affairs and has provisions to carry out reorganisation of districts in the border areas. China’s unilateral decision to bring about a legislation which could be manipulated to impinge on existing bilateral arrangements on border management as well as on the boundary question, and that is of concern to India. Such unilateral move will have no bearing on the arrangements that both sides have already reached earlier, whether it is on the boundary question or for maintaining peace and tranquility along the LAC in India-China Border areas. [6]

Since early May 2020, the Chinese side has been hindering India's normal, traditional patrolling pattern in the Eastern Ladakh. They departed from the understandings in the Galwan Valley area and sought to erect structures just across the LAC. When this attempt was foiled, Chinese troops took violent actions on 15 June 2020 when Indian and Chinese troops engaged in a brawl that left twenty Indian soldiers dead while causing an undisclosed number of Chinese casualties. [7]

The clash was a part of a broader border standoff between the two forces along the LAC which is yet to be resolved. [8] The Chinese side also attempted, and succeeded, in transgressing the LAC in four more areas of Eastern Ladakh. These attempts were invariably met with appropriate responses from the Indian side. The resulting face-off is sought to be addressed by the ground commanders as per the provisions of the bilateral agreements and protocols. Presently, the two sides have engaged in discussions through established diplomatic and military channels to address the situation arising out of China’s aggressive activities along the LAC.

The border is divided into eastern, middle, and western sectors wherein disputes exist in each one. In the eastern sector, the line is disputed because China declined to sign the agreement declaring the Shimla Convention and the tripartite arrangement illegal on the grounds that the local government could not be a party to it. Additionally, the middle sector of the border starts from the tri-junction between the Southwestern of Ngari Prefecture, Tibet, to the tri-junction between China, India, and Nepal. The border is 450 km long, with about 2000 of land under dispute. Finally, the western sector covers the entire South-East, East and North Ladakh region.

Notably, the Ladakh region is especially complex, with particularly unusual features. First, there is Aksai Chin that India has long claimed but China has occupied since the mid-1950s. China began building a road through the area in 1956—linking Tibet to Xinjiang—and has occupied it since. There is also the territory that Pakistan has ceded to China in Shaksgam Valley in its occupied North-West Ladakh in 1963. Surveying and mapping the region’s terrain has proved immensely challenging. [9]

The McMahon Line in the eastern sector is a known alignment, marked clearly - though not precisely - on maps in the possession of both India and China. But in the western sector, the situation is fundamentally different. In that area the border alignment was not as clearly defined as the McMahon Line, nor indeed had this desolate and lofty tract between Jammu & Kashmir, Ladakh and China, comprising the Aksai Chin plateau, been sufficiently surveyed to make it possible to draw a precise alignment. The British, reflecting their imperialist interests, had over the years, favoured varied border alignments - by one count, 11 variations, in three distinct basic patterns. Between these variations, the broad alignment specified by independent India conformed to the geographical features and traditional practices.

All China’s border claims and disputes have taken decades to get resolved and that too at China’s terms and conditions. This is the legacy that the treaties of Argun (1858) and Peking (1860) have bestowed upon China: never bargain from a position of weakness. This is the reason why China has taken such a long time to resolve its border disputes with its neighbours. The only anomalies have been found in cases where China’s own security interests or economic interests have been the prime concern. In fact, it compromises with its neighbours when its internal stability is threatened. [10]

Indian Position on the LAC: India-China have signed five border agreement in 1993, 1996, 2005, 2012 and 2013

India and China share a border of 3,488 km. Though the LAC can be said to be demarcating the temporary line dividing the two, yet each side’s perceptions of the same differ. That gives rise to regular cross-LAC transgressions by the PLA. In an effort to resolve the dispute, the two sides initiated official level talks in 1981. There were eight rounds of official border talks from 1981 to 1987. In 1988, a Joint Working Groups (JWG) was created to find a solution to the border disagreement. The outcome of the JWG meetings was slow. In 2003, during AB Vajpayee’s visit to China, it was repackaged and rechristened as the Special Representatives’ Talks and Special Representatives were appointed from both the sides. The first round of Special Representatives’ talks was held between Brajesh Mishra and Dai Bingguo. Until now there have been 22 rounds of talks.

In 1993, the agreement on the ‘Maintenance of Peace and Tranquility along the Line of Actual Control in the India-China Border Areas’ was signed. The agreement stated that neither side shall use or threaten to use force against the other by any means. Each side will keep its military forces in the areas along the LAC to a minimum level compatible with the friendly and good neighbourly relations.

In 1996, the agreement on ‘Confidence-Building Measures in the Military Field Along the Line of Actual Control in the India-China Border Areas’ was signed. It stated that neither side shall use its military capability against the other side. No armed forces deployed by either side in the border areas along the LAC as part of their respective military strength shall be used to attack the other side, or engage in military activities that threaten the other side or undermine peace, tranquility and stability in the India-China border areas. Measures to reduce or limit respective military forces were agreed.

In 2005, the agreement between the Government of the Republic of India and the Government of the People's Republic of China on the ‘Political Parameters and Guiding Principles for the Settlement of the India-China Boundary Question’ was signed. It was agreed that the differences on the boundary question should not be allowed to affect the overall development of bilateral relations; the two sides will resolve the boundary question through peaceful and friendly consultations and neither side shall use or threaten to use force against the other by any means; the boundary should be along well-defined and easily identifiable natural geographical features to be mutually agreed upon between the two sides; and in reaching a boundary settlement, the two sides shall safeguard due interests of their settled populations in the border areas. [11]

In 2012, ‘India-China Agreement on the Establishment of a Working Mechanism for Consultation and Coordination on India-China Border Affairs’ was signed. It was agreed that the Working Mechanism will be headed by a Joint Secretary level official from the Ministry of External Affairs of the Republic of India and a Director General level official from the Ministry of Foreign Affairs of the People's Republic of China, and will be composed of diplomatic and military officials of the two sides.

The Working Mechanism was tasked to study ways and means to conduct and strengthen exchanges and cooperation between military personnel and establishments of the two sides in the border areas; explore the possibility of cooperation in the border areas that are agreed upon by the two sides; undertake other tasks that are mutually agreed upon by the two sides but will not discuss resolution of the Boundary Question or affect the Special Representatives Mechanism; address issues and situations that may arise in the border areas that affect the maintenance of peace and tranquillity; will work actively towards maintaining the friendly atmosphere between the two countries; and hold consultations once or twice every year alternately in India and China - emergency consultations, if required, could be convened after mutual agreement. [12]

In 2013, the agreement on ‘Border Defence Cooperation’ was signed: The two sides shall carry out border defence cooperation on the basis of their respective laws and relevant bilateral agreements; and shall implement border defence cooperation in the following ways:-

  1. Exchange information-including information about military exercises, aircrafts, demolition operations and unmarked mines-and take consequent measures conducive to the maintenance of peace, stability and tranquility along the line of actual control in the India-China border areas;
  2. Jointly combat smuggling of arms, wildlife, wildlife articles and other contrabands;
  3. Assist the other side in locating personnel, livestock, means of transport and aerial vehicles that may have crossed or are possibly in the process of crossing the line of actual control in the India-China border areas;
  4. Work with the other side in combating natural disasters or infectious diseases that may affect or spread to the other side. [13]
Institutional Bilateral Economic and Commercial Dialogue Mechanisms

India-China Economic and Commercial Relations are shaped through various dialogue mechanisms.

Joint Group on Economic Relations, Science and Technology (JEG) was led by the Commerce Ministers of both sides. The Joint Economic Group (JEG) was established in 1988 during the visit of Prime Minister Rajiv Gandhi to China, to discuss trade cooperation issues. So far 11 JEGs were held with the last one in Delhi in March 2018. During the 9th JEG, the two sides also set up three working groups on Economic and Trade Planning Cooperation (ETPC), Trade Statistical Analysis (TSA) and Service Trade Promotion (or Trade in Services – TIS).

Strategic Economic Dialogue (SED) was established during the visit of Chinese Premier Wen Jiabao to India in December 2010, to discuss macro-economic cooperation. So far six SED took place in New Delhi from 7–9 September 2019. There are five Working Groups under the SED: Infrastructure, Environment, Energy, High Technology and Policy Coordination. The SED is co-chaired by Vice-Chairman NITI Aayog and Chairman, Chinese National Development and Reforms Commission (NDRC).

The NITI Aayog – Development Research Centre of China (DRC) Dialogue was established pursuant to the MoU signed during the visit of Prime Minister Narendra Modi to China in May 2015, to discuss global economic cooperation issues. Vice-Chairman NITI Aayog leads the India delegation while President (Minister-level) of DRC of China leads the Chinese delegation. The fifth NITI-DRC dialogue was held in Wuhan on 28-29 November 2019.

India-China Financial Dialogue is held in accordance with the MoU signed during Chinese Premier Wen Jiabao’s visit to India in April 2005. The ninth India-China Financial Dialogue was held in New Delhi on 25Sepember 2019 which was co-chaired by Secretary DEA.

Other Institutional Mechanisms

Some of the other institutionalized dialogue mechanisms between the two countries include the JWG on Collaboration in Skill Development and Vocational Education, Joint Working Group on Information and Communication Technology & High-Technology, Joint Working Group on Industrial Park Cooperation, Joint Study Group and Joint Task Force on Regional Trading Agreement (RTA), India-China Joint Working Group on Agriculture, India-China Joint Working Group on Cooperation in Energy and the Joint Study Group on BCIM Economic Corridor.


One China Policy

The Indian side recalls that India was among the first countries to recognize that there is one China and that its one China policy has remained unaltered. The Indian side states that it would continue to abide by its one China policy. The Chinese side expresses its appreciation for the Indian position. [15]

Former External Affairs Minister of India, Sushma Swaraj said during a bilateral meeting with Wang Yi, Foreign Minister of China in June 2014 that Indian side recognized the principle of ‘one China’ while Chinese side is yet to accept ‘One India’. Indian side had made this statement to raise concerns over Chinese military presence in Pakistan Occupied Kashmir and issue of stapled visas for residents of Arunachal Pradesh.

India was among the first nations to use the world ‘One China’, and along with Burma and Pakistan recognise China. The Indian government might have surmised that an early recognition of the new Communist regime in China would be helpful in securing its goodwill and helpful in settling the border issue. Former Prime Minister of India, Jawaharlal Nehru’s message to Ambassador Panikkar in September 1949 indicated that Government of India was thinking of making the boundary question and the status of Tibet as part of the negotiations with China on diplomatic recognition. India’s international stature received a temporary boost and India played a role in the Korean peninsula as a result of good relations with China as well as America. India’s recognition provided the space for China to prepare for the invasion of Tibet in late 1950. [16] India also maintained that Taiwan was an inalienable part of China. In about four years, there was the Panchseel Agreement, and India while conceding China’s suzerainty over Tibet, took a nuanced position on Indo-Tibet trade. Various joint statements till 2010 reiterated these positions, but India’s reservations began showing after China insisted on issue of stapled visas to the Kashmiris and Arunachalis. [17]

India’s Position on the ‘Core Interests’ of China

China’s ‘Core Interests’ to refer to sovereignty issues relating to Xinjiang, Taiwan, Tibet and South China Sea.


Although India is concerned about the developments in Xinjiang but it has refrained from issuing any statements. Along with France, Germany, Japan, Australia, the United Kingdom, the United States and 33 other nations, India avoided in criticizing Beijing for violation of human rights in Xinjiang, Hong Kong and Tibet. [18]

South China Sea

Several reasons have been attributed to India’s interest in the South China Sea (SCS):-

  1. Increasing trade with East Asia, freedom of transshipment across the international Sea Lanes of Communication (SLOC) over the geographical expanse SCS and the strategic importance of the Indo-Pacific region;
  2. Apprehensions regarding China’s growing assertiveness in the Indian Ocean Region;
  3. Importance of blue water maritime presence and naval partnerships to deter adversarial activities in the region;
  4. Security of trade-transit route across the Indio-Pacific Ocean passing through the SCS is vital to India’s growing trade, energy and security interests. [19]

"India believes that States should resolve the disputes through peaceful means without threat or use of force and exercise self-restraint in the conduct of activities that could complicate or escalate disputes affecting peace and stability," Gen (retd) V K Singh, Minister of State said in a written response to a question in Rajya Sabha, "India undertakes various activities, including cooperation in oil and gas sector, with littoral states of the South China Sea."

India’s position on South China Sea is consistent and has been articulated on several occasions in the past. India attaches importance to freedom of navigation, overflight and unimpeded lawful commerce in the international waters in accordance with international laws, notably the United Nations’ Convention on the Law of the Sea (UNCLOS), 1982.

India stands for peaceful resolution of disputes, including respect for legal and diplomatic processes without resorting to threat or use of force, and in accordance with international laws. India stands ready to work with international partners to maintain and promote peace, stability and development in the Indo-Pacific region. [20]


India’s ‘one-China’ policy does not officially recognise Taiwan’s sovereign existence and refers to Tibet as part of China. Government of India’s policy on Taiwan is clear and consistent. Government facilitates and promotes interactions in areas of trade, investment, tourism, culture, education and other such people-to-people exchanges. [21] Ties between Indian and Taiwan-linked political figures are long-standing. Indian and Kuomintang (KMT) leaders interacted in significant ways during the Second Sino-Japanese War (1937–1945). Even prior to that, Indian leaders (particularly those on the All India Congress Committee) and Indian prime minister Jawaharlal Nehru expressed solidarity with the Chinese people at an international congress in Brussels while protesting against colonialism in 1927, an event that included Soong Ching-ling, the wife of the famed Chinese nationalist Sun Yat-sen.

India had diplomatic relations with the ROC after independence in 1947 for a brief period till 1949. Both ROC and India had resident Ambassadors in both the capitals of New Delhi and Nanjing till 1948-49. Subsequent to the establishment of the PRC in October 1949, the KMT government of China fled to Taiwan and established the ROC there. India recognised the new PRC regime in Beijing and simultaneously de-recognised her relations with the ROC. India desisted from having any formal relations with Taiwan till the early 1990s.

Though there were no official relations between the two sides, in the 1990s both the countries gradually started improving bilateral relations. India started the Look East Policy in the 1990’s and began giving emphasis to the countries in the Asia Pacific/Indo-Pacific region. Taiwan falls in this domain of the Indian Foreign Policy. In 1992, the Taiwan External Trade Development Council (TAITRA) set up a liaison office in Mumbai and, in 1995, India opened its representative office in Taipei and named it the ‘India-Taipei Association’ (ITA). Ambassador Vinod Khanna was appointed as the first Director-General of the ITA. The main aim of the opening of the ITA was economic engagement. Subsequently, a month later, Taiwan opened its office in New Delhi, and called it the ‘Taipei Economic and Cultural Centre’ (TECC). Now, the TECC offices are operational in Chennai, Kolkata, and Mumbai.

In 2010, two ministers from Taiwan, Wu Ching-chi (Minister of Education) and Liu Yi-ru (Chair of the Economic Planning and Development Council) led respective delegations to New Delhi. Shen Lyu-shun (Deputy Foreign Minister) and Hsiung Hsiang-tai (Deputy Defence Minister) also visited India in 2010 and 2011, respectively. On 7 March 2011, India’s foreign secretary, Nirupama Rao, received a group of Journalists from Taipei that briefed about the economic development of Taiwan. On April 8, 2012, India allowed stop-over visits of the Taiwanese President Ma Ying-jeou in Mumbai on his way to Africa (2012) and Taiwan vice-president Wu Den-yih, had a layover at a Delhi airport en-route to Rome (2014). In 2012, Tsai Ing wen has visited India as the leader of the DPP.

Over the years, bilateral engagement between India and Taiwan has gradually improved. Particularly noteworthy milestones include, but are not limited to, the initiation of direct flights between New Delhi and Taipei in 2003 and a series of visits by significant political figures. Former Indian defense minister George Fernandes visited Taiwan in 2003 and former president A.P.J. Abdul Kalam did the same in 2010. Similarly, then KMT presidential candidate Ma Ying-jeou went to India in 2007 and Tsai visited in 2012 as the chair of the Democratic Progressive Party (DPP). The India-Taiwan Parliamentary Friendship Forum in 2016 was seen as a “formal platform for ‘friendship’. On 13 February 2018, a Taiwanese delegation comprising of members of the Taiwan-India Parliamentary Friendship Association interacted with Indian Parliamentarians in New Delhi. Trade has increased six-fold from USD 1.19 billion in 2001 to almost USD 6.4 billion in 2017, and US$ 7.05 billion in 2018.
India should designate Taiwan a consultative partner in strategies such as ‘Make in India’, Skill India, and Digital India. Co-developing industrial zones in India and specifically encouraging small-and medium-enterprise collaborations to create job opportunities could be a new direction for the future of India-Taiwan ties. The focal points of such cooperation could be electronics (and related technologies), automobiles (electric vehicles), petrochemicals, agricultural technologies, and food processing. Over time, the agenda could be expanded to incorporate other matters such as the feasibility of a free trade agreement.[22]


The Indian side recognizes that the Tibet Autonomous Region is part of the territory of the People's Republic of China and reiterates that it does not allow Tibetans to engage in anti-China political activities in India. The Chinese side expresses its appreciation for the Indian position and reiterates that it is firmly opposed to any attempt and action aimed at splitting China and bringing about "independence of Tibet”. [23]

On 10th March 1959, General Zhang Chenwu of Communist China extended an invitation to the Tibetan leader, Dalai Lama to attend a theatrical show by a Chinese dance troupe. When the invitation was repeated with new conditions that no Tibetan soldiers were to accompany the Dalai Lama and that his bodyguards be unarmed, Tibetans gathered around the Norbulingka Palace in Lhasa determined to thwart any threat to Dalai Lama’s life and prevented him from going. On 17 March 1959, Dalai Lama, disguised as a common soldier, slipped past the massive throng of people along with a small escort and proceeded towards the Kyichu River. Three weeks after escaping Lhasa, on 31 March 1959, His Holiness, Dalai Lama and his entourage reached the Indian border from where they were escorted by Indian guards to the town of Bomdila in the present day Indian state of Arunachal Pradesh. The Indian government had already agreed to provide asylum to His Holiness and his followers in India. Soon after his arrival in Mussoorie on 20 April 1959, Dalai Lama met with the Indian Prime Minister and the two talked about rehabilitating the Tibetan refugees. [24]

The Tibetan Parliament in Exile (TPiE) is the unicameral and highest legislative organ of the Central Tibetan Administration. Established and based in Dharamsala, Himachal Pradesh in India. The creation of this democratically elected body has been one of the major changes that His Holiness the Dalai Lama has brought about in his efforts to introduce a democratic system of administration. Today, the Parliament consists of 45 members. Ten members each from U-Tsang, Do-tod and Do-med, the three traditional provinces of Tibet, while the four schools of Tibetan Buddhism and the traditional Bon faith elect two members each. Five members are elected by Tibetans in the west: two from Europe, two from North and South America, and one from Australasia (Australia and Asia excluding India, Nepal and Bhutan). The Tibetan Parliament-in-Exile is headed by a Speaker and a Deputy Speaker, who are elected by the members amongst themselves. Any Tibetan who has reached the age of 25 has the right to contest elections to the Parliament.[25]

Tibet road system has increased to 118,800 km, it has expanded approximately 4.93 km per day since 1959. Under the current 14th Five-Year Plan (FYP), China aims to spend over RMB 190 billion (approximately $30 billion) on infrastructure projects in Tibet between 2021 and 2025. The regional transportation department states that by 2025, Tibet will exceed 1300 km of expressways, and have over 120,000 km in highways total. Tibet-related projects in the 14th FYP include the Ya’an to Nyingchi phase of the Sichuan Tibet Railway line, preliminary work on the Hotan-Shigatse and Gyirong-Shigatse (China-Nepal border) railway lines, and the Chengdu-Wuhan-Shanghai high-speed railway network. The plan also mentions upgrading the national highways G219 and G318, both of which run parallel to the China-India border near Ladakh and Arunachal Pradesh. [26] About 30 airports have been either built or under construction in Tibet and Xinjiang provinces, which will boost China’s civil and military infrastructure in the remote regions bordering India. [27]

One Belt One Road

India shares international community’s desire for enhancing physical connectivity and believes that it should bring greater economic benefits to all in an equitable and balanced manner. India is working with many countries and international institutions in support of physical and digital connectivity in our own immediate and near neighbourhood.

India is of firm belief that connectivity initiatives must be based on universally recognized international norms, good governance, rule of law, openness, transparency and equality. Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities; balanced ecological and environmental protection and preservation standards; transparent assessment of project costs; and skill and technology transfer to help long-term running and maintenance of the assets created by local communities. Connectivity projects must be pursued in a manner that respects sovereignty and territorial integrity.

Expansion and strengthening of connectivity is an integral part of India’s economic and diplomatic initiatives. Under the ‘Act East’ policy, we are pursuing the Trilateral Highway project; under our ‘Neighbourhood First’ policy we are developing multimodal linkages with Myanmar and Bangladesh; under our ‘Go West’ strategy, we are engaged with Iran on Chabahar Port and with Iran and other partners in Central Asia on International North South Transport Corridor. The Bangladesh, Bhutan, India, Nepal (BBIN) Initiative is aimed at enhancing logistics efficiencies in South Asian region. India is also actively considering acceding to TIR Convention.

Guided by our principled position in the matter, we have been urging China to engage in a meaningful dialogue on its connectivity initiative, ‘One Belt, One Road’ (OBOR) which was later renamed as ‘Belt and Road Initiative’ (BRI). India is awaiting a positive response from the Chinese side. Regarding the so-called ‘China-Pakistan Economic Corridor’ (CPEC), which is being projected as the flagship project of the BRI/OBOR, the international community is well aware of India’s position. The Corridor passes over illegally occupied Indian territory and no country can accept a project that ignores its core concerns on sovereignty and territorial integrity. [28]

China’s imperialist planning has ensured project inroads into the entire Indo-Pacific Region with serious economic and strategic challenges to India in its immediate neighbourhood in South Asia. With Bangladesh formally joining the OBOR initiative in October 2016, New Delhi is making concerted efforts to maintain its balance. The political turmoil in Nepal in recent past has occasionally disturbed its strong relations with India. While recent cancellation of a few BRI projects displays Nepal’s sensitivity towards Chinese ‘debt–trap’, it’s negative response to New Delhi led BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) exercise recently gave opposing signals. As China offers its ports for trade with land-locked Nepal, India is required to put up lot of economic and diplomatic efforts to ensure long term bonding with Nepal is closely maintained. China intends to connect Yunnan province in China to Kyaukpyu port in Burma. The project would provide China an alternate route to the Strait of Malacca for hydrocarbon supply, along with increased Chinese strategic presence in Bay of Bengal. [29]

South Asia

Since at least the seventh century, Nepal has had with contacts with Tibet, which is geographically contiguous across the high Himalayan watershed. While Buddhism was the backbone for cultural exchanges, the commercial motive came from trans-Himalayan trade, which was conducted at almost every geographical point along the border. Much of this lucrative trade consisted of transit of goods between India and Tibet, and Kathmandu served as an important entrepôt.
China under Qianlong Emperor after the 1792 Treaty of Betrawati not only inserted itself as the dominant power to the immediate north of the Himalayan watershed but also tried to degrade Nepal’s status to that of a tributary state. From 1792 to 1910, Nepal sent seventeen missions to the emperor in Beijing. Henceforth, China and Nepal were to have significant and regular contact, and the Chinese Amban in Lhasa became the purveyor of China-Nepal-Tibet relations. Death of King Tribhuvan in March 1955 presented the opportunity that Nepal was seeking to re-establish relations with China. The new monarch, Mahendra Bir Bikram Shah (1955–1972), wrote immediately to India of Nepal’s intention to open negotiations with China. Formal diplomatic relations were established on August 1, 1955. This achieved the first of two Chinese objectives, but there was still the matter of ending Nepal’s privileges in Tibet. [30]

China’s Geo-Strategic Goals in Nepal are to weaken Indian Influence, maintain the Geopolitical Imperative of the BRI, and enhance its political, economic, security and diplomatic influence. [31] For China, increased engagements with Nepal have ensured a near-absence of exiled Tibetans’ political activity in the country. Due to various security agreements and exchanges, the flow of Tibetan refugees into the country has also reduced drastically. Nepali immigration officials’ figures show a sharp drop from 1,248 Tibetans in 2010 to just 85 applications for an exit permit to India (with transit through Nepal) in 2015. Control over Nepal’s affairs also helps Beijing reduce Indian and Western influence in the country. Under the previous Communist Party government of PM Oli there was a growing ‘convergence’ between its pro-China, and nationalist, anti-Indian position and China’s ambitions to reduce Indian influence in South Asia. This aligns with the ‘neighbourhood policy’ Xi laid out way back in 2013, when he said “the diplomatic work with neighbouring countries is out of the need to realise the two centenary goals and achieve the great rejuvenation of the Chinese nation”. [32]

Some of the major on-going projects in Nepal under Chinese assistance include:-

  1. Upper Trishuli Hydropower Station and Transmission Line Projects;
  2. Kathmandu Ring Road Improvement Project;
  3. Larcha (Tatopani) and Timure (Rasuwagadi) Frontier Inspection Station Project;
  4. Pokhara International Regional Airport;
  5. Upgradation of Syaprubensi-Rasuwagadhi Road;
  6. Upgradation of Civil Service Hospital;
  7. Upgradation of Kodari Highway and restoration of bordering bridges at Kodari and Rasuwagadhi.

With the signing of the Memorandum of Understanding on Cooperation under the BRI on 12 May 2017 in Kathmandu between Nepal and China, new avenues for bilateral cooperation in the mutually agreed areas are expected to open.

China thinks that the unification of the communist forces represents a change in the balance of power to its advantage, and it is working to ensure that this remains so – that is, notwithstanding the recent split in 2021. As a result, there has been a growing and increasing direct Chinese intervention in Nepal’s internal affairs since 2017. To shore up Oli’s position, Xi in October 2019 paid the first Chinese presidential visit in twenty-three years and upgraded relations to a ‘strategic partnership’. Military-to-military relations have seen a paradigm lift with Chinese offers of equipment and training, joint exercises since 2018, and support for the police infrastructure. The Chinese embassy in Kathmandu regularly brokers peace between the various Nepalese factions. In December 2020, after Oli dissolved the parliament, the vice minister of the Chinese Communist Party’s International Department went to Kathmandu to assess the situation. The Chinese ambassador regularly interacts with senior communist leaders and reportedly exhorts them to maintain unity. [33]

The Confucius Institute was established in Kathmandu University (CIKU) in 2017 through a partnership between the Hebei University of Economics and Business . The Confusion Institute offers the services of Chinese language teaching for Chinese language instructors; delivery of Chinese language teaching resources; administration of the HSK examination (Chinese Proficiency Test); provision of information and consultative service concerning Chinese education, culture and other areas; and conducting language and cultural exchange activities between China and other countries. The Confucius Institute at Kathmandu University has established four Confucius classrooms and 14 teaching sites, and cultivated more than 20,000 students in all. [34]

Connectivity linkages between the PRC and trans-Himalayan countries have taken on a new hue with the recent ‘Himalayan Quadrilateral’ meeting between China, Pakistan, Afghanistan and Nepal on July 27, 2020. At the Himalayan Quad meeting, foreign ministers from all four countries deliberated on the need to enhance the BRI in the region through a “Health Silk Road”.[35]


China and Bangladesh established their diplomatic relations in 1976 after a military coup in Dhaka displaced and killed the founder of the Republic of Bangladesh, Sheikh Mujibur Rahman. China had till then opposed the liberation war and backed Pakistan military’s genocidal attempts to subdue the independence movement, refused diplomatic recognition after Bangladesh gained formal independence from Pakistan in December 1971 at the end of the defeat of the Pakistani forces by Indian army, and had persistently vetoed its entry into the UN.

China-Bangladesh relations became stronger under the military regimes of Zia-ur-Rahman and Gen. Ershad Ahmed. Military ties were established during this period, as the Dhaka tried to balance Indian influence and its close ties with the Awami League and the other democratic forces.

In 21st century, economic ties have grown, especially since China began to construct a series of seven bridges over major rivers in the country to improve communications and then offered to build infrastructure under the BRI. Chinese President, Xi Jinping in his visit to Dhaka in 2016 promised to provide some $26 billion in loans for several projects in Bangladesh. So far only a few of them have been funded - total around $ 1.7 billion with Bangladesh being cautious about taking large Chinese loans that cannot be easily repaid. In bilateral trade, China has run an overwhelming trade surplus against Dhaka; Beijing buys little from Bangladesh.

Bangladesh is the second biggest importer of Chinese arms, after Pakistan. Bangladesh has acquired a sizeable amount of military hardware from China in recent years including corvettes, naval guns, anti-ship missiles and surface-to-air missile systems. The anti-ship missile launchpad close to Chittagong Port was built with Chinese assistance. In collaboration with China, Bangladesh successfully test-fired anti-ship missile C-802A (a modified version of China’s Yinh Ji-802) with a range of 120 km in May 2008 from BNS Osman, which is a Chinese built Jianghu class frigate. [36] In 2016, Bangladesh reportedly paid $203 million for the two submarines to boost its naval power. Bangladesh army also had inducted Chinese-built FM-90 surface-to-air missiles. However, China's trainer aircraft to Bangladesh along with the air defence system has developed defects. Similarly, frigates have developed snags. [37] Bangladesh did not allow Chinese investment in deep-sea ports suitable for a future Chinese Navy presence, as it cancelled the Sonadia deep-sea project and only agreed to a port project in Payra, which can be 'approachable only through a 75-kilometre-long canal and so a very unlikely place for a naval base. [38]

Trade. Bangladesh-China bilateral trade is tilted in favour of Beijing. Trade deficit with China has increased 1600% in last 20 years (c. 2019). [23] Some 25% of Bangladesh's total imports are from China, in 2018-19 China's export to Bangladesh was US$13.6 billion whereas Bangladesh's export to China was only $0.56 billion. [23] China has given several loans to Bangladesh, which compared to India [with which Bangladesh shares land border on 3 sides] are on less favourable terms, and could lead Bangladesh into debt-trap.[26]
Export to China: Bangladeshi products export to China is approaching the 1 billion USD mark. It has already reached 600 million USD in FY 2020 from only 32.36 million USD in 2002.

Major Exportable: Bangladeshi export basket to China is dominated by the apparels. The other major export items include fish-crustacean-mollusks and other aquatic invertebrates, raw hides and skins, plastic products, ores – slag an ash, optical-photo-technical and medical apparatus, oil seeds, cotton, electrical and electronic equipment, footwear, furniture etc.

Imports from China: Bangladesh imports almost a quarter of her total imports from China.

Major Imports from China: Bangladesh’s major imports from China include cotton, machinery, electrical and electronic equipment, manmade staple fibers, knitted or crocheted fabric, manmade filaments, plastics, vehicles other than railway, special woven or tufted fabric, lace, tapestry etc., articles of iron or steel, articles of apparel-accessories, fertilizers, organic chemicals, iron and steel etc.

Investment Opportunities

For China, Bangladesh is attractive because of the following reasons:-

  1. Largely homogenous society;
  2. Democratic country with broad support for market oriented economic policies, Steady 6+% GDP growth for the last ten years;
  3. Abundant supply of disciplined easily trainable and low–cost work force with increasing supply of professionals, technologists, mid and low level skilled workers, training expenditure of the employer is exempted from income tax, English proficiency of the workers in general, active encouragement for Foreign Private Investment with legal protection through Foreign Private Investment (Promotion and Protection Act 1980);
  4. Bangladesh exports enjoy EBA (Everything but Arms) to EU and GSP in most of the developed countries including Japan and Australia. Bangladesh has bilateral agreements to avoid double taxation with 31 countries including China.
  5. 4621 Bangladeshi products enjoy duty free and quota free access to Chinese market.


The Maldives

Direct trade between the two countries was restored in 1982, but no significant trade was carried out for twenty years. In 2002, trade volume was US$ 2.977 million in total, and it has increased drastically since, reaching US$ 64 million in 2010.

China’s major exports to the Maldives are rice and consumer goods, whereas the Maldives is exporting more and more of their marine products from their flourishing fishing industry to China, such as Yellow fin Tuna. Representatives from both countries continue to confirm their keenness to maintain this dynamic and successful trade cooperation, particularly in areas such as ‘fisheries, tourism, infrastructure and construction’. Maldivian Economic Development Minister Mahmood Razee confirmed in May 2011 that the Maldivian government is aiming to encourage private sector investment into other sectors, such as energy, health, education and commercial ports development, by carrying out a Public Private Partnership program.

Feydhoo Finolhu is a tiny islet just 0.5 square miles in area, located 3 nautical miles from the Maldivian capital, Malé. An undisclosed Chinese company received a 50-year lease to the island in December 2016 for a bargain price of $4 million. Another Chinese developer is building a similar resort at Kunaavashi, an atoll 35 nautical miles from Malé. China’s largest, and most visible, infrastructure projects in the Maldives have been on the capital island of Malé and adjacent Hulhumalé.
Beijing Urban Construction Group signed a deal to expand the Velana International Airport in 2014, displacing India’s GMR which had previously held the contract. A new 3,400-meter runway, built to the east of the existing runway, opened in 2018. The expansion also included a new fuel farm and cargo terminal. While there may be real concerns about cost, the project made a great deal of sense for a nation that is so dependent on tourism. [39]

These investments have had costs for the Maldives. By 2018, Chinese loans had saddled Malé with nearly $1.5 billion in debt—a high figure for a nation with a GDP of less than $9 billion. Indebtedness to China doesn’t only burden a country’s economy. It also risks making the nation vulnerable to debt trap diplomacy, whereby Beijing leverages debt to get borrower states to serve China’s interests. However, the tables turned again in 2018, when the election of Mohamed Ibrahim Solih restored democracy—as well as strong Maldivian ties with New Delhi. Solih initiated an “India First” policy meant to strengthen “the multifaceted, mutually beneficial partnership between India and the Maldives.” Solih pulled out of his country’s trade deal with Beijing. India authorized $1.4 billion to help the Maldives with loan paybacks and provided additional financial support for community development projects. New Delhi currently has plans to build a new cancer hospital and cricket stadium, to develop a port, and to upgrade an airport. [40]


China and Bhutan became neighbors only after the Chinese annexation of Tibet in 1951. Prior to that it was with Tibet that Bhutan shared borders.
China’s claims over Bhutanese territory are indirect, stemming from its claims over Tibet. When the Qing dynasty extended Chinese rule over Tibet in the 18th century, the Tibetan ruler Polhane, who apparently held suzerainty over Bhutan, passed this on to Tibet’s Chinese overlord. China bases its territorial claims in Bhutan on the latter’s ‘vassalage’ to Tibet. However, Bhutanese scholars reject China’s “vague suzerainty claim over Bhutan” as being based on misinformation.

China began asserting its claims over Bhutan with increasing vigor in the late 19th century to counter growing British influence there. In 1930, Mao Zedong claimed that Bhutan (among other Himalayan kingdoms) fell within the “the correct boundaries of China.” China was even more aggressive in asserting such claims; official maps showed parts of Bhutanese territory as part of China. Moreover, during its annexation of Tibet, China briefly occupied eight Bhutanese enclaves in western Bhutan. Chinese incursions into Bhutanese territory have continued, as China’s has been building roads in disputed areas. This despite the fact that under Clause 3 of the 1998 ‘Treaty to Maintain Peace and Tranquility on the Bhutan-China Border Areas’, the two sides agreed to maintain the status quo..

Although China and Bhutan do not have official diplomatic relations, they have engaged in 24 rounds of ministerial-level talks to resolve their border dispute. In 1996, China put forward a package proposal, under which it offered to recognize Bhutanese sovereignty over the Pasamlung and Jakarlung Valleys in return for Bhutan recognizing Chinese sovereignty over Doklam, Sinchulung, Dramana, and Shakhatoe in the western sector. Bhutan has not accepted this proposal to date. China recently revived this land swap deal. By raising its claim over Sakteng, Beijing has indicated to Thimphu that it wants the border settled now and as per the package proposal. It is also possible that China is eyeing Sakteng for its own strategic value.[41]

Accepting the 1996 package deal would result in settled borders with China and pave the way for normal relations between Thimphu and Beijing. But it would require Bhutan to cede control over the Doklam Plateau to the Chinese, and this will not go down well in New Delhi.

Sri Lanka

China’s relationship with Sri Lanka has been vastly different, due in part to China’s greater distance from the island. The growth of the China-Sri Lanka relationship is a recent phenomenon and one largely anchored on economic and financial ties. However, in recent years, military and political relations between the two countries have also grown.

In terms of public debt, China over the last decade and a half has been the second-largest foreign lender for Sri Lanka. Several large infrastructure development projects, including the Colombo-Katunayake expressway, which connects the main commercial city and the major airport; Hambantota port; and the second international airport of the country, Mattala Airport, all were funded by Chinese loans. During the decade of 2010-2020, China has been the largest foreign investor in Sri Lanka. These investments include two controversial projects: the Colombo Port City Project and the investment in Hambantota Port by the China Merchants Port Company. Under the port city project, 116 hectares of reclaimed land in Colombo was leased to CHEC Colombo Port City (Pvt) Ltd, owned by a Chinese state-owned enterprise for 99 years.

In 2020, China continued to be the largest goods exporter to Sri Lanka despite the heavy import restrictions imposed by the Sri Lankan government to control foreign currency outflows. This policy, however, does not seem to have affected China as much as it impacted India. Chinese imports were reduced by 8 percent in 2020, while in contrast, imports from India went down by approximately 19 percent. [42]

Chinese Investments in Sri Lanka:-

  1. Southern Expressway (ongoing, started construction in 2011);
  2. Outer Circular Highway Project (ongoing, started construction in 2014);
  3. Colombo Katunayake Expressway (completed in 2013, started construction in 2009);
  4. Hambantota International Airport project (completed in 2013, started construction in 2010);
  5. Hambantota Port Development Project (completed, started construction in 2007);
  6. CICT Colombo Terminal (completed in 2014, started construction in 2011);
  7. Norocholai power station (completed in March 2011, started construction in 2006);
  8. Colombo Port City (ongoing, to be completed in 2042, started construction in 2014);
  9. Lotus Tower (completed in September 2019, started construction in 2012). [43]

Over the decade starting 2005-2015, China has emerged as the leading source of Official Development Assistance (ODA) and Foreign Direct Investment (FDI) in Sri Lanka – $14 billion. Most of it is ODA in loans and grants–$12 billion in sectors like energy, infrastructure and services.

Note: Indian authors on Xinjiang

[1]Historical Ties, accessed April 24, 2021,
[2]Russell Goldman, India-China Border Dispute: A Conflict Explained, The NewYork Times, accessed April 20,2021
[3]Letter from the Prime Minister of China to the Prime Minister of India, 23 January 1959, Page 52, Notes, Memoranda and Letters Exchanged and Agreements signed between The Governments of India and China 1954-59, Ministry of External Affairs. Government of India.
[9]Alyssa Ayres, “The China-India Border Dispute: What to Know, Council on FR, accessed on April 19, 2021,
[16]Vijay Gokhale, The Long Game
[19]Raja C Mohan, Samudra Manthan

[Back to Contents]

India Pakistan Relations

India-Pakistan relationship is characterized by mistrust and hostility even though the two-share common linguistic, cultural, geographical and economic linkages. The relations have been defined by the Partition in 1947, the Kashmir conundrum and the four wars and numerous cross-border skirmishes fought between the two South Asian neighbours. The differences between the two countries revolve around issues ranging from border disputes to water sharing. However, a far more important factor is the visceral antipathy towards India, which animates Pakistan in all its actions[1]. Pakistan has never shed the animosity and employed various means to pursue its feud through direct military aggression, supporting insurgencies, stoking communal tensions, infiltration and use of terrorism as an instrument of state policy[2]

Timeline: India-Pakistan Relations

August 1947 - Partition of British India, India and Pakistan became independent states carved out of the former British Raj. While India adopted a secular, democratic and liberal vision, Pakistan with its emphasis on religion turned into a militaristic and theocratic society.

1947/48 - The first India-Pakistan war over Kashmir, after armed tribesmen (lashkars) from Pakistan’s North-West Frontier Province (now called Khyber-Pakhtunkhwa) invade the disputed territory in October 1947.

February 1954 - The accession of Jammu and Kashmir to India ratified by the state’s constituent assembly.

September 1960 - India and Pakistan signed a World Bank-brokered Indus Water Treaty governing six rivers, or three rivers each. It is the only India-Pakistan treaty that has held.

August 1965 - A second war over Kashmir that ended a month later in UN-mandated ceasefire.

January 1966- Indian Prime Minister Lal Bahadur Shastri and Pakistani President Ayub Khan signed an agreement at Tashkent agreeing to withdraw to pre-August lines and that economic and diplomatic relations would be restored.

December 1971 - India and Pakistan war over East Pakistan. The war ended with the creation of Bangladesh. The war was a repudiation of two-nation theory.
July 1972 - India and Pakistan signed Shimla Agreement.

December 1988 - India and Pakistan signed an agreement on the prohibition of attack against nuclear installations and facilities.

December 1989 - Armed resistance to Indian rule in Kashmir.

1996 - India granted Pakistan the status of Most Favored Nation (MFN) for trade.

May 1998 – India detonated five nuclear devices at Pokhran. Pakistan responded by detonating six nuclear devices of its own in the Chaghai Hills.

February 1999 - Indian Prime Minister Atal Bihari Vajpayee travelled by bus to Lahore (newly opened Delhi–Lahore Bus service) to meet Prime Minister Nawaz Sharif. The two signed the Lahore Declaration.

May 1999- The Kargil conflict broke out when Pakistani forces intruded and occupied strategic positions on the Indian side of the LoC, prompting an Indian counter offensive in which Pakistani forces were pushed back to their side of the original LoC.

December 2001- On 13 December, an armed attack on the Indian parliament in New Delhi left 14 people dead. LeT and JeM were held responsible for the attacks.

November 2003- India and Pakistan implement a formal ceasefire along the International Border and the Actual Ground Position Line in Jammu and Kashmir

January 2004- Prime Minister Vajpayee and President Musharraf held direct talks at the 12th South Asian Association for Regional Cooperation (SAARC) summit in Islamabad in January, and the two countries' Foreign Secretaries met later in the year. The year marked the resumption of the Composite Dialogue Process.

February 2007 –The train service between India and Pakistan (the Samjhauta Express) was bombed near Panipat, north of New Delhi. Sixty-eight people were killed, and dozens injured.

October 2008- Pakistani President Asif Ali Zardari and Indian Prime Minister Manmohan Singh formally announced the opening of Khokrapar-Munnabao rail link, as well as cross-LoC Srinagar-Muzafarabad and Poonch- Rawalakot roads for trade. Trade began across the Line of Control, limited to 21 items and two days a week.

November 2008- On November 26, armed gunmen open fire on civilians at several sites in Mumbai, India. In the wake of the attacks, India broke off talks with Pakistan.

May 2014- India's new Prime Minister Narendra Modi invite Pakistani counterpart Nawaz Sharif to New Delhi for his inauguration.

January 2016- Six gunmen attack an Indian air force base in the northern town of Pathankot, killing seven soldiers in a battle that lasted nearly four days.

September 2016- Indian Army carried out "surgical strikes" to destroy terror launch pads across the Line of Control in Pakistan.

February 2019 - Pulwama Attack. At least 40 CRPF personnel were killed and five injured when a Jaish suicide bomber rammed a vehicle carrying over 100 kg of explosives into their bus in Pulwama district.

February 2019- Balakot strike, India pounded Jaish-e-Mohammed's biggest training camp in Pakistan.

February 2021- India Pakistan agree to ceasefire along LoC at the DGMO meet.

Pakistan-sponsored Terrorism

The greatest problem in the relationship has emerged out of Pakistan’s use of terrorism against India as a tool of state policy. Pakistan's remarkable consistency since its very inception in seeking to bleed India through the use of terrorism is testimony to its abiding antipathy towards the latter. The fundamental philosophy of “bleeding India through a thousand cuts”, a military doctrine given by Zia ul Haq to avenge the defeat of the 1971 war, has not seen a shift and neither is one expected in the near future[3].

The movement in bilateral relations remain constrained owing to the continuing support in Pakistan to cross-border terrorism against India; absence of any credible action on the ground against infrastructure of support to terrorism in areas under Pakistan’s control; and increased incidents of unprovoked ceasefire violations by Pakistan forces, including in support of terrorist infiltration, along the Line of Control and International Border. [4]

Jammu and Kashmir

Jammu and Kashmir is affected by terrorism sponsored and supported from across the border for the last three decades. Pakistan’s steady support to terrorism in Jammu and Kashmir continues. A triad of terrorist groups are being used for this purpose – the Jaish E Mohammad. Lashkar-e Taiyyaba and the Al Badr. The Hizbul Mujahideen, which comprises mainly of local youth from the Valley, also has the backing. Multiplicity of groups enables Pakistan’s Inter Services Intelligence (ISI) to dissipate the counter terrorist campaign by the Indian security forces in Kashmir while creating a rivalry amongst the leaders and cadres for allocation of resources by Rawalpindi (ISI HQs).

Ceasefire violations along the Line of Control (LOC) have spiked into four digits, increasing every year. In 2020, the Pakistan troops made highest number of ceasefire violations along the Jammu and Kashmir border. There have been 5,133 ceasefire violations by the Pakistan Army along the Indo-Pak border in 2020. Of these, 1,565 ceasefire violations took place since August 2019, after the Indian government amended Article 370 and bifurcated the state of Jammu and Kashmir into two union territories.

Jammu and Kashmir has been affected by terrorist and secessionist violence that is sponsored and supported from across the border. Since the advent of militancy in Jammu and Kashmir in 1990, 14,054 Civilians and 5,294 personnel of Security forces have lost their lives till December 2019. The trends of terrorist violence in Jammu and Kashmir during the last few years and current year are shown in the table given below[5]:

Pakistan has always sought to use deniable violence to achieve its objective of wrestling Jammu and Kashmir from India. From 1947 onward, Pakistan has used non-state actors to wage proxy warfare and campaigns of terrorism in India under the guise of people’s war, guerilla warfare, or jihad[6]. Pakistan’s deep state (Army and ISI) has vested interests in the continuation of the proxy war and these acts as the principal impediment to normalization between India and Pakistan.

(Source- Ministry of Home Affairs,

Timeline of Proxy Warfare in Jammu and Kashmir

1949- Tribal raids to force Maharaja to accede to Pakistan.

1965- Zulfiqar Ali Bhutto addressed the UN Security Council and declared his nation’s intent to “fight for thousand years” against India.

1978- Zia-Ul-Haq devised a radical strategy to “bleed India through thousand cuts”.

1989- Pakistan launched its proxy war, Hizbul Mujhahidden, led by Syed Sallahuddin, emerged as armed wing of Jamaat-e-Islami (JeI) at the behest of Pakistan’s ISI to bringing further movement in militancy in Jammu and Kashmir.

1990- Killings of Kashmiri Pandits and the resulting exodus.

1998- Wandhama massacre, 23 members of Kashmiri pandit community were murdered in their homes in Wandhama village.

1999- Hijacking of Indian airlines plane.

2000- Chitisinghpora incident, innocent killing of Sikh minority.

2000- Series of attacks on Amarnath Yatris and other civilians.

2000- Kothi bomb blast, a bomb blast in Kothi bagh area of Srinagar was carried out by Lashkar-e-Toiba.

2001- Attack on Amarnath Yatris.

2001-Terrorists launched a fidayeen attack on the State Assembly in Srinagar, by blowing up a hijacked car.

2001- A dastardly attack carried out on the Indian Parliament house, New Delhi.

2016- A group of JeM terrorist attacked the air force base in Pathankot, Punjab.

2016- Terrorist attacks in Poonch and Uri army camps.

2019- Pulwama CRPF attack, suicide terror attack was conducted by Pak based terrorist organization Jaish-e-Mohammad, on a convoy carrying CRPF personnel, in Pulwama district.

Khalistan Separatism

Pakistan is strenuously stoking Sikh separatism and is playing a lynchpin role in the renewal of the Khalistan movement in Indian Punjab. Pakistan has been aiding and supporting Khalistan insurgency since 1980. The Khalistan movement aims at the creation of an independent state in India, namely Khalistan. Pakistan’s support is in line with its long-term strategy to bleed India through “thousand cuts” to avenge the defeat of the 1971 war. In September 2020 report titled ‘Khalistan, a project of Pakistan’, published by Macdonald-Laurier Institute, Terry Milewski claims that “Fantasy or not, it is clear who is driving the Khalistan bus: Pakistan – the same country where countless Sikhs were murdered and expelled from in the name of Islam.” [7] Pakistan has been putting efforts to revive the Khalistan movement by smuggling drugs and weapons across the border through drones[8]. The sources revealed that the terror groups like Babbar Khalsa International (BKI) and Khalistan Zindabad Force (KZF) are in contact with their Pakistani handlers to smuggle weapons from across the India-Pakistan border[9].

In November 2018, a grenade attack at the Sant Nirankari Mission building in Punjab brought back the fears of the Khalistan movement's revival. Reportedly, the attack was a part of efforts by Pakistan’s Inter-Services Intelligence (ISI) to revive the Khalistan-related chaos in the State. Pakistan’s enthusiasm to develop the Kartarpur corridor is sourced in its interest to reinvigorate the Khalistan separatist movement in Punjab. At the inauguration of the Kartarpur corridor on 09 November 2019, Pakistan's abominable agenda did not take long to reveal itself as the pilgrimages were welcome with the audio-video featuring several slain Khalistani terrorists, including the infamous Jarnail Singh Bhindranwale.

On 23 November 2019, India’s cabinet approved the Kartapur corridor project; however, on the same day, Pakistan permitted the Sikhs for Justice (SFJ)—a US-based Khalistan sympathiser group, to open its regional office in Lahore, Pakistan. The SFJ had allegedly sought support from the Pakistan government for 'Referendum 2020'—a campaign to separate Punjab from India and establish Khalistan[10].

India has been raising concerns against the pro-Khalistani elements prompting anti-India activities. Noticeable in this respect is the Khalistan Liberation Force's declaration (KLF) as a banned outfit under India’s Unlawful Activities (Prevention) Act [UAPA] in December 2018. [11] The proscription has been imposed for involvement killings, bombings and other terror activities. In recent years, several KLF modules and other Khalistan-related groups were revealed in Punjab.

Indus Water Treaty

The Indus Waters Treaty was signed in 1960 after nine years of negotiations between India and Pakistan with the help of the World Bank, which is also a signatory. The treaty gave the waters of the western rivers—the Indus, Jhelum, and Chenab—to Pakistan and those of the eastern rivers—the Ravi, Beas, and Sutlej—to India. Indus Water Treaty is heavily weighted in Pakistan’s favour and has been systematically used by the latter to stymie Indian projects and has not contributed to improved India-Pakistan ties as originally expected[12]
Despite India’s scrupulous observance of the Indus Water treaty provisions and its concessions, Pakistan accuses of it not fully complying with the treaty’s terms. Pakistan has been expressing concerns over India's Ratle (850 MW), Pakal Dul (1000 MW) and Lower Kalnai (48 MW) projects - located in the Chenab basin - contending they violated the IWT, signed in 1960.

The Permanent Indus Water Commission, set up under the treaty, continues to meet regularly to discuss technical issues concerning the implementation of the treaty. The Annual Meeting of the Permanent Indus Commission (PIC) comprising of Indus Commissioners of India and Pakistan was held on March 23-24, 2021 in New Delhi. The meeting could not be held last year due to restrictions induced by the prevailing Covid 19 pandemic situation.

Discussions continued on designs of two Indian projects, namely, Pakal Dul (1000 MW) and Lower Kalnai (48 MW). Indian side held that these projects are fully compliant with the provisions of the Treaty and provided technical data in support of its position. Pakistan side requested India for sharing of information on design of other Indian hydropower projects being planned to be developed. Indian side assured that the information will be supplied as and when required to be supplied under the provisions of the Treaty[13].


The India-Pakistan bilateral trade relation has over the last more than five decades, witnessed a chequered history, reflecting the changing dimensions of geopolitical tensions and diplomatic relations between the two countries. India and Pakistan have followed a restrictive bilateral trade regime and hence trade figures between India and Pakistan has remained abysmally low. Trade between both nations had stood at just $2.4 billion in 2017-18, accounting for a mere 0.31 per cent of India’s total trade with the world and just about 3.2 per cent of Pakistan’s global trade. Further In 2018-19, bilateral trade between India and Pakistan was valued at USD 2.6 billion; Pakistan’s imports from India accounted for USD 2.06 billion which is 3 per cent of Pakistan’s total imports, and India’s imports from Pakistan stood at USD 495 million accounting for only 0.1 per cent of India’s total imports.

(Source- Nisha Taneja, Samridhi Bimal, Varsha Sivaram “Emerging Trends in India Pakistan Trade”, ICRIER Working paper)

(Source- Nisha Taneja, Samridhi Bimal, Varsha Sivaram “Emerging Trends in India Pakistan Trade”, ICRIER Working paper)

The India-Pakistan bilateral trade relation has over the last more than five decades, witnessed a chequered history, reflecting the changing dimensions of geopolitical tensions and diplomatic relations between the two countries. India and Pakistan have followed a restrictive bilateral trade regime and hence trade figures between India and Pakistan have remained abysmally low. Trade between both nations had stood at just $2.4 billion in 2017-18, accounting for a mere 0.31 per cent of India’s total trade with the world and just about 3.2 per cent of Pakistan’s global trade. Further In 2018-19, bilateral trade between India and Pakistan was valued at USD 2.6 billion; Pakistan’s imports from India accounted for USD 2.06 billion which is 3 per cent of Pakistan’s total imports, and India’s imports from Pakistan stood at USD 495 million accounting for only 0.1 per cent of India’s total imports.

Barely a day after the Pulwama attack on 14 February 2019, the Indian government in a tough message to Pakistan announced its withdrawal of the Most Favored Nation status for trade accorded to Pakistan since 1996. In the same year after the change in the Constitutional status of Jammu and Kashmir on August 5, 2019, Pakistan completely suspended its bilateral trade with India[14]. It forgot that the move would amount to a flea-bite for India and only cause problems for the balance of payment problems Pakistan itself was facing. The impact of these actions has been telling.

The Indian government’s decisions–withdrawal of MFN status and imposition of 200 per cent duty hurt Pakistan’s exports to India that fell from an average of USD 45 million per month in 2018 to USD 2.5 million per month in March-July 2019. Truck traffic from Pakistan to India in April-November 2019 fell to 348 trucks from 4381 trucks the year earlier same period and from India to Pakistan it was 113 trucks in April-November 2019 as compared to 223 trucks for the same period in 2018.

India Pakistan Dialogue Process

Indo Pakistan dialogues since 1947 has been characterized by rollercoaster of expectations and disappointments. Whether it was the Nehru–Liaquat talks post Partition, or the Swaran Singh–Bhutto talks of 1962–63, or the composite dialogue process of the 1990’s and the next decade, the results have been the same barring some positive movement on issues like connectivity (road and rail), trade, visas and so on. On issues like Kashmir and terror attacks against India, there has been no forward movement[15]
India has made repeated efforts and consistently sought to normalise relations (keeping with its ‘Neighborhood First’ policy) with Pakistan in its own and regional interest with a good neighbourly approach. However, it has been repeatedly rewarded by the attacks on vital Indian targets by Pakistan based terrorist groups - a pattern that has become part of their DNA. Some of the instances are the cross-border terror attack on Pathankot Airbase on 2 January 2016; attack on Army Camp in Uri in August 2016; and terror attack on the convoy of Indian security forces in Pulwama by Pakistan based Jaish-e-Mohammad (JeM) on 14 February 2019[16]
These measures failed in their endeavor because of Pakistan’s intransigent, unrealistic and unifocal approach, which did not take into account either the moral or juridical aspects of the issue or the existing realities. Over the years United States among other countries had suggested about the possible role of dialogue in reduction of tension. India remains committed to resuming bilateral dialogue with Pakistan in the spirit of Simla Agreement and Lahore Declaration. However, Pakistan must stop its sponsorship of cross border terrorism against India for any meaningful dialogue to be held. Members of the international community generally understand India's position.

Timeline of the Dialogue Process

1950- Nehru-Liaquat talks and agreement

1960- Indus Water Treaty signed by India and Pakistan

1965- Swaran Singh and ZA Bhutto talks on Kashmir

1966- Tashkent declaration, Indian Prime Minister Lal Bahadur Shastri and Pakistani President Ayub Khan signed the Tashkent Agreement in 1966. It was agreed that “both sides will exert all efforts to create good neighbourly relations in accordance with the United Nation Charter” and return to the status quo ante.

1972- Shimla agreement was signed between the then Indian Prime Minister Indira Gandhi and Pakistani President Zulfikar Ali Bhutto. By this agreement, the countries resolved to settle their differences by peaceful means through bilateral negotiations or by any other peaceful means mutually agreed upon between them.

1998- A composite dialogue was started between India and Pakistan. This was the first time reference of "all outstanding issues including Jammu and Kashmir" was mentioned. The CDP comprises discussions on the following issues: Jammu and Kashmir, peace and security, Sir Creek, Siachen, Terrorism and Drug Trafficking, Wullar Barrage/Tulbul navigation project, and promotion of friendly exchanges.

1999- The Lahore declaration, then prime minister Atal Bihari Vajpayee visited Lahore to meet Prime Minister Nawaz Sharif. The two signed the Lahore Declaration. Kargil war happened in the same year disrupting the talks process.

2001 - President Pervez Musharraf was invited for Agra summit. It failed, as Pakistan was adamant on discussing Kashmir issue first.

2003- India and Pakistan implement a formal ceasefire along the International Border and the Actual Ground Position Line in Jammu and Kashmir.

2004-2005 - Discussions on composite dialogue resumed.

2008 - Mumbai terror attacks stalled the whole process.

2010 - Talks started again and it was named "resumed dialogue" instead of composite dialogue.

2011- Talks stalled following firing on the border and beheading of an Indian soldier.

2015- The External Affairs Minister of India, Smt. Sushma Swaraj led the Indian delegation to the Fifth Ministerial Conference of the Heart of Asia-Istanbul Process in Islamabad proposed a Comprehensive Bilateral Dialogue.

2016- Cross-border terror attack on Pathankot Airbase camp, talks stalled

DGMO’s Statement on LoC Ceasefire

On 24-25 February 2021, in a surprise development the Directors General of Military Operations (DGMOs) of India and Pakistan recommitted themselves to the 2003 ceasefire agreement at the Line of Control and agreed to address ‘core issues’ that could undermine peace and stability. A joint statement issued stated: “The Director Generals of Military Operations of India and Pakistan held discussions over the established mechanism of hotline contact. The two sides reviewed the situation along the Line of Control and all other sectors in a free, frank and cordial atmosphere. In the interest of achieving mutually beneficial and sustainable peace along the borders, the two DGMOs agreed to address each other’s core issues and concerns which have propensity to disturb peace and lead to violence. Both sides agreed for strict observance of all agreements, understandings and cease firing along the Line of Control and all other sectors with effect from midnight 24/25 Feb 2021.Both sides reiterated that existing mechanisms of hotline contact and border flag meetings will be utilised to resolve any unforeseen situation or misunderstanding[17]”.

This sudden move is a welcome step considering that the 2003 ceasefire had been in tatters since 2014 with over 5,000 incidents of ceasefire violations reported in 2020 itself. It has destroyed several homes, schools and infrastructure on both sides of the border. The ceasefire agreement reinforces the sanctity of the LoC and increases chances of stability. However, considering Pakistan’s past track record India can’t be euphoric about it and neither can it afford to lower its guard.

Pakistan and Financial Action Task Force (FATF)

The Financial Action Task Force (FATF), set up in 1989 following a G-7 resolution, provides the international standards for anti-money laundering and combatting terrorist financing (AML/CFT). An Inter-governmental organisation with 38 members and two observers, the FATF is a policy making body which sets “standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system” [18].

The methodology of FATF consists of two basic components. One, the technical compliance assessment addresses the specific requirements of the FATF Recommendations, principally as they relate to the relevant legal and institutional framework of the country and the powers and procedures of the competent authorities. These represent the fundamental building blocks of an anti-money laundering and counter-terrorist financing (AML/CFT) system. Two, the effectiveness assessment assesses the adequacy of the implementation of the FATF Recommendations, and identifies the extent to which a country achieves a defined set of outcomes that are central to a robust AML/CFT system. The focus of the effectiveness assessment is therefore on the extent to which the legal and institutional framework is producing the expected results.

Together, the assessments of both technical compliance and effectiveness will present an integrated analysis of the extent to which the country is compliant with the FATF Standards and how successful it is in maintaining a strong AML/CFT system, as required by the FATF Recommendations. Since 2001, FATF has been maintaining two types of list: commonly known as the Black List (Formally called the “Call for Action”) and the Grey list (Formally called “other Monitored jurisdictions).

Pakistan, on whose soil several terrorist groups operate freely, and whose agencies are known to have created and supported many of these groups, is an obvious weak point in the International fight combat terrorist financing[19]. Pakistan has been under scrutiny of this terror watchdog and has a long history of FATF grey listing- from 2008 to 2010 and then from 2012 to 2015 for making money laundering and terror funding as its foreign policy tool to foment violence and civil disturbance in its neighborhood.

In June 2018 Pakistan was again placed on the ‘Grey List’ by the FATF and was given a plan of action to complete by October 2019 or face the risk of being placed on the 'Black List' along with Iran and North Korea. The FATF press release indicated that the ‘action plan’ should largely look at plugging the holes in terror financing and activities of UN-designated terrorists.

Action Plan given by FATF

Pakistan will work to implement its action plan to accomplish these objectives that include: (1) demonstrating that TF risks are properly identified, assessed, and that supervision is applied on a risk-sensitive basis; (2) demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations, and that these actions have an effect on AML/CFT compliance by financial institutions; (3) demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS); (4) demonstrating that authorities are identifying cash couriers and enforcing controls on illicit movement of currency and understanding the risk of cash couriers being used for TF; (5) improving inter-agency coordination including between provincial and federal authorities on combating TF risks; (6) demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and persons and entities acting on behalf or at the direction of the designated persons or entities; (7) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions and enhancing the capacity and support for prosecutors and the judiciary; and (8) demonstrating effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services; (9) demonstrating enforcement against TFS violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases; (10) demonstrating that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources. [20]

Since then, the country continues to be on that list due to its failure to comply with the FATF mandates and the successive deadlines.


In February 2020, the organization expressed reservations over “Pakistan’s failure to complete its action plan in line with the agreed timelines and in light of the terrorist financing risks emanating from the jurisdiction” and was retained on the grey list till June 2020. Due to the COVID-19 pandemic, it managed to get an extension of four months[21].

On 13 October 2020, The Asia Pacific Group, an additional affiliate of the FATF in its 45-page mutual evaluation report on Pakistan, mentioned that out of the 40 recommendations only 25 were partially compliant; 4 were non-compliant; 9 were largely compliant areas, only one was fully compliant.

During its virtual plenary held from 21-23 October 2020, FATF concluded that Pakistan will continue in its 'grey' list till February 2021 as it has failed to fulfill six key obligations of the global money laundering and terrorist financing watchdog that include failure to take action against two of India's most wanted terrorists - Maulana Masood Azhar and Hafiz Saeed. It also mentioned that Pakistan should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) demonstrating that law enforcement agencies are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and those acting on behalf or at the direction of the designated persons or entities; (2) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions; (3) demonstrating effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists and those acting for or on their behalf, preventing the raising and moving of funds including in relation to NPOs, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services; and (4) demonstrating enforcement against TFS violations, including in relation to NPOs, of administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases[22].

There was also some progress in a number of areas in its action plan, including: taking action to identify and sanction illegal MVTS, implementing cross-border currency and bearer negotiable instruments controls, improving international cooperation in terrorist financing cases, passing amendments to the Anti-Terrorism Act to increase the sanctioning authority, financial institutions implementing targeted financial sanctions and applying sanctions for AML/CFT violations, and controlling facilities and services owned or controlled by designated persons and entities[23].

India being a member of FATF has ensured that Pakistan is rightly put on grey list and should be pushed to the blacklist. FATF, from its own channels, that included field visits, had gathered enough proof to realise the extent of global terror financing that was happening with the connivance of Pakistan-based institutions. FATF should be persuaded not take Pakistan’s anti-terror financing violations lightly and initiate counter measures against it. This will require hard work on the diplomatic front.

As of October 2021 Pakistan continues to remain on the grey list. FATF has mentioned that Pakistan’s continued political commitment has led to significant progress across a comprehensive CFT action plan as Pakistan has completed 26 of the 27 action items in its 2018 action plan. However the FATF has urged Pakistan to continue to make progress to address as soon as possible, the one remaining CFT-related item by continuing to demonstrate that TF investigations and prosecutions target senior leaders and commanders of UN designated terrorist groups.

A potential blacklisting will lead to Pakistan’s status further demoted, it can be expected that the country will face considerable difficulties and challenges in order to access financial assistance from global economic institutions such as the International Monetary Fund (IMF). The IMF highlighted that if Pakistan gets demoted to the blacklist, it will have grave implications for capital inflows to the country. Accordingly, after its team-visited Pakistan, the IMF pointed out “A potential blacklisting by FATF can result in a freeze of capital flows and lower investment to Pakistan.” The IMF report has also noted potential risks of FATF blacklisting, which include the freezing of capital flows to Pakistan, slow progress in refinancing or re-profiling loans from major bilateral creditors, and increasing headwinds from a weaker global economic backdrop.

China-Pakistan Nexus

China and Pakistan have continued to maintain close and stable relations even though they lack commonality in terms of ethnicity, religion, culture, language, and societal values. Since the establishment of diplomatic relations in 1951, China-Pakistan ties have steadily strengthened and deepened. In March 1963 Pakistan concluded a border agreement with China under which it ceded to China an area of 5,010 square kilometers of Pakistan Occupied Kashmir (PoK), an area that remains under Chinese control. The agreement laid a solid foundation for their bilateral relationship. Since the 1990s Beijing has been Pakistan’s top supplier of both military hardware and nuclear technology. However the unholy nexus that started in the military sphere has transcended to other aspects of the relations. The two neighbours are more deeply engaged in non-security-related fields such as economic development, general academic collaboration and cultural exchanges.

Timeline of China Pakistan relations

1950- Pakistan becomes the first majorly Muslim country to recognize the People’s Republic of China

1951- The two countries established formal diplomatic relations

1956- Pakistani Prime Minister H.S. Suhrawardy and Chinese Premier Zhou Enlai signed the Treaty of Friendship between China and Pakistan in Beijing

1963- China and Pakistan reach first formal trade agreement.

1963- Pakistan concluded a border agreement with China under which it ceded to China an area of 5,010 square kilometers of PoK, an area that remains under Chinese control.

1965 - In response to war with India, U.S. cuts military support to Pakistan. China soon becomes Pakistan’s principal arms supplier.

1970- Pakistan helps the USA arrange the 1972 Nixon visit to China

1978-The Karakoram highway linking the mountainous Northern Pakistan with western China officially opens

1986- China and Pakistan reach a comprehensive nuclear cooperation agreement

1996 - Chinese President Jiang Zemin pays state visit to Pakistan.

1999 - A 300-megawatt nuclear power plant, built with Chinese help in Punjab province, is completed.

2002 - Chinese Vice Premier Wu Banggu attends ground-breaking ceremony for Pakistan’s Gwadar deep-sea port. China provides $198 million for $248 million joint project.

2006- China Pakistan signed free trade agreement

2008- Pakistan and China agree to build a railway through the Karakoram highway, in order to link China’s rail network to Gwadar port.

2010- Chinese premier Wen Jiabao visits Pakistan

2013- Management of Gwadar Port is handed over to state-run Chinese overseas port holdings

2013- Pakistan and China approved the China-Pakistan Economic Corridor that would link Kashgar in Xinjiang to Gwadar in Balochistan

2013- Pakistan and China sign the landmark Memorandum of Understanding on Cooperation for the Long-term Plan on China-Pakistan Economic Corridor, a flagship project of Chinese mega initiative in the Belt & Road Initiative (BRI).

2014- The governments of Pakistan and China agree on the construction of the 27 km Orange Line metro train project in Punjab.

2015- The two countries celebrate 2015 as the Year of Friendly Exchanges 2015 - Trade between the two countries reaches US $16 billion.

2015- Chinese President Xi Jinping undertakes a landmark visit to Pakistan, both countries signed over 50 documents including the agreement on the China-Pakistan Economic Corridor (CPEC) outlining projects worth USD 46 billion. The pledged investment already raised USD 62 billion.

2016- China-Pakistan unveils the Long-term Plan of CPEC, paving the ways for further cooperation and collaboration.

2017- Prime Minister Muhammad Nawaz Sharif attends the Belt and Road Forum for International Cooperation in Beijing.

2018- Prime Minister Imran Khan pays a historic visit to China and both sides agree to further strengthen the All-Weather Strategic Cooperative Partnership and jointly build Closer China-Pakistan Community of a Shared Future in the New Era

2018- CPEC enters in its Second Phase, focused on social-economic development of Pakistan on a faster pace.

2018- Phase-II of the China-Pakistan Free Trade Agreement was signed, facilitating Pakistani exports.

2019- Prime Minister Imran Khan visits China to attend the Second Belt and Road Forum for International Cooperation.

2019- JWG (Joint Working Group)on International Coordination and Cooperation launched.

2019- CPEC Authority has been set-up to coordinate and monitor progress on CPEC Projects

2020- Extensive bilateral coordination in the wake of the Coronavirus pandemic; China is the major contributor who extended the largest amount of assistance to Pakistan in fighting the outbreak.

China Pakistan Economic Corridor

The CPEC, a flagship component of China’s ambitious BRI, was billed as a game changer by the Pakistani elites. Officially launched in April 2015, the economic corridor that would link Kashgar in Xinjiang to Gwadar in Balochistan five years later has entered its second phase. While the first phase was essentially about electricity projects and railway lines the second phase has special emphasis on development of special economic zones, agriculture, industry, trade and science and technology. Some of the projects are the Karakoram Highway (N-35 or National Highway 35), ML-1 railway line, Peshawar-Karachi motorway, Karachi Circular Railway, and Gwadar Port.

India has opposed the BRI for not being transparent in its terms and conditions, for not respecting sovereignty of other states and for creating dependencies and driving recipient countries into debt. CPEC violates India’s sovereignty as it traverses through Pakistan’s illegally occupied part of Jammu and Kashmir and Ladakh[24].

CPEC is a strategic project that gives China a foothold in the western Indian Ocean with the Gwadar port, located near the strategic Strait of Hormuz, where Chinese warships and a submarine have surfaced. Access here allows China greater potential to control maritime trade in that part of the world—a vulnerable point for India, which sources more than 60% of its oil supplies from the Middle East. What’s more, if CPEC does resolve China’s “Malacca dilemma”—its over-reliance on the Malacca Straits for the transport of its energy resources—this would give Asia’s largest economy greater operational space to pursue unilateral interests in maritime matters to the detriment of freedom of navigation and the trade-energy security of several states in the Indian Ocean region, including India[25].

The Government of India is of the firm belief that connectivity initiatives must be based on universally recognized international norms. They must follow principles of openness, transparency and financial responsibility and must be pursued in a manner that respects sovereignty, equality and territorial integrity of other nations. Other countries in this regard have also endorsed India’s consistent position[26].

Defense, Nuclear and Missile Cooperation

China-Pakistan relations are moving from an “all-weather strategic cooperative partnership” to one where Beijing is increasingly integrating Pakistan into its military system to fulfill global ambitions.

China-Pakistan defence, nuclear and missile cooperation has strengthened. Pakistan depends mostly on China for its nuclear programme firms arranging critical components for the Pakistani nuclear programme from other countries. The Pakistani nuclear effort received considerable assistance from China. In the late 1970s, Beijing supplied Pakistan with a broad array of missile and nuclear weapons related assistance. This assistance included warhead designs, highly Enriched uranium (HEU), components of various short and intermediate range missile systems, gas centrifuge equipment and technical expertise. The A.Q. Khan network later transferred some of this technology to other countries. In addition to providing technical knowhow China is also financing nuclear reactors either under construction or in design stage[27]. In 1990s, China designed and supplied heavy water Khushab reactor, which plays a key role in Pakistan’s production of plutonium[28].

The legal basis of China’s nuclear trade with Pakistan is questionable. The NPT does not bar civil nuclear commerce with non-NPT countries. Pakistan is not a signatory to the NPT nor a member of the NSG but its benefactor, China, is. Although NSG Guidelines prohibit civil nuclear commerce with Pakistan, China has stated that it signed nuclear agreements with Pakistan prior to joining the NSG in 2004. Since NSG Guidelines exclude such agreements signed prior to 2004, Beijing conveniently uses this grandfather clause in the NSG Guidelines to its benefit.

Pakistan is reportedly expanding its nuclear arsenals and developing new types of nuclear weapons. However, concerns have been raised internationally regarding development of these tactical weapons as Pakistani military commanders could lose the ability to prevent the use of such weapons, which would be more portable and mobile than Islamabad's current nuclear weapons and delivery vehicles. The mix of terrorism and concerns about safety of Pakistan’s nuclear weapons & material presents challenges, which were voiced by President Obama at the Nuclear Safety Summit in 2016.

China’s military institutions train Pakistani military personnel and carry out joint military and counter-terrorism exercises. China has recently begun helping Pakistan develop aerospace capability. The establishment inside Pakistan of satellite stations linked to China’s BeiDou Satellite Navigation System ensures that the avionics, guidance systems etc., of the Pakistan military will be tied in with Chinese systems[29]. Meanwhile, China’s People’s Liberation Army (PLA) has been promoting synergy between its personnel deployed in the Xinjiang and Tibet Military Regions—both part of the PLA Western Theatre Command, which exercises operational jurisdiction over China’s borders with Afghanistan, Pakistan and India.

Support on Kashmir and Pakistan’s Terrorist Activity

China’s support for Pakistan has become more overt since April 2015 with Beijing insisting that India should resume talks with Pakistan and resolve the Kashmir issue. It has also argued that Pakistan is a bigger victim of terrorism. India has firmly rejected China’s interference in the country's internal affairs.

China is giving cover to Pakistani terrorist activity and terrorists like Masood Azhar. China, a veto-wielding member of the UNSC and a close ally of Pakistan, has consistently blocked moves first by India and later by the US, the UK and France to designate Azhar as a global terrorist by the 1267 Committee by putting technical holds, India’s concerns are that Pakistan has increasingly become a pawn in Chinese policy, under an increasing CPEC related debt trap. In future there will be further military dependencies. The collusive China-Pakistan threat, both asymmetric and conventional is likely to magnify[30].


[1]Satish Chandra, India’s relations with its SAARC neighbours, Vivekananda International Foundation, 2019
[3]General VP Malik, A Comprehensive Response Strategy to a Collusive and Collaborative Threat from China and Pakistan, 30th USI National Security Lecture, 2014
[3]Zulfikar Ali Bhutto addressed the UN Security Council on 22nd September 1965. He declared his nation’s intent to “fight for a thousand years” against India. In 1978 Zia-ul-Haq devised a radical strategy to “bleed India through a thousand cuts” giving shape to Bhutto’s pronouncement at UN and initiating terrorism within India through Kashmir.
[4]Kashmir the true story,
[5]Annual Report of Ministry of Home Affairs, 2019-2020.
[6]Christine Fair, Fighting to the End: The Pakistan Army's Way of War, 2014, Oxford University Press
[7]Milewski, Terry. “Khalistan- A Project of Pakistan”, Macdonald-Laurier Insititute, September 2020, Available from:
[8]Harsha Kakkar, “Pakistan plan to open Punjab flank”, The Statesman, December 15, 2020
[10]Seshadari Chari, “Kartarpur, Khalistan and Pakistan Army eagerness to open this corridor”, November 8, 2019
[11]Banned Organisations, Ministry of Home Affairs. New Delhi. Available at
[12]Satish.Chandra Indus Waters Treaty Merits Revisit. The Sunday Guardian Live. January 8, 2017.
[13]116th meeting of the India-Pakistan Permanent Indus Commission, March 24, 2021,
[14] “India withdraws Most Favoured Nation status to Pakistan after Pulwama attack, India Today, February 15, 2019
[15]Tilak Devasher, “Missing factors in India’s policy towards Pakistan”, Vivekananda International Foundation, Occasional Paper, 2017
[16]MEA Bilateral Brief- India Pakistan Relations,
[17]Ministry of Defence, Joint Statement,
[25]Harsh V Pant, “Responding to the China-Pakistan Economic Corridor Challenge”, Mint , December 1, 2017
[27]Pakistan Nuclear Weapons Program, “Nuclear Threat Intiative”
[28]General VP Malik, A Comprehensive Response Strategy to a Collusive and Collaborative Threat from China and Pakistan, 30th USI National Security Lecture, 2014.
[29]Jayadeva Ranade, “China plans to sell Pak an aircraft carrier and integrate it militarily”, Sunday Guardian Live, February 2, 2019
[30]Dinkar Peri, “Pakistan has become pawn in Chinese Policy- Air Chief”, The Hindu, December 29, 2020

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India-Bhutan Relations


India and Bhutan share decades of close cultural and economic linkages. They share a close relationship not only in terms of geography but also in terms of history, traditions, culture and spirituality. The cordial relations between the two sovereign nations commenced with the Indo-Bhutanese treaty of 1949. Diplomatic relations between India and Bhutan were established in 1968 with the appointment of a resident representative of India in Thimphu. The basic framework of India-Bhutan bilateral relations is the Treaty of Friendship and Cooperation signed in 1949, which was revised in February 2007.

Bhutan plays a significant role in two of India’s major foreign policies – the ‘Neighborhood First Policy’ and the ‘Act-East Policy’. The recent high-level exchanges have set the tone for strengthening of the relationship. India’s Prime Minister Modi chose Bhutan for his first international visit after getting elected in 2014. Also, Foreign minister S. Jaishankar visited Bhutan on his first trip abroad after assuming office in June 2019.

India’s soft power in Bhutan is deeply integrated with the overall diplomatic relationship between the two countries.[1]It ranges from economic to cultural partnership. Buddhism has reinforced India’s soft power in Bhutan Government of India has consistently supported the socio-economic developments of Bhutan. The key areas of focus of GOI’s assistance include agriculture and irrigation development, ICT, health, industrial development, road transport, energy, civil aviation, urban development, human resource development, capacity building, scholarship, education and culture. [2]

Economic Cooperation

Mutually beneficial economic ties have been the main pillar of India-Bhutan bilateral relations. India continues to be the largest trading and development partner of Bhutan. Development through Five Year Plans (FYP) in Bhutan started in 1961. The first two five year plans of Bhutan were entirely funded by India.[3] For the 12th Five Year Plan, India’s contribution of Rs. 4500 cr. will constitute 73% of Bhutan’s total external grant component.

Some of the major projects in Bhutan undertaken with Indian assistance in the past include 1020 MW Tala Hydroelectric Project, 336 MW Chukha Hydroelectric Project, 60 MW Kurichhu Hydroelectric Project, Penden Cement Plant, Paro Airport, Bhutan Broadcasting Station, Major Highways, Electricity Transmission and Distribution System, Indo-Bhutan Microwave Link, Exploration of Mineral Resources, and Survey and Mapping[4].

Hydropower Cooperation

Cooperation in hydropower projects is one of the most significant examples of win-win cooperation between India and Bhutan[5]. Bhutan is among the water-rich countries in the world with 30,000 MW hydro potential. India has helped Bhutan harness hydropower energy with new technology and financial assistance. Bhutan understands the dependence of its economy on hydropower and has actively cooperated with India

The ongoing cooperation between India and Bhutan in the hydro-power sector is covered under the 2006 bilateral agreement for cooperation and its Protocol signed in 2009. Four hydro-electric projects (HEPs) totaling 2136 MW are already operational in Bhutan and are supplying electricity to India. The 720 MW Mangdechhu was commissioned in August 2019. Two HEPs namely, 1200 MW Punatsangchhu-I, 1020 MW Punatsangchhu-II in Inter-Governmental mode and Kholongchhu HEP (600 MWs) under the joint venture mode are under various stages of implementation. These projects are a reliable source of inexpensive and clean electricity to India, a major contributor towards Bhutanese GDP and strengthening India-Bhutan economic integration.


India is Bhutan's largest trading partner. In 2018, total bilateral trade between the two countries stood at Rs. 9227.7 crores. Major exports from India to Bhutan are mineral products, machinery and mechanical appliances, electrical equipments, base metals, vehicles, vegetable products, plastics and articles[6].

Total trade between India and Bhutan has nearly doubled in the last five years from 2014-15 to 2018-19. In the year 2014-15, total trade between India-Bhutan stood at 483.8 US$ million and it increased to 1,026.80 US$ million in 2018-19.

COVID-19 and India-Bhutan Cooperation

India-Bhutan relations have been strong during the COVID-19 pandemic. Leaders of both India and Bhutan have coordinated responses to fight the coronavirus pandemic. The Government of India has ensured that it delivers all essential commodities such as food, fuel and medicines to Bhutan on time. For this, around 500 trucks reach Bhutan with the daily supplies from India. India provided three consignments of the medical supplies to Bhutan which included Hydroxychloroquine (HCQ) [7].

At the regional level, India organised a videoconference on March 15 with leaders of the SAARC countries where Prime Minister Narendra Modi proposed a SAARC COVID-19 Emergency Fund to mitigate the impact of coronavirus in the region.

The crisis led India and Bhutan to jointly work at the regional front. The teamwork showed by the two countries in the challenging time of COVID 19 has further strengthened the special relationship.


[1]Medha Bisht, “What role does the soft power play in the India-Bhutan relations?”, IDSA, April 05, 2019,
[2]MEA Brief, India Bhutan Relations,
[3]Embassy of India, Bhutan.
[5] Nisha Taneja, Samridhi Bimal, Taher Nadeem, Riya Roy, “India Bhutan Economic Relations”, ICRIER, August 2019
[6]Embassy of India, Bhutan.
[7]Sidhant Sibal, "COVID-19 crisis: Ensured essential supplies to Bhutan during lockdown, says Indian envoy Ruchira Kamboj", Wion, May 6, 2020.

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India and Bangladesh

Significance of Bangladesh for India

Bangladesh is India’s immediate neighbour in the eastern frontiers with considerable geostrategic, geo-economics and geopolitical significance.

Currently, India and Bangladesh are enjoying a multi-dimensional and multi-faceted partnership in the region.[1]

The bilateral relationship between both countries were “premised on a cooperative framework enabling a regional platform, which provided opportunities for other neighbours to join the process too”. [2]

India considers Bangladesh a critical partner of her ‘Neighborhood First’ policy and ‘Act East’ policy.

India and Bangladesh “are geographically contiguous and share common ecosystems such as forests and seas”. [3]

The national security of India, the integration and overall development of India’s eastern and north eastern regions are interlinked to the socio-economic and political scenarios of Bangladesh.

Prior to the Covid-19 pandemic days India and Bangladesh “were the two fastest growing Asian economies” of the world.[4]

Historical Ties

The year 2021 is significant as Indo-Bangladesh is celebrating ‘50 years of the establishment of their ties’ post the 1971 Bangladesh Liberation War, supported by India.

The Ministry of External Affairs (MEA) of India states that “the relationship between India and Bangladesh is anchored in history, culture, language and shared values of secularism, democracy, and countless other commonalities between the two countries” and also premised on equality, sovereignty, trust “and win-win partnership that goes far beyond a strategic partnership”.[5]
The language Bengali/Bangla, which is spoken in both India and Bangladesh, is a “strong bond” that glue both the nation-states.[6]

Immediately after the independence of Bangladesh in 1971, India was one of the first nation-states to recognise Bangladesh as an independent country and establish the necessary diplomatic relations with them.[7]
The bilateral relations between both the nation-states have generally been cordial, especially since 2009, when Awami League had come to power in Bangladesh.

Present Engagements

Recent security and defence engagements between India and Bangladesh:-

The “trust quotient” between India and Bangladesh has increased during the period of PM Modi and his Bangladeshi counterpart Sheikh Hasina.[8]

An expert points out that “the chemistry between the two leaders is palpable. This arises primarily from India’s unflinching support to the Sheikh Hasina government in the face of domestic opposition and meddling by external actors”. [9] In return, Bangladesh has reciprocated by “demonstrating low tolerance for radicalism and greater sensitivity to India’s security concern”. [10]

India’s security concern pertaining to the anti-India insurgent groups camping in the bordering state of Bangladesh was an issue that has been bothering the country for many years until it was addressed by PM Sheikh Hasina when she returned to power in 2008.

The defence cooperation between India and Bangladesh has strengthened “with India extending a US$ 500 million Defence Line of Credit to Bangladesh in 2019”. [11]

The growing level of military cooperation between the two countries became evident when a “122-member contingent from the Bangladesh Armed Forces” was present at the 2020 Republic Day parade of India. [12]

‘Sampriti’ - a joint counter-terrorism exercise since 2010 between the armies of two nation-states and the joint naval exercises in Bay of Bengal - ‘Bongosagor’ (2019), ‘Ex CORPAT’ (2020) are examples of growing defence
e/military cooperation between India and Bangladesh. [13]
A delegation of Indian army also participated in ‘Shantir Ogroshena 2021 (Front Runner of the Peace)’ - a multinational military exercise held in Dhaka “to mark the birth centenary of the Bangabandhu Sheikh Mujibur Rahman and the golden jubilee of the liberation of Bangladesh”. [14]

India-Bangladesh Cross-Border Connectivity

Ever since 2010, India and Bangladesh have been improving connectivity via rail, road and coastal ways.

Some recent agreements between the two countries related to land, cross-border connectivity and transportation are:

  1. ‘The 2015 India-Bangladesh Land Boundary agreement’.
  2. ‘Reviving the Protocol on Inland Water and Trade Transit (PIWTT)’.
  3. ‘The Inauguration of the Maitri-Setu Bridge/India-Bangladesh Friendship Bridge over the Feni river connecting “Sabroom district in south Tripura to Ramgarh in Bangladesh”. [15]
  4. ‘Agreement on the use of Chattogram and Mongla Ports for movement of India’s transit cargo through Bangladesh’.


The two nations share 54 rivers and “a bilateral Joint Rivers Commission (JRC) is working since June 1972 to maintain liaison between the two countries to maximize benefits from common river systems”.[17]

With “the operationalization of the Daukandi (Bangladesh) – Sonamura (Tripura) Inland Waterway Protocol route” in 2020, the cross-border connectivity of India and Bangladesh has achieved another significant milestone.[18]

According to MEA - “the operationalization of this new protocol route, besides further facilitating overall bilateral trade with Bangladesh, will provide an economical, faster, safer and environment friendly mode of transport and will result in substantial economic benefits to local communities on both sides”. [19]

The “opening up of the India-Bangladesh protocol route” could pave way for a “water grid programme” between the two countries; the programme was announced in the 2019 Budget of India.[20]

The plan is to connect 1400-km long National Waterway-1 to 1,600 km long India-Bangladesh protocol route via National Waterway-2; the programme could result in seamless connection between both the countries.[21]

A new border haat is being considered by both countries “at Sonamura subdivision of Sepahijala district, to boost trade and commerce between the two countries”. [22]

Presently, there are four border haats operational along the Indo-Bangladesh border - two in Balat and Kalaichar in Meghalaya; the other two in Kamalasagar and Srinagar in Tripura.

PM Modi and PM Sheikh Hasina have recently launched a 10.5-kilometer-long railway line that “connects Haldibari in the eastern Indian state of West Bengal with Chilahati in Bangladesh”. [23]

The ‘Haldibari-Chilahati rail link’ could increase “the accessibility of the railway network” to the main ports, land borders and dry ports so as “to support the growth in regional trade as well as to encourage the region’s economic and social development”. [24]

In addition to the ‘Haldibari-Chilahati rail link’ , there are 4 other ‘operational links’ between India and Bangladesh. They are - Radhikapur (India)-Birol (Bangladesh), Gede (India)-Darshana (Bangladesh), Petrapole (India)-Benapole (Bangladesh) and Singhabad (India)-Rohanpur (Bangladesh). [25]

Trade and Economic Engagement Between India and Bangladesh

Bangladesh is India’s biggest trading partner in South Asia.

According to MEA, the bilateral trade between the two countries “has grown steadily over the last decade. India’s exports to Bangladesh in FY 2018-19 stood at US$ 9.21 bn and imports from Bangladesh during the same period were US$1.04 bn”. [26]

To promote and advance cooperation in bilateral trade, India and Bangladesh have decided to create “an India-Bangladesh CEO’s Forum to provide policy level inputs in various areas of trade and investment” while also facilitating “exchanges among the business communities of both the countries”. [27]

Power Sector cooperation has become one of the trademarks of India-Bangladesh bilateral relations. Bangladesh is currently importing from India 1160 MW of power.[28]

An Agreement has been reached between India and Bangladesh ‘to export power including building a transmission line from Berhampur in India to Bheramara in Bangladesh’.[29]

India’s ‘Vaccine Maitri’ and Bangladesh

As the new mutant variants of Covid-19 are emerging in different parts of the world, India partners with Bangladesh in her fight against the ongoing pandemic.
Indian government has cooperated with Bangladesh by providing them with protective equipment and necessary medicines to fight the Covid-19 virus.[30]

As on March 4, 2021, Bangladesh became “the highest recipient of the vaccines from India”, after receiving around “9 million doses of the COVISHIELD vaccines from Serum Institute of India (SII)”. [31]

PM Sheikh Hasina has pledged a contribution of USD 1.5 million to ‘the SAARC Corona Emergency Fund’ proposed by PM Modi to combat the Covid-19 pandemic in the region.[32] PM Modi has made an initial offer of USD 10 million for the proposed fund from India’s side.[33]

Bangladesh also extended support to India during the second wave of Coronavirus surge. India received consignments of protective items and medicines from Bangladesh which included 10,000 vials of Remdesivir injection, PPE kits, other Covid-related medicines, hand sanitisers etc.[34]

PM Modi’s Visit to Bangladesh to Celebrate 50 Years of Bangladesh Independence

On 26th March 2021 PM Narendra Modi began his 2-day visit to Bangladesh. The visit by India’s Prime Minister is to “remember ‘Bangabandhu’ Sheikh Mujibur Rahman, the father of the nation of Bangladesh, and celebrate the golden jubilee of the 1971 liberation war”. [35]

With PM Modi selecting Bangladesh for his first foreign visit after the onset of the current pandemic situation, the experts believe that “India’s ties with Bangladesh has gone way beyond symbolism”. [36]

The 2-day visit is considered to be a part of PM Modi’s visionary strategy for developing the eastern and (particularly) the North eastern parts of India with the support of Bangladesh.[37]

India and Bangladesh have signed a total of five Memorandum of Agreements (MoUs) during PM Modi's visit to Bangladesh.[38] The MoUs include areas of sports, commerce, information technology, disaster management, connectivity and more.[39]

During the visit, PM Modi handed over to PM Hasina a ‘representational box’ “as a symbol of India's gift of 1.2 million COVID vaccine doses to Bangladesh”. [40]

After the talks between the leaders of both nation-states, a joint statement has been released reiterating the strong commitment of India and Bangladesh to “eliminating terrorism in all its forms and manifestations”.[41]

The Mitali Express - a new passenger train service to improve ‘people to people connectivity’ was jointly inaugurated by PM Modi and PM Hasina during Indian PM’s two-day visit[42] . The Mitali express is “scheduled to run between Dhaka (Bangladesh) and Jalpaiguri (India, West Bengal)”.[43]

Marking protest against Indian Prime Minister’s visit to Dhaka, hardline Islamist groups unleashed violence across Bangladesh by attacking Hindu temples, train, buses and various government offices in the country. [44] The accusation hurled at PM Modi by the Islamist forces was that he was discriminating minority Muslims against the Hindu-majority in India. [45]

Present Challenges and Way Forward
Issue of Water Sharing

Water has been a problematic dimension of an otherwise ‘warm’ India-Bangladesh relationship, but “to regard water sharing as a contentious issue between India and Bangladesh is too alarmist”, remarks an expert.[46]

Bangladesh has always expressed the desire to “to sign an agreement over the 54 common rivers, which has been resisted by India for long given the different nature of the rivers in question”. [47]

India has also been expected by Bangladesh to share more water particularly from the river Teesta “but New Delhi has so far been unable to strike a deal on the matter, likely due to strong opposition from” her state of West Bengal and its Chief Minister Mamata Banerjee.[48]

Bangladesh “being the lower riparian state is in a weaker position on the use of these rivers….If Bangladesh does not get enough water (or if it gets too much when the rivers are full), it will face catastrophe”.[49]

‘Hydrological catastrophe’ in Bangladesh means instability in India`s West Bengal, north eastern region, and even far away states; also, the “severe dislocations in Bangladesh mean refugee and migrant flows into India”. [50]

As no agreement has been reached so far on sharing of waters of the Teesta river with India, the government of Bangladesh “wants to manage the water of its side by building a reservoir so that it could use it in an optimum manner and all through the year. To complete this project, Dhaka in early August 2020 sought financial assistance of nearly $1 billion from Beijing”.[51]

As much as it is a national security concern for India, the settlement of ‘water’ with Bangladesh is also necessary to retain/project India’s role as a responsible and key regional player.[52]

The ‘Indian Opportunity’ in Bangladesh’s Economic Growth

The recent economic growth of Bangladesh can expedite the integration of the regions belonging to the eastern subcontinent.[53]

As pointed out by experts, “Whether one likes it or not, the region’s prospects for a collective economic advance are rather dim. Thanks to Pakistan’s opposition to economic cooperation with India and its support for cross-border terror, the main regional forum for the subcontinent, the South Asian Association for Regional Cooperation (Saarc), is in a coma”.[54]

Hence, it would be in the best interests of India to use Bangladesh’s economic growth as an opportunity for promoting regional integration amongst India, Bangladesh, Nepal and Bhutan and this might help in promotion of the BBIN grouping which has not advanced speedy enough as of now. [55]

Also, the rise of Bangladesh in economic development could augment India’s overall plans to expedite “the development of its eastern and northeastern states”. [56]

Formalisation of The ‘Informal Trade’

Another challenge in the Indo-Bangladesh ties is the need for ‘formalisation of the informal trade’.

It has been reported that the worth of informal trade between the two countries “is equal to, and by some estimates even greater than, formal trade”. [57]

There are studies which “reveal that the goods and commodities engaged are not products of the bordering areas. In the case of ‘informal exports’ from India, a bulk of the material comes from far away states in the western and northern parts of the country”; also, the large portion of goods coming “in via Bangladesh are products of third countries”. [58]

These statistics do not incorporate “trade in contraband items and illegal exports such as livestock”. [59]

The North-Eastern region of India, West Bengal and Bangladesh are a “natural sub-region” - “Without dissolving the artificial boundaries created in the non-sovereign domains, the area will remain forever trapped in a suboptimal equilibrium. Time and circumstances are conducive for breaking that status-quo and both countries must seize the moment”, says an expert. [60]

Other Concerns

The border killings are an area of concern. In the backdrop of “incidents of killings of Bangladesh nationals in 2020” along the Indo-Bangladesh border, EAM Jaishankar stated that though “every death is regrettable….the problem is crime,” also adding that the reported deaths of Bangladeshi nationals are ““are fairly deep inside India”. [61]

Mr. Jaishankar continued by saying that the shared objective of both nation states to address the border killing should be “a no crime-no death border” policy.[62]

Though, over the years India and Bangladesh has made considerable improvement in the cross-border transportation system, this is one area the experts repeatedly suggest India and Bangladesh should increasingly focus upon.

For example, India’s Siliguri (Northern West Bengal) has “a natural advantage for accelerating and epitomising inclusive and sustainable transit transport connectivity for the Bangladesh, Bhutan, India, Nepal (BBIN) sub-region”, says experts. [63]

As the epicenter of “connectivity as well as transit point between the northeast and the rest of India and with Bangladesh, Bhutan and Nepal”, Siliguri has the capability “to accelerate economic recovery and growth for the people in this sub region”. [64]

Both nations could consider regions like Siliguri to advance cross-border connectivity. The larger idea is to “materialise an inclusive transport-led growth” for the region, particularly for the North-east and eastern parts of India. [65]
According to a recent World Bank report, seamless connectivity in transport between India and Bangladesh has the potential to “to increase national income by as much as 17% in Bangladesh and 8% in India. [66]

The report suggested that by “strengthening the Bangladesh-Bhutan-India-Nepal motor vehicles agreement (MVA)”, the regional transportation in eastern South Asia could be transformed and thus bring significant economic gains to India and Bangladesh. [67]


[1] Vasisht, Cchavi. “Discussion on India-Bangladesh Relations: Opportunities and Challenges.” Vivekananda International Foundation, 2 Feb. 2021,
[2]Datta, Sreeradha. “Towards a Durable Political Understanding: Fifty Years of Indo-Bangladesh Relations.” Indian Foreign Affairs Journal, 2020, pp. 183–190.,
[3]Vasisht, Cchavi. “Discussion on India-Bangladesh Relations: Opportunities and Challenges.” Vivekananda International Foundation, 2 Feb. 2021,
[4]Datta, Sreeradha. “Towards a Durable Political Understanding: Fifty Years of Indo-Bangladesh Relations.” Indian Foreign Affairs Journal, 2020, pp. 183–190.,
[5]"India-Bangladesh Relations.” Ministry of External Affairs (MEA). September 2017,
[6]Ramachandran, Sudha. "India-Bangladesh Relations: Time to Move Beyond Connectivity." – The Diplomat. January 04, 2021.
[7]"India-Bangladesh Relations." Ministry of External Affairs (MEA). September 2017.
[8]Ghose, Sandip. "Modi, Hasina Must Lay Ground for Borderless Economy between India, Bangladesh." ThePrint. March 26, 2021.
[9]Ghose, Sandip. "Modi, Hasina Must Lay Ground for Borderless Economy between India, Bangladesh." ThePrint. March 26, 2021.
[12]Datta, Sreeradha. “Towards a Durable Political Understanding: Fifty Years of Indo-Bangladesh Relations.” Indian Foreign Affairs Journal, 2020, pp. 183–190.,
[14]ANI. “Indian Army Delegation in Bangladesh for Multinational Military Exercise 'Shantir Ogroshena 2021': India News - Times of India.” The Times of India, 4 Apr. 2021,
[15]Gupta, Moushumi Das. "Maitri Setu & Why the India-Bangladesh Bridge Is Being Touted as 'Gateway to Northeast'." ThePrint. March 10, 2021.
[16]PIB. "Union Shipping Minister Flags off First Container Ship from Kolkata Port to Agartala via Chattogram Port." Press Information Bureau. July 16, 2020.
[17]"India-Bangladesh Relations.” Ministry of External Affairs (MEA). September 2017.
[18]"Tripura Receives First Ever Inland Shipping Cargo from Bangladesh." Ministry of External Affairs, Government of India. September 03, 2020. receives first ever inland shipping cargo from Bangladesh.
[20]Manchanda, Megha. "Water Grid Programme Set to Connect India with Bangladesh Seamlessly." Business Standard. July 06, 2019.
[21] Ibid.
[22]Chakraborty, Tanmoy. “Land for New Border Haat between India and Bangladesh.” Telegraph India, 28 Feb. 2020,
[23] Ramachandran, Sudha. "India-Bangladesh Relations: Time to Move Beyond Connectivity." – The Diplomat. January 04, 2021.
[24]Nag, Devanjana. "Number of Rail Links between India-Bangladesh Rises to Five: Haldibari-Chilahati Railway Line inaugurated." The Financial Express. December 18, 2020.
[25]Parashar, Utpal. "PM Modi, Sheikh Hasina Launch 5th Rail Link Connecting India and Bangladesh." Hindustan Times. December 17, 2020.
[26]MEA. "India-Bangladesh Bilateral Relations." Ministry of External Affairs. January 2020.
[29]Gupta, Shishir. "Delhi-Dhaka Ties Move beyond Symbolism, Seek to Power Growth and Connectivity." Hindustan Times. March 26, 2021.
[30]Vasisht, Cchavi. “Discussion on India-Bangladesh Relations: Opportunities and Challenges.” Vivekananda International Foundation, 2 Feb. 2021,
[31]Siddiqui, Huma. "Vaccine Maitri: Bangladesh Only Country in the World to Receive 9 Mn Vaccine Doses; PM Modi to Visit Dhaka." The Financial Express. March 04, 2021.
[32]PTI. "Bangladesh Pledges USD 1.5 Mn to SAARC COVID-19 Emergency Fund." March 22, 2020.
[34]"Partnerships of Hope: Bangladesh Contributes to Supporting India to Fight Covid-19." Invest India. May 21, 2021.
[35] Gupta, Shishir. "Delhi-Dhaka Ties Move beyond Symbolism, Seek to Power Growth and Connectivity." Hindustan Times. March 26, 2021.
[37]Gupta, Shishir. "Delhi-Dhaka Ties Move beyond Symbolism, Seek to Power Growth and Connectivity." Hindustan Times. March 26, 2021.
[38]PTI. "Modi Meets Hasina; India, Bangladesh Sign Five MoUs." The Hindu. March 27, 2021.
[39] PTI. "Modi Meets Hasina; India, Bangladesh Sign Five MoUs." The Hindu. March 27, 2021.
[40]PTI. "Modi Meets Hasina; India, Bangladesh Sign Five MoUs." The Hindu. March 27, 2021.
[41]PTI. "Modi Holds 'productive Meeting' with Hasina; India, Bangladesh Sign Five MoUs." Mint. March 27, 2021.
[42]Datta, Sreeradha. “India Bangladesh the Mitali (Friendship) Journey.” Vivekananda International Foundation, 25 Mar. 2021,
[43] Ibid.
[44]Paul, Ruma. "Bangladesh Violence Spreads after Modi's Visit, Attacks on Hindu Temples, Train." Reuters. March 28, 2021.
[46]Datta, Sreeradha. "INDIA-BANGLADESH RELATIONS IN A CHANGING WORLD." UNISCI Journal, January 2019, 191-208.
[47]Datta, Sreeradha. "INDIA-BANGLADESH RELATIONS IN A CHANGING WORLD." UNISCI Journal, January 2019, 191-208.
[49] Bajpai, Kanti. "Why Bangladesh Should Matter to Us - Times of India." The Times of India. September 17, 2011.
[50] Ibid.
[51] Bajpai, Kanti. "Why Bangladesh Should Matter to Us - Times of India." The Times of India. September 17, 2011.
[52] Datta, Sreeradha. "INDIA-BANGLADESH RELATIONS IN A CHANGING WORLD." UNISCI Journal, January 2019, 191-208.
[53] Mohan, C. Raja. "Bangladesh's Rise Is an Opportunity for India, but Is Overshadowed by Negative Domestic Politics." The Indian Express. October 20, 2020.
[54] Mohan, C. Raja. "Bangladesh's Rise Is an Opportunity for India, but Is Overshadowed by Negative Domestic Politics." The Indian Express. October 20, 2020.
[55] Ibid.
[56] Ibid.
[57] Ghose, Sandip. "Modi, Hasina Must Lay Ground for Borderless Economy between India, Bangladesh." ThePrint. March 26, 2021.
[58] Ghose, Sandip. "Modi, Hasina Must Lay Ground for Borderless Economy between India, Bangladesh." ThePrint. March 26, 2021.
[59] Ibid.
[60] Ibid.
[61] Bhattacherjee, Kallol. “Killings along India-Bangladesh Border Because of Crime: Jaishankar.” The Hindu, 4 Mar. 2021,
[62] Ibid.
[63] Chatterjee, Bipul, and Prashant Sharma. "View: Enhancing Siliguri Corridor for Ease of Trade and Transit in South Asia." The Economic Times. February 20, 2021.
[64] Chatterjee, Bipul, and Prashant Sharma. "View: Enhancing Siliguri Corridor for Ease of Trade and Transit in South Asia." The Economic Times. February 20, 2021.
[65] Ibid.
[66] Surojit Gupta / TNN / Mar 9, 2. (2021, March 09). India, Bangladesh to make sharp economic gains with seamless transport connect: World Bank report - Times of India. Retrieved from
[67] Ibid.

[Back to Contents]

India and Nepal


India-Nepal 1,850 km “open and non-regulatory” border provides a basis for resilient socio-cultural and economic relations. The healthy economic ties are reflected in the import-export basket of the two countries, comprising over 60 per cent of trade and commerce. The two countries’ social and cultural relations are established through religious beliefs and pilgrimage, marriages and kinship ties, and similar cultures. Around 8 million Nepalese citizens live and work in India. Nepalese citizens’ involvement in serving the Indian Armed Forces depicts the mutual trust shared between them.

Historical Basis

The India-Nepal relation dates back to ancient times. Nepal was granted a “duty-free” imports and transit facility during British rule. The 1950 India–Nepal Treaty of Friendship, Trade and Commerce laid the foundation for unique cooperation. The treaty ensured the continuation of India’s “special relationship” with Nepal as the importance of ancient cultural ties, including similar social systems, religions, and most importantly, interchanges between citizens through pilgrimage, trade, employment, and marriage. During 1967-68, India emerged as a major aid donor to Nepal, providing approximately 60 per cent as financial aid. Nepal’s trade with India accounted for 98 per cent by 1963-64. The next significant development was the “1996 Trade Treaty” where India provided “duty-free” access to most of Nepal’s manufactures products, except alcohol, perfumes, cosmetics and tobacco products in the Indian market.

However, the India-Nepal relationship has undergone numerous sets of challenges since India’s Independence in 1947 and Nepal’s Revolution in 1950. India’s role in the 1950 Revolution for the democratisation of Nepalese politics was perceived with doubts and anti-Indian sentiments. The use of Indian forces to maintain law and order in Nepalese territory, unequal trade terms, and the language of Indian leaders in the initial years gave an undue and false impression of India’s influence. The next dip in the relationship was during 1988-89. Numerous factors such as negotiations in a trade agreement and Nepal’s import of arms from China harmed the mutual trust between India and Nepal’s national security concerns.

India’s Engagement with Nepal

Indian imports to Nepal outweigh the Nepalese exports to India (Government of India, 2016). [1] In 2015, out of total exports from Nepal, India’s share was 56.7 per cent, whereas India has been a significant supplier of Nepal’s imports with 65 per cent of supplies (WITS 2016). [2] India’s main exports to Nepal are petroleum products, motor vehicles and spare parts, rice and paddy, medicines, electrical and agricultural equipment and parts, and others. Both countries have developed a strong and effective network of informal trade practices at their respective borders.

Indian investments constitute around 30 per cent of Nepal’s total approved Foreign Direct Investments (FDI). About 150 Indian ventures are operating in Nepal in varied sectors such as manufacturing, banking services, power sector, education and telecom services and tourism industries. Some large Indian investors include ITC, Dabur India, Hindustan Unilever, MTNL, State Bank of India, Punjab National Bank, Life Insurance Corporation of India, Asian Paints, GMR India, Berger Paints, Tata Power, and many others.

The political and diplomatic relations received a boost with the official visit by Indian Prime Minister (PM) Narendra Modi in 2014, after a gap of 17 years. The emphasis on ‘Neighbour First Policy’ and ‘Sabka Sath Sabka Vikas’ has enhanced bilateral relations. There have been regular exchanges of high-level visits and interactions between India and Nepal. Indian President Shri Pranab Mukherjee visited Nepal in 2016, and Nepal’s President, Mrs Bidya Devi Bhandari, visited India in 2017. India and Nepal also share several bilateral institutional dialogue mechanisms, including the India-Nepal Joint Commission and Nepal-India Parliamentary Friendship Group. Both countries are part of regional organisations, such as SAARC, BIMSTEC and others.

India and Nepal cooperation in the defence sector is unparalleled in the region. The trust is visible with about 32,000 Gorkha Soldiers from Nepal serving in the Indian Army. India is also assisting the Nepal Army in its modernisation by supplying equipment and providing training. Conducting joint military exercises, such as Surya Kiran, and assistance during disasters shows the mutual harmonious relationship between the two armies. In November 2020, Indian Army Chief General, MM Navarane and Indian Foreign Secretary, Harsh Vardhan Shringla visited Nepal to reset the bilateral ties.

Infrastructure Projects – Varied infrastructure development areas has been recognised, such as health, water resources, education and rural development. In recent years, India has been assisting Nepal in the developing border infrastructure through upgradation of roads, developing cross-border rail links and establishing of Integrated Check Posts at Birgunj, Biratnagar, Bhairahawa, and Nepalgunj. In 2018, the ‘India-Nepal New Partnership in Agriculture’ was launched. Another key area of cooperation is the water resource, as the two countries share numerous small and big rivers. The two countries have a Power Exchange Agreement since 1971 to meet power requirements in border areas. In 2014, PM Modi signed another Power Trade and Development Agreement (PTDA). Successful completion of the cross-border pipeline petroleum products pipeline, connecting Motihari in India to Amlekhgunj in Nepal is the first-of-its-kind in the region. A further boost to connectivity is provided by India as it gave Rs 10,000 crore as a concessional “Line of Credit” to Nepal of develop HIT (Highways, I-ways and Transways). For the financial year 2019-20, the total economic assistance under ‘Aid to Nepal’ was INR 1200 crore.

India promotes people-to-people contacts in the fields of art and culture, academics and media through cultural programmes, scholarships, events organised in partnership with different local bodies of Nepal. Several MoUs/Agreements have been signed between India and Nepal’s cultural organisations, such as MoU between Sahitya Kala Akademi (India) and Nepal Academy, Doordarshan (India) and Nepal TV and many others. Both governments are also cooperating for the twinning of sister cities Kathmandu-Varanasi, Lumbini-Bodhgaya and Janakpur-Ayodhya. To showcase Indian culture, Swami Vivekananda Centre for Indian Culture was set up in Kathmandu in 2007. Way back in 1991, BP. Koirala India-Nepal Foundation was set up to foster educational, cultural, scientific and technical cooperation between India and Nepal. Both nations’ citizens cross the border for work, business opportunities, trading and maintaining their strong kinship bonds.

Current Challenges

Unequal trade relations – The total bilateral trade in 2020-2021 reached USD 7436.26 million. In 2020-2021, while Nepal’s exports to India stood at USD 670.33 million, India’s exports to Nepal were USD 6765.93 million. [3] The overall growth in bilateral stood at -5.53 per cent. [4]

Pending border disputes – In 2020, the two countries faced a border row because of the inauguration of an 80-km long road connecting the Lipulekh pass with Dharchula in Uttarakhand by the Indian Defence Minister Rajnath Singh. Nepal protested that the road passed through its territory and later passed Constitutional Amendment endorsing a new map, including the disputed areas – Kalapani, Lipulekh and Limpiadhura within its territory. Earlier, in 2019 India published maps picturing Kalapani as part of India’s territory. However, the bilateral ties were brought on track with a series of high-level interactions, but still, the dispute remains unresolved.

Revising the 1950 treaty - The imposition of economic blockade by India in 2015 generated a feeling of India’s high handedness among the new generation of Nepalese. The trade embargoes by India are political but have political, economic and social impacts. The 1989 embargo by India resulted in Nepal decision to import arms from China. The embargo has also led to Nepal shifting its dependence on China. Until 2015, India was the only exporter of fuel to Nepal, but during the 2015 blockade, there was an acute shortage of fuel, and Nepal shifted towards China for the supply of fuel. [5]

Open and porous borders have been exploited by the insurgent groups as entry points, safe havens, training and support. For example, the Assam’s Kamptapur Liberation Organisation (KLO) is said to have linkages with the Maoist insurgents of Nepal. There is also a Nepal claims that India treats it with high-handedness. In contrast, India has objected to Nepal’s insensitivities for India’s security concerns.

China’s interference – Nepal shares a 1,414 kilometres border with China on the northern side of Nepal. Therefore, Nepal holds strategic importance for India’s security concerns. In recent years, China has emerged as the largest source of Foreign Direct Investments in Nepal and the second-largest trading partner of Nepal (WITS 2016). Nepal is also cooperating with China under its Belt and Road Initiative. While evaluating China’s increasing closeness with Nepal, it is pertinent to note that China’s economic assertiveness also have strategic and security implications. [6] In 2020, China’s President Xi Jinping ordered a high-level four-member team of communist party officials to travel to Kathmandu to stop the Nepal Communist Party from splitting. In 2019, Chinese President Xi Jinping stopped over in Kathmandu and concluded a 14-point joint statement focussing on elevating the Nepal-China relationship to a ‘strategic partnership’. [7]

The Way Forward

Since 2015, the bilateral ties between India and Nepal have been marred by political and border tensions. The anti-India ultra-nationalistic outlook sported by the former Prime Minister KP Oli has deteriorated the relations. However, with the fall of the Communist government in July 2021, the new government under Sher Bahadur Deuba is attempting to ease ties with India. As a result, a number of delegations of the ruling Nepali Congress Party have visited India between August to November 2021. The ruling BJP delegations have equally reciprocated these visits to Nepal. While the two countries hope to resolve the existing tensions, the next general elections in Nepal will be a deciding factor in the bilateral ties. KP Oli led UML is still the largest party in the Parliament. To achieve political victory over UML, the Nepali Congress party will have to fight intense in the forthcoming elections. Meanwhile, India should continue its interaction with Nepal in its best diplomatic efforts and deal with the concerning areas.

Noteworthy, Nepal acts as a buffer state and holds economic and strategic importance for India. There is a need for immediate review of the India-Nepal Friendship Treaty 1950. Nepal wants to appear as an independent country, but the 1950 Treaty does not show such a status as Clause 2 and the letter accompanying the treaty requires the two parties to forge a joint strategy to avoid any threat stemming from a third country. India itself is thinking to revisit its traditional foreign policy objectives and principles to take a pragmatic course for realising its short- and long-term security and other interests. Further, a detailed boundary inspection through sophisticated technology can be one of the solutions to resolve the border dispute. With the help of diplomacy and dialogue, both countries must work together to regain their bilateral relationship strength.


Nepal established its diplomatic with China in 1955. It was a significant step towards King Mahendra’s quest to diversify Nepal’s bilateral ties other than India. The late King Tribhuvan had been wary of Chinese intentions in Nepal, especially after the forced annexation of Tibet by Communist China. King Tribhuvan solely relied on the advice of India for its security and foreign policy. However, his son Mahendra chose to drift away from India. By formalising relations with China, Nepal intended to benefit from China mutually. For instance, China had been looking for international recognition of Tibet as a Chinese territory through its One China Policy (OCP). While other countries had to take a diplomatic stand on OCP, neighbouring Nepal’s endorsement meant that Tibet was historically part of China and countries in a similar geopolitical setup did not receive any threats from China. Secondly, ties with Nepal would challenge India’s regional presence.

On the other hand, Nepal intended to move away from India’s mutual security obligations and use China as a pressure point in case of a dispute with India. To further deepen the ties, Nepal and China signed a Treaty of Peace and Friendship in 1960, followed by a border agreement in 1961. In the early years, China contributed to several developmental projects, including Araniko Highway connecting Nepal’s capital City Kathmandu to border town Kodari on the Nepal-China border. However, amidst the 1962 Sino-India War, Nepal chose to stay neutral to avoid confrontations with India and China.

Chinese Concerns over Tibetan refugees in Nepal

Dalai Lama’s refuge in India and outpouring of thousands of Tibetan refugees in Nepal to reach India drove panic in China. Therefore, for a close vigil of the Tibetans crossing the China border to reach India via Nepal, China had reportedly pushed Nepal to pursue its Zone of Peace Policy which would free Nepal from any security obligations towards India. The Zone of Peace Policy could not materialise due to India’s strong objections to it. Also, despite pressure from China, Nepal provided a safe passage to the Tibetan refugees to join the Tibetan Government in Exile logged in Dharamshala, India. It also hosted thousands of refugees who chose to stay in Nepal. In 1989, Nepal had stopped issuing refugee cards to Tibetans, but with the intervention of the United Nations, Nepal agreed upon a Gentleman’s Agreement to protect their rights.

BRI and Strategic Cooperation

In the present context, China continues to focus on its two objectives in dealing with Nepal. First, to secure Nepal’s commitment to OCP and pressure to stop any free-Tibet movements in Nepal; second, challenge India’s presence in Nepal through its deep economic pockets. In one such effort, China had successfully persuaded the Nepalese government to sign its ambitious multi-billion-dollar Belt and Road Initiative (BRI) [formerly known as One Belt One Road] in May 2017. In the follow-up to the BRI agreement in 2017, Chinese President Xi Jinping paid a state visit to Nepal in October 2019. Xi became the first president to visit China after twenty-three years. The last Chinese President to visit Nepal was Jian Zemin in 1996. The bonhomie extended by Prime Minister KP Oli was shown through a mega welcome given to the Chinese President. During the visit, the two countries elevated the bilateral ties from Comprehensive Partnership of Cooperation Featuring Ever-lasting Friendship to Strategic Partnership of Cooperation Featuring Ever-lasting Friendship for Development and Prosperity. Prefixing strategic partnership with Nepal has been a long-standing desire for China which it achieved in 2019.

Since 2017, the Nepalese Army has held bilateral military excises named “Sagarmatha Friendship Exercises” with China’s People’s Liberation Army, and so far, only two excises have taken place. However, the formalisation of Military ties keeps China in an advantageous position. It may allow China to access a potential Nepalese market for its defence products. Two, the Joint Agreement signed during Xi’s visit to Nepal categorically asks Nepal to expedite the process of signing the Extradition Treaty. The treaty was reportedly scheduled to be signed during the visit of Chinese President Xi in 2019. However, due to the reported protests from political parties, international organisations and civil society members, it was replaced with the Treaty on Mutual Legal Assistance in Criminal Matters. Meanwhile, once the Extradition is signed, it will jeopardise the future of more than 20,000 Tibetan Refugees living in Nepal.

Economic and Political Cooperation

The economic cooperation between Nepal and China has also advanced in the last seven years. In 2014, China had surpassed India, becoming the most prominent Foreign Direct Investor in Nepal. The investment has focused mainly on development projects in Nepal, including building Pokhra International Airport in Nepal. As per the Chinese state media Xinhua, “China has committed the largest share of foreign direct investment (FDI) received by Nepal with investment pledges of 22.5 billion Nepali rupees (188 million US dollars) in the 2020-21 fiscal year that ended in mid-July.” [8] On the political front, Prime Minister KP Oli’s Communist Party of Nepal (UML) have established party level ties with the Communist Party of China (CPC). During the political confrontation between Prime Minister KP Oli and Maoist Chief Prachanda in 2021, the CPC delegation arrived in Nepal to mediate and suggest Oli and Prachanda continue with the Communist alliance. However, despite the best efforts of China, the two broke the coalition, causing frustration in Beijing. Oli led government was friendly and hospitable to Chinese interests.

People to People Ties

At the people-to-people level front, China attempts to explore the ancient Nepal-Tibet ties. The Chinese Ambassador has been an active participant and host during Nepal’s religious and cultural festivals. Also, in recent years, Nepalese students have made China one of the important educational centres. It is estimated that more than 6000 Nepali students are currently registered with the Chinese universities in several academic programmes, especially for medical education. [9] Meanwhile, since the closure of the Chinese borders due to COVID-19, thousands of Nepalese students are stuck at home with no hope of returning. [10] Social media has been abuzz with Nepalese students demanding their return to China to complete their studies.

Perils of Himalayan Quad

Further, amidst an ongoing Quadrilateral Security cooperation between the US, India, Japan and Australia or “Quad”, the concept of “Himalayan Quad” has emerged as a potential China-led block consisting of Nepal, Pakistan and Afghanistan. Himalayan Quad is seen as a counter-balance to an existing Quad grouping led by the United States. The term “Himalayan Quad” was incepted in the backdrop of the First Foreign Minister Level meeting between China, Pakistan, Nepal and Afghanistan for effective coordination in responding to COVID-July 19-21, 2020. Chinese state media has been quick to validate the ‘Himalayan Quad’ and termed it an important cooperative mechanism “to build a community with a shared future for mankind”. However, no further progress was reported in this regard until December 2021.

The Way Ahead

Chinese presence in Nepal is primarily based on its twin objectives - Tibet and India’s traditional presence in Nepal. In addition to these two, the presence of the United States continues to bother China. As a result, through a nexus with the communist forces in Nepal, China has been trying to create a China-friendly space in Nepal. However, advances made by China in the backdrop of Nepal-India border tensions are a matter of great concern for India. China will continue to exploit political instability in Nepal and counter India on several fronts, including assistance, investment and trade. While India and Nepal are resolving their issues diplomatically, the new generation of the young Nepalis still sees 2015 blockade like situations as a challenge to Nepal’s independence and security. Social media is highly popular among the youth, which has/had led to #GoBackIndia and #backoffIndia trends on twitter. Therefore, India needs to focus more on its developmental works in Nepal to safeguard its goodwill in Nepal. Also, a friendly government in Nepal will continue to boost bilateral ties.


[1] Government of India, Exports and Import Data Bank, 2016, Ministry of Commerce, India.
[2]World Bank. 2016. World Integration Trade Strategy.
[3]About India Nepal Relations, Embassy of India, Kathmandu, Nepal
[4]Indian Embassy in Nepal “COMMERCE WING UNCLASSIFIED BRIEF As on 2 July, 2021”
[5]Deepjyoti Chand, “Trade Embargo as a Geopolitical Tool: A case of Nepal-India Trade Relations” Polish Political Science Review, 2018, Vol 6: Issue 1.
[6]Girdhari Dahal, Foreign Relation of Nepal with China and India. Journal of Political Science, 2018, Vol. 18, pp: 46-61.
[7]Joint Statement between Nepal and People’s Republic of China, Ministry of Foreign Affairs, Kathmandu, Nepal
[8] “China remains largest source of FDI for Nepal for 6 consecutive years” Xinhua, July 21, 2021,
[9] “Over 100 Nepali students to study in China under government scholarship” Xinhua, August 28, 2019.
[10] “China’s Nepali students in limbo” Nepali Times¸ October 04, 2021.

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India-Afghanistan Relations


India and Afghanistan have a strong relationship based on historical and cultural links. The historic linkages are recorded from the Indus Valley Civilisation. During the Mauryan period (post Seleucid-Mauryan war in 305 BCE) in the area south of the Hindu Kush mountain range, Hinduism and Buddhism flourished. Until the arrival of Islam in 07th Century, Afghans had strong influence of Hinduism and Buddhism. Between 10th Century to mid-18th Century, north India was invaded by the Islamic invaders based in Afghanistan, including Ghaznavids, Ghurids, Khaljis, Suris, Mughals, and Durranis. During Mughal period in India (1526-1858), several Afghans migrated to India due to political unrest in their respective provinces/regions. [1]

Among other prominent political linkages in modern era, Indian National Congress Khan Abdul Ghaffar Khan was the leader of Khudia Khidmatgars, an important leader in the Indian Independence Movement. The agreement emphasise on the fundamental and lasting importance of the Treaty of Friendship between the Government of India (GoI) and the Royal Government of Afghanistan of 04 January 1950, and subsequent agreements and joint statements between two nations. In January 1950, India and Afghanistan signed a five-year Treaty of Friendship in New Delhi, India, which provided an establishment of diplomatic posts in each other’s countries. [2]On 19 July 1973, India was one of the first countries to recognise the new Republic of Afghanistan. On 03 September 1975, both countries signed a Trade Agreement. [3] In recent years, India-Afghanistan relations have been further strengthened by the Strategic Partnership Agreement, signed between the two countries on 04 October 2011. [4]

Key Projects and Initiatives of Rebuilding Afghanistan

India’s development portfolio of more than USD 3 billion for Afghanistan is aimed at building capacities and capabilities of Afghan nationals as well as its institutions to improve governance and public service.

India’s participation in Afghanistan’s development process is based on five foundation stones:

  • Large infrastructure projects.
  • Human resource development and capacity building.
  • Humanitarian assistance.
  • High-impact community development projects.
  • Enhancing Trade and Investment through air and land connectivity.

Through its commitment, India has successfully completed large infrastructure projects in Afghanistan, including 218 kms road construction from Delaram to Zaranj (along with international border with Iran) in Nimruz Province in southern Afghanistan. The road provides alternate connectivity for Afghanistan through Iran; India–Afghanistan Friendship Dam (IAFD) aka Salma Dam in 2016; and the Afghan Parliament building inaugurated in 2015, which is a symbol of Afghan democracy.
Since its inauguration in 2017, the India-Afghanistan Air Freight corridor has witnessed close to 1,000 flights, carrying goods valued at over USD 216 million. This has provided a boost to Afghan exports to India and has directly benefitted Afghan farmers, small traders, and exporters.

More than 65,000 Afghan students have studied in India under various scholarship programmes, and 15,000 students are presently studying in India. Three thousand scholarships so far have been granted to young Afghan women to pursue higher studies in India. Going beyond basic education, India also provided vocational training to a large number of women in Afghanistan.

Through Chabahar port in Iran, India provided 75,000 tonnes of wheat to Afghanistan during the coronavirus pandemic. India also sent more than 20 tonnes of “life-saving” medicines and other medical equipment to Afghanistan as an assistance to address the coronavirus challenge.

In 2020, India signed an agreement with Afghanistan for building the Shatoot dam, which would provide clean and safe drinking water to two million residents of Kabul city. It builds on the 202-km Phul-e-Khumri transmission line of 2009. India will also launch Phase-IV of High Impact Community Development (HICD) projects in Afghanistan, which include approximately 150 projects worth USD 80 million.

The most important symbol of India’s assistance in the reconstruction of Afghanistan has been the construction of the multipurpose Afghan India “When Afghanistan becomes a haven of peace and a hub for the flow of ideas,commerce, energy and investments in the region, we will all prosper together.” — Prime Minister Narendra Modi Friendship Dam (AIFD). The project implementation faced several challenges, including logistical and security aspects. The project was inaugurated jointly by the Prime Minister of India with the President of Afghanistan on 4 June 2016. The Dam has an installed capacity of 42 MW and supplies water for irrigating 75,000 hectares of land. Since then, the project has been generating electricity and releasing water for irrigation[5].

The Taliban Takeover and India’s Options in Afghanistan

On 15 August 2021 the Taliban captured Kabul, the capital of Afghanistan. It was the culmination of a military offensive that began in May 2021 against the Afghan government. Most of the provincial capitals of Afghanistan had fallen one after the other amid a U.S. troop withdrawal to be completed by 31 August 2021.
There are grass root concerns about the fallout of the situation in Afghanistan on the internal security situation in India, particularly in Jammu and Kashmir, Punjab and the hinterland.

As far the recognition of Taliban led government in Afghanistan is concerned India continues with its wait and watch policy.

India should ramp up its efforts to induce west to impose sanctions on Pakistan. Pakistan has not been just involved in soliciting funding for the terror acts of the Taliban, financing their operations, giving diplomatic networking as the Taliban's indirect representatives overseas. Moreover, it also involved in arranging training for the Taliban, recruiting skilled and unskilled manpower to serve in Taliban armies, planning and directing offensives, providing and facilitating shipments of ammunition and fuel. Both at the diplomatic and the track two levels India should develop a narrative of Pakistan’s role in supporting Taliban. India should also recalibrate its policies by enhancing collaboration and cooperation with regional countries like Iran and Tajikstan. Lastly our policies should be empathetic towards the “people of Afghanistan[6].

The increasing level of violence in Afghanistan remains a matter of grave concern for India. While India supports all efforts to bring peace and stability in Afghanistan,

A unified Afghanistan with sovereign, independent, and functional Afghan government based on the principles underlying the current constitution, including democracy, non-violent political competition, and basic human rights for Afghan people.

An Afghanistan that prevents terrorist groups from using its soil as safe haven and to train and mount attacks both in the region and around the world.
An Afghanistan that serves as a central trade and transit hub connecting South and Central Asia.

India is seeking ways to scale up humanitarian assistance. India also announced that it will deliver urgent humanitarian aid consisting of food grains and medicines to the people of Afghanistan.

India has invested heavily in peace and development in Afghanistan. New Delhi has reiterated the need to preserve the gains of the last two decades, and the interests of Afghan minorities, women and other vulnerable sections must be ensured.


[1]Adamec, Ludwig W. 2012. Historical dictionary of Afghanistan. 4th ed. USA:Scarecrow Press
[2]Government of India-Ministry of External Affairs. “Treaty of Friendship”, 04 January 1950, Available from: Accessed on 09 April 2021.
[3]Government of India-Ministry of External Affairs. “Trade Agreement between the Government of India and the Government of the Republic of Afghanistan”, 03 September 1975, Available from: Accessed on 09 April 2021.
Embassy of India in Afghanistan. “Bilateral Brief”, August 2020, Available from: Accessed on 10 April 2021.“India, Afghanistan sign 5 pacts for developing educational infra in Afghan provinces”, Hindustan Times, 05 July 2020, Available from: . Accessed on 15 April 2021.“India-Afghanistan: A historic and time-tested friendship”. Available from: . Accessed on 03 April 2021.Chaudhury, Dipanjan Roy. “India announces set of development projects for Afghanistan as country prepares for transition”, The Economic Times, 24 November 2020, Available from: . Accessed on 15 April 2021.
[4]Government of India-Ministry of External Affairs. “Text of Agreement on Strategic Partnership between the Republic of India and the Islamic Republic of Afghanistan”, 04 October 2011, Available from: . Accessed on 05 April 2021.
[5]Ministry of External Affairs, India and Afghanistan- A Development partnership,

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India-Maldives Bilateral Relations


India and Maldives share close and strong relation of friendship and cooperation through ethnic, linguistic and cultural connections. The relationship has been strengthening with the high-level official visits in recent years.

Except of the period of six years between February 2012 to November 2018, the relationship has been close, cordial, and multi-dimensional. After the Maldives’ independence in 1965, India was among the first nation to recognise and establish diplomatic relations with the Island nation.

During the first few decades of the Maldives’ independence, the bilateral relationship was limited, although the two nations did sign a comprehensive Trade Agreement in 1981. However, bilateral relations took their first major step forward following India’s intervention to quell a coup attempt against then Maldivian government in November 1988. [1]

India’s prompt assistance during the November 1988 Coup attempt and the immediate withdrawal of Indian forces when they were no longer required rejected the notions of any Indian dominance or territorial aspirations[2]; which further led to the long-term trustworthy and friendly bilateral relations between both countries.

The proximity of the Maldives to the West Coast of India—which is barely 70 Nautical Miles away from Minicoy and 300 Nautical Miles away from India’s West Coast[3]; and its situation at the hub of commercial sea-lanes running through the Indian Ocean, highlights Maldives’ significant strategic importance to India.

Maldives, positioned as a “Toll-Gate” between the Western Indian Ocean points of the Gulf of Aden and the Strait of Homruz at one side, and Eastern Indian Ocean points of the Strait of Malacca on the other. Therefore, the geo-strategic importance of the Maldives to India has increased hugely.
The one-time claim of Maldives over Minicoy Island was resolved under the Maritime Boundary Treaty of 1976 signed between India and the Maldives, where latter has recognised Minicoy Island as an integral part of India.

Defence & Security Cooperation

Since 1988, defence and security has been a significant area of cooperation between India and the Maldives. Through largest number of training opportunities for Maldivian National Defence Force (MNDF), India has been providing assistance in capacity building by meeting Maldives’ requirements of defence training and equipment—approximately 70 per cent. [4]

Since 1991, in addition to other joint defence exercises, India and Maldives have been conducting a series of the Coast Guard maritime joint training exercises— “DOSTI”.

The main objective of “DOSTI” is to strengthening cooperation between the Coast Guards of India and Maldives, with a view to enhance mutual capabilities for search and rescue operations, combating piracy and armed robbery, damage control and casual evacuation at sea for safer seas. [5]

According to the official data of 2019-2020, India has trained over 1250 MNDF personnel and have offered 175 training vacancies over the last decade. Along with military-to-military exercises at various occasions, the Indian Navy has deployed Mobile Training Teams (MTT) of Marine Commandos to Maldives in 2017, 2018 and 2019. India has also processed a proposal to establish relations between Maldives’ MNDF’s College of Defence Studies and Indian Defence Universities, extending the defence cooperation to of Joint Exercises, Maritime Domain Awareness, gifting of hardware, infrastructure development. [6]

In strong defence and security ties, the Indian armed forces have played an essential role through collaboration with the Maldivian armed forces to enhance the overall defence and security capabilities of the Maldives, for peace and stability in the region.

COVID-19 Vaccine Assistance

Among India’s neighbours, Maldives has been highly beneficiary of Government of India (GoI)’s COVID-19 relief.

From 13-21 March 2020, a 14-member Rapid Response Medical Team (RRMT), including Anaesthetist, Pulmonologist, Cardiologist, Public health care specialist, nurses, etcetera, from the Armed Forces Medical Services (AFMS) was deployed in Maldives. The team guided and provided training to the Maldivian authorities and personnel tackling coronavirus threat in the Island nation.

On 14 March 2020, India donated 317 cartons of essential medicines to meet three months requirement of Maldives.

As a part of ‘Operation Sanjeevani’, a special Indian Air Force (IAF) aircraft airlifted 6.2 tonnes of essential medical supplies from India to Maldives on 02 April 2020.
On 20 April 2020, the Indian PM had telephonic conversation with President of Maldives on the challenges posed by COVID-19 threat. The Indian PM assured the President of Maldives of continued Indian support for minimising the health and economic impact of COVID-19.

On 20 January 2021, Maldives received 1,00,000 doses of COVISHIELD vaccine under the Vaccine Diplomacy Programme (VDP) from India. Among India’s neighbouring countries, Maldives has been the largest COVID-19 assistance recipient with medicine supply, food supply, medical team, training and financial assistance of USD 250 million.[7]

After a month, on 20 February 2021, India’s Minister of External Affairs—S Jaishankar gifted another 1,00,000 doses of COVID-19 vaccine during his two-day visit to the Maldives. The MEA Jaishankar also announced a “standalone new Line of Credit (LoC)” worth USD 40 million from India for sports infrastructure development in Maldives.[8]

Other Key Projects and Assistances

India was the first among nations to provide assistance to the Maldives during the 2004 Tsunami crisis, and water crisis in Male in 2014. Under “Operation NEER”, India supplied bottled drinking water to Male through aircrafts and Navy ships. The assistances from India (in 1988, 2004, 2014) highlighted India’s proximity and capacity to recue Maldives in distress situations, which are widely acknowledged by the people and government of the Maldives.

In recent past, India assisted Maldives with around USD 40 million Line of Credit (LoC) for the housing sector. Following are some of the major infrastructure projects that have been successfully implemented as India’s assistance to Maldives’ development programme.

The Indira Gandhi Memorial Hospital (IGMH) was built with Indian Grant Assistance in 1995, with major renovation cost of ₹ 52 crore.

The Maldives Institute of Technical Education (MITE)—currently known as the Maldives Polytechnic project. MITE was completed at a cost of ₹ 12 Crore and handed over to the Government of Maldives in 1996.

The Faculty of Hospitality & Tourism Studies’ Foundation Stone was jointly laid by the former Indian Prime Minister (PM) Atal Bihari Vajpayee and former Maldivian President Maumoon Abdul Gayoom during former’s visit to the Maldives in September 2002. The faculty was handed over to the Government of Maldives in 2014.
Under the Technology Adoption Programme in Education Sector in Maldives, India funded the ICT training to Maldivian teachers and youth for vocational training. The project was worth USD 5.3 million and was concluded in December 2020.

Under the financial assistance of USD 33 million, India is building a Police Academy of Maldives in Addu as a part of National College for Policing and Law Enforcement (NCPLE).

During a virtual meeting with Maldives’ Foreign Minister—Abdulla Shahid, on 13 August 2020, India’s Minister of External Affairs—S Jaishankar announced the Government of India (GoI)’s decision to support the Government of Maldives (GoM) in implementation of the Greater Male Connectivity Project (GMCP) through a Line of Credit (LoC) of USD 400 million and a grant of USD 100 million. The GMCP is a crucial project for the proposed Gulhifalhu Port and will act as a major catalyst for the Maldivian economy in the future through jobs and economic activity.

The on-going projects include the Maldives Mapping and National GIS Development Project, Hulhumale’ greening and Hulhumale’ breakwater projects, Strengthening National Planning Capacity Project. [9]
In the important area of Science and Technology, India has been contributing to Maldives’ development through three long-term and short-term programmes—Indian Technical Education Cooperation (ITEC) programme, Aid to Maldives (ATM) programme, and the Commonwealth programme. The long-term development areas include, medicine, social sciences, commerce, information technology, and defence related studies, whereas, computer studies, and other technical & vocational training programmes comes under short-term development areas.

China as an Imminent Player in the Maldives

Since the establishment of diplomatic relations in 1972, the two countries have supported each other, whether it is support for economic development or support at international forums. The Agreement on Trade and Economic Cooperation was signed in 2004 and the bilateral free trade agreement in 2017. China has increased its economic influence in the country by focussing on building the infrastructure, such as the Sinamale bridge aka China-Maldives friendship bridge. The Maldives is also part of the China’s Maritime Silk Route. However, since 2018, there are voices raised over the Chinese debt trap. As per the recent statistics, Mr Nasheed, Speaker of Parliament stated that the Chinese debt comprises of USD 3.1 billion, including, government-to-government loans as well as the private sector. [10] Despite these concerns, China continues to be an important player in the country. China supplied medical supplies and equipment, helped improve the testing capacity and also provided assistance during the COVID-19 crises. The Maldives also assisted the stranded Chinese tourists and personnel engaged in the projects of the BRI in the Maldives.


[1]Poplin, Cody M. “India-Maldives Brief”, Centre for Policy Research, 02 December 2014, Available from: . Accessed on 31 March 2021
[2]Government of India. “India-Maldives Bilateral Relations”, Ministry of External Affairs (IOR Division), September 2020, Available from: 25 March 2021
[4] Ibid.
[5]Government of Maldives. “Maldives-India Relations”, High Commission of the Republic of Maldives in India, Available from: Accessed on 01 April 2021.
[6]Government of India. “India-Maldives Bilateral Relations”, High Commission of India in Maldives, August 2020, Available from: Accessed on 01 April 2021.
[7]Bagchi, Indrani. “India to supply COVID vaccines to six nations; Maldives, Bhutan to be first recipients”, The Times of India, 19 January 2021, Available from: Accessed on 02 April 2021.
[8] “India gifts another 1 lakh COVID-19 vaccines to Maldives”, The Asian Age, 21 February 2021, Available from: ; Accessed on 02 April 2021.
[9]Government of Maldives. “Maldives-India Relations”, High Commission of the Republic of Maldives in India, Available from: Accessed on 01 April 2021.
[10]Anbarasan Ethirajan, China debt dogs Maldives' 'bridge to prosperity’, BBC, 17 September 2020,

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India and Myanmar

Key Engagements and Way Forward

Since the initiation of political reforms in 2010, Myanmar aimed to increase engagements with other nations, like India, Japan, United States, Russia, South Korea and others; and decrease its dependence on China. Myanmar has transformed itself socially, economically and politically. November 2020 marked a significant event in Myanmar’s journey of democratic transition, with the National Democratic League (NLD) winning a landslide victory. However, on 01 February 2021, the Myanmar military aka Tatmadaw declared a state of emergency for a year and detained the NLD leader Aung San Suu Kyi and other government officials. The brief aims to foresee India’s prospects for increasing engagements with Myanmar in the context of the declaration of emergency in Myanmar and the change in administration in the United States (US).

Historical Ties between India and Myanmar

India and Myanmar signed a Treaty of Friendship in 1951. The visit of Prime Minister Rajiv Gandhi in 1987 laid the foundations for a stronger relationship between India and Myanmar.

India’s Myanmar policy turned pragmatic by the early 1990s when the Government of India took a conscious decision to improve relations with the Junta government in Myanmar. Operation Golden Bird, conducted along the Indo-Myanmar border in the North-Eastern state of Mizoram in April–May 1995. Former foreign secretary, Late J.N. Dixit stated that since 1992 New Delhi start with a policy of ‘constructive engagement’ with the military regime.

A number of agreements enhancing bilateral cooperation have been signed between the two countries. Institutional mechanisms for facilitating regular dialogue on a range of issues of bilateral interest have also been established.

High-level visits have been a regular feature of India-Myanmar relations for several years. During the talks, the issue of security and stability along the land border shared by the two countries received special attention. Earlier in the 1990s and again in recent years, Myanmar has reassured India that Myanmar's territory will not be used for attacks against India.

India and Myanmar embarked on the journey of market-oriented reforms in the early 1990s. Both countries signed a Bilateral Investment Promotion Agreement (BIPA) and a Double Taxation Avoidance Agreement (DTAA) in 2008. India and Myanmar are signatory to the India-ASEAN Trade in Goods Agreement. Myanmar is also a beneficiary country under India’s Duty-Free Tariff Preference Scheme for LDCs.

India has accomplished several projects in Myanmar, which were executed by Indian institutions, both government and private. The projects have covered various sectors such as roads, railways, telecommunications, and energy.

The origin of the Indian community in Myanmar is traced back to the mid-19th century with British rule in Burma in 1852. A large number of the Indian community is living in Mynamar.

Indian government is also involved with the restoration and conservation of ancient pagodas in Myanmar that had suffered damage due to severe earthquakes in 2016. India’s cultural and religious roots are shared deeply across the entire region. The performances by Indian cultural troupes in Myanmar have been organised regularly since 1997.

Myanmar’s Importance for India

Myanmar’s geographical location gives it a strategic position in India’s domestic and foreign policy. India shares a 1,643 km land border and maritime boundary in the Bay of Bengal with Myanmar.

Myanmar is a crucial partner of India’s strategy to bridge South and South-East Asia through ASEAN, BIMSTEC and Mekong Ganga Cooperation (MGC). Myanmar is also associated with SAARC as an observer since 2008.

India’s economic engagements with Myanmar; facilitating connectivity, trade and investments. To access Myanmar’s rich resources, such as oil and natural gas, teak, paper, and others.

Stability in North East India and control insurgency. Indian insurgents in the North East have maintained sanctuaries inside Myanmar since the late 1960s. Myanmar being part of the Golden Triangle, drug trafficking is a paramount security concern for both countries.

Historical and Cultural relations, such as the development of “Buddhist Circuit”

India’s Engagement with Myanmar

The first joint visit by the Indian Foreign Secretary and the Army Chief in October 2020. The visit marked a crucial outreach by India to build security and economic ties.[1]

Myanmar has cooperated with India for carrying out Operation Sunrise to curtail the problem of insurgency.[2] Also, the Tatmadaw has been collaborating with the Indian Army to deny the AA escape routes and safe havens in India.
India-Myanmar signed a strategic defence cooperation agreement in 2018. India has also increased military exports to Myanmar, such as anti-submarine torpedo-Tal Shyena. Taking bilateral defence cooperation to new heights, India delivered Russia’s Kilo-class diesel-electric submarine, the INS Sindhuvir to Myanmar Navy. [3] Both countries conducted joint military operations (IMBAX-2017 and IMBEX-2018-19).

With over USD 1.2 billion, Myanmar has the highest Indian investment in any country in South Asia. Recently, India proposed to invest USD 6 billion to set up an oil refinery near Yangon.

India and Myanmar agreed to operationalise the strategic Sittwe port in Rakhine state in the first quarter of 2021 and initiate steps to complete India-Myanmar-Thailand trilateral highways. [4]

On 27 December, Myanmar signed an agreement with the Serum Institue of India to procure COVID-19 vaccine. [5]

Present Challenges

Delay in Connectivity Projects and security challenges. The Indian Ministry of Home Affairs has stated that the Kaladan Multi-Modal Transit Transport Project is under threat due to “adverse security condition”.

Myanmar’s imports have decreased substantially since 2011; Myanmar exports to India have decreased from 15.5 per cent to 2.9 per cent in 2018. India is the seventh-largest export destination of Myanmar, accounting for 2.9 per cent of Myanmar’s exports in 2018.

Insurgent groups from Kachin, Karen, and other ethnic groups are harbouring militants from northeast India, who receive arms and other support from China. Proximity to the ‘Golden Triangle’ together with a porous and poorly guarded border provides the enabling environment for traffickers to smuggle heroin and psychotropic substances.

The continued influx of Rohingyas refugees to India has remained a threat to internal security.[6] In the past few months, over 100 Rohingya refugees were arrested for illegally crossing the border.

Countering China dominance in Myanmar and the region. There is constant pressure from China to move forward with its BRI infrastructure projects in the country. China is also establishing military facilities in 14 countries, including Myanmar, according to Pentagon annual report “Military and Security Developments Involving the People's Republic of China (PRC) 2020”. The Pentagon said that China uses OBOR to support China’s development and deepen its economic integration with nations. [7]

The Way Forward

Supporting Myanmar democratic processes, due to the current emergency, India faces the dilemmas of maintaining a balance between the military forces and civilian government in India. Unlike in the past, India must engage strategically with the country to avoid any further push towards China.

Explore diverse sectors for trading - Indian Foreign Secretary - Harsh Vardhan highlighted the potential of exporting the northeast surplus hydropower to Myanmar.[8] Establish more Border Haats at strategic points and improve the border infrastructure at trading points.

Solving the security issues and Rohingya Crises The Biden administration will be pushing for Rohingyas’ safe return. The Director of the Myanmar Institute for Peace and Security, Dr Min Zaw Oo, urged that the new US administration’s interaction “should be supportive”, as the strict and targeted approach could further damage relations between the US and Myanmar and push Myanmar closer to China.

US support to India as an important player The US foreign policy under new President Joseph Biden is centred on promoting democracy and human rights violations in armed conflict areas of Myanmar. The US has also imposed targeted sanctions on Myanmar military officials involved in the military coup. The US has shown significant importance of India in the India-Pacific region, such as in 2018, the US military renamed its Pacific Command as the Indo-Pacific Command (INDOPACOM). The QUAD latest submit in February 2021 brings back the focus on the changing balance of power in the Indo-Pacific. [9] If the US provides support to India as an important player in Myanmar, then it would significantly boost India’s presence in the region.

Myanmar is an important neighbour for India for fulfilling its objectives under ‘Neighbourhood First’ and the ‘Act East’ policies. India must prioritise and decide the key drivers for establishing the relations: Economic interests or Security concerns. With the declaration of state of emergency, the world countries have condemned the situation in Myanmar and demanded the restoration of the country’s democratically elected government. However, world countries must move cautiously and avoid any push towards China as done in the past. It is essential to balance Myanmar relationship with world countries in these times of crises.


[1]MEA, “Visit of Chief of Army Staff and Foreign Secretary to Myanmar”, 05 October 2020, Press Releases,
[2]Manish Shukla, “India Myanmar Army Launches Operation Sunrise 3 to Crackdown insurgent groups at India-Myanmar border”, 26 October 2020, ZeeNews
[3]MEA statement
[4]MEA Statement
[6]Cchavi Vasisht, “Myanmar Round Up: December”, Vivekananda International Foundation, New Delhi
[7]Press Trust of India, “China eyes military facilities in Pak, Myanmar, 10 other nations: Pentagon”, 03 September 2020, Business Standard
[8]IANS, “North East India gateway to East, SE Asia: Foreign Secretary Shringla”, 16 September 2020, South Aisa Monitor
[9]MEA, “3rd India, Australia, Japan, USA Quad Ministerial Meeting”, 18 February 2021, Press Release,

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