Welcome to Foreign Policy’s South Asia Brief.
The highlights this week: India and China strike a deal to resume patrolling activities along part of their disputed border, India-Canada relations continue to deteriorate as New Delhi’s envoy rejects Ottawa’s allegations, and Bangladesh’s interim government bans the Awami League party from political activity.
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What to Make of the India-China Border Deal
Indian Foreign Secretary Vikram Misri announced on Monday that India and China had reached an agreement to resume patrolling activities along their disputed border in the region of Ladakh. Those movements had been curtailed since 2020, when a violent clash broke out between Indian and Chinese forces in the area.
Public details about the agreement remain sketchy, indicating that sensitive negotiations may be ongoing, but Indian reports suggest that the two sides ultimately hope to restore troop positions to their pre-2020 locations. The accord falls far short of resolving a long-standing border dispute between India and China, but it eases tensions that had reached their highest level since the two countries went to war in 1962.
The breakthrough should also greatly benefit the India-China economic relationship. Trade ties have endured over the decades, and the last few years were no exception. Even after the Ladakh clash—the deadliest between India and China since 1962—bilateral trade volume remained robust. It registered at $118 billion during India’s 2023-24 fiscal year, with China ranking as its top trading partner.
However, Chinese foreign direct investment (FDI) in India has slowed considerably since 2020, with Chinese financing subjected to heavy scrutiny. Much of this slowdown began after the Ladakh crisis, but some of it started amid concerns over the COVID-19 pandemic. This is no small matter for India, which previously secured Chinese capital for high-growth industries including infrastructure, energy, and technology.
In July, India’s chief economic advisor, V. Anantha Nageswaran, recommended that New Delhi consider increasing FDI from Beijing. He said more investment could help boost Indian exports, presumably by strengthening sluggish export-based sectors such as manufacturing. Nageswaran also argued that more Chinese investment could ease India’s trade deficit with China, reducing the need for imports.
When Nageswaran made his recommendations, bilateral tensions were too high for policymakers to take them seriously. India’s trade minister said New Delhi was not considering such a policy shift. But the new border deal could create the political and diplomatic space for India to begin loosening restrictions on Chinese FDI. This could bring boons to key sectors, such as India’s automobile industry, that have lost out since 2020.
There may be a lesson here for the India-Canada relationship, which has taken a sharp turn for the worse in recent years—though Ottawa is traditionally a friend of New Delhi.
India-Canada trade ties are strong, but concerns are growing that economic relations could become a casualty of broader tensions, especially if visa processing is affected. The border deal shows that India is prepared to do what is needed to bolster an important commercial partnership in an otherwise troubled relationship.
Easing India-China border tensions will kindle hopes of improving bilateral ties on the whole: New Delhi often asserts that addressing the border issue is a precondition for moving the relationship forward. However, a single border agreement shouldn’t be seen as a prelude to a broader detente. The new accord focuses only on part of the disputed border, and it doesn’t stipulate any immediate troop disengagements.
Moreover, mistrust between Indian and Chinese border troops remains strong. Farther afield, China’s deepening influence in South Asia and its growing naval presence in the Indian Ocean ensure that bitter competition will continue. And China’s security assistance to its close ally Pakistan guarantees enduring suspicions in New Delhi about Beijing’s intentions.
Yet the persistence of these entrenched tensions underscores the significance of any deal—as modest as it is—that aims to lower the temperature of a border dispute that is arguably the most considerable point of contention between Asia’s biggest powers.
What We’re Following
India-Canada ties continue free fall. India’s high commissioner to Canada, Sanjay Kumar Verma, gave an interview to Canada’s CTV over the weekend. Last week, Canada’s government publicly accused Verma—who serves in a role equivalent to an ambassador—and five other diplomats of involvement in transnational repression and ordered them to leave the country.
Verma vociferously rejected these allegations during the interview, lambasting Canadian Prime Minister Justin Trudeau for shattering India-Canada ties. He said Ottawa had provided no evidence, only intelligence, to back up the allegations. “On the basis of intelligence, if you want to destroy a relationship, be my guest,” he said.
Bilateral relations will be difficult to repair. India wants Canada to crack down on Sikh separatists on its soil, while Canada wants India to cooperate with its investigation into the killing of a Sikh separatist in British Columbia last year; Ottawa has accused New Delhi of complicity in the crime. Neither demand is currently viable, given domestic political realities and the extent of tensions.
The best chance of salvaging ties may be to hold talks away from the public eye focused on reaching an understanding to stop the relationship from complete collapse, given the importance of cooperation on trade, people-to-people ties, and countering China. The best opportunity may come on the sidelines of the G-20 summit in Brazil next month, assuming both Trudeau and Indian Prime Minister Narendra Modi are there.
If the two leaders attend but don’t engage at all, that won’t bode well for the trajectory of the relationship.
Modi attends BRICS summit. Modi traveled to Kazan, Russia, this week for the BRICS leaders’ summit, where he used the opportunity to underscore New Delhi’s strong partnership with Moscow and assert the importance of ending the war in Ukraine—as he often does during high-level engagements with Russia. Modi did both in a bilateral meeting with Russian President Vladimir Putin just ahead of the summit.
Significantly, Modi also held a meeting on the sidelines with Chinese President Xi Jinping. The announcement of the India-China border deal this week likely opened up diplomatic space for the engagement. It marks just the third time the two leaders have met since the 2020 Ladakh clash; the other two times were also on the sidelines of multilateral conferences: at the G-20 summit in 2022 and the BRICS summit last year.
BRICS projects itself as an alternative to Western hegemony, as FP’s Keith Johnson wrote this week; that helps India showcase its strategic autonomy while continuing to pursue partnership with the West. India can also point to Modi’s presence at the summit as another example of India delivering a direct message to Putin that aligns with the West’s position that Russia’s war in Ukraine is wrong.
This year’s summit featured the leaders of 24 countries and welcomed the four new members of BRICS: Egypt, Ethiopia, Iran, and the United Arab Emirates.
Pakistan passes controversial amendment. Pakistan’s Parliament passed a constitutional amendment early on Monday that critics fear could curtail the independence of the judiciary—one of the last remaining bastions of pushback against policies that aim to curb the opposition Pakistan Tehreek-e-Insaf (PTI) party and broader dissent.
PTI legislators didn’t vote on the bill; PTI chairman Gohar Ali Khan said they didn’t feel comfortable voting on it because imprisoned party leader and former Prime Minister Imran Khan advised against it. But other PTI leaders have lambasted the measure as a “death blow” for judicial independence and the “bleakest” moment in the history of Pakistan’s Parliament. The party has vowed to protest the law.
There was little the PTI could do to stop the amendment, with the government having secured more than enough votes to pass it. It’s just the latest setback for the party, which faces mounting challenges amid intensifying security crackdowns against protesters and with a national internet firewall in place. These measures make it difficult for the party to mobilize online and offline.
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Under the Radar
Retributive politics are a long-standing reality in Bangladesh. Two parties that are bitter rivals—the Awami League and the Bangladesh Nationalist Party (BNP)—have alternated holding power for much of the country’s recent history, which has intensified polarization. Typically, when one is in power, the other is in its crosshairs: When the Awami League’s Sheikh Hasina was prime minister, she cracked down hard on the BNP and its allies.
Hasina resigned under pressure in August, and there are worrying indications that Bangladesh’s interim government is continuing the toxic trend—despite vowing to restore democracy, clean up politics, and undertake large-scale reforms. Last weekend, it announced that it would ban the Awami League from participating in political activities—essentially one step short of banning the party altogether.
The move comes after reports of arrests of Awami League leaders and supporters on questionable charges and threats against media outlets that print photos of Hasina. The ban on political participation will make it difficult for the Awami League to mount campaigns in Bangladesh’s next national election, whenever it takes place, and could raise the risk of political violence.
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