Context: Recently, Indonesia witnessed violent protests against a range of cost-of-living issues. The protests have generally been seen as an incitement of anger against the elites by the middle class.
Relevance of the Topic : Prelims: India and its neighbourhood: Indonesia
Indonesia, Southeast Asia’s largest democracy and economy, was rocked by one of its most intense waves of protests in recent years. Protestors attacked public buildings, burned down and looted houses of public officials.
Causes of the Protests in Indonesia
Public resentment against elite privileges: Members of Parliament in Indonesia receive a monthly housing allowance of 50 million rupiah (about $3000) which is almost ten times the national minimum wage.
Austerity measures introduced by the government: President Prabowo’s government announced budget cuts worth 306 trillion rupiah (approximately $18.8 billion) to fund the flagship school meals programme. This led to steep budgetary reductions in vital sectors such as public works, economic affairs, investment, and higher education.
Tax hikes by regional governments: To offset the impact of reduced central funding, regional authorities imposed heavy tax increases. E.g., 250% hike in property tax in Pati, Central Java.
Income inequality: While the Gini coefficient of Indonesia has been declining, the country still registers one of the highest levels of inequality in the Southeast Asian region. As per an Oxfam report, Indonesia ranks sixth among countries with the greatest wealth inequality.
Additional issues include low wages and job insecurity. Education also remains underfunded, with various barriers restricting higher education.
At the regional and global level, Indonesia’s political stability is crucial for ASEAN and for global supply chains that depend on Southeast Asia’s largest economy. Continued unrest could therefore affect not just Indonesia but the wider region.
Context: Recently, Pakistan and Saudi Arabia signed a Strategic Mutual Defence Agreement which formalised the defence and security partnership between the countries.
Relevance of the Topic: Mains: Key provisions of the pact; Implications for India’s strategic interests.
The pact comes in the aftermath of Israel’s strike in Qatar and amid growing regional instability in West Asia, including threats from Iran, Yemen’s Houthis, and Israel’s assertiveness.
Key Feature of the Defence Pact
Mutual Defence Clause: Any aggression against either country shall be considered an aggression against both.
Strategic Objectives:
To enhance defence cooperation, joint training, and military exchanges.
To strengthen joint deterrence against regional adversaries.
Pakistan has announced that its nuclear programme will be made available to Saudi Arabia, if needed, under the new defence pact.
Saudi Arabia-Pakistan Defence Partnership:
The partnership has deep historical roots shaped by shared security concerns and sustained military cooperation since the 1960s.
Historical Background of Defence Cooperation:
1960s: Pakistani troops were stationed in Saudi Arabia to bolster internal and regional security.
1979: Pakistan’s special forces assisted during the Grand Mosque seizure in Mecca.
1982: A Bilateral Security Cooperation Agreement institutionalised defence ties, enabling training, advisory roles, and Pakistani arms supply to Saudi Arabia.
Historically, the Saudi-Pakistan defence equation, underpinned by religious commonality, has been defined by Saudi economic support and Pakistani military assistance. Pakistani military personnel have trained Saudi forces, while Riyadh has provided crucial financial and energy support.
Implications of the Saudi Arabia-Pakistan Defence Pact:
For Saudi Arabia:
Strategic Security: Strengthens deterrence against Iran and its proxies like Houthis, militias in Iraq, Syria, Lebanon.
Regional Balancing: It demonstrates Riyadh’s strategic autonomy, diversifying its defence alignments beyond exclusive reliance on the United States.
For Pakistan:
Military Benefits: Access to advanced weaponry (possibly via Saudi financing of the US arms purchases).
Economic Relief: Strengthens Pakistan’s bargaining power for financial aid and investments from Riyadh.
Geopolitical Leverage: Reinforces Pakistan’s role in Muslim world security architecture.
Domestic Prestige: Enhances the political capital of Pakistan’s civilian and military leadership.
India’s Position and Concerns:
India is aware of the long-standing arrangement and will study its implications for national security and regional stability. The strategic concerns include:
Saudi financing may indirectly bolster Pakistan’s military capabilities altering the regional balance of power to India’s disadvantage.
The pact’s mutual defence clause could embolden Pakistan, complicating India’s security calculus in South Asia.
For Saudi Arabia, its partnership with India continues to offer greater economic and strategic value. A core characteristic of India’s strategic autonomy has been to develop its own relationship with Saudi Arabia (and other countries) with a focus on leveraging India’s economic heft.
Context: India and China have renewed diplomatic activity such as border patrol agreements, resumption of direct flights and efforts to expand trade and cultural exchanges.
Relevance of the Topic: Mains: India - China bilateral relations.
India-China border is un-demarcated and is referred to as the Line of Actual Control (LAC). The border length is around 3,488 km as per India, while China claims it to be about 2,000 km. The different interpretations by the two countries leads to frequent disputes.
The border is divided into three main sectors
Western Sector (Ladakh, ~1597 km): Aksai Chin (~38,000 sq. km) under Chinese occupation, and China also controls Shaksgam Valley ceded by Pakistan in 1963.
Middle Sector (Himachal Pradesh and Uttarakhand, ~545 km) which is the least disputed, though differences exist near the Barahoti plains.
Eastern Sector (Arunachal Pradesh and Sikkim, ~1346 km) where China claims about 90,000 sq. km of Arunachal Pradesh as “South Tibet,” while the Sikkim boundary is formally settled but still faces PLA activity.
India-China Border Dispute
Historically, the 1914 Simla Agreement drew the McMahon Line between British India and Tibet, but China rejected it.
China occupied Tibet in 1950 and built a road in Aksai Chin in the 1950s.
The 1962 India-China war resulted in India’s defeat, with China retaining Aksai Chin and withdrawing from its advances in Arunachal Pradesh, leaving the boundary issue unresolved. India-China relations after the 1962 war remained tense, with little progress on the boundary dispute.
In 1988, Rajiv Gandhi’s visit to Beijing marked a turning point, as it re-opened dialogue after decades of mistrust.
However, political instability in India (1989-1991) slowed progress until P.V. Narasimha Rao’s government (1991-1996) was able to re-focus on China.
Initial Steps (1988-1992):
Between 1988 and 1993, six rounds of talks of the Joint Working Group (JWG) were held.
The dialogue included both diplomats and military commanders, with first meetings at Bum La (eastern sector) and Chushul/Moldo (western sector) in 1992.
Border trade resumed in 1992 after a gap of over 30 years, and consulates were re-opened in Mumbai and Shanghai in December 1992.
Border Peace and Tranquillity Agreement (BPTA), 1993:
Signed during Prime Minister Narasimha Rao’s visit to Beijing in September 1993.
Core Principle: The boundary dispute would be resolved peacefully, and neither side would use or threaten force.
The Agreement recognised the Line of Actual Control (LAC) for the first time in an official bilateral document. Both sides agreed :
Not to cross the LAC; if intrusions occurred, forces would withdraw upon caution.
To jointly check and determine contested segments of the LAC.
To maintain minimal force levels along the LAC and reduce them on the principle of mutual and equal security.
To freeze the military situation, acknowledging India’s geographic disadvantage compared to China’s easy access through the Tibetan plateau.
The agreement emphasised setting aside the boundary dispute to build cooperation in other areas.
1996 Agreement on Confidence-Building Measures:
Signed during Chinese President Jiang Zemin’s visit to India in 1996.
Expanded upon the 1993 BPTA by specifying military confidence-building measures (CBMs).
Both sides agreed :
Not to use force and to continue peaceful consultations.
To reduce or limit military forces and heavy weaponry (tanks, artillery, missiles) in border areas.
To avoid large-scale military exercises near the LAC; if held, exercises would be directed away from the other side.
Article X: Stressed the need for a common understanding of the LAC alignment. Both sides committed to exchange maps for clarification and confirmation.
Challenge of LAC Clarification
In 2000, both sides exchanged maps of the relatively undisputed Central sector.
In 2002, maps of the western sector were exchanged, but were rejected within minutes as they represented maximalist positions of both sides.
By 2005, efforts to clarify the LAC were abandoned.
Key contested areas included: Samar Langpa, Trig Heights, Depsang, Kong Ka La, Pangong Tso, Spanggur Gap, Mount Sajun, Dumchele, Demchok, and Chumar. These same areas became flashpoints in later standoffs, including in 2020.
The 1993 and 1996 agreements marked important milestones in institutionalising peace and stability along the border. However, the failure to define and clarify the LAC meant that the agreements could only postpone and not prevent future confrontations.
The failure to achieve a mutually accepted definition of the Line of Actual Control left the core dispute unresolved making subsequent tensions and face-offs inevitable.
Context: Recently, Nepal witnessed a violent youth-led movement dominated by a generation known as ‘Gen Z’. It is the largest anti-establishment uprising since the abolition of monarchy in 2008.
Nepal’s President has appointed former Chief Justice Sushila Karki as the country’s new Prime Minister and dissolved Parliament. He announced fresh elections on March 5, 2026.
Relevance of the Topic: Mains: India and its Neighbourhood: Crisis in Nepal & its Implications on India.
Gen Z Protests in Nepal
Youth-led movement dominated by those born between 1996 and 2012, a generation known as “Generation Z”, frustrated with corruption, nepotism, unemployment, and political dysfunction.
The protest began after the government banned 26 social media platforms in August 2025, cutting off their main space for expression and mobilisation.
The situation escalated when several protestors in Kathmandu were killed by police firing, turning a demand for digital freedom into a nationwide anti-establishment uprising.
Enraged youth set fire to government buildings, vandalised the homes of former Prime Ministers, attacked ministers, and even freed political prisoners from Central Jail.
Causes of the Protests?
Unfulfilled promise of 2008 Republic: Wave of discontent against geriatric and nepotistic leadership that ran Nepal with 17 different prime ministerships in the last 20 years. The governance has remained weak, unstable, and unresponsive.
Corruption and Nepotism: Anger against entrenched political elites and their children’s lavish lifestyles while ordinary citizens face unemployment and poverty due to economic stagnation.
Youth Disillusionment: Nepal has one of the world’s youngest populations (median age 25). Youth face high unemployment, lack of opportunities, and widespread inequality.
Ban of Social Media Platforms: The government’s ban on 26 social media platforms (Facebook, WhatsApp, Instagram, X, YouTube) cut off Gen Z’s primary space for political expression.
State Violence: The killing of protesters by security forces was the tipping point that transformed peaceful dissent into nationwide outrage.
Nature of the Protests:
Leaderless Mobilisation: Unlike the Jana Andolans of 1990 and 2006, the movement lacked structured leadership or clear political objectives.
Spontaneous and Digital-Driven: Mobilisation was initially through social media pages such as Next Generation Nepal.
Nihilistic Rage: Protesters attacked homes of five former Prime Ministers, vandalised state institutions, and freed political prisoners, showing an anti-establishment thrust rather than specific reform demands.
Urban-Centric but Spreading: While centred in Kathmandu, protests spread to other cities, reflecting nationwide disillusionment.
As protests turned violent, the Prime Minister of Nepal resigned, while the President remained absent deepening the leadership vacuum. In response, the Army was deployed to restore order.
Implications of the Gen Z Protests in Nepal:
Delegitimisation of Political Elites: Attacks on the homes of former Prime Ministers and ministers reflected a collapse of public trust in traditional parties and leaders.
Expansion of Military Role: The Army’s takeover of security functions raises concerns about potential military influence in political decision-making.
Emergence of New Political Voices: The protests weakened trust in established political parties and created space for new leaders. At the same time, pro-monarchy groups tried to use the unrest to push for a return of the old order.
Regional and Economic Impact: Instability threatens Nepal’s economy, deters investment and tourism, and poses security and diplomatic challenges for India and South Asia.
Implications for India:
Border Management and Security: Political instability in Nepal poses risks of refugee inflows, illegal activities, and cross-border crime across the open India-Nepal border.
Strategic Competition: Prolonged chaos could allow China or other external actors to expand their influence in Nepal, challenging India’s traditional strategic space.
Economic Disruptions: Instability undermines India’s trade and investment in Nepal, including energy, infrastructure, and hydropower projects.
India must focus its attention on supporting a crucial transition towards a new, more democratic and developed Nepal.
Context: Recently, the Prime Minister of India visited Japan for the 15th India-Japan Annual Summit. The visit is expected to further consolidate the Special Strategic and Global Partnership between the two nations.
Relevance of the Topic: Mains: India-Japan bilateral relations.
Key Highlights of India PM’s Visit to Japan
India and Japan inked 21 pacts during the recent visit. The key agreements, MOUs and announcements include:
India-Japan joint vision for the next decade: The roadmap covers vital areas such as economic growth, security, technology, innovation, health, sustainability, mobility and people-to-people exchanges.
Revision of the 2008 Joint Declaration on Security Cooperation.
Bilateral energy partnership on clean Hydrogen and Ammonia.
Memorandum of cooperation on joint crediting mechanism.
Private investment target of ¥10 trillion (about $68 billion) in India over the next decade.
Economic Security Initiative launched to promote supply chain resilience in strategic sectors.
MoU on India-Japan digital partnership 2.0
Launch of the India - Japan AI Initiative to strengthen collaboration on large language models, data centres, and AI governance.
Launch of the Next Generation Mobility Partnership
Launch of the India - Japan Small and Medium Enterprises Forum
Launch of the Sustainable Fuel Initiative
Implementing arrangement between the Indian Space Research Organisation (ISRO) and Japan aerospace exploration agency (JAXA) concerning joint lunar polar exploration mission.
Transfer of Japan's next-generation E10 series Shinkansen technology for the Mumbai-Ahmedabad bullet train project.
Japan Human Resource Exchange: an action plan to promote two-way exchange of 5 lakh people between India and Japan, particularly 50,000 skilled and semi-skilled personnel from India to Japan in the next five years.
Overview of India-Japan Bilateral Relationship:
India and Japan are two of Asia’s leading democracies and among the world’s top five economies. The partnership is rooted in civilisational ties reinforced by convergence in their regional and global outlooks. The countries share values, trust, and strategic outlook.
Strategic Partnership:
India-Japan bilateral relations were elevated to Global Partnership in 2000, Strategic and Global Partnership in 2006, and Special Strategic and Global Partnership in 2014.
India’s Act East Policy and Indo-Pacific Oceans Initiative (IPOI) align closely with Japan’s Free and Open Indo-Pacific (FOIP) policy.
Multilateral and Regional Cooperation:
Cooperation between the countries extends to plurilateral platforms such as the:
Quad (India and Japan coordinate closely with the US and Australia to ensure a free, open, and inclusive Indo-Pacific)
International Solar Alliance (ISA)
Coalition for Disaster Resilient Infrastructure (CDRI)
Supply Chain Resilience Initiative (India and Japan are looking to diversify and secure supply chains through the SCRI which also involves Australia).
Japan leads the Indo-Pacific Oceans Initiative (IPOI’s) connectivity pillar.
Trade Ties:
Bilateral trade reached $22.8 billion in FY 2024.
Imports from Japan continue to outweigh exports.
India’s main exports: chemicals, vehicles, aluminium, and seafood
India’s major imports: machinery, steel, copper, and reactors.
Investment:
Japan is India’s fifth-largest source of FDI with $43.2 billion cumulative investment up to December 2024. Annual inflows have been strong: $3.1 billion in FY 2024.
Around 1,400 Japanese companies with nearly 5,000 establishments operate in India; more than 100 Indian companies are present in Japan.
Emerging Focus Areas:
Digital cooperation (involving AI, semiconductors, startups), clean energy, supply chain resilience, industrial competitiveness, public infrastructure and skill development.
Economic security initiative focuses on semiconductors, critical minerals, AI, telecommunications and clean energy.
Infrastructure Cooperation:
Japan has been India’s largest Overseas Development Assistance (ODA) donor since 1958, supporting critical infrastructure and human development projects. ODA disbursement stood at about JPY 580 billion ($4.5 billion) in FY 2024.
The flagship Mumbai-Ahmedabad High Speed Rail is the flagship project symbolising advanced technology transfer and skill development. The latest tranche of JPY 300 billion ($2.2 billion) was signed in 2023.
Japan is transferring its next-generation E10 series Shinkansen technology for the Mumbai-Ahmedabad bullet train project.
Defence and Security:
Key agreements on defence and security include the Joint Declaration on Security Cooperation (2008), Defence Cooperation and Exchanges MoU (2014), Information Protection Agreement (2015), Reciprocal Provision of Supplies and Services Agreement (2020), and co-development of the UNICORN naval mast (2024).
Military Exercises:
Malabar (with the US and Australia), Milan (multilateral naval), JIMEX (bilateral maritime), Dharma Guardian (Army), and Coast Guard cooperation are held regularly.
Dialogue Mechanisms: Defence Ministers’ meetings, Chiefs’ visits, and Joint Service Staff Talks (2024) have consolidated trust.
People-to-People, Culture and Education:
Tourism: 2023-24 was celebrated as the Year of Tourism Exchange with the theme “Connecting Himalayas with Mount Fuji”.
Education: There are more than 665 academic partnerships between Indian and Japanese universities. Platforms like Edu-Connect and Universities Forum promote exchanges. The Skill Connect platform launched in 2023 links Indian talent with Japanese employers.
Diaspora: About 54,000 Indians live in Japan, mainly IT professionals and engineers.
The visit consolidates India-Japan relations making Japan India’s most consistent partner in Asia.
Context: Indian Prime Minister’s Asia tour covering the Shanghai Cooperation Organisation (SCO) Summitin Tianjin, China and a bilateral visit to Japan has significant implications for India’s foreign policy. The visit comes amid trade tensions with the US, strained ties with China, and shifting alliances in Asia.
Relevance of the Topic: Mains: PM Modi’s Asia Tour: Opportunities and Challenges for India.
For India, the tour highlights both strategic opportunities and persistent challenges in its continental and maritime engagements.
Opportunities for India
Strengthening Strategic Partnership with Japan: India and Japan share converging interests in maintaining a free, open, and inclusive Indo-Pacific. Defence cooperation, joint exercises, and technology collaborations can deepen mutual trust. Japan’s concerns over US unpredictability create room for India to emerge as a reliable strategic partner.
Expanding Trade and Technology Cooperation: Japan offers prospects for investment in critical technology, resilient supply chains, and infrastructure development. Collaborations in areas like digital economy, semiconductors, and green energy can reduce India’s over-dependence on China.
Leveraging Maritime Asia: India’s geographical position and naval strength make it a natural partner for Japan, South Korea, and Southeast Asian nations. Maritime partnerships allow India to project influence beyond the continental constraints of its neighbourhood.
Diplomatic Space in SCO: Despite contradictions, the SCO provides a platform for India to engage with China, Russia, Central Asia, and Pakistan simultaneously. Participation helps India avoid isolation in regional forums where China is expanding its influence. Even limited dialogues on border management or counter-terrorism can reduce immediate risks of escalation.
Balancing Major Powers: India’s presence in both Japan and China underscores its multi-alignment strategy. By engaging with the US allies like Japan, while also remaining part of SCO, India signals its intent to retain strategic autonomy.
Challenges for India:
Economic Vulnerabilities to China
India’s manufacturing sector remains dependent on China for critical inputs like rare earth magnets and tunnelling equipment. Disruptions in supply chains, such as China’s withdrawal of engineers from iPhone production in India expose India’s fragile industrial base.
Campaigns like Make in India and Swadeshi will take time to reduce this dependency.
Limitations of the SCO Forum:
The SCO is portrayed as an inner-Asian club standing up to American dominance, but this aspiration is undermined by severe internal contradictions. They include-
India-China mistrust
India-Pakistan disputes
Though counterterrorism was one of SCO’s founding goals, the forum has been unwilling to censure Pakistan due to China’s protection.
Economic divergence: India rejects China’s Belt and Road Initiative (BRI), central to SCO’s economic vision.
Russia’s Shrinking Utility:
Discounted Russian oil, once seen as a stabilising factor, has now become a diplomatic liability as the US pressures India to scale down energy ties with Russia.
Russia’s growing dependence on China reduces India’s room for manoeuvre in Eurasian geopolitics.
Erosion of Strategic Primacy in South Asia:
With SAARC effectively non-functional, China has quietly drawn much of the Asian subcontinent into the SCO orbit. China is promoting new minilateral formats such as trilaterals with Pakistan and Afghanistan, and dialogues with Bangladesh and Myanmar positioning itself as South Asia’s most consequential external power.
China seeks to entrench its role as both economic engine and political stabiliser, thereby eroding India’s traditional strategic primacy in the neighbourhood.
Uncertainty in US Relations:
Trade tensions with the US threaten India’s biggest export market.
While the SCO and Japan visits show alternatives, neither Russia nor China can replace the US as a trade partner. In 2024, India’s exports to the US stood at $88 billion with a $45 billion trade surplus, far exceeding exports to Russia ($5 bn) and China ($15 bn) combined.
Risk of Losing Strategic Space to US-China Rivalry:
As both the US and China advance competing regional visions for South Asia, India risks being squeezed between the two.
China is embedding itself as the region’s “benign benefactor” through the SCO and minilateral formats, while the US has signalled its intent to counter this influence by appointing a special envoy for South Asia.
In this growing great-power rivalry, India faces the danger of erosion of its traditional strategic primacy in its own neighbourhood.
For India, the challenge is to stabilise difficult ties with China and Russia, while deepening reliable partnerships like Japan to safeguard its strategic autonomy in an era of great-power rivalry.
Context: During the recent official visit of the Philippines President to India, both nations have elevated their bilateral relationship to Strategic Partnership. The move aims at renewed commitments in trade, defence and maritime cooperation, and digital collaboration.
Relevance of the Topic: Mains: India-Philippines Bilateral ties.
India and the Philippines established diplomatic ties in 1949. Over 75 years, the relationship has grown steadily. In recent years, amid the rising assertiveness of China in the South China Sea, shared democratic values and strategic interests have brought the two nations closer.
Indonesia: Comprehensive Strategic Partner Trade, energy, security.
Singapore: Strategic Partner in finance, defence training.
Philippines: Strategic Partner (2025) in Defence, PTA, maritime.
Trade and Economic Cooperation
Bilateral trade between the countries has crossed over $3 billion annually and is on a rising trajectory.
Decision to start negotiations on a Preferential Trade Agreement (PTA) to enhance bilateral trade further.
Both sides committed to expediting the review of the India-ASEAN Free Trade Agreement (FTA) to further strengthen regional trade linkages.
This is especially relevant as reciprocal tariffs imposed by the U.S. have impacted India and ASEAN exports, making regional trade cooperation more important.
Defence Cooperation
India’s indigenous defence industry is emerging as a key partner to Philippines’ ongoing military modernisation and regional maritime concerns.
The Philippines has acquired BrahMos supersonic cruise missiles from India in 2022.
The Philippines has expressed interest in other Indian systems like the Akash missile and air defence systems.
Agreement to conduct service-to-service talks for enhanced joint training and information exchange between their armed forces.
Maritime & Indo-Pacific Security:
Both leaders reaffirmed support for freedom of navigation and a rules-based order in the Indo-Pacific region.
The Philippines is seen as an important partner in India’s Act East Policy and MAHASAGAR vision.
Indian naval ships, including a hydrography ship, participated for the first time in a naval exercise in the Philippines during the visit.
The Philippines condemned the Pahalgam terror attack, expressing solidarity with India.
Digital and Scientific Collaboration:
India to support a pilot project to help the Philippines build its Sovereign Data Cloud infrastructure.
Ongoing joint research between the two countries in areas such as virology, AI, and additive manufacturing.
People-to-People & Connectivity Initiatives
Direct flights between India and the Philippines to begin in 2025.
India to offer free e-tourist visas to Filipino nationals for one year starting August 2025.
Strategic Importance of Elevated Partnership:
The partnership comes at a time when both countries are navigating economic challenges due to external trade disruptions and facing shared security concerns in the Indo-Pacific.
Strategic Indo-Pacific Engagement: Strengthens India’s Act East Policy by partnering with a key Southeast Asian nation amid growing tensions in the South China Sea.
Defence Diplomacy and Export Boost: Expands India's role as a defence exporter, with BrahMos as a flagship project, and supports the Philippines' military modernisation through indigenous Indian systems.
Economic Diversification through PTA: Launch of Preferential Trade Agreement (PTA) negotiations and ASEAN FTA review offers India a route to reduce dependence on traditional markets amid US tariff pressures.
Technological and Digital Collaboration: Positions India as a reliable digital partner through initiatives like the Sovereign Data Cloud and joint research in AI, virology, and additive manufacturing.
Maritime Security Collaboration: Enhances joint naval operations, coast guard interoperability, and supports freedom of navigation based on international law.
The elevation of ties to a Strategic Partnership marks a major milestone in India-Philippines relations. The particular focus is to deepen defence and maritime cooperation, as both countries seek to navigate their security concerns due to China’s increasing assertiveness in the Indo-Pacific region.
“From the Indian Ocean to the Pacific, we are united by shared values. Ours is not just a friendship of the past; it is a promise to the future.” - PM Narendra Modi
Context: The UAE government has given clarification on eligibility and investment criteria for its Golden Visa scheme, dismissing the widespread media claims in India about a ₹23 lakh visa as false.
Relevance of the Topic: Prelims: Key facts about UAE's Golden Visa.
What is the UAE’s Golden visa?
The UAE’s ‘Golden visa’ is a long-term residence visa which enables foreign talents to live, work or study in the UAE while enjoying exclusive benefits which include:
entry visa for 6 months with multiple entries to proceed with residence issuance
long-term, renewable residence visa valid for 5 or 10 years
privilege of not needing a sponsor.
ability to stay outside the UAE for more than the usual period of 6 months in order to keep their residence visa valid
ability to sponsor their family members, including spouses and children and domestic helpers
permit for family members to stay in the UAE until the end of their permit duration, if the primary holder of the Golden visa passes away.
Who is a Sponsor?
In the context of the UAE residency system, a sponsor refers to a local individual or organisation (usually an employer or relative) who takes legal responsibility for a foreign national residing in the UAE.
The sponsor has the legal right to cancel the visa of the person they are sponsoring.
Categories eligible for UAE Golden Visa
How much money has to be spent for the visa: AED 2 million for real estate and other investors. Main categories of individuals eligible for the UAE Golden Visa :
Public investors: People willing to invest dirhams (AED) 2 million in an accredited UAE investment fund. There are some requirements for this:
investors must possess a valid commercial or industrial licence
a tax certificate to prove annual tax contribution of at least AED 2,50,000
Entrepreneurs: People willing to invest AED 5,00,000 in any project approved by the authorities are eligible. The projects need to be tech-based.
Real estate investors: People owning property worth AED 2 million (not under mortgage) along with proof of residence in the UAE.
Exceptional talent: Doctors, scientists, athletes and domain experts.
Outstanding students, Humanitarian pioneers and Frontline heroes.
Who is not Eligible?
The UAE has clarified that crypto investors are not eligible for this visa.
Golden Visa available in the US:
Requirement: Applicants who invest $1 million in a non-targeted area or invest $8,00,000 in a targeted, rural area with high unemployment, and create 10 full-time jobs for US workers are eligible for the EB-5 visa.
Benefit: The US EB-5 visa also allows permanent residency.
How is the UAE Golden Visa different from the US Green Card?
The UAE Golden Visa offers long-term but temporary residency, while the US Green Card provides permanent residency.
The Golden Visa has no citizenship pathway, whereas Green Card holders can apply for US citizenship after 5 years (or 3 years if married to a US citizen).
Context: Despite being home to 25% of the global population, South Asia remains one of the least economically integrated regions in the world.
Relevance of the topic:
Prelims: About SAARC, SAFTA , key facts about economic integration in South Asia.
Mains: Reasons behind Poor economic integration in South Asia and its impact.
Economic and national security are often discussed separately, but they are deeply intertwined.
Economic instability fuels unrest, while security threats disrupt trade and investment.
No country can achieve lasting security without economic prosperity, and vice versa. E.g., Border disputes among South Asian nations significantly hamper trade and economic cooperation, preventing the region from achieving its full potential.
The South Asian region is one of the least economically integrated regions in the world.
South Asia, the most populous region of the world (25% of the world’s population), represents a combined market of only $5 trillion in GDP. On the other side, the EU, with 5.8% of the world’s population, accounts for $18 trillion in GDP, and NAFTA has a GDP of $24.8 trillion. This clearly shows the underexploited capacity of the South Asian region.
South Asian Free Trade Area (SAFTA) was created under SAARC to foster trade Cooperation. Despite this, inter regional trade stands at just 5-7% of the total international trade - the lowest among all major regional blocs. The EU accounts for approximately 45% of total international trade, ASEAN accounts for 22% and NAFTA around 25%.
Current trade among SAARC (South Asian Association for Regional Cooperation) countries is just around $23 billion, far below the estimated $67 billion. United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), estimates South Asia's trade potential at $172 billion, with over 86% unexploited by 2020. Bangladesh has the highest unexploited proportion, at 93%, followed by the Maldives (88%), Pakistan (86%), Afghanistan (83%), and Nepal (76%).
Barriers to Regional Trade and Integration
High Intra-Regional Trade Costs
Intra-South Asia trade costs 114% of the value of goods, making regional trade more expensive than global trade. E.g., It is about 20% more costly for a company in India to trade with Pakistan than with Brazil, which is 22 times farther away. Intraregional trade costs for ASEAN are some 40% lower than intra-SAARC trade costs, at 76%, creating high incentives for interdependence in that bloc.
Underperforming SAARC and SAFTA: SAARC had the aim of ending distrust and tension, but trust deficits and regional conflicts hinder the full implementation of agreements such as SAFTA. Despite SAFTA, trading with neighbours is not ‘free’. As estimated by the UNESCAP, in spite of trade liberalisation under SAFTA, intraregional trade in South Asia is less than a third of its potential.
Security and Trust Deficit: Political diversity, regional disputes, minority issues and terrorism are major obstacles to regional cooperation. Most SAARC countries are in conflict with each other, preventing effective regional integration. E.g., due to terror insurgencies and border disputes, bilateral trade between India and Pakistan fell from $2.41 billion in 2018 to $1.2 billion in 2024 and Pakistani exports to India fell from $547.5 million in 2019 to just $480,000 in 2024.
Absence of Strategic Vision: Regional forums lack leadership, enforcement, and long-term planning. E.g., SAARC summits are irregular, and often unproductive.
Impacts of Poor Regional Integration:
Lesser trade opportunity means lesser capacity for innovation, production and investment in the people of the country.
South Asia’s trade-to-GDP ratio decreased from 47.30% in 2022 to 42.94% in 2024.
The World Bank reported a softened growth forecast of 5.8% for 2025, down from 6% in 2024.
The trade deficit of the subregion has widened from $204.1 billion in 2015 to $339 billion in 2022.
Therefore, to exploit the full potential of the South Asian region, members must work actively to enhance intra-regional trade, keeping aside their bilateral conflicts.
Context: India has taken several strategic, infrastructural, and diplomatic steps to position itself as a regional integrator, particularly in the Bay of Bengal and broader South Asia. However, India risks undermining the idea of cooperative regionalism, if it begins to use trade access to signal political displeasure.
Relevance of the topic:
Prelims: India’s initiatives like BIMSTEC, Sagarmala, Act East, Neighbourhood first policy etc.
Mains: Impact of recent India - Bangladesh trade tensions on India's credibility as a regional leader in the Bay of Bengal.
India’s strategic steps in the Bay of Bengal Region:
India has taken several strategic, infrastructural, and diplomatic steps in the Bay of Bengal and broader South Asia. They include:
India has invested heavily in port infrastructure through the Sagarmala programme to improve coastal logistics and connectivity.
India's port infrastructure remains the most extensive and efficient in the region. Cargo-handling capacity is expanding rapidly, and coastal shipping and multimodal linkages are more developed than those of any other BIMSTEC partner.
Regional countries like Bangladesh rely on Indian gateways for faster, cheaper access to global markets. Alternatives via Sri Lanka or Southeast Asia are costlier and less time efficient.
Policychanges such as Goods and Services Tax (GST) cuts on bunker fuel and incentives for coastal shipping have doubled the cargo movement on the east coast in a decade.
At the regional level, India is pushing for better integration through BIMSTEC. India has signed the BIMSTEC Maritime Transport Cooperation Agreement to harmonise customs procedures and foster multimodal linkages, with the broader goal of reducing the cost and friction of trade within the Bay.
ThroughAct East and Neighbourhood first policy, India emphasis on building connectivity with ASEAN and South Asian neighbours, especially through the Northeast.
These steps aim to improve connectivity, economic ties, and trust among its neighbours.
Concerns about India's credibility as a regional trade facilitator
India recently withdrew a key transshipment facility granted to Bangladesh. India cited misuse of the facility and regulatory concerns as reasons for the withdrawal.
This move, coupled with restrictions on Bangladeshi imports of some goods via land routes, has raised concerns about India's credibility as a regional trade facilitator in the Bay of Bengal.
Geopolitical Implications
Infrastructure alone does not confer leadership. In a fragmented region like the Bay of Bengal, credibility matters as much as capacity.
Erosion of Trust: If India’s neighbours see trade routes being weaponised for political signaling, they will start hedging- possibly turning more towards China or Southeast Asia.
Impact on Regional Leadership: India wants to be the economic and connectivity hub of the Bay of Bengal, but leadership requires predictable and rule-based behaviour.
Signal to smaller BIMSTEC Members: Countries like Nepal, Bhutan, Myanmar, and Sri Lanka may begin to doubt India’s commitment to neutral, cooperative regionalism.
Bay of Bengal is at an Inflection Point:
On one level, it is a zone of opportunity. With improved connectivity, it could emerge as a self-sustaining corridor between South and Southeast Asia.
On another level, the region remains vulnerable to strategic anxieties.
The line between economic policy and geopolitical preference is beginning to blur.
Way Forward
Clarify Policy: Clearly state the reasons for suspending Bangladesh’s transshipment facility and the conditions for its restoration.
Rules-Based Mechanism: Establish transparent trade and transit rules to prevent political disruptions from affecting economic cooperation.
Strengthen BIMSTEC: Use BIMSTEC to institutionalise regional trade norms, customs coordination, and dispute resolution.
Credibility over Coercion: Maintain policy consistency to reinforce India’s image as a dependable regional leader, not a reactive power.
Context: India and Oman are currently negotiating a Comprehensive Economic Partnership Agreement (CEPA) aimed at deepening bilateral trade, investment, and strategic engagement. ‘Omanisation’ is the last key issue in conclusion of India-Oman FTA talks.
Relevance of the topic:
Prelims: Key facts related to FTA, CEPA.
Mains: Significance of India-Oman FTA and challenges.
Major Highlights:
Initiated in November 2023, the CEPA was expected to be concluded by mid-2024. However, progress has been impeded by Oman’s ‘Omanisation’ policy.
Omanisation policy implemented by Oman aims to boost the employment of its citizens in the private sector. The policy mandates companies to meet specific quotas for hiring Omani nationals. These quotas vary by sector and are periodically revised.
India’s Response: India wants that the regulations on compulsory employment of Omanis in various sectors be frozen at the current level for India, and not increased after the India-Oman CEPA is signed.
India-Oman Trade Relations
Oman is India’s third largest trading partner in the Gulf Cooperation Council (GCC). The bilateral trade was ~$9 billion in FY2024.
India’s key imports from Oman: petroleum products and urea account for over 70% of imports. Other important items- propylene and ethylene polymers, pet coke, gypsum, chemicals and iron and steel.
India’s main exports to Oman: petroleum products, iron and steel, rice (particularly basmati), processed minerals, ships, boats and floating structures, electrical machinery, machinery parts, tea, coffee, spices, fruits and meat products.
Potential Gains from CEPA
Boost to Indian Exports: Indian goods worth $3.7 billion like gasoline, iron & steel, electronics, machinery may benefit from removal of 5% import duty in Oman.
Services Sector Opportunity: India hopes to send more professionals to Oman, and hence does not want increased restrictions related to employment of expats.
Strategic Leverage in West Asia: India-Oman CEPA can widen India’s access to West Asia, fostering economic and strategic ties in a region of critical importance.Enhances India’s trade connectivity and access to critical maritime routes and markets in the Gulf.
India-Oman CEPA holds strategic and economic significance for India’s outreach to West Asia. Resolving the ‘Omanisation’ hurdle is key to unlocking trade potential, enhancing market access, and strengthening bilateral ties in a critical region.
Context: Inaugurating the Rising Northeast Summit, the Prime Minister of India said that the northeastern region would emerge as a gateway for trade with Southeast Asia over the next decade. Pitching for investments in the eight States, he described Northeast as the powerhouse of energy and ‘Ashta Lakshmis’ or the eight forms of Goddess Lakshmi.
It was a counter to recent remarks by Bangladeshi Chief Adviser Muhammad Yunus who referred to the northeastern region as a “landlocked” territory that could be an “extension” of the Chinese market.
Relevance of the Topic: Mains: Importance of Northeast Region in India's foreign policy paradigm.
India’s Foreign Policy and the Northeast Region:
India’s North-East Indian region borders five countries and plays a crucial role in India’s regional diplomacy. It is pivotal to several flagship foreign policy frameworks:
Neighbourhood First Policy: Encourages deeper political and economic engagement with immediate neighbours like Bangladesh, Bhutan, and Myanmar — all of which share borders with the northeast.
Act East Policy: Envisions enhanced connectivity with ASEAN through the northeast, positioning it as a strategic interface. The trade volume between India and ASEAN is nearly $1.25 billion. This trade volume will cross $200 billion in the coming years.
BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) : The northeast connects key BIMSTEC countries, offering a corridor for sub-regional cooperation.
Infrastructure as a Strategic Tool:
Kaladan Multimodal Transit Transport Project (KMTTP): Aims to connect Mizoram with Myanmar’s Sittwe Port via road, river, and sea.
India–Myanmar–Thailand Trilateral Highway: Seeks to provide seamless overland connectivity to ASEAN, bolstering economic and strategic integration.
Act East Roadmap & BBIN Corridor: Strengthen logistical links for trade and transit.
These projects are not only about physical connectivity but also about asserting India’s strategic autonomy and reducing dependency on routes vulnerable to China’s influence.
Key destination for two strategic sectors: Semiconductors and Energy:
1. Semiconductor Sector
2024: Tata Group commenced construction of a semiconductor unit in Assam, with a total investment of Rs 27,000 crore. The semiconductor plant has opened doors of opportunity for the semiconductor sector and other cutting edge-technology in the region.
The country will soon get the first ‘Made in India’ chip produced at the semiconductor plant in the Northeast region.
2. Energy Sector:
Beyond power generation, NE presents new avenues in the manufacturing of solar modules, cells, energy storage systems, and research and development.
The government is making large investments in areas of hydro or solar power in every state of Northeast, and projects worth crores have already been distributed.
Important Schemes for development of North-East India
Bio-economy, bamboo, tea production, petroleum, sports and eco-tourism as some of the areas where the region is an emerging hub.
1. PM-DevINE Scheme:
Prime Minister’s Development Initiative for North Eastern Region (PM-DevINE) is a Central Sector scheme (100% Central funding) announced in 2022.
Objectives of PM-DevINE scheme:
Fund infrastructure convergently in the spirit of PM GatiShakti.
Support social development projects based on felt needs of NER.
Enable livelihood activities for youth and women.
Fill the development gaps in various sectors.
Outlay: Rs. 6600 crore for 4 year period (FY23 to FY26)
Implemented by: Ministry of Development of North-East Region.
2. 'Purvodaya': Vision for Eastern Development:
The Government of India’s ‘Purvodaya’ initiative aims at unlocking the economic potential of eastern India, including the northeast.
It involves large-scale investment in infrastructure, industry, and connectivity. This complements India's multi-vector diplomacy by fostering regional integration and inclusive development.
It is aimed at extending support to the industries for enhancing regional infrastructure, creating employment opportunities, and promoting resilience and prosperity in the region.
Under the UNNATI Scheme, the following specific incentives are provided to the industrial Units:
Capital Investment Incentive
Capital Interest Subvention
Manufacturing & Services Linked Incentive
It is mandatory for all the non-exempt Union Ministries/Departments to earmark at least 10% of their annual Gross Budgetary Allocation towards the development of NER.
Harnessing Soft Power Potential of North-East Region:
India also seeks to harness the soft power potential of the northeast. During the 2023 G-20 meetings, several events were held in northeastern cities, showcasing local culture, biodiversity, and heritage. This aligns with India’s goal of building cultural diplomacy and regional identity.
India’s northeast is no longer a peripheral outpost but a fulcrum for regional connectivity, economic diplomacy, and strategic engagement. By promoting connectivity diplomacy, sub-regional integration, and transnational infrastructure, India is asserting its vision of a multipolar Asia rooted in cooperation, connectivity, and mutual growth.
As Mr. Jaishankar rightly put it, the northeast is not landlocked — it is land-linked.
