Other Bilateral Relations of India

Taking stock of India-China Bilateral Ties 

Context: Recently, the Chinese Foreign Minister paid a two day official visit to New Delhi, first such visit since 2021. He co-chaired the 24th round of the Special Representatives’ dialogue on the Boundary Question between India and China with India’s National Security Advisor.

Relevance of the Topic : Mains: India and its Neighbourhood: India-China Relations. 

India-China relations constitute one of the most significant bilateral equations in contemporary international politics. Characterised by deep economic interdependence, multilateral cooperation, and persistent strategic distrust, the relationship has been under strain since the 2020 Galwan clashes

Recent talks between Chinese Foreign Minister Wang Yi and Indian leadership, along with the planned Modi-Xi meeting at the upcoming SCO Summit in Tianjin, indicate renewed efforts to stabilise borders, rebuild economic ties, and restore strategic trust.

Key Developments of Chinese Foreign Minister’s Visit

Border Management and Security: 

  • Both sides agreed to establish new mechanisms under the Working Mechanism for Consultation and Coordination (WMCC) on India-China Border Affairs:
    • Expert Group to explore early harvest outcomes in boundary delimitation.
    • Working Group to advance effective border management in order to maintain peace and tranquillity in the border areas.
    • General Level Mechanisms in the Eastern and Middle Sectors, in addition to the existing General Level Mechanism in Western Sector. 
  • Both sides reiterated that peace and tranquillity along the LAC is essential for overall ties.

Political and Diplomatic Engagement: 

  • Indian Prime Minister Modi stated that India-China relations must be guided by mutual respect, sensitivity, and shared interests.

Economic and People-to-People Ties: 

  • Agreement to resume direct flight connectivity and finalise an updated Air Services Agreement.
  • Decision to reopen border trade routes at Lipulekh Pass, Shipki La Pass, and Nathu La Pass.
  • China assured India of addressing its needs for fertilisers, rare earth minerals, and tunnel boring machines.
  • Revival of Kailash-Mansarovar Yatra and planning of people-to-people exchanges to mark the 75th anniversary of diplomatic ties in 2025.
  • Agreement to facilitate visas for tourists, businesses, media, and other visitors.

Strategic and Regional Issues: 

  • India strongly raised concerns about cross-border terrorism from Pakistan, with both sides agreeing that SCO must prioritise counter-terrorism.
  • India expressed concerns over China’s mega dam on the Brahmaputra (Yarlung Tsangpo), stressing the need for transparency and data-sharing.
  • On trans-border rivers cooperation, the Chinese side agreed to share hydrological information during emergency situations based on humanitarian considerations. 
  • Both sides agreed to cooperate on multilateral issues, uphold a rules-based WTO system, and promote a multipolar world.
  • India and China pledged reciprocal support for hosting BRICS summits in 2026 and 2027.

Challenges in India-China Relations: 

  • Taiwan Controversy: China’s readout claimed Jaishankar acknowledged Taiwan as part of China. India clarified no change in policy, i.e., relations with Taiwan remain economic, technological, cultural.
  • Trust Deficit from repeated Chinese incursions on the border: Depsang in 2013, Chumar in 2014, Doklam in 2017, Galwan in 2020. 
  • Chinese Projects on Brahmaputra: India remains cautious of hydrological risks and ecological consequences.
  • China-Pakistan Axis: India continues to be wary of China’s all-weather friendship with Pakistan. China’s military cooperation with Pakistan was on display during Operation Sindoor, when the Chinese supplied weapons and live intelligence to the Pakistanis. 
  • China’s export restrictions: India is concerned at China’s export restrictions on rare earths, tunnel boring machines, and fertilisers, which are key to India’s development and food security.

The Wang Yi visit and the upcoming Modi-Xi meeting represent an opportunity for recalibration in India-China relations. The litmus test remains peace and stability on the border. For India, the challenge will be to remain firm on sovereignty while pragmatic on cooperation.

Also Read: India-China Relations: Developments & Challenges 

India’s Strategic Engagement with Namibia 

Context: Namibia is a valued and trusted African partner with which India is seeking to boost bilateral cooperation and partnerships. 

Relevance of the Topic: Mains: India’s engagement in Africa; India-Namibia bilateral relations; Global South diplomacy. 

India’s Engagement with Namibia

India and Namibia have a shared anti-colonial heritage and enjoy warm and cordial relations.

Diplomatic Engagement: 

  • India was among the first nations to raise the question of Namibian independence in the UN in 1946. 
  • At the Non-Aligned Movement (NAM) summit, India offered full diplomatic recognition to SWAPO (South West Africa People's Organisation), which led Namibia’s liberation struggle, accompanied by material assistance and military training.
  • The first SWAPO Embassy (South West Africa People’s Organisation led Namibia’s liberation struggle) abroad was established in New Delhi in 1986. 

Bilateral Trade & Investment: 

  • Bilateral trade has grown from less than $3 million in 2000 to almost $800 million in 2025, supported by a $12 billion development partnership across Africa. 
  • Indian companies have invested in mining, manufacturing, diamond processing and services in Namibia.

Digital Infrastructure & Capacity building: 

  • Namibia became the first country in Africa to adopt India’s Unified Payments Interface (UPI). 
  • India’s targeted investments in capacity-building include, India-Namibia Centre of Excellence in IT at the Namibia University of Science and Technology, and the ‘India Wing’ funded by a $12 million grant. These efforts leverage India’s strengths in IT and respond to Namibia’s youthful population and digital readiness.
  • Namibia’s recent accession to the Global Biofuels Alliance and the Coalition for Disaster Resilient Infrastructure (CDRI) aligns with India’s global vision of resilient infrastructure. 

Translocation of Cheetahs

  • Eight cheetahs from Namibia were translocated to Kuno National Park in Madhya Pradesh in 2022, the world’s first intercontinental translocation of a major carnivore species.
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Significance of Namibia to India: 

  • Namibia’s rich mineral resources, particularly Uranium, Copper, and rare earth metals, can meet strategic critical mineral requirements to India. 
  • Gateway in Southern Africa: Namibia’s ports and connectivity provide India with an entry point into southern Africa’s markets.
  • Global South Diplomacy: Namibia is a key collaborator in the Global South’s broader effort to reshape international rules and usher reforms in global governance. This is in line with India’s advocacy for rules-based international order. 

Challenges

  • Lack of Consistent Engagement: India’s developmental ambitions in Africa are often criticised for uneven implementation and long lapses. This is evident in the recent visit to Namibia by an Indian head of government, the first in nearly three decades.
  • Lack of major agreement or strategic framework to access Namibia’s critical mineral reserves. 

To further the engagement, India needs to overcome structural and operational issues by consistent engagement matched by sustained investment and institutional coherence. The upcoming India-Africa Forum Summit could serve as a vital platform to formalise and solidify these diplomatic efforts through institutional cooperation.

Indian PM’s visit to Maldives

Context: The Prime Minister of India visited Male, Maldives on July 25-26 for the 60th anniversary of the Independence Day of the Maldives. It also marks the 60th anniversary of establishment of diplomatic relations between the two nations.

This visit signals renewed effort to strengthen bilateral ties amidst regional concerns. Earlier, the Indian PM had emphasised that Maldives represents concrete expression of India’s Neighbourhood First Policy.

Relevance:Mains: India and Neighbourhood relations: India-Maldives. 

Key Highlights of Indian PM’s visit to Maldives

  • India reiterated its commitment to further deepen ties with Maldives in keeping with its ‘Neighbourhood First’ and Vision MAHASAGAR policies. 
  • ​The leaders took stock of the progress in the implementation of the India-Maldives Joint Vision for a ‘Comprehensive Economic and Maritime Security Partnership’, adopted during the State Visit of the President of Maldives to India in 2024. 
  • There was a call to further strengthen defence and maritime security cooperation between the countries under the Colombo Security Conclave.
  • As Global South partners, the countries emphasised to continue working on issues such as climate change, promotion of renewable energy, disaster risk reduction and weather science.
  • The countries witnessed exchange of 6 MOUs in the fields of fisheries and aquaculture, meteorology, digital public infrastructure, UPI, Indian pharmacopoeia and concessional Line of Credit. 
  • India extended a new Line of Credit offering Rs 4850 crores (approx USD 550 million) in support of infrastructure development and other activities in Maldives. 
  • An Amendatory Agreement for the existing LoCs was also exchanged. It reduces Maldives’s annual debt repayment obligations by 40%. 
  • The countries exchanged Terms of Reference of the proposed Free Trade Agreement.

Ties between India and Maldives hit a rough patch over the India Out campaign that Mr. Muizzu had backed during his campaign (2023), and the Boycott Maldives social media campaign that followed over criticism of Mr. Modi by Maldivian Ministers. 

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India - Maldives: Evolution and Contemporary Issues

Importance of Maldives:

  • Strategic location: In the Indian Ocean, Maldives archipelago comprising 1,200 coral islands lies next to key shipping lanes of communication which ensure uninterrupted energy supplies to countries like China, Japan, and India. More than 97% of India’s international trade by volume and 75% by value passes through the region.
  • Member of SAARC: It is important for India to have the Maldives on board to maintain its leadership in the region. Maldives was the only SAARC country which seemed reluctant to follow India's call for a boycott of the SAARC summit in Pakistan after the Uri attack.
  • Blue Economy: Maldives has an intrinsic role in advancing blue economy through sustainable management and utilisation of marine resources.
  • Regional Security: India has the ambition to be a Net-security provider in the Indian Ocean region and this calls for close military and naval ties with Maldives so that India protects its own interests as well of its neighbours in the Indian Ocean region.

Area of Cooperation between India and Maldives

Economic Relations:

  • Tourism development: Maldives' economy is heavily reliant on tourism (over 28% of GDP). State Bank of India has supported economic development of Maldives since 1974 by providing loan assistance for promotion of island resorts, export of marine products and business enterprises.
  • Financial Assistance: India has provided substantial financial assistance to Maldives in the past, including-
    • ₹3,000 crore currency swap arrangement under the SAARC framework.  
    • $1.4 billion financial assistance (2018) to help Maldives manage its mounting debt.
    • India extended currency swap facility (2024) to help Maldives with its debt servicing and mitigate foreign exchange crises. 
  • Livelihood development: India developing High Impact Community Development Projects (HICDPs) in areas of livelihood and income generation, health, education, gender and child empowerment, sports and sustainable development. Over 45 HICDPs have been implemented across Maldives. 

Defence Relations:

  • Defence cooperation between India and Maldives ranges from-
    • Providing training to Maldivian Defence Personnel in Indian Military Academy
    • Supply of military equipment (E.g., Handover of two Dhruv helicopters and Dornier aircraft to Maldives National Defence Force for aerial surveillance)
    • Provision of patrol vessels and coastal radar systems
    • Joint combat exercises to help in maritime surveillance
  • Exercise DOSTI- Maritime Search and Rescue (M-SAR), Humanitarian Assistance and Disaster Relief (HADR), Marine Pollution Response (POLRES), and Anti-piracy operations.
  • Exercise EKUVERIN: This bilateral annual exercise commenced in 2009 at Belgaum, India.

Humanitarian Assistance and Disaster Relief (HADR): 

  • Operation Cactus: India saved Gayoom’s regime from a coup in 1984. 
  • 2004 Tsunami Relief: India was the first country to respond with aid, naval and air force assistance. 
  • COVID-19 pandemic: Supply of Made-in-India vaccines E.g., Covishield (first country to donate vaccines to Maldives. 

People-to-People Relations:

  • Indians are the second largest expatriate community in the Maldives. About 25% of Doctors and Teachers in Maldives are Indian nationals.
  • India Cultural Center (ICC) in Male conducts courses in yoga, classical music and dance. Also, Hindi commercial films, TV serials and music are immensely popular in Maldives.

Present Challenges:

  • Chinese Investment & Maldives-China FTA:
    • Maldives’ growth is driven by massive infrastructure projects funded by China, including the development of Hulhule Island, Friendship bridge connecting it to Male etc. 
    • Maldives has also signed an FTA with China. This raises concerns regarding Chinese debt-trap policy.
  • Political Instability: Internal political dynamics in Maldives lead to change in its foreign policy orientation. This has the potential to complicate its relations with India. 
  • Religious Radicalisation: Its political instability has also challenged overall security of the Indian Ocean by increasing radicalisation, with reports of Maldivians joining the Islamic State.

Way Forward

  • Both countries need to enhance regional cooperation by using common platforms such as the Indian Ocean RIM Association and Indian Ocean Naval Symposium.
  • India needs to implement its ‘Neighbourhood First Policy’ with strategic sensitivity and keeping vigilance about China's growing influence. 

India-Canada Ties: Strategic Reset 

Context: A leadership change in Canada under the Prime Minister Mark Carney has led to a strategic reset in India-Canada ties, with both sides working to restore diplomacy and revive trade talks after a two-year standoff.

Relevance of the Topic: Mains: India-Canada Ties: Significance and Challenges.

Background of the Canada - India Tensions

  • India-Canada relationship faced a major setback in September 2023 when former Canadian Prime Minister Justin Trudeau accused Indian agents of being involved in the assassination of Hardeep Singh Nijjar, a Canadian citizen and pro-Khalistan separatist leader. India denied the allegations, calling them “absurd and motivated,” and responded by expelling Canadian diplomats and suspending visa services.
  • The situation worsened in October 2024, with further diplomatic expulsions amid Canadian investigations into alleged Indian involvement in clandestine operations targeting Sikh separatists.

Recent Strategic Reset Between India-Canada

A shift in Canada’s leadership and a more pragmatic foreign policy under the new Prime Minister have created an opportunity to reset ties with India, focusing on shared priorities and economic cooperation. The improvements in India-Canada Relations is reflected by:  

  • High-Level Engagement: The new Prime Minister of Canada hosted the Indian Prime Minister at the G7 Summit. Calling it his great honor, the Indian counterpart highlighted the need for win-win cooperation, reflecting a positive shift in bilateral intent.
  • Mutual Cooperation: Both leaders emphasised cooperation on energy transition, artificial intelligence, and countering transnational repression and terrorism.
  • Revival of Dialogue: India’s External Affairs Ministry confirmed plans to restart senior ministerial and working-level engagements.
  • Resumption of the Trade talk: Talks on the Canada-India Free Trade Pact, stalled since 2023, are being revived.

Significance of India-Canada Relations

India-Canada bilateral ties are underpinned by shared values of democracy, pluralism, expanding economic engagement and long standing people-to-people ties. 

  • Strategic Economic Partnership: 
    • Bilateral trade stood at $12.4 billion in 2024, with potential for exponential growth.
    • Canadian investments in India (direct and indirect) now total nearly CA$100 billion, particularly in infrastructure, financial services, and real estate.
    • India supplies Canada with pharmaceuticals, textiles, gems and jewelry, while Canada exports potash, timber, paper, and mining products to India.
  • Educational and People-to-People Ties: 
    • India is the largest source of international students in Canada, contributing significantly to its education sector and economy. 
    • Canada is among the top 5 tourist sources for India. A large and politically active Sikh diaspora in Canada, the largest outside India, influences bilateral dynamics.
  • Geopolitical and Strategic Convergence: 
    • Both countries are part of democratic alliances and share concerns about transnational terrorism, climate change, and emerging technologies like AI and renewable energy. 
    • Trade diversification is a priority for both amid growing concerns over US tariffs and China’s assertiveness.
  • Complementary Economic Strengths: Canada seeks to diversify beyond the US market; India offers a young market with rising consumption.

Key Challenges in the Relationship

  • Khalistan Issue: India sees Canada’s inaction against Khalistan-linked separatist groups as a serious security concern, which continues to cause diplomatic friction.
  • Pending Extradition Requests: More than two dozen extradition and provisional arrest requests by India, related to individuals charged with extremism, remain unresolved in Canada.
  • Allegations of Transnational Repression: Canada is investigating the killings of two Sikh separatists and has accused Indian nationals of involvement. While India denies any role, the ongoing legal cases have strained bilateral trust.
  • Mistrust in Security Cooperation: Canada accuses Indian diplomats of covert surveillance, while India criticizes Canada for ignoring intelligence inputs and not cooperating on counterterror efforts.
  • Stalled Trade Negotiations: Despite prolonged discussions, both countries have been unable to finalise a Free Trade Agreement (FTA), limiting economic potential.

Way Forward

  • Revive Strategic Dialogue: Resume high-level diplomatic talks to rebuild trust and strengthen institutional ties.
  • Boost Security Cooperation: Establish joint mechanisms for intelligence sharing and counterterror collaboration.
  • Fast-Track Trade Engagement: Accelerate trade talks like EPTA to expand economic cooperation and reduce dependency on third markets.
  • Adopt Economic-First Approach: Prioritise trade and investment ties regardless of political differences, especially in education and energy.
  • Leverage Diaspora Diplomacy: Strengthen cultural links through the Indian diaspora while addressing extremist influences diplomatically.

The recent strategic reset signals a move toward pragmatic diplomacy between India and Canada, and signals a shift towards a stable, future-ready partnership focused on trade, trust, and shared global goals.

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DAP Fertiliser Crisis Made in China

Context: China’s informal ban on DAP exports to India during the crucial sowing season has disrupted supply chains, and has exposed India’s strategic dependence on the geopolitical rival.

Relevance of the topic:

Prelims: Major fertilisers used in India, India’s top fertiliser import sources.

Mains: Fertiliser supply chain disruptions and their impact on farmers and way Forward.

DAP Fertiliser in Indian Agriculture

  • India is the largest importer of Di-Ammonium Phosphate (DAP) in the world, the second-most used fertiliser in the country after Urea.
  • DAP contains - 46% Phosphorus (P) and 18% nitrogen (N), and is critical during sowing for root and shoot development.
  • China has historically been the top exporter of DAP to India. 80% of India’s speciality fertilisers- crucial for high-value horticultural crops like fruits and vegetables, come from China. 

China’s Informal Weaponisation of Trade: 

Informal Export Ban on DAP: 

  • China has stopped exporting DAP to India without an official notification. 
  • Until 2023-24, China was a prominent supplier of DAP to India. 
  • In 2024-25, imports from China fell from 22.9 lakh tonnes (LT) in FY24 to 8.4 LT in FY25. 
  • Since January 2025, not a single tonne from China has been imported. 
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Impacts on India

Shortage of Di-Ammonium Phosphate (DAP) the second most-used fertiliser in India during the peak kharif sowing season.

  • Rise in DAP Prices: 
    • DAP import prices rose from ~$515/tonne (mid-2024) to $810+/tonne (mid-2025).
    • DAP prices in local markets spiked from the official MRP of ₹1,350 to ₹1,700+ per 50-kg bag due to shortages and hoarding.
  • Distress among farmers due to erratic supply and growing black market.
  • Shortage-driven crop damage may raise prices of vegetables, pulses, and oilseeds, fuelling food inflation.
  • Fertiliser units may struggle to meet demand, leading to underproduction and reliance on second-tier alternatives like Single Superphosphate (SSP) and Ammonium Phosphate Sulphate (APS). China's indirect control over upstream phosphate resources affects India’s ability to domestically manufacture DAP. 
  • Indian importers have to source more phosphates from Saudi Arabia, Morocco, Russia and Jordan, however, none of these countries have been able to fill the void left by China.

Way Forward

  • Supply diversification: Establish new supply lines from Morocco, Saudi Arabia, Russia, etc.
  • Boost Domestic Production: Invest in reviving and upgrading public and cooperative sector fertiliser units.
  • Subsidise innovation in green and nano-fertilisers to reduce import dependence.
  • Like the proposed India Rare Earth Mission, create a National Fertiliser Mission with production-linked incentives, research, and domestic backward linkages.
  • Leverage multilateral forums (e.g., WTO) to raise the issue of informal trade blockades.
  • Explore bilateral pressure through BRICS or SCO diplomatic backchannels.
  • Improve real-time logistics and digital tracking of fertiliser distribution and direct benefit transfers for fertiliser subsidies to bypass black-market exploitation.

India's fertiliser crisis is a strategic wake-up call. It offers an opportunity for India to reset its fertiliser ecosystem toward efficiency, resilience, and autonomy.

Key Facts: 

  • DAP contains 46% Phosphorus (P) and 18% Nitrogen (N). Experts recommend that Indian farmers should be discouraged from applying fertilisers with very high individual nutrient content- be it DAP (46% P); Urea (46% N) and Muriate of Potash (60% potassium or K).
  • Ammonium phosphate sulphate (APS), a NPKS complex (20: 20: 0: 13), has emerged as India’s third most consumed fertiliser after urea and DAP. APS is more balanced i.e., has nutrients in the right quantities and proportions for effective absorption by the plant roots and leaves. 

Other Examples of China's Strategic Trade Weaponisation: 

  • In 2010, China halted rare earth exports to Japan amid the Senkaku Islands dispute.
  • In 2024-25, China restricted rare earth magnet exports to India, affecting defence and EV sectors.
  • In 2025, Chinese firms refused to supply parts for tunnel boring machines used in Indian infrastructure.

Also Read: Bio & Organic Fertilisers 

India-EU FTA: Disagreements over Food Safety Rules 

Context: India and the European Union (EU) are negotiating a Free Trade Agreement. The progress is stalled due to disagreements over food safety norms under Sanitary and Phytosanitary (SPS) measures.

Relevance of the Topic: Prelims: About Sanitary and Phytosanitary (SPS) Measures; EU-India FTAMains: India - EU relations.  

India-EU Trade and Investment Agreement

  • India and the European Union (EU) are negotiating a comprehensive Free Trade Agreement (FTA), officially known as the India-EU Trade and Investment Agreement.
  • Despite 12 rounds of talks, key differences over Sanitary and Phytosanitary (SPS) continue to hinder progress.

Sanitary and Phytosanitary (SPS) Measures: 

  • The Agreement on the Applications of Sanitary and Phytosanitary (SPS) Measures came into force on 1 January 1995 with the establishment of World Trade Organisation (WTO). It set out the basic rules for food safety and animal and plant health standards.
  • The Agreement allows countries to set their own standards. However, the regulations must be based on science.
    • They should be applied only to the extent necessary to protect human, animal or plant life or health. 
    • They should not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail.

Countries can set higher standards based on appropriate assessment of risks so long as the approach is consistent, not arbitrary.

Indian Concerns

  • EU’s Sanitary and Phytosanitary (SPS) exceed global norms, often being stricter than WHO Codex guidelines.
  • The EU regularly rejects Indian shipments citing differences in standards, including restrictions on the use of methyl bromide fumigation for certain plant products.
  • As per the Economic Advisory Council to the Prime Minister (EAC-PM) report in 2022, the EU enforces stringent aflatoxin limits. E.g.,
    • For direct human consumption, the EU permits a maximum of 2 µg/kg for aflatoxin B1 and 4 µg/kg for total aflatoxins.
    • Codex Alimentarius (International food standards body under WHO) has set a more lenient general limit of 15 µg/kg (or 15 parts per billion) for total aflatoxins in peanuts, meant for human consumption.
  • This divergence in standards often leads to trade disruptions and additional compliance burdens for Indian exporters targeting the EU market.

India - EU Trade

  • EU is India’s largest and most premium export destination for agricultural items, particularly coffee, tea, spices and rice. 
  • However, India’s exports to the EU have seen limited growth over the years, rising from $3.02 billion in FY19 to $4.54 billion in FY25, largely due to the stringent standards imposed by the EU on foreign agricultural products.

Aflatoxins: 

  • Aflatoxins are a group of poisonous carcinogens and mutagens produced by certain moulds (fungi), particularly Aspergillus species, that grow on various food crops and agricultural commodities. 
  • The toxins are commonly found on agricultural crops such as peanuts, maize (corn), rice and tree nuts, especially in warm and humid climates.
  • When consumed, they can have severe health implications including acute toxicity, liver cancer, immune system suppression and growth impairments.

Also Read: Old Continent Rises: India-Europe Relations in a Shifting World Order 

India rejects Hague Tribunal’s Ruling on Indus Waters Treaty

Context: A recent supplemental award by the Court of Arbitration (CoA) in The Hague has turned attention to the challenges confronting the Indus water Treaty. 

Relevance of the Topic: Prelims: About Indus Water Treaty Mains: Challenges confronting Indus Water Treaty and India's strategic vision.  

About Indus Water Treaty

  • Signed in 1960 between India and Pakistan, brokered by the World Bank. 
  • Objective: To determine the distribution of the waters of the Indus and its tributaries between India and Pakistan.
  • The Treaty divides the six rivers of the Indus basin between the two countries.
    • The Eastern Rivers (Ravi, Beas, and Sutlej) were allocated for exclusive use by India.
    • The Western Rivers (Indus, Jhelum, and Chenab) were allocated primarily to Pakistan, but India allowed for specific non-consumptive uses like navigation, flood protection or flood control, Domestic use, Agricultural use, Generation of hydro-electric power etc.
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Dispute Resolution Mechanism 

The treaty provides 3 step Dispute Resolution Mechanism  : 

Step 1: Permanent Indus Commission (PIC): 

  • Disputes are first decided at the level of the Indus Commissioners.
  • The treaty required the creation of a PIC, with a commissioner from each country for communication.

Step 2: Neutral Expert

  • Appointed by the World Bank and involves rendering a binding decision.

Step 3: Court of Arbitration (CoA)

  • If a neutral expert fails, the dispute goes to CoA. It is a generally seven-member ad-hoc arbitral tribunal, determines its procedures and decisions by majority vote.
  • The Indian government has consistently opposed the proceedings of The Hague-based Court of Arbitration ever since its constitution by the World Bank in October 2022.

Following the Pahalgam terrorist attack (April 2025), where over 25 Indian civilians were killed by Pakistan-based militants, India placed the Treaty in abeyance citing Pakistan’s continued support for cross-border terrorism.

Supplemental award by the Court of Arbitration (CoA): 

  • The tribunal rejected India’s suspension of the Treaty. It held that the treaty does not allow unilateral suspension or abeyance by any party.
  • It stated that India’s decision after April 2025 (following the Pahalgam attack) to suspend the treaty cannot override the binding dispute‑settlement mechanism under Article IX and Annexure G. 
  • The Court unanimously ruled that it has full authority to decide on disputes related to the Kishenganga and Ratle hydropower projects, despite India’s decision to place the Indus Waters Treaty in abeyance. 

India’s Response:  

  • India called the court illegal, the proceedings irrelevant, and reiterated that the Treaty stands in abeyance until Pakistan abjures cross-border terrorism.
  • During this period, India is not obligated to comply with the treaty’s provisions, rendering any arbitration proceedings or decisions by this body without jurisdiction or legal standing.

India's Strategic Choices:  

  • India can continue boycotting the Court of Arbitration to deny its legitimacy.
  • It can withdraw from the Treaty entirely, though this carries risks.
  • It might also maximise its legal entitlements including the neutral expert’s forthcoming decision, and use structural advantages to pressure Pakistan without breaching the agreement. 
  • India can offer conditional cooperation using upstream geography as leverage, if Pakistan meets clear and verifiable conditions.
  • India should expand its infrastructure and fully utilise both its entitled share of the eastern rivers and its permissible use of the western ones under the Treaty.
  • Craft a diplomatic path that connects peace efforts with counter-terror commitments.

India needs to communicate clearly to the world that India is not undermining peace, but seeking meaningful cooperation based on accountability.

Also Read: India puts Indus Waters Treaty on Hold with Pakistan 

India curbs Jute and Flax Imports from Bangladesh

Context: India's Directorate General of Foreign Trade (DGFT) has restricted the import of select jute and flax products from Bangladesh to a single entry point, Nhava Sheva Seaport (JNPT) near Mumbai. The directive has added a new layer of complexity to an already delicate trade relationship between the two South Asian neighbours. 

Relevance of the Topic :Prelims: Key facts related to India-Bangladesh trade.

Mains: Impact of India’s Restriction on Jute and Flax Imports from Bangladesh.

The official notification cites quality control, traceability, and inspection uniformity as the primary reasons behind this move. 

India - Bangladesh Trade Relations:  

  • In FY24, Indian exports to Bangladesh stood at $13.3 billion, while imports were approximately $2.7 billion, highlighting the strategic leverage India holds. 
  • Jute trade has long been a cornerstone of Bangladesh’s exports to India.
  • Under regional frameworks like the South Asian Free Trade Area (SAFTA) and India’s Duty-Free Tariff Preference (DFTP) Scheme for Least Developed Countries (LDCs), Bangladesh has enjoyed near-complete duty-free access to the Indian market. 
  • The import value of raw jute from Bangladesh surged from $3.26 million in 2020 to $9.43 million in 2022, stabilising around $8.64 million in 2024. 
  • Imports of jute yarn increased from $2.06 million in 2020 to $3.82 million in 2023, underscoring Bangladesh’s dominance in natural fibre supply chains. 
  • The import of single flax yarn spiked from $95,107 in 2020 to $3.88 million in 2021.

However, this sharp growth also raised concerns within Indian regulatory bodies over potential misclassification, under-invoicing, and exploitation of less-monitored land ports. 

These inconsistencies raise valid concerns about compliance and origin, particularly when routed through smaller land ports lacking the digital and logistical infrastructure of seaports like Nhava Sheva.

Key Implications: 

Economic Impact on Bangladesh: 

  • This move blocks access through traditional land ports like Petrapole and Gede, which were commonly used for cross-border trade between India and Bangladesh. 
  • Bangladesh’s small and medium exporters rely heavily on land routes for cost-effective transportation, redirection to a seaport increases logistics costs and delays, affecting their competitiveness.

Impact on Bilateral Relations: 

  • While regulatory vigilance is justifiable, the unilateral nature of such actions risks denting bilateral trust. It may dampen investor confidence, harm small exporters, and strain the goodwill that has defined India-Bangladesh trade for decades. 
  • Sudden port restrictions or policy shifts risk unsettling an otherwise growing and mutually beneficial trade relationship.

Way Forward

  • Trade regulation must be accompanied by diplomatic engagement and institutional transparency. 
  • Formalise Comprehensive Economic Partnership Agreement (CEPA) to expand bilateral trade and investment.
  • Build shared inspection infrastructure.
  • Engage in bilateral consultations to ensure that trade flows remain not just regulated but resilient.

After pursuing an open door policy for decades, recent measures by India suggest a shift from trade liberalisation to trade management- to protect domestic interests, plug revenue leakages, and assert regulatory sovereignty. While the rationale may be economically sound, the execution must be diplomatically sensitive. 

Also Read: India restricts Bangladeshi Exports via all Land Ports 

Five-nation tour to deepen India’s Global South Outreach

Context: The Prime Minister of India is on a five-nation diplomatic tour from July 2 to 9 in Ghana, Trinidad & Tobago, Argentina, Brazil and Namibia aimed at deepening India's bilateral ties and strengthening India’s leadership role in the Global South. 

Relevance of the Topic: Prelims: Key Highlights of the visits; Location of the countries. Mains: Significance of the Global South Outreach 

This tour is significant for enhancing cooperation in areas like energy, economy, defence, healthcare, and capacity building. 

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Countries in the Tour: Purpose and Significance 

1. Ghana:  

  • First visit by an Indian PM to Ghana in the last three decades.
  • Ghana is one of West Africa’s fastest-growing economies, its relationship with India is marked by robust and expanding trade and investment.
  • Ghana is a valued partner in the Global South and plays an important role in the African Union and the Economic Community of West African States (ECOWAS).
  • India is the largest destination for Ghanaian exports; gold accounts for more than 70% of India’s imports from Ghana. 
  • India and Ghana have elevated their ties to the level of comprehensive partnership with the resolve to expand bilateral ties in food security, pharmaceuticals, and development cooperation. Ghana plans to emerge as the vaccine hub for Africa.
  • India-Ghana cooperation will be enhanced in areas- such as training of armed forces, maritime security, defence supply and cyber security. 
  • Indian companies will cooperate with Ghana in the exploration and mining of critical minerals. India would share its experience of UPI digital payments with Ghana. 
  • Prime Minister Modi was conferred with the country’s highest state honour, the Companion of the Order of the Star of Ghana during the visit for his distinguished statesmanship and influential global leadership.

2. Trinidad & Tobago: 

  • First bilateral visit by an Indian PM after 1999.
  • 40-45% of the Indian diaspora in the Caribbean lives in Trinidad and Tobago.
  • Both Prime Minister Kamla Persad-Bissessar and President Christine Carla Kangaloo are of Indian origin.
  • The visit will mark 180 years of the arrival of Indian immigrants in T&T.
  • The bilateral economic relationship has witnessed steady growth, with total trade reaching $341.61 million in FY 2024-25.

3. Argentina: 

  • First bilateral visit by an Indian PM in 57 years. 
  • Both countries will review ongoing cooperation and discuss ways to enhance defence, agriculture, mining, oil and gas, energy, etc. partnerships. 
  • Argentina is a key economic partner in Latin America and a G20 member.
  • India and Argentina have significantly advanced bilateral cooperation in the mineral resources sector, particularly in lithium, a critical input for India’s green energy transition.
  • Argentina is a major supplier of soybean and sunflower oil to India.
  • In 2024, India was Argentina’s fifth-largest trading partner and export destination.

4. Brazil: 

  • Brazil is India’s largest trading partner in South America.
  • Indian PM will meet Brazilian President during the BRICS Leaders’ Summit in Rio de Janeiro, which will be followed by a State Visit. 
  • At BRICS, the PM will discuss the reform of global governance, peace and security, strengthening multilateralism, responsible use of AI, climate action, global health, etc.
  • For the State Visit, the PM will travel to Brasilia where he will hold bilateral discussions on broadening the Strategic Partnership in areas of mutual interest, including trade, defence, energy, space, technology, agriculture, and health. 

5. Namibia: 

  • Bilateral trade has grown from less than $3 million in 2000 to almost $600 million now. 
  • Indian companies have invested in mining, manufacturing, diamond processing and services in Namibia.
  • Eight cheetahs from Namibia were released by the PM at Kuno National Park in Madhya Pradesh in 2022, the world’s first intercontinental translocation of a major carnivore species.
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Significance of India's Global South Outreach

  • Reinforces India’s leadership role in the Global South. 
  • Focus on South-South cooperation.
  • Strengthens India's economic diplomacy and strategic alliances.
  • Enhances cultural and diaspora linkages.
  • Counter China’s influence with democratic and transparent partnerships.
  • India reasserting itself as a voice of emerging economies.

Also Read: The Global South: origins and significance 

The diplomatic trip aims to reinforce partnerships on both sides of the Atlantic and strengthen India’s collaboration with regional and multilateral platforms including BRICS, the African Union, the Economic Community of West African States (ECOWAS), and the Caribbean Community, or CARICOM. 

India-France Army Exercise: Shakti 2025

Context: The eighth edition of the India-France Army exercise, ‘Shakti 2025’, that started in June has concluded in France. 

Relevance of the Topic: Prelims: Key facts about Shakti 2025. 

India-France Army Exercise: Shakti 2025

  • Exercise SHAKTI is a biennial Joint Military Exercise between the Indian and French Armies. 
  • Aim: To enhance interoperability, operational coordination, and mutual understanding.
  • The 2025 edition focuses on joint operations in a sub-conventional environment under Chapter VII of the United Nations Charter, with training conducted in semi-urban terrain.
  • Specialist detachments from both sides engaged in Electronic Warfare (EW) and Counter-Unmanned Aerial System (C-UAS) training, incorporating signal interception, jamming, spectrum control, and drone-neutralisation exercises.

Exercise Shakti boosts joint operational preparedness and reaffirms the shared commitment towards peace, stability, and global security. 

India-France Military Exercises: 

Exercise Varuna: 

  • Annual bilateral Naval exercise between India and France. It was first started in 1983, and named Varuna later.
  • The joint-exercise is held either in the Indian Ocean or Mediterranean Sea.
  • Aim: To improve Indo-French coordination on capabilities like cross-deck operations, replenishment-at-sea, minesweeping, anti-submarine warfare and information sharing. 
  • It showcases the two nations' commitment to enhancing naval interoperability and operational synergy.

Exercise FRINJEX: 

  • The maiden Joint Military Exercise FRINJEX-23 between Indian Army and French Army was held in 2023.
  • Aim: To enhance inter-operability, coordination and cooperation between both forces at tactical level. 
  • The scope of the exercise involves establishment and operationalisation of a joint command post to secure an envisaged area for undertaking joint humanitarian assistance and disaster relief, establishing an Internally Displaced Population (IDP) camp and move of disaster relief material.

Exercise Tarang Shakti: 

  • It is a biennial multinational air combat exercise hosted by Indian Air Force. 
  • Aim: To showcase India's military capabilities and strengthen international cooperation among the participating nations. 
  • Tarang Shakti 2024 was the first edition of the exercise and the largest international air exercise hosted by India. France was one among the 11 countries that participated with military assets.  

The exercises cement defence cooperation with France which is a key aspect of the overall Indo-France Strategic Partnership.

Also Read: India – France: Strategic partners 

India-Croatia to strengthen bilateral ties

Context: Recently, the Prime Minister of India visited Croatia. He held official talks with the Croatian Prime Minister to enhance bilateral relations across defence, space, infrastructure, and digital sectors.

Relevance of the Topic:  Prelims: Recent developments in India-Croatia bilateral ties; Location of Croatia. 

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Key Highlights of the Visit

  • Defence Cooperation: India and Croatia will make long-term plans for deepening the defence partnership, focusing on defence production alongside training and military exchange.
  • Joint Ventures in Space: India and Croatia to jointly work on space technology and projects, reflecting India's growing soft power in tech diplomacy.
  • Economic Cooperation:
    • India seeks to enhance investment into Croatia’s critical industries like pharmaceuticals, agriculture, IT, clean technology, digital technology, and semiconductors.
    • Under the Sagarmala Project, the Indian PM invited Croatian companies to participate in port modernisation, coastal zone development, multimodal connectivity, and shipbuilding initiatives in India.
  • Connectivity: Croatia can serve as India’s gateway into Central and Southeastern Europe. Though not a formal stakeholder in IMEC (India-Middle East-Europe Economic Corridor) yet, Croatia would complement the corridor’s European leg through regional logistics and port connectivity. 

India has historical ties with the Adriatic region, further strengthened by people-to-people connections.

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Location of Croatia

  • Croatia is situated in Central and Southeast Europe, on the coast of the Adriatic Sea. 
  • It borders Slovenia (northwest), Hungary (northeast), Serbia (east), Bosnia and Herzegovina and Montenegro (southeast), and shares a maritime border with Italy to the west.
  • Capital and largest city: Zagreb

Exercise Khaan Quest

Context: Exercise Khaan Quest 2025 is a multinational military exercise being hosted by Mongolia in Ulaanbaatar from June 14 to June 28.

Relevance of the Topic: Prelims: Key facts: Exercise Khaan Quest. 

Exercise Khaan Quest

  • It is an annual joint military exercise that brings together military forces from around the world. This year’s exercise involves military contingents from over 20 countries, including India. 
  • The current year is the 22nd iteration of the exercise.
    • The exercise first started as a bilateral event between the US and Mongolian armed forces in 2003. 
    • Subsequently, from 2006 onwards, the exercise graduated to a multinational peacekeeping exercise.
  • Objective: To collaborate and enhance their peacekeeping capabilities. 
  • Focus: The exercise focuses on a high degree of physical fitness, joint planning and joint tactical drills.

The aim of the exercise is to also prepare the Indian armed forces for peacekeeping missions while operating in a multinational environment, thereby increasing interoperability and military readiness in peace support operations. An Indian Army contingent is being represented by 40 personnel. 

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