ANANTA INSIGHTS
India and Neighbourhood | January 2025
Welcome to the January edition of Ananta Insights on India and its Neighbourhood, our monthly survey of developments in South Asia.
MALDIVES
Continuing Thaw
The Foreign Minister of Maldives, Abdulla Khaleel, was the first foreign dignitary to visit India in the new year. The three-day visit that began on 2 January came almost three months after President Mohamed Muizzu visited India in October 2024, paving the way for renewed diplomatic engagement after a period of unprecedented strain in bilateral relations.
During Khaleel’s meeting with Dr S Jaishankar on 3 January, the Indian External Affairs Minister emphasized the strong ties between the two countries, and described Maldives as a “concrete expression” of India’s Neighbourhood First policy.
Jaishankar highlighted the signing of a framework for the use of local currencies for cross-border transactions, which would reduce dependency on foreign currencies and boost economic ties.
The discussions also focussed on enhancing maritime and security cooperation. The strategic location of Maldives in the Indian Ocean is important for India’s Security and Growth for All in the Region (SAGAR) initiative.
The two sides committed to effectively addressing shared challenges such as piracy, illegal fishing, drug trafficking, and terrorism within their Exclusive Economic Zone (EEZ). The Comprehensive Economic and Maritime Security Partnership adopted during Muizzu’s visit also featured in the discussions.
The meeting set the stage for future collaboration in sectors including defence, trade and infrastructure. India assured Maldives that it would prioritize the completion of the Maldives National Defence Forces’ Ekatha harbour project at Uthuru Thila Falhu (UTF). New Delhi has also committed to the speedy implementation of the Greater Mali Connectivity Project and the development of a new commercial port in Thilafushi.
India is extending significant financial assistance to the Maldives. Following talks between President Muizzu and Prime Minister Narendra Modi in New Delhi, India provided access to $400 million to Maldives through a US Dollar/Euro Swap Window, and allocated an additional Rs 30 billion under an Indian Rupee Swap Window, effective until June 2027. Earlier in May and September 2024, India had rolled over T-bills subscribed by SBI amounting to $100 million for another year.
Further reading:
SRI LANKA
Building Bridges
Anura Kumara Dissanayake’s visit to India from 15 to 17 December 2024, his first trip overseas after becoming President of Sri Lanka on 21 September, signaled continuity in the historically significant relationship between the two neighbors.
Dissanayake’s ruling coalition won a historic majority in Parliament in November, enabling him to approach regional powers like India and China with confidence. On 1 January, his government launched its Clean Sri Lanka campaign for all-round rejuvenation of the country that saw massive social and economic upheaval in 2022.
The comprehensive joint statement issued after President Dissanayake met Prime Minister Modi on 16 December outlined the main areas of collaboration — the digital economy, tourism, renewable energy, information technology, agriculture, dairy farming, fisheries, maritime security, counter-terrorism, human trafficking, and capacity-building of Sri Lankan defence forces.
Enhanced connectivity, including physical, digital, and energy linkages, will be a key focus of the economic cooperation between the countries. India will convert existing loans into grants for railway signaling systems and the development of Kankesanthurai port. An additional grant of $20.66 million has been provided to settle payments for previously completed projects that were initially funded through Lines of Credit.
The two leaders agreed to continue consideration of proposals including the supply of liquified natural gas (LNG) from India to Sri Lanka, inter-grid connectivity, a multi-product petroleum pipeline between their countries involving trilateral collaboration with the United Arab Emirates, and the joint development of offshore wind power potential in the Palk Strait. They also agreed to support the development of Trincomalee as a regional energy hub.
The two sides expressed satisfaction at the resumption of passenger ferry services between Nagapattinam and Kankesanthurai and agreed to work for an early restarting of the Rameswaram-Talaimannar ferry. Ongoing projects such as Phase III and IV of the Indian Housing Project, the 3 Islands Hybrid Renewable Energy Project, and the community development initiatives across Sri Lanka were prioritized for timely completion.
New Delhi will support efforts by Colombo to replicate India’s successful experiment in people-centric digitization. The two leaders agreed to expedite the Sri Lanka Unique Digital Identity (SLUDI) project aimed at improving the delivery of government services to the public, promote digital financial transactions by extending the use of Unified Payments Interface (UPI) digital payment systems, and continue bilateral exchanges to gather learnings from India’s Aadhaar, GeM, PM Gati Shakti, and DigiLocker platforms.
India will also offer scholarships to Sri Lankan university students, and train 1,500 Sri Lankan civil servants over the next five years. The Start-up India initiative will collaborate with Sri Lanka’s Information Communication Technology Agency (ICTA) to mentor Sri Lankan start-ups.
India’s support is crucial for Sri Lanka as it works on its economic recovery. For India, ensuring Sri Lanka’s stability and preventing external influences in the region are key priorities as the two countries work for a better future together.
Further reading:
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‘Treat us like humans’: Fishing wars trap Indians in Sri Lankan waters | Climate Crisis | Al Jazeera
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India funds Rs. 290 Mn. for rehabilitation of Karainagar Boatyard – DailyNews
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No threat from Indian Air Force training drone found in Trinco – Top Story | Daily Mirror
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Lifting ban on Chinese ‘research vessels’: A litmus test for Sri Lanka
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India-Sri Lanka Roundtable Discussion 2 – ANANTA ASPEN CENTRE
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Arohana Podcast on Sri Lanka, access – https://youtu.be/56uifOJAq2U?si=DxYP5i4bn5KVdVg6
PAKISTAN
Twin Taliban Problem
Relations between Pakistan and Afghanistan continued to deteriorate through last year.
Early on 25 December, Pakistan carried out air strikes in Afghanistan’s Paktika province, ostensibly targeting camps of the terrorist Tehreek-e-Taliban Pakistan (TTP). This was the Pakistani military’s second operation inside Afghanistan in 2024 and the third since the Taliban took power in Kabul in August 2021; Pakistani air strikes had killed at least 45 civilians in the Kunar and Khost provinces in April 2022, according to Afghan officials.
Within days of the December bombings, the Taliban claimed to have retaliated, hitting “several points” in Pakistan.
The major driver of the Pakistan-Afghanistan conflict is the activities of the TTP, which operates from bases within Afghanistan. For decades, Afghanistan has rejected the Durand Line, a border established by British colonial authorities in the 19th century, which divides the lawless tribal areas straddling modern-day Afghanistan and Pakistan.
Although the Taliban deny harbouring the TTP, they share their jihadi ideology and justify their actions. Following the Taliban’s return to power in Kabul in 2021, Pakistan had hoped to leverage its historical ties with the Islamist militia to curb the activities of the TTP. However, the increase in attacks within Pakistan since then indicates that these efforts have been unsuccessful.
The Pakistan-Afghanistan hostility is a source of regional instability that everyone agrees can benefit neither country. It remains to be seen where their fraught relationship is headed in the new year. India is among the many countries that will be watching the situation closely.
Further reading:
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UAE desires to expand coop with Pakistan in multiple sectors
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Pakistan reaffirms support for Kashmir plebiscite – Newspaper – DAWN.COM
AFGHANISTAN
Continuing Crisis
There was a sharp spike in violent incidents in Afghanistan in December.
On 28 December, at least 10 Taliban fighters were reported killed in an attack on the Ministry of Interior in Kabul, which was claimed by the National Resistance Front of Afghanistan, an alliance of former Northern Alliance members, led by Ahmad Massoud, son of the legendary “Lion of Panjshir” Ahmad Shah Massoud.
Earlier on 11 December, Taliban minister Khalil Haqqani, a member of the powerful Haqqani network, was killed in a suicide bombing that was claimed by ISIS.
For the Afghan people, 2024 was another year of immense hardship as the country’s economic crisis worsened, pushing millions to the brink of starvation. According to the United Nations, three-quarters of the population lacks reliable access to food. World Bank and United Nations Development Programme (UNDP) data show monetary poverty has skyrocketed from 55% in 2022 to a staggering 85% in 2024.
Since taking power, the Taliban have implemented a series of measures that have severely restricted the rights and freedoms of women. They have deprived millions of girls of their right to education, and undone decades of progress in female literacy. Women have been barred from working in most sectors, and the regime has ordered all NGOs to dismiss their female employees or face closure. A strict dress code requires women to wear full-body coverings, and they are prohibited from traveling without a male chaperone.
The UN estimates that excluding women from the workforce is costing the country billions of dollars annually, crippling economic growth. Unless the Taliban reverse their repressive policies — especially the restrictions on women and girls working and studying — and embrace inclusive economic development, the prospects for the country remain bleak.
India has reached out to the Taliban in the new year, establishing the first high-level contact with the government in Kabul since 2021. India’s Foreign Secretary Vikram Misri met the Afghan Acting Foreign Minister Amir Khan Muttaqi in Dubai on 8 January. With the region in geopolitical flux — including the Taliban-Pakistan hostility, the weakening of Iran and Russia’s preoccupation in Ukraine, China’s outreach to Kabul, and the impending return of Donald Trump to the White House — India is seeking to secure its national interests in Afghanistan.
Further reading:
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UN Security Council Addresses Afghanistan’s Challenges – Observer Voice
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Afghanistan in 2024: Poverty and Unemployment Persist | TOLOnews
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Dhadhicha Pratha: A Patriarchal Legacy Of Exploitation | Feminism in India
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Iran minister in Delhi for talks to boost ties, trade via Chabahar | India News – The Indian Express
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Arohana Podcast on “The Peace and Conflict Series: Lessons learnt from Afghanistan”, access-https://youtu.be/KMAS_a1Sd64?list=TLGGd1swMjAxMjAy
BANGLADESH
Simmering Tensions
The interim government led by Nobel laureate Muhammad Yunus has struggled to return Bangladesh to stability, with recurring reports of violence against religious minorities. The Global Bengali Hindu Coalition has urgently appealed to the Indian government for international intervention to protect the minorities in the country, including seeking UN sanctions and the deployment of UN peacekeeping forces. The group has also called for the completion of the “unfinished population exchange” from the 1947 Partition.
The Bangladesh United Sanatani Awakening Alliance has documented 51 instances of attacks on Hindu temples, orphanages, and crematoriums between 5 August and 21 December 2024. These attacks have included looting, arson, and even murder, with the caretaker of a temple in Natore Sadar being killed during a robbery on 20 December.
The Indian government has expressed concern over the targeting of Hindus and other minorities. At the same time, the visit of Foreign Secretary Misri to Dhaka for consultations with senior officials of the caretaker administration indicates a willingness in New Delhi to engage with the post-Hasina regime. Meanwhile, the Yunus regime has continued to seek the return of the former Prime Minister for what it calls the “judicial process”.
India has foundational ties with Bangladesh and powerful security stakes in the country. Bilateral ties have been under strain since the regime change in Dhaka in August 2024, and New Delhi has had to walk the political and diplomatic tightrope with its very important neighbour.
Further reading:
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Court rejects bail for Chinmoy Krishna Das amid protests, chaos
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CA press wing debunks false claim of religious discrimination in public jobs | The Daily Star
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India, Bangladesh to exchange 185 jailed fishermen on Jan 5 – The Tribune
NEPAL
A Deficit of Trust
KP Sharma Oli travelled to Beijing in December 2024 on his first overseas visit after taking over as Nepal’s Prime Minister for the fourth time in July. India has been wary of Oli, whom it perceives as leaning towards China. The government of Oli’s predecessor Pushpa Kamal Dahal Prachanda had decided to put a map on the country’s currency note showing certain areas in Uttarakhand as part of Nepal, provoking India to say such “unilateral measures” would not change the reality on the ground.
Oli’s anti-India rhetoric over the years and pursuit of collaboration with China have contributed to the erosion of trust. New Delhi views Oli as insincere, and the current impasse in India-Nepal relations reflects this lack of confidence. While Oli apparently seeks to mend ties, his past actions and statements continue to pose hurdles.
Further reading:
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Nepal’s tourism sector sees notable recovery with 13% growth in 2024
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Census data: For evidence-based decision-making – The Himalayan Times
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MCC approves additional USD 50M for Nepal – The Himalayan Times
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In pivot from India, Nepal PM K.P. Sharma Oli visits China to seek investment – The Economic Times
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Arohana Podcast on Neighbourhood series: bonds beyond borders, India Nepal relations-https://youtu.be/ThdDHc8Cf_4?list=TLGG60IeFQoL9FcwMzAxMjAyNQ