By: Khushbu Ahlawat, Consulting Editor, GSDN

A landmark free trade agreement with Brussels has opened Europe’s markets to Indian exporters just as a new carbon levy threatens to close the door again — and how India resolves that contradiction may determine the shape of its industrial decarbonisation for a decade. There is a certain irony in how 2026 has unfolded for India’s trade relationship with Europe. In January, New Delhi and Brussels finally concluded a free trade agreement that had been under negotiation, on and off, for nearly two decades — a deal covering two economies that together account for roughly a quarter of global GDP and close to a third of world trade. It was framed by officials on both sides not merely as a commercial arrangement but as a strategic hedge, a way of anchoring economic ties between two large democracies at a moment when great-power rivalry was reshaping supply chains everywhere. Yet in the very same month that the agreement’s benefits began to take effect, the European Union’s Carbon Border Adjustment Mechanism — better known by its acronym, CBAM — entered its definitive, financially binding phase, adding a new and rising cost to precisely the sectors the FTA was supposed to help. India, in effect, won wider access to the European market and immediately began paying a carbon toll to use it.

That collision between trade liberalisation and climate regulation is not an accident of timing so much as the defining tension of how European climate policy now intersects with developing-country trade. Understanding why CBAM is proving so difficult for India to absorb — and what genuine options exist to turn a costly compliance burden into a driver of industrial modernisation — requires looking closely at both the mechanics of the EU’s carbon levy and the significant gaps in India’s own emerging carbon market.

What CBAM Actually Does, and Why 2026 Is the Year It Started to Bite

CBAM was established under EU Regulation 2023/956, adopted in May 2023 as part of the bloc’s broader “Fit for 55” climate package, with the explicit goal of preventing “carbon leakage” — the risk that European manufacturers, facing rising costs under the EU’s Emissions Trading System, would simply be undercut by imports from countries with laxer climate rules, or would relocate production abroad to escape those costs altogether. For a transitional period running from October 2023 through the end of 2025, CBAM asked only for quarterly emissions reporting from importers, with no actual payment obligation — effectively a dry run to let companies and regulators work out methodology before money changed hands.

That grace period ended on January 1, 2026, when CBAM moved into what the European Commission calls its “definitive regime.” From that date, importers of covered goods — initially iron and steel, aluminium, cement, fertilisers, hydrogen and electricity, alongside certain downstream products like screws and bolts — must be registered as “authorised CBAM declarants” simply to bring those goods into the EU at all; a March 31, 2026 deadline for that authorisation has already passed, and shipments from unregistered importers now risk being blocked at customs entirely. Each year, declarants must purchase and surrender CBAM certificates corresponding to the embedded emissions in their imports, priced against the weekly average auction price of the EU’s own Emissions Trading System — a price that stood at roughly EUR 75 per tonne of CO2 equivalent as of March 2026 and had climbed further, to around EUR 75.28 (about US$87), by the second quarter of the year. Notably, the definitive regime treats sectors differently: for iron, steel and aluminium, only direct production emissions count toward the certificate obligation for now, while cement and fertiliser imports must additionally account for indirect emissions embedded in the electricity used to produce them — a distinction that matters because it foreshadows exactly the kind of expanded, harder-to-avoid liability India’s exporters are likely to face as the mechanism’s scope widens in future years. Free allowances that currently cushion EU domestic producers under the ETS are themselves scheduled to be phased out gradually between 2026 and 2034, meaning the certificate cost that CBAM imposes on importers is set to climb in tandem, not remain static.

For India, the exposure is concentrated and severe. India’s CBAM-affected exports to the EU were valued at roughly US6.4billionin2023,themostrecentyearforwhichconsistentdataexists,withironandsteelalonecontributingtheoverwhelmingmajority—someUS5.41 billion — followed by aluminium at US$0.97 billion and much smaller contributions from cement and fertilisers. The steel sector’s exposure is compounded by a structural disadvantage: Indian steel production carries a direct emissions intensity of roughly 4.68 tonnes of CO2 equivalent per tonne of output, close to double the EU27 average of 2.3 tonnes for a comparable product mix — meaning Indian steel doesn’t just face CBAM’s cost, it faces a disproportionately high version of it compared to competitors with cleaner production processes. The early data bears this out starkly: by April 2026, just months into the definitive regime, India’s iron and steel exports to the EU had already declined by 13 percent since the start of the year. That is a meaningful contraction in a relationship where the EU ranks as India’s third-largest trading partner, with bilateral goods trade worth roughly EUR 118 billion in 2025, representing about 11.1 percent of India’s total trade.

Why India’s Own Carbon Market Can’t Simply Absorb the Hit

The obvious question is whether India’s own domestic carbon-pricing system can offset this exposure — after all, CBAM’s founding logic explicitly allows importers to deduct any carbon price already paid in the country of origin, precisely so that exporters aren’t taxed twice for the same emissions. India does have such a system: the Carbon Credit Trading Scheme, established through a 2022 amendment to the Energy Conservation Act, 2001, which serves the dual purpose of giving India’s carbon market a legal foundation and helping the country meet the emissions-reduction targets it has pledged under the Paris Agreement’s Nationally Determined Contributions framework.

The trouble is that the CCTS and CBAM were built on fundamentally incompatible architectures. CBAM prices a fixed cost per tonne of embedded emissions in every covered import. The CCTS, by contrast, is an intensity-based baseline-and-credit system: firms that outperform their assigned emissions targets earn tradeable credits, while those that fall short face a financial penalty rather than a straightforward carbon price. That structural mismatch alone makes it difficult for compliance under one system to translate cleanly into recognised credit under the other. Making matters harder, the CCTS is not currently recognised under Article 9 of the CBAM regulation — the specific provision that lets EU importers reduce their certificate obligations by deducting a verified carbon price already paid at origin. India did secure what has been described as a “forward-looking most-favoured-nation assurance” as part of the FTA negotiations, guaranteeing that India won’t be treated worse than other trading partners as CBAM implementation evolves — but that is a non-discrimination guarantee, not formal recognition of the CCTS as an equivalent carbon-pricing mechanism.

Even in the best case, where the EU eventually agreed to recognise verified CCTS costs, the financial relief would be modest at best. CCTS credit prices are currently estimated in the range of US11toUS15 per tonne — against a CBAM certificate price approaching US$87 per tonne in mid-2026. That is roughly a sixfold gap, and it is not a gap that incremental price convergence closes quickly. Layered on top of this pricing mismatch is a further complication specific to India’s electricity grid: because India’s power generation still leans heavily on coal and grid emissions intensity varies substantially by state, exporters in different parts of the country will face materially different CBAM costs depending on where their production is located — a regional cost variation the CCTS, focused on sector-wide baselines, was never designed to capture.

From Defensive Compliance to Strategic Leverage

None of this means CBAM is destined to permanently erode India’s competitiveness in Europe. Industry analysis — including a 2025 report from Ernst & Young — has argued that the mechanism can be treated as a prompt for revenue-enhancing diversification rather than purely a defensive cost to be absorbed. One pathway is geographic: shifting export volumes away from the EU and toward non-CBAM markets in Africa, Latin America and the Middle East, several of which already offer higher unit revenues for Indian steel and aluminium than the European market does, potentially generating enough additional margin to help cover the cost of whatever CBAM certificates remain necessary for the EU-bound share of exports.

A second, more structural pathway involves treating CBAM as leverage for genuine industrial decarbonisation rather than merely a compliance cost to be minimised. Strengthening the CCTS itself is the obvious starting point — deepening market liquidity, tightening baseline stringency, and building more rigorous monitoring, reporting and verification systems, all of which would help establish a credible, defensible domestic carbon price that the EU might eventually be persuaded to recognise under Article 9. Alongside this, transition finance instruments — carbon-linked green bonds targeted specifically at CBAM-exposed sectors like steel, aluminium, cement and fertilisers — could help absorb the up-front cost of abatement technology, with repayment terms structured to reward measurable emissions cuts, which would in turn reduce both future CCTS compliance costs and CBAM liabilities in a mutually reinforcing cycle.

There is also a case for direct India-EU cooperation on financing the transition, rather than leaving Indian exporters to bear the adjustment cost alone. One proposal gaining attention among trade-policy researchers is an India CBAM Levy Industrial Decarbonisation Fund, under which India would collect a domestic levy on CBAM-covered exports and channel the proceeds directly into industrial decarbonisation projects, with Brussels formally recognising this effort under Article 9 in return — potentially structured with matching EU contributions and a shared governance role in setting the fund’s priorities. A two-year pilot of such an arrangement could plausibly be built around the EUR 500 million in new climate finance the EU has already committed to India, giving both sides a low-stakes way to test whether a jointly governed fund can actually bridge the recognition gap that the CCTS alone cannot close. Any such arrangement would also need a specific carve-out for small and medium enterprises, which are disproportionately exposed to CBAM’s compliance demands given their limited capacity to handle emissions verification and standardisation procedures relative to larger, better-resourced exporters.

Conclusion: A Test Case for Climate Justice in Trade Policy

CBAM sits at an uncomfortable intersection of legitimate climate ambition and a longer, unresolved history of inequity in how the costs of decarbonisation get distributed between the industrialised world and developing economies. The EU’s framing of the mechanism — as a tool to prevent carbon leakage and reward cleaner production — is defensible on its own terms, but it also shifts a meaningful share of the transition’s financial burden onto exporters in countries like India that industrialised later, on dirtier grids, and with far less accumulated capital to fund a rapid clean-technology upgrade. For India, the practical response cannot be a single lever pulled once. It will require a genuinely parallel effort: strengthening the CCTS until it is robust enough to earn EU recognition, using targeted transition finance to accelerate real emissions reductions in the most exposed sectors, diversifying export markets to reduce dependence on CBAM-covered trade routes, and — perhaps most importantly — persuading Brussels that a jointly governed decarbonisation fund serves both sides’ interests better than a one-way compliance regime does. Handled well, CBAM could become the forcing mechanism that finally accelerates India’s industrial decarbonisation on India’s own terms. Handled poorly, it risks becoming simply another cost of doing business with Europe — one that falls hardest on the small and mid-sized exporters least equipped to pay it.

By: Khushbu Ahlawat, Consulting Editor, GSDN

As the Shanghai Cooperation Organisation marks a quarter-century, its expanding security architecture and connectivity ambitions sit uneasily alongside an unresolved question: what, exactly, is the SCO for?

On paper, the numbers tell a story of an organisation in confident expansion. Ten full member states, a partner network stretching from the Gulf to Southeast Asia, three new security centres unveiled in a single year, and leaders publicly sketching agendas that run out to 2030 and beyond. When the Shanghai Cooperation Organisation convened its 26th Council of Heads of State meeting in Bishkek, Kyrgyzstan, on August 31 and September 1, 2026 — the summit marking the bloc’s 25th anniversary — the assembled leaders had every institutional reason to project momentum. What the summit could not paper over, however, was the organisation’s oldest and most persistent problem: an SCO that is very good at building new structures and considerably less good at getting its members to agree on what those structures should actually do.

A Smaller Room, A Bigger Agenda

The Bishkek summit was, by design and by necessity, a more modest gathering than the previous year’s leaders’ meeting in Tianjin, China — itself a lavish affair that had drawn extensive international attention. Eighteen heads of state and seven representatives of international organisations made the trip to Kyrgyzstan, a respectable turnout but a noticeably thinner one when set against the SCO’s own stated ambition of positioning itself as a central pillar of Eurasian multilateralism. The gap was most visible among the bloc’s “SCO Plus” partners — the loosely affiliated states from the Middle East, South Asia and Southeast Asia that engage with the organisation without committing to full membership obligations. A dozen of these partner states opted to skip Bishkek altogether. Notably, five of the six Gulf Cooperation Council monarchies holding SCO partner status — Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE — sent no delegation at all, a telling signal that for Gulf capitals already managing their regional interests through the GCC and bilateral ties with Beijing, the SCO offers limited additional value, particularly with Iran now a full member and the Middle East itself gripped by continuing instability.

Prime Minister Narendra Modi led India’s delegation to Bishkek as part of a four-day visit to Central Asia that also took him to Uzbekistan, and used his address to reiterate a framework he had first articulated at the previous year’s Tianjin summit: a three-pillar approach built around Security, Connectivity and Opportunity. Where the 2025 iteration of this formula had been largely aspirational, Modi’s 2026 remarks pushed for the bloc to move “beyond vision towards concrete outcomes,” framing the anniversary as a moment to convert 25 years of dialogue into tangible deliverables for the next 25. His speech leaned heavily into counterterrorism messaging — a near-constant in India’s SCO interventions since the Pahalgam terror attack sharpened New Delhi’s insistence that the organisation abandon what it calls double standards in confronting cross-border terrorism — while also spotlighting technology, startups, youth engagement and civilisational dialogue as newer areas where India wants the grouping to build tangible programming. Concretely, India secured backing in the Bishkek Declaration for initiatives it had championed, including the formal adoption of English as an official SCO Charter language, a Civilisational Dialogue Forum, a Young Scientist Forum, and a Young Author’s Conclave — modest wins, but ones that expand India’s institutional footprint within a bloc historically dominated by the Russia-China axis.

Building Out the Security Architecture

If there is one domain where the SCO continues to institutionalise with real momentum, it is security — though even here, “institutionalise” is doing more work than “unify.” The Bishkek summit built on groundwork laid during China’s and Kazakhstan’s earlier chairships and formally unveiled three new security structures, each reflecting the organisation’s preference for a decentralised model in which specialised centres, spread across Central Asian capitals, handle discrete threat categories while notionally coordinating with one another.

The most significant of these is the Universal Centre for Countering Security Threats and Challenges, to be headquartered in Tashkent. It effectively absorbs and broadens the mandate of the SCO’s long-standing Regional Anti-Terrorist Structure, extending coverage beyond conventional terrorism into cyber threats, online radicalisation, and biological risk — an acknowledgment that the security threats Central Asian and South Asian states now face have outgrown the organisation’s original, narrower counter-terrorism remit from the early 2000s. Complementing it is a Centre for Combating Organised Crime in Bishkek, intended to coordinate law-enforcement cooperation across member states, and a dedicated Anti-Drug Centre in Dushanbe, targeting the narcotics trafficking routes that run through Afghanistan and into Central Asia and beyond. The throughline across all three is a coordination-without-centralisation model: each hub retains a specific mandate while, in theory, feeding operational intelligence into a shared network. Whether that theory survives contact with the SCO’s chronic difficulty in achieving consensus on what actually constitutes a shared threat remains, as with most SCO security initiatives, an open question.

Economic Ambition, Institutional Drift

Where the security track shows at least the appearance of forward motion, the SCO’s economic agenda tells a more halting story. The proposal for an SCO Development Bank — an idea that gathered visible momentum during the Tianjin summit and received another mention in the Bishkek Declaration — remains stuck in essentially the same place it was a year earlier. Fundamental questions of membership, capital contribution and governance structure remain unresolved, even as both Kyrgyzstan and Kazakhstan have separately signalled interest in hosting the eventual institution, adding a competitive wrinkle to an already slow-moving negotiation. For an organisation whose members include economies as disparate as China, India, Russia and some of the world’s smaller Central Asian states, agreeing on capital shares and lending priorities for a joint development bank was never going to be simple — but the repeated deferral suggests the political will to resolve those technical questions has not yet matched the rhetorical enthusiasm.

Artificial intelligence has emerged as a newer, and similarly contested, frontier of SCO economic cooperation. China has positioned itself as the driving force here, having hosted a major AI forum during its own 2025 chairship and now pushing member states to engage with the Shanghai-based World AI Cooperation Organization, which was formally established in July 2026 as a China-anchored platform for international AI governance. India’s response has been notably cautious. Rather than aligning with the Chinese-led initiative outright, New Delhi has articulated its own set of priorities for AI cooperation within the SCO framework — emphasising human capital development, broad-based access for social empowerment, system trustworthiness and energy efficiency, AI applications in scientific research, and the democratisation of AI resources for inclusive economic growth. The gap between Beijing’s institution-building instinct and India’s more principles-first, deliberately non-committal posture is emblematic of a wider pattern: even where SCO members agree a new domain deserves attention, they frequently diverge sharply on whose institutional architecture should host that cooperation.

Connectivity remains the SCO’s longest-running economic theme, and also its most geopolitically loaded. Kazakhstan’s President Kassym-Jomart Tokayev used the Bishkek platform to propose a Strategy for SCO Transport Connectivity extending to 2035, centred on digitalising cross-border transit through a unified platform that would harmonise customs procedures, transport documentation and information systems across member states — a genuinely ambitious piece of regional infrastructure diplomacy. But the strategy’s success depends on reconciling competing corridor visions that the SCO has never actually reconciled: China’s Belt and Road Initiative, Russia’s Middle Corridor interests, and the India-backed International North-South Transport Corridor all compete, rather than complement, in several of the same geographies. For New Delhi in particular, any push to fold these corridors into a single integrated Eurasian transport vision runs directly into India’s consistent objection to the Belt and Road Initiative’s China-Pakistan Economic Corridor component, which passes through Pakistan-administered Kashmir and which India regards as a violation of its territorial sovereignty — a redline India has restated at essentially every SCO gathering since it joined the bloc as a full member in 2017.

The Pakistan Factor and India’s Widening Calculus

Two developments from the Bishkek summit period deserve particular attention from an Indian strategic vantage point. First, the SCO chairmanship for the coming year passes from Kyrgyzstan to Pakistan, meaning Islamabad will host the 27th SCO summit and will, in that capacity, shape the organisation’s agenda-setting for 2027. For India, this raises a sensitivity that goes beyond the optics of Indian officials attending events on Pakistani soil; it extends to close scrutiny of how Islamabad frames security narratives — on terrorism, on Kashmir, on regional connectivity — while sitting in the chair’s seat. Given the unresolved and often acrimonious state of India-Pakistan relations, most recently strained further by the Pahalgam attack that Modi referenced in his own Bishkek remarks, the organisation’s internal cohesion is widely expected to face a renewed stress test through 2027.

Second, Pakistan has been actively courting Central Asian states as an alternative transit and trade partner, a push that has accelerated on the sidelines of SCO diplomacy itself. During bilateral talks held alongside the Bishkek summit, Pakistani Prime Minister Shehbaz Sharif offered Kyrgyz President Sadyr Japarov access to the ports of Karachi and Gwadar for landlocked Kyrgyzstan’s trade — with both sides notably acknowledging China’s “key role” in developing the regional transport corridors that would make such access viable. Earlier in 2026, Pakistan and Uzbekistan had separately agreed to expand transit trade routed through Chinese territory, explicitly aimed at reducing dependence on transit through Afghanistan. The strategic logic for Islamabad is twofold: position Pakistani ports as a rival gateway to the India-backed Chabahar port project in Iran, which New Delhi has championed precisely as a route into Central Asia and Afghanistan that bypasses Pakistan; and simultaneously squeeze the Taliban regime’s economic leverage by rerouting Central Asian trade away from Afghan territory. For India, which has invested diplomatic and financial capital in Chabahar and the International North-South Transport Corridor as strategic hedges against Pakistan-dependent routes, this quiet contest for Central Asian transit allegiance is arguably as consequential as anything discussed in the summit’s formal sessions.

Conclusion: An Organisation Still Searching for Its Centre of Gravity

Twenty-five years after its founding as a grouping focused narrowly on border security and counter-terrorism cooperation among China, Russia and the Central Asian republics, the SCO now finds itself administering an agenda that spans cyber security, organised crime, narcotics interdiction, artificial intelligence governance, continental transport corridors and civilisational dialogue forums — an extraordinary expansion in institutional scope for an organisation that still cannot fully resolve basic questions like who will capitalise its proposed development bank. The Bishkek Declaration’s own framing of the SCO entering “a new stage of its evolution” captures the ambition accurately; what it elides is that evolution, for this organisation, has consistently meant adding new structures faster than it resolves the underlying divergences between members — divergences that run from India’s redlines on the Belt and Road Initiative to the Gulf partners’ ambivalence about deeper involvement to the always-present strategic asymmetry between China’s institutional weight and everyone else’s.

For India specifically, the SCO functions less as a vehicle for consensus-driven regional integration and more as one arena among several — alongside BRICS, the G20, and its bilateral relationships — in which to advance a distinct set of priorities: counterterrorism accountability without double standards, connectivity built around routes like Chabahar and the INSTC rather than the BRI, and a cautious, values-based approach to emerging technology governance that resists simply adopting China’s institutional templates. As Pakistan prepares to assume the chair and Islamabad’s Central Asian courtship intensifies, the SCO’s next year is unlikely to resolve the tension between expanding ambition and persistent divergence that has defined its first quarter-century. If anything, 2027 may test that tension more severely than any summit since India and Pakistan both joined the bloc.

By : Sonalika Singh, Consulting Editor, GSDN

Iran’s strategy toward Saudi Arabia illustrates how a state with inferior conventional military capabilities can impose substantial strategic costs on a stronger regional rival through indirect warfare, stand-off weapons, maritime pressure and partnerships with non-state armed groups. The Houthi movement in Yemen has become an important component of this strategy. Saudi Arabia retains considerable military, economic and diplomatic capabilities. Nevertheless, the Houthi campaign has progressively constrained Riyadh’s strategic freedom of action by exposing its territory and critical infrastructure to relatively inexpensive missile and drone attacks, threatening maritime routes and complicating its reliance on external security partners. 

The foundations of this pressure were established well before the current regional escalation. Iran’s relationship with the Houthis developed over several years, while the movement itself evolved from a primarily local insurgency into a force capable of employing ballistic missiles, cruise missiles, unmanned aerial vehicles (UAVs) and maritime systems. 

A 2021 study by the Center for Strategic and International Studies (CSIS), which examined 4,103 Houthi attacks between January 2016 and October 2021, found that the monthly number of attacks against Saudi Arabia and other targets more than doubled during the first nine months of 2021 compared with the same period in 2020. CSIS also assessed that Iran’s Islamic Revolutionary Guard Corps–Quds Force and Lebanese Hezbollah had provided weapons, training and technical assistance. The significance of this development is that Saudi Arabia’s current vulnerability did not emerge suddenly. It was the product of a gradual transformation in the character, range, and sophistication of Houthi warfare. 

Iran’s strategic logic is relatively straightforward. Tehran faces adversaries with significantly greater conventional military resources, particularly the United States and Saudi Arabia. Attempting to match these capabilities directly would be prohibitively expensive and would increase the risk of a major escalation. By working through regional partners, Iran can extend its strategic reach, impose costs on adversaries and complicate their security calculations without necessarily committing its own conventional forces to direct confrontation. 

The Houthis are particularly valuable in this regard because of Yemen’s geography. The country sits alongside the Red Sea and the Bab el-Mandeb, one of the world’s key maritime gateways linking the Indian Ocean with the Suez Canal and European markets. This gives Iran an indirect means of exerting pressure not only on Saudi Arabia but also on international shipping and energy flows. 

For Saudi Arabia, the geographical problem is especially difficult. A substantial portion of the kingdom’s economic strength is concentrated in large, fixed installations: oil-processing facilities, export terminals, pipelines, airports, and industrial infrastructure. These assets cannot simply be relocated when hostilities begin. 

This creates structural asymmetry. Saudi Arabia must defend many geographically dispersed and economically important sites, while an attacker can concentrate relatively limited resources against selected targets. The objective of the Houthi campaign therefore does not necessarily have to be the destruction of Saudi military forces. It can instead be to create sufficient disruption, uncertainty, and defensive expenditure to make continued military operations increasingly costly. 

CSIS documented an evolution in Houthi, targeting predominantly military objectives toward critical infrastructure and maritime assets. The movement employed ballistic and cruise missiles, UAVs, sea mines, and unmanned maritime systems. This shift expanded the strategic problem facing Riyadh from border security to the protection of a nationwide economic and infrastructure network. 

The development of Houthi weaponry has further strengthened this asymmetric strategy. CSIS documented Iranian assistance involving ballistic and cruise missiles, UAVs, anti-tank weapons, sea mines and unmanned maritime vehicles. It also assessed that several Houthi systems were derived from Iranian designs. 

The Borkan-2H ballistic missile, for example, was assessed by a UN panel as a lighter version of Iran’s Qiam-1 missile, while the Houthis developed cruise-missile variants with Iranian assistance. The Samad family of UAVs further expanded the geographical reach of Houthi attacks. 

The importance of these systems lies not only in their destructive potential but also in the defensive burden they create. Saudi Arabia must account for attacks originating from multiple directions and protect an expanding number of potential targets. Even when individual attacks are intercepted, the requirement to maintain persistent air and missile defence across a large territory imposes significant financial and operational costs. 

This is central to Iran’s use of the Houthis. Tehran does not need the movement to become a substitute for Iran’s own military forces. Instead, the Houthis extend Iran’s strategic reach and create an additional axis from which pressure can be applied to Saudi Arabia and its partners. 

The relationship between Iran and the Houthis has involved allegations and evidence of weapons transfers, training, technical assistance and intelligence support. In 2024, Reuters reported claims by U.S. officials and other sources regarding Iranian and Hezbollah involvement in supporting Houthi operations, while U.S. sanctions targeted Iranian and Houthi-linked individuals and networks involved in weapons and financing. 

An UN-related report, also reported by Reuters in 2024, described the Houthis as having developed into a more capable military organization with assistance from Iran, Hezbollah and Iraqi specialists. At the same time, Iran has repeatedly denied supplying the Houthis with military support. 

Evidence of Iranian assistance does not necessarily establish that every Houthi operation is directly planned or ordered by Tehran. The Houthis have their own political, territorial and strategic objectives within Yemen. Their relationship with Iran is therefore better understood as a partnership that enhances Houthi capabilities and expands Iran’s regional leverage, rather than as a simple command-and-control structure. 

The maritime dimension has transformed the Houthi campaign from a predominantly regional security issue into a problem with global economic consequences. 

Beginning in late 2023, Houthi attacks on commercial shipping significantly altered the security environment around the Red Sea and Bab el-Mandeb. Some commercial vessels diverted around the Cape of Good Hope, adding considerable time and cost to voyages between Asia and Europe. 

The strategic significance is considerable. A relatively inexpensive non-state actor demonstrated the ability to influence the decisions of major international shipping companies and disrupt one of the world’s most important trade corridors. The economic costs are consequently distributed across countries, shipping companies, insurers, and consumers rather than being confined to the immediate battlefield. 

For Iran, this creates an additional layer of leverage. Pressure generated through the Houthis does not need to remain confined to Saudi Arabia. It can affect international trade and energy markets, creating incentives for external powers to engage with Tehran over regional security. 

The same logic applies to Saudi Arabia’s energy infrastructure. Riyadh has historically regarded its extensive energy network and geographical position as sources of economic strength. Yet these same characteristics can become vulnerabilities during a prolonged conflict. 

Saudi Arabia developed the East-West Pipeline partly to provide an alternative route for transporting crude toward the Red Sea and reduce dependence on the Strait of Hormuz. Such diversification enhances resilience, but it does not eliminate vulnerability. Pipelines, terminals, and processing facilities remain in fixed infrastructure that can be targeted. 

Reports of attacks against energy infrastructure, combined with Houthi pressure around the Red Sea, therefore highlight a broader strategic problem: alternative routes are valuable only if the infrastructure connecting them remains secure. Diversification can reduce dependence on one chokepoint without eliminating the wider problem of infrastructure vulnerability. 

The cumulative effect can be described as strategic compression. Saudi Arabia cannot focus exclusively on defending its southern border with Yemen. It must simultaneously consider threats to cities, oil facilities, pipelines, ports, airports, shipping, and maritime approaches. 

At the same time, developments around the Strait of Hormuz can constrain the eastern side of the kingdom’s energy system. During the September 2026 escalation, Reuters reported that traffic through Hormuz remained substantially below normal levels, while the Bab el-Mandeb was also facing disruption amid Houthi advances along Yemen’s Red Sea coast. 

The simultaneous pressure on both maritime corridors demonstrates why the Houthi front matters to Saudi Arabia’s broader strategic position. The kingdom’s security challenge is no longer confined to a conventional land border. It encompasses multiple geographical theatres and infrastructure networks that are economically interconnected. 

The political and strategic consequences are equally important. Saudi Arabia has invested heavily in its armed forces and maintains a longstanding security relationship with Washington. Yet repeated missile and drone attacks have demonstrated the limitations of relying exclusively on conventional military superiority against dispersed and relatively inexpensive threats. 

The 2019 attacks on Saudi oil infrastructure provided an earlier illustration of this problem. Even sophisticated air-defence systems cannot guarantee complete protection of a large territory containing extensive energy infrastructure. The experience also reinforced the value of diplomatic risk reduction. 

This context helps explain Riyadh’s pursuit of engagement with Tehran, including the 2023 Saudi-Iranian rapprochement brokered by China. Such engagement did not necessarily represent a rejection of Saudi Arabia’s relationship with Washington. Rather, it provided an additional mechanism for reducing the risk that Saudi territory would become a battlefield in a broader U.S.-Iran confrontation. 

The Houthi factor complicates this calculation. If Iran can exert pressure through Yemen without directly engaging Saudi forces, Tehran can raise the costs of confrontation while maintaining some distance from the immediate battlefield. Saudi Arabia, meanwhile, must account for the possibility that escalation elsewhere in the region could activate the Houthi front. 

The September 2026 escalation illustrates how the capabilities developed over previous years can become particularly consequential during a wider confrontation involving Iran. 

Reuters reported that Houthi forces had advanced along Yemen’s Red Sea coast and that Saudi Arabia and the Houthis were exchanging attacks. During the same period, concerns grew over disruptions affecting both Bab el-Mandeb and the Strait of Hormuz. 

The G7 foreign ministers subsequently warned that developments in Yemen threatened regional stability, global energy security and freedom of navigation, while calling on Iran to end its support for the Houthis. The significance of this response lies in the extent to which the Houthi issue has moved beyond being a localized Saudi-Yemeni security problem. It has become connected to wider questions about international trade, energy security, and freedom of navigation. 

China’s position is similarly revealing. Reuters reported in September 2026 that Beijing privately urged Iran to use its influence to restrain the Houthis after Saudi Arabia sought Chinese intervention. This reflects China’s own interests in maintaining stable energy supplies and protecting maritime trade. 

The episode demonstrates a broader consequence of Iran’s strategy: pressure generated through the Houthis can create incentives for major external powers to engage directly with Tehran, even when those powers have interests that differ substantially from Iran’s. 

Nevertheless, describing Saudi Arabia as completely defeated would be misleading. Riyadh retains substantial financial resources, military capabilities, diplomatic relationships, and alternative energy infrastructure. It has also demonstrated the ability to intercept many incoming missiles and drones. 

The more precise analytical conclusion is that Iran has constrained Saudi Arabia’s strategic freedom of action by making several of Riyadh’s options more costly. 

Military escalation carries the risk of further attacks against critical infrastructure. Reliance on U.S. security guarantees does not eliminate the threat posed by relatively inexpensive missiles and drones. Diversification through the Red Sea reduces dependence on Hormuz but introduces exposure to another vulnerable maritime theatre. Diplomatic accommodation with Iran can reduce certain risks but cannot guarantee that Iranian partners will remain inactive during a wider regional confrontation. 

The strategic dilemma is therefore one of cost and vulnerability rather than conventional military inferiority. The significance of the Houthi strategy lies less in any single battlefield victory than in the architecture of regional power it has created. 

Iran has combined geography, regional partnerships, stand-off weapons and economic chokepoints to impose costs that conventional military superiority alone cannot easily eliminate. The Houthis provide Tehran with access to the southern approach to the Red Sea, a mechanism for applying pressure to Saudi Arabia’s western flank and the capacity to disrupt international maritime commerce. 

When combined with pressure around the Strait of Hormuz and the activities of other regional partners, the result is a distributed security problem rather than a single battlefield. Saudi Arabia must respond simultaneously across multiple fronts while protecting infrastructure that is geographically fixed and economically indispensable. 

This is the deeper meaning behind the argument that Iran has “checkmated” Saudi Arabia through the Houthis. It does not mean that Saudi Arabia has been militarily defeated or stripped of its ability to act. Rather, it describes a situation in which Iran has helped create a network of vulnerabilities that significantly increases the costs and risks associated with Riyadh’s strategic choices. 

The Houthis have therefore become an instrument through which Iran can convert Yemen’s geography into regional leverage. By extending the battlefield toward the Red Sea, increasing pressure on Saudi Arabia’s western flank and creating risks for international shipping, the movement enables Tehran to impose strategic costs without having to match Saudi Arabia or its external partners weapon for weapon. 

The broader lesson is that conventional military superiority does not automatically translate into strategic control. A state may possess vastly greater financial resources, advanced weapons and sophisticated armed forces, yet remain vulnerable when an adversary can exploit geography, fixed infrastructure, asymmetric weapons and non-state partnerships. Iran’s strategy has sought precisely to exploit that gap, and the Houthis have emerged as one of its most consequential instruments for doing so. 

By: Khushbu Ahlawat, Consulting Editor, GSDN

A cautious embrace at the BRICS table conceals a deeper disagreement over what comes first — border stability or economic re-engagement

When Chinese President Xi Jinping touched down in New Delhi on September 12, 2026, to attend the 18th BRICS Summit, the optics were unmistakable: his first visit to India in nearly seven years, arriving at Prime Minister Narendra Modi’s invitation, for a gathering marking two decades of the BRICS grouping. Xi’s delegation included Wang Yi, China’s foreign minister, and Cai Qi, a Politburo Standing Committee member and one of Xi’s closest lieutenants — a lineup that signalled Beijing was treating the visit as more than ceremonial. On the sidelines, Modi and Xi held their third consecutive annual meeting, following earlier encounters in Kazan and Tianjin, and India’s foreign ministry confirmed afterward that both leaders had reaffirmed a commitment to resolving the long-contested boundary dispute.

That single fact — three leader-level meetings in three years, after a five-year freeze — is itself a measure of how far the relationship has travelled since the 2020 Galwan Valley clash brought Indian and Chinese troops into their deadliest confrontation in decades. But beneath the choreography of summit diplomacy lies a harder truth: New Delhi and Beijing are not walking toward normalisation along the same path, at the same pace, or for the same reasons. Understanding that divergence — not the handshake itself — is the key to reading where this relationship goes next.

From Doklam to Galwan to Détente: A Short Memory of a Long Border

India and China share a roughly 3,500-kilometre frontier that has never been formally demarcated, a legacy of colonial-era cartography and the unresolved aftermath of the 1962 war. The current thaw is not the first attempt at reconciliation. A similar cycle played out in 2017, when a 73-day military stand-off at Doklam — on the India-China-Bhutan trijunction — was defused just days before Modi travelled to Xiamen for that year’s BRICS summit and met Xi on the sidelines. That episode established a pattern that has repeated since: crisis, disengagement, summit diplomacy, incremental normalisation.

The 2020 Galwan clash broke that pattern more severely than Doklam had. Twenty Indian soldiers and an unconfirmed number of Chinese personnel died in hand-to-hand fighting in the Galwan river valley — the first fatalities on the border in over four decades — and New Delhi responded by freezing high-level political contact, banning dozens of Chinese mobile applications, and tightening scrutiny of Chinese investment under an amended foreign direct investment policy. It took until the Modi-Xi meeting on the margins of the 2024 BRICS summit in Kazan, Russia, for the ice to begin cracking, followed by a patrolling arrangement along the Line of Actual Control (LAC) and the restoration of direct flights between Indian and Chinese cities. A further meeting in Tianjin in August 2025, on the sidelines of the Shanghai Cooperation Organisation summit, kept the momentum going, with Xi speaking of deeper strategic communication and Modi pressing for a relationship anchored in what New Delhi calls the “three mutuals” — mutual respect, mutual sensitivity, and mutual interest.

The institutional architecture built around this thaw is worth noting, because it is where the real, unglamorous work of de-escalation happens, away from summit photo-ops. Special Representative-level talks on the boundary question, dormant for five years, resumed in December 2024. At their August 2025 round, the two sides agreed to set up an Expert Group and a Working Group under the existing Working Mechanism for Consultation and Coordination on India-China Border Affairs, tasked respectively with pursuing an “early harvest” on delimitation and building a firmer border-management framework. A further Senior Highest Military Commander-level mechanism was proposed for the Eastern and Middle Sectors of the border, mirroring one that already exists in the west. By August 2026, that groundwork had advanced to the point where both sides were reportedly finalising new military hotlines and additional venues for commander-level talks in those sectors — plumbing-level detail, but the kind that actually reduces the odds of a patrol-level scuffle spiralling into a Galwan repeat.

Two Capitals, Two Sequences

It is tempting to read the frequency of Modi-Xi meetings as proof that the relationship is simply “improving.” A closer look at what each side is actually asking for suggests something more like a negotiated standoff over sequencing.

New Delhi’s position, articulated consistently since the Kazan meeting, is that the pace of economic and diplomatic normalisation should track the pace of border stabilisation — not run ahead of it. This is why Indian officials keep returning to the language of “peace and tranquillity” along the LAC as a precondition, not a parallel process. Beijing’s position, expressed by figures like Ambassador Xu Feihong and Foreign Minister Wang Yi, is closer to the opposite: that the border issue should be “properly handled” so that it does not become a permanent hostage to the broader relationship, and that economic ties in particular should move forward “without stagnation or backsliding,” in Wang’s phrase. China’s own vocabulary for this is the “dual-track” approach — shuāngguǐ — advancing the border talks and the wider relationship simultaneously, rather than making one contingent on the other.

The gap between these two sequencing logics shows up starkly in the economic data. India’s trade deficit with China — already the largest bilateral trade imbalance India runs with any single partner — has continued to widen through the mid-2020s, driven by India’s near-total dependence on Chinese suppliers for a long list of intermediate and finished goods: solar panels, active pharmaceutical ingredients, lithium-ion battery components, laptops, viscose yarn and specialised machinery among them. Government trade-policy think-tanks have noted that the great majority of what India imports from China falls in the low-to-medium technology band — bearings, motors, valves, moulds, fasteners — items that are not, in principle, beyond India’s industrial capacity to substitute, but which decades of import dependence have made cheaper to buy than to build.

That dependence became a live political issue in 2025, when Beijing tightened export licensing on seven categories of rare-earth elements and the permanent magnets made from them — materials indispensable to electric-vehicle motors, wind turbines, precision-guided munitions, and consumer electronics. China controls upward of 90 percent of global rare-earth processing capacity, and the licensing regime it imposed required Chinese exporters to secure end-use certificates co-signed by both the Indian foreign ministry and the Chinese embassy, ostensibly to guarantee the materials would not reach defence applications or be re-exported to the United States, which was itself locked in a parallel tariff standoff with Beijing. Indian automakers, who had built their electric and hybrid vehicle supply chains on the assumption of steady Chinese input, found themselves staring at production slowdowns within weeks, with industry bodies publicly warning that the vulnerability extended well beyond magnets to antibiotics, active pharmaceutical ingredients and other critical inputs. Even after diplomatic engagement eased some of the licensing bottleneck, Indian firms reported that clearances remained inconsistent — a reminder, for New Delhi, of exactly the kind of leverage it does not want dangling over a relationship it is trying to stabilise.

This is the economic backdrop against which India has, cautiously, begun to loosen some of its post-Galwan investment restrictions — mandating faster clearance timelines for Chinese capital proposals in sectors like capital goods, electronic components, polysilicon and ingot wafers, and permitting select Chinese-linked manufacturing units to bid for government power-sector tenders, with the explicit caveat that this was not to be read as a precedent. The approved joint venture between India’s Dixon Technologies and China’s Vivo, with Dixon retaining a majority 51 percent stake, is often cited as a template India would like to see replicated: Chinese capital and technology entering Indian manufacturing on terms that keep control, and the associated intellectual property and supply-chain benefits, substantially in Indian hands.

What the September 2026 Meeting Actually Changed

Set against this longer arc, the September 2026 Modi-Xi meeting was less a breakthrough than a checkpoint. The joint signals from both capitals — India’s readout referencing a “fair, reasonable and mutually acceptable resolution” to the boundary question and continued attention to trade imbalances, supply-chain fragility and market access; China’s emphasis on the dual-track approach and on tighter coordination within BRICS, the G20, the SCO and the United Nations — essentially restated each side’s existing position rather than resolving the gap between them. Modi’s own remarks at the summit’s open plenary on September 13 kept the focus on what New Delhi still considers unfinished business: the “weaponisation” of critical minerals and technology, a barely-veiled reference to the rare-earth episode.

What the summit did do was create institutional cover for the border-management mechanisms — the new hotlines, the additional commander-level venues, the Expert and Working Groups — to keep operating with political backing from the top, even as the harder economic questions remain unresolved. A trans-river cooperation meeting, expected around the same period, was set to address hydrological data-sharing arrangements on rivers that originate in Tibet and flow into India, another quietly consequential thread in the relationship that rarely makes headlines but carries real stakes for water security in India’s northeast.

The Road Ahead

Three things are worth watching as this relationship moves past the September summit. First, whether the Expert Group and Working Group under the WMCC can actually agree on a “terms of reference” for boundary delimitation — a bureaucratic-sounding hurdle that has, in practice, stalled every prior attempt at a substantive settlement since talks began in the 1980s. Second, whether Beijing’s rhetorical commitment to smoother economic engagement translates into predictable, rules-based licensing for the critical inputs India depends on, rather than case-by-case discretion that can be tightened whenever Beijing’s broader relationship with Washington sours. Third, and perhaps most tellingly, whether India uses this period of relative calm to accelerate the diversification and import-substitution strategies that officials and industry bodies have been urging since the rare-earth shock — because a bilateral relationship this asymmetric in economic leverage will keep reproducing the same vulnerability at the next point of friction, however the border talks proceed.

None of this means the optimism around the Xi-Modi meeting is misplaced. Restored military hotlines, functioning expert groups and a third consecutive year of leader-level dialogue represent genuine, hard-won progress over the post-Galwan nadir. But normalisation built on two different sequencing logics — India’s border-first caution and China’s parallel-track urgency — is inherently fragile. The test of this relationship will not be measured in summit statements or ceremonial tree-plantings, but in whether the two sides can agree on which comes first: trust on the ground, or trade at the table. Until that question is settled, the India-China relationship will likely continue to move the way it has since 2020 — forward, but only ever by increments, and always with one eye on the mountains.

The View From Outside

The India-China recalibration is not unfolding in a vacuum, and neither capital is treating it that way. For Washington, a warmer Delhi-Beijing channel complicates the assumption — implicit in much of the Quad’s architecture — that India’s threat perception of China would keep it firmly anchored to the US-led Indo-Pacific coalition. New Delhi has been careful to signal that this is not a realignment away from the Quad or from its deepening defence and technology partnerships with the United States, Japan and Australia, but rather an exercise in what Indian officials frequently describe as strategic autonomy: managing an unresolved rivalry with China without being permanently hostage to it, while keeping other partnerships intact. Beijing, for its part, has its own external calculus — a prolonged tariff confrontation with Washington gives China every incentive to stabilise its periphery, India included, so it is not simultaneously managing friction on multiple fronts.

For countries like Russia, which has courted both New Delhi and Beijing as anchors of a multipolar order, and for the wider BRICS grouping now entering its third decade, a functional India-China relationship is almost a precondition for the bloc’s coherence — it is difficult to build shared institutions with two founding members who cannot manage their own border. That broader context may explain some of the urgency behind the 2026 summit diplomacy: both Modi and Xi have reasons, distinct but overlapping, to be seen managing this relationship responsibly, even if the harder questions of sequencing remain, for now, unresolved.

By: Khushbu Ahlawat, Consulting Editor, GSDN

Introduction

The US-Saudi civil nuclear agreement signed on 22 July 2026 has been described, accurately, as a landmark: a 30-year Section 123 agreement that could give Saudi Arabia the enrichment rights Washington spent two decades denying it, granted at the precise moment the Kingdom sits inside a live regional war and beside a nuclear-armed defence partner of its own. What has received less attention is how confused, contradictory and improvised the deal actually looks up close — and how that improvisation, more than the enrichment clause itself, is the clearer signal of where Gulf security is actually headed. Saudi Arabia is not simply acquiring one nuclear pathway through Washington. It is assembling several deterrents at once, deliberately keeping each one ambiguous, and the American deal is only the most visible of the three.

A deal even its own negotiators didn’t see coming

Start with the basic confusion at the heart of the agreement as submitted to Congress. President Trump signed the 123 agreement on 22 July, then declared the following day that it would only take effect if Saudi Arabia joined the Abraham Accords and normalised relations with Israel — a condition that, according to CNN’s reporting, surprised the administration’s own nuclear negotiators and appears nowhere in the text that was actually transmitted. When the White House formally sent the agreement to Congress in late August to start the mandatory 90-day review clock, officials confirmed the Abraham Accords linkage remained in force even though the document itself carries no such requirement, and even though the Saudis have publicly said normalisation requires a credible path to Palestinian statehood first — a precondition Israel’s current government has shown no appetite for meeting. Two administrations’ worth of Gulf-nuclear diplomacy has, in effect, been condensed into a deal that can legally take effect on its own terms in 90 days regardless of what Trump says about it, creating a genuinely open question about whether the enrichment provisions the agreement contains will ever actually be exercised, or remain a legal shell hostage to a separate and much harder diplomatic track.

Compounding the confusion, the substance of what was actually agreed is not fully public. Sources familiar with the matter told the Associated Press that the entire text submitted for congressional review was classified at a level unprecedented for a 123 agreement — previous civil nuclear pacts have occasionally carried classified annexes, but never a fully sealed core text. Trump has meanwhile insisted publicly, in a social media post, that “there will be no enrichment of material” under the deal, even as CNN’s reporting on the submitted document describes an agreement that does include an enrichment pathway. Senator Tim Kaine has pointed out that, unlike the 2009 UAE agreement, which required Abu Dhabi to accept the IAEA’s Additional Protocol as a condition of forgoing enrichment, the Saudi text appears to include no equivalent inspection guarantee. It is entirely possible for Washington’s public description of a deal and the deal’s actual legal content to diverge this sharply only when the process behind it has been driven by urgency and improvisation rather than a settled nonproliferation strategy — which is precisely the environment a war with Iran, and a scramble to keep Riyadh inside the American orbit rather than Moscow’s or Beijing’s, tends to produce.

The other deterrent nobody will confirm or deny

If the American track is confused, the Pakistani track is deliberately so. When Saudi Arabia and Pakistan signed their Strategic Mutual Defence Agreement in Riyadh in September 2025 — the bilateral predecessor to the trilateral Mecca pact that added Turkey the following August — the published text committed both states to treat an attack on either as an attack on both, but made no mention of nuclear weapons. Ambiguity took over almost immediately from there. Pakistan’s defence minister, Khawaja Muhammad Asif, told GeoTV days after the signing that Pakistan’s nuclear capabilities “will be made available” to Saudi Arabia under the agreement, only to later walk the comment back by saying a nuclear umbrella was “not on the radar.” A senior Saudi official, speaking to Reuters on condition of anonymity, described the pact as “comprehensive” and covering “all military means” — language that, read generously, could mean anything, and read less generously, was designed to mean exactly that.

Expert opinion has split accordingly. Chatham House concluded the pact “sets a precedent for extended deterrence” by a nuclear-armed state operating outside the Non-Proliferation Treaty, comparing it loosely to the kind of assurance the United States has long extended to Japan and South Korea. The Belfer Center’s Rabia Akhtar has pushed back hard against that reading, arguing the agreement is “far more a political signal than an operational transformation” and noting that Pakistan’s declared nuclear doctrine has always been calibrated specifically against India, with no institutional or doctrinal basis for extending that deterrent to a Gulf patron. The Asia-Pacific Leadership Network reached a similar conclusion, calling the arrangement “paper promises” built more on decades of financial and technical entanglement — Saudi Arabia’s historic role bankrolling elements of Pakistan’s own enrichment programme, and its $11 billion balance-of-payments lifeline to Islamabad in 2023 — than on any credible new military commitment. What neither camp disputes is that the ambiguity itself is doing real work: Riyadh gains a deterrent signal against Iran without Pakistan ever having to specify what, if anything, it would actually do, and Islamabad gains continued Saudi financial and political backing without formally contradicting a nuclear doctrine it has maintained since 1998.

Three tracks, one strategy

Read together, these are not competing explanations for how Saudi Arabia intends to secure itself against a nuclear-capable or nuclear-threshold Iran. They are complementary layers of the same hedging strategy, pursued simultaneously and left deliberately unresolved. The American track supplies the legal and technological foundation — a civilian enrichment capability that, however murky its current congressional status, establishes domestic know-how and infrastructure that did not exist before, and that Riyadh has wanted since it approved its National Project for Atomic Energy back in 2017. The Pakistani track supplies an ambiguous but repeatedly gestured-at extended-deterrence signal, cheap to maintain precisely because neither government has to define its limits. And a third, quieter track functions mainly as leverage over the first two: the standing possibility, raised explicitly in multiple analyses of the American negotiations, that Saudi Arabia could turn to Russian or Chinese nuclear vendors if Washington’s terms prove too restrictive or its domestic politics — an Abraham Accords condition Riyadh may simply refuse to meet — kill the deal outright. Each track alone is deniable. Mohammed bin Salman can tell interviewers, as he told 60 Minutes in September 2023, that Saudi Arabia would “have to get” a nuclear weapon only if Iran obtained one, framing everything as contingent and reactive, while the underlying infrastructure and relationships that would make a rapid pivot possible are assembled in the meantime, track by track, deal by deal.

What this means for the rest of the region

This is the mechanism through which the Saudi deal’s proliferation risk actually spreads outward, and it is a more precise mechanism than a simple domino narrative. Turkey and Egypt are unlikely to demand identical enrichment rights from Washington tomorrow — neither has anything like Saudi Arabia’s leverage as a swing oil producer facing direct Iranian missile fire, and both have their own separate nuclear relationships already in motion, Egypt’s with Russia’s Rosatom at El Dabaa and Turkey’s own long-stated nuclear ambitions layered atop its new formal defence pact with a nuclear-armed Pakistan under the Mecca framework. What the Saudi precedent actually does is lower the political cost of pursuing exactly this kind of multi-track ambiguity elsewhere. If Riyadh can hold a classified, contested, publicly-mischaracterised civil nuclear agreement with Washington in one hand and an unconfirmed, semi-denied extended-deterrence relationship with Islamabad in the other, and suffer no serious diplomatic penalty for the contradiction, the lesson available to every other capital in the region is that strategic ambiguity works — that a state does not need to choose between a declared weapons programme, which invites sanctions and IAEA censure, and genuine restraint, which the UAE’s 2009 agreement to forgo enrichment entirely represents. It can instead accumulate capability and coalition partners across several ambiguous tracks at once, and let uncertainty itself do the deterrent work.

There is also a UAE-specific dimension to this that deserves more attention than it usually gets. Abu Dhabi accepted the “Gold Standard” in 2009 — forgoing domestic enrichment entirely in exchange for a faster, less politically fraught path to American nuclear cooperation — on the explicit understanding that this represented the regional norm Washington would hold every Gulf state to. If Saudi Arabia now secures enrichment rights that the UAE was denied, even amid all the current confusion over whether those rights will actually be exercised, the UAE has a legitimate grievance and a real incentive to revisit its own restraint. Emirati officials have not said publicly that they intend to renegotiate their 2009 agreement, but the structural incentive to do so — matching a neighbour’s capability rather than being left the more constrained party in a region where relative nuclear standing increasingly functions as a marker of great-power backing — will only grow the longer the Saudi deal’s actual terms remain contested. A nonproliferation framework that depends on early movers being rewarded for restraint works only as long as later movers are not rewarded more generously for holding out; the Saudi case, whatever its ultimate outcome, has already put that logic under visible strain.

The Iranian variable nobody controls

Underlying all three tracks is an assumption that has itself gone strangely unexamined: that Iran’s own nuclear trajectory will remain the fixed point against which Saudi Arabia calibrates its hedging. It will not. Iran’s stockpile of uranium enriched to 60 percent — a short technical step from weapons-grade — has existed since the collapse of the 2015 deal, but the 2026 war has made the status of that stockpile, and of the facilities capable of further enriching it, considerably harder to track than before. Strikes on Iranian nuclear sites during the conflict have not eliminated Tehran’s programme so much as scattered and obscured it, and IAEA access has been intermittent at best amid active hostilities. Riyadh is therefore hedging not against a known, static Iranian capability but against a moving and increasingly opaque one — which is precisely the condition under which strategic ambiguity, rather than a declared threshold or a formal treaty commitment, becomes the rational posture for every other regional actor as well. Mohammed bin Salman’s 2018 formulation, that Saudi Arabia would seek a weapon only “if Iran obtained one,” always assumed a discrete, verifiable Iranian crossing point that outside observers could confirm. A war that has degraded transparency into Iran’s programme rather than clarified it removes exactly the kind of clear trigger that formulation depended on, leaving Riyadh to hedge against a range of possible Iranian outcomes rather than a single defined one.

This is also why the three-track strategy makes more sense as a permanent posture than as a temporary bridge to some future, calmer settlement. If Iranian capability becomes durably harder to verify, there is no clean off-ramp at which Saudi Arabia could credibly stand down its own hedging without appearing to unilaterally disarm against an adversary whose true status nobody, including the IAEA, can fully certify. American, Pakistani and Russian-Chinese options each become not sequential fallback plans but standing insurance policies to be maintained indefinitely and adjusted incrementally as the regional picture shifts — a posture that is, by design, resistant to the kind of clear-cut congressional votes, IAEA verification milestones or treaty ratifications that have historically given outside observers confidence that a given proliferation risk has been contained rather than merely managed. The region is not moving toward a moment when these questions get resolved. It is settling into a structure where they remain permanently and deliberately unresolved.

Conclusion

The debate over whether the US-Saudi 123 agreement will “ignite” a Middle East arms race treats the enrichment clause as the trigger and everything else as context. The more accurate picture, once the Pakistani and improvisational dimensions are put back into the frame, is that the arms race this deal might contribute to is already partly under way, running through channels far murkier than a congressionally reviewed civil nuclear pact: a defence minister’s contradicted television remarks, a defence pact whose text has never been published, a 123 agreement whose core terms are classified even as the president publicly mischaracterises them, and a conditionality clause that surprised the people who negotiated the deal it was attached to. None of this proves Saudi Arabia has decided to build a weapon, and every expert cited here who has examined the Pakistani option in detail concludes that a genuine, operational nuclear umbrella remains unlikely given Islamabad’s own doctrine and interests. But a region where the most consequential nuclear-adjacent commitments are made through anonymous official statements, deliberately unclear defence-minister interviews and classified texts that contradict their own signatories’ public claims is a region where the normal guardrails against proliferation — public agreements, verifiable inspection regimes, congressional and parliamentary scrutiny — are being quietly hollowed out from several directions simultaneously. That erosion of clarity, not any single enrichment percentage written into a single American document, is the more durable legacy this moment is likely to leave behind, and it is one that will outlast whatever happens to the Abraham Accords condition currently holding the headline deal in limbo.

By: Khushbu Ahlawat, Consulting Editor, GSDN

Introduction

On 7 August 2026, in a palace in Mecca, the leaders of Saudi Arabia, Turkey and Pakistan signed a defence pact declaring that an armed attack on any one of them would be treated as an attack on all three — language modelled deliberately on Article 5 of the NATO treaty. Three weeks later, Israel announced its single largest arms deal with a European state in years: a $3.5 billion agreement to help Greece build a multi-layer air-defence network called “Achilles Shield,” anchored by Rafael’s David’s Sling interceptor system, IAI’s Barak MX and a battery of surveillance radars. Israeli officials, Greek officials and most of the commentary that followed have framed these as separate stories — one a Middle Eastern realignment, the other a European rearmament decision shaped by the war in Ukraine and generic anxiety about Russia. Read side by side and in sequence, they look considerably more connected than that framing allows, and the connection runs directly through Ankara.

What actually got signed in Mecca

The Mecca Joint Defence Agreement, as it has since been formally named by its three signatories, did not appear from nowhere. It extends a bilateral Strategic Mutual Defence Agreement that Pakistan and Saudi Arabia signed in Riyadh in September 2025, adding Turkey to a collective-security arrangement at a moment when the region was already gripped by the wider war between the United States, Israel and Iran that had begun that February. On paper, the numbers are formidable: the three states together field close to 1.4 million active military personnel, some 3,400 aircraft, 6,000 tanks and more than 340 naval vessels according to the 2026 Global Firepower Index, and the grouping combines Turkey’s status as NATO’s second-largest army, Saudi Arabia’s oil wealth, and Pakistan’s position as the only nuclear-armed state in the Muslim world. Steven Cook of the Council on Foreign Relations called it a “major change” in Middle Eastern geopolitics and the first institutional security arrangement of its kind in the region; the Atlantic Council’s analysts were similarly struck by the symbolism, even while flagging how thin the substance underneath it still is.

That thinness matters and should not be glossed over. The text of the agreement has never been released. There is no joint command structure, no standing combined force, and no specified trigger mechanism for when the mutual-defence clause would actually be invoked — a gap that became visible almost immediately, when Pakistan and Turkey offered no military response after Saudi Arabia was struck by Iranian drones in the opening phase of the Iran war, despite the kingdom being a founding party to the pact. When officials from the three countries met again in Istanbul at the end of August to begin turning the political declaration into something operational, under a newly created Strategic Political and Defence Committee, they were candid that the institutional architecture — how the clause would actually function, who would decide when it applies — remains undefined. Analysts at the Arab Center in Washington have concluded that the pact’s political language carries more weight than its operational content, at least for now, with its more consequential near-term impact likely to run through defence-industrial cooperation rather than any actual collective-defence trigger: reports point to deepening the existing co-production of Baykar’s Akinci drone with Saudi Arabian Military Industries, and advanced Saudi-Turkish discussions over participation in Turkey’s Kaan fighter jet programme, both of which would help Riyadh toward its target of localising more than half its defence procurement spending by 2030.

None of that operational thinness, however, is the point from Athens’s perspective. A declaratory Article 5-style commitment between Turkey, a nuclear-armed Pakistan and an oil-rich Saudi Arabia does not need a functioning joint command to change how a neighbouring state calculates risk. It only needs to exist on paper, backed by three governments with genuine capability, to shift the baseline assumption against which Greece’s own defence planners size their air-defence requirements.

Why the timing lines up

Greek officials have publicly framed the Achilles Shield decision around lessons drawn from the war in Ukraine — the value of layered, combat-proven interception against drones, cruise missiles and long-range rockets in an era when high-intensity conflict has made air and missile defence look newly indispensable across NATO’s eastern flank. That framing is genuine, and it fits a pattern visible across the alliance generally. But it sits awkwardly with the specific timing and the specific systems Greece chose to acquire. David’s Sling, SPYDER and Barak MX are not primarily designed with Russian long-range ballistic missiles in mind; they are systems Israel developed and repeatedly combat-tested against exactly the mix of threats — short- and medium-range rockets, loitering munitions, drone swarms — that a state facing Turkey’s Aegean-based drone and stand-off strike capability would need most. Greece has already deployed Israeli-origin Drone Dome systems specifically to protect its Aegean islands from Turkish aerial threats, well before the Mecca pact existed. What the pact adds is not a new category of threat but a reason to treat the existing one as more urgent: Turkey’s drone and missile capability, expanding for years on its own trajectory, now sits inside a formal collective-security architecture that includes a nuclear weapons state, however incomplete that architecture’s institutional machinery remains.

That is also the more coherent explanation for why the Greece-Israel deal and the parallel push toward closer Greece-Cyprus-Israel security coordination — discussed at a trilateral summit in Jerusalem in December 2025 and revisited since — has accelerated specifically in 2026 rather than in any of the previous years when Aegean tensions were also high. Turkey’s capabilities were already growing before August; what changed is the alliance structure around Turkey, and a Greek government watching Ankara gain, at least on paper, the backing of a nuclear state and a wealthy Gulf patron has an obvious incentive to lock in its own countervailing partnership while Israel’s defence industry, flush with wartime orders and export reform, is actively looking for exactly this kind of long-term industrial relationship rather than one-off sales.

A market shifting east, not just toward Europe

It is worth correcting one assumption embedded in the standard account of Israel’s export boom, because the actual 2025 figures complicate it. Israel’s Ministry of Defence confirmed in June 2026 that total defence exports reached a record $19.2 billion for the year, up nearly 30 percent from $14.8 billion in 2024 — an unambiguous surge. But Europe’s share of that total actually fell, from 54 percent of all exports in 2024 to 36 percent in 2025, even as the value of European deals likely still grew in absolute terms given the size of the overall increase. What overtook it was Asia-Pacific demand, which very nearly doubled year on year, from about $3.4 billion to $6.1 billion, driven by countries seeking the same combat-tested missile and air-defence systems that are now anchoring the Greek deal. Europe remains, in absolute dollar terms, Israel’s largest single regional market, and the Greece and Finland deals are genuinely significant within it. But the narrative that European demand is what is “driving Israel’s export growth,” as is often assumed, understates how much of the recent surge is actually coming from buyers further east — a detail that matters for judging how central European goodwill really is to Israel’s defence-industrial strategy going forward, versus how replaceable any one European market might become if political relations sour.

The France counterexample, and why it is now more than friction

The Israel-France relationship supplies the clearest illustration of how far “friction” can travel before it becomes rupture, and the scale of that rupture by 2026 goes further than intermittent exhibition disputes. France barred Israeli firms from Eurosatory in 2024, only for a French commercial court to overturn the ban; Israeli companies were then blocked from the 2025 Paris Air Show after refusing to remove offensive-weapons displays, and Eurosatory 2026 saw a fourth restriction, this time confining Israeli exhibitors strictly to air- and missile-defence systems — a limitation Israel’s Defence Ministry called discriminatory and, in blunter Israeli commentary, “anti-Semitic.” What distinguishes 2026 from the earlier rounds is that Israel stopped merely protesting and reciprocated structurally: in April, Defence Ministry Director-General Amir Baram ordered a halt to all Israeli defence procurement from France, choosing to rely instead on domestic production and purchases from “friendly countries” rather than continue buying from a government it now regards as consistently hostile. That is a materially different posture from Spain’s 2025 contract cancellations or Italy’s 2026 decision not to renew certain agreements, both of which represent one side declining to buy or sell rather than a mutual severing of the relationship. France and Israel, on the 2026 evidence, are disengaging from each other’s defence-industrial base in both directions — which suggests the France relationship should be read less as a data point on a shared European spectrum of “friction” and more as a genuine outlier at the far end of it.

A sharper way to read the map

The standard account of Israel-Europe defence ties — deep cooperation persisting despite political friction over Gaza and settlements — is accurate as far as it goes, but it flattens a distinction that the 2026 evidence draws quite sharply. The states moving toward deeper, structural defence-industrial integration with Israel — Greece, Cyprus, Finland, and the Central and Eastern European buyers such as Romania, Serbia, Estonia, Slovakia and the Czech Republic — are disproportionately states with acute, specific, named threat perceptions: Turkey for Greece and Cyprus, Russia for Finland and the eastern flank states. The states moving toward restriction — France, Spain, Italy, the UK, the Netherlands, Norway — are, not coincidentally, states more geographically insulated from those particular threats and more exposed to domestic political and legal pressure generated by the war in Gaza and the West Bank. The Mecca pact does not create that divide, but it sharpens it considerably for one specific pair of states, by handing Ankara a formal, if still institutionally hollow, collective-security architecture that includes a nuclear-armed partner — and by doing so just weeks before Greece signed the largest Israeli arms deal in years. Reading that sequence as coincidence requires ignoring exactly the kind of alliance-politics logic that has driven Israeli-European defence cooperation for decades: partners buy from Israel not because they have resolved their political disagreements with Jerusalem, but because a specific, named threat has just become more concrete than the disagreement.

What would actually test this reading

If threat-specificity really is the variable doing the work here, rather than a generic split between “pragmatic” and “principled” European capitals, a few things should follow over the next year or two. Finland’s extension of cooperation through 2034, and its reported involvement in roughly twenty separate defence projects with Israeli firms, should keep deepening regardless of how the Gaza conflict’s diplomatic fallout evolves, because Helsinki’s calculus is anchored to its border with Russia rather than to any view of the Middle East. Greece and Cyprus’s trilateral coordination with Israel should continue to outpace whatever domestic political friction exists in Athens — where persistent public criticism of Israel’s conduct in Gaza remains real, and where a 2027 electoral cycle could yet complicate the pace of formal trilateralisation — precisely because the Turkish variable does not go away regardless of who governs Greece. And the Mecca pact itself should be watched less for whether it produces genuine collective military action, which its current design makes unlikely, than for whether its defence-industrial track — Baykar-SAMI drone co-production, the Kaan fighter jet talks — actually matures into the kind of localisation Riyadh wants by 2030, because that would represent Turkey and its new partners building an alternative supply chain to the Western and Israeli one, rather than merely declaring solidarity against a shared external threat. Should that industrial track advance, the countries currently deepening ties with Israel over Turkish-linked threat perceptions would have even more reason to entrench those partnerships rather than reconsider them — a self-reinforcing dynamic that the standard “friction versus pragmatism” framing, focused as it is on Gaza-related political sentiment, is not well equipped to anticipate.

By: Khushbu Ahlawat, Consulting Editor, GSDN

A Himalayan kingdom of fewer than 800,000 people is building religious infrastructure, hosting royal visits, and convening Buddhist gatherings at a pace with no precedent in its recent history. A temple complex broke ground in Lumbini in June. A shrine went up in Rajgir last September. Land has been earmarked for a temple and guest house in Varanasi, near Sarnath, where the Buddha delivered his first sermon. Sri Lankan Prime Minister Harini Amarasuriya’s five-day visit to Bhutan this past August, capped by the keynote at Thimphu’s first Global Conscious Food Systems Summit, was the latest entry in that pattern, not an isolated courtesy call. None of this is happening in a vacuum — except that, in the most literal sense, it is. A real vacuum is opening in the leadership of world Buddhism, in the very institution that has anchored Himalayan Buddhist authority for nearly a century, on a timeline nobody controls. Bhutan appears determined to be ready for it before anyone else is.

The clock that is actually running

The proximate cause of that vacuum is not abstract. The 14th Dalai Lama, Tenzin Gyatso, turned 90 in July 2025, and in the days before his birthday he made a declaration that has since reshaped the succession question from a distant hypothetical into an active geopolitical dispute: his reincarnation, he said, will be recognised solely by the Gaden Phodrang Trust, the nonprofit institution he established for that purpose, and by no other authority. Beijing’s response came within hours. A Chinese foreign ministry spokesperson reiterated that any reincarnation of the Dalai Lama, like that of the Panchen Lama, must be selected by drawing lots from a golden urn under the supervision of the central government — the same 2007 regulation, “Order No. 5,” that requires state approval for the recognition of all Tibetan Buddhist reincarnations on Chinese soil. When India’s minister for minority affairs, Kiren Rijiju, publicly backed the Dalai Lama’s position, Beijing warned New Delhi to “be prudent” on what it called a highly sensitive matter, and India’s foreign ministry retreated to studied neutrality, saying only that the government does not take positions on matters of religious belief.

The likeliest outcome, according to most scholars tracking the dispute, is not a resolved succession but a contested one: two rival 15th Dalai Lamas, one recognised by the Tibetan exile establishment operating out of Dharamsala and one installed through Beijing’s state apparatus, each claiming legitimacy before a global following that will have to choose. That prospect carries particular weight for the countries clustered along the Himalayan arc — India, Nepal, Mongolia and Bhutan — where nearly half of the Tibetan exile community still lives, mostly in India, and where the institutional authority the Dalai Lama has held since fleeing Tibet in 1959 has functioned as a kind of gravitational centre for Vajrayana Buddhist practice across the region. Some analysts have gone further, suggesting the next Dalai Lama could plausibly be identified on Indian soil, conceivably even in Tawang — the birthplace of the sixth Dalai Lama and a district China formally claims as part of its own territory — a scenario that would fuse the religious succession dispute directly onto the unresolved India-China border question.

Bhutan sits inside all of this without being a direct party to it, and that position — adjacent to the dispute but not implicated in it — is precisely what its recent diplomacy has been built to exploit.

Why Bhutan, specifically, can do this

The detail that gets lost in most accounts of Bhutan’s Buddhist outreach is that Bhutanese state Buddhism is not the Dalai Lama’s own school. Bhutan’s national religion, formalised under the 17th-century unifier Zhabdrung Ngawang Namgyal and enshrined today in the 2008 constitution, is the Drukpa Kagyu lineage — a distinct branch of Tibetan Vajrayana Buddhism from the Dalai Lama’s Gelug tradition, with its own historical hierarchy, its own monastic institutions, and its own claim to religious authority that predates and does not depend on Lhasa’s Gelug establishment. That distinction matters enormously for how Bhutan can behave right now. A country whose state religion were itself Gelug, or that hosted the Dalai Lama’s own exile institutions the way India does, would face an almost impossible choice as the succession dispute sharpens — recognise the Gaden Phodrang Trust’s candidate and risk Beijing’s fury, stay silent and risk its own religious community’s anger, or attempt open neutrality and satisfy no one. Bhutan, by contrast, can expand its own religious infrastructure, host interfaith gatherings, and position its monarchy as a custodian of Himalayan Buddhist heritage without ever being asked to rule on who the next Dalai Lama actually is, because that question sits outside its own lineage’s chain of authority.

The Global Peace Prayer Festival that Bhutan hosted in Gelephu in November 2025 is the clearest illustration of what this buys Thimphu. The ten-day gathering brought together lamas, scholars and practitioners from across Buddhism’s schools — including figures close to the Dalai Lama himself — under prayers led by Bhutan’s own Chief Lama, with relics from the Piprahwa-Kapilavastu excavation brought over from India to lend the event additional weight. A festival like that is not a neutral act in the ordinary sense; convening rival Buddhist constituencies under one roof, at a moment when those constituencies are edging toward an institutional split, is itself a form of influence-building. But it is influence Bhutan can accumulate specifically because nobody needs to ask the Bhutanese monarchy whose side it is on in a succession dispute that, doctrinally, is not its dispute to settle.

The economic engine behind the religious outreach

None of this soft-power accumulation would carry the weight it currently does without the domestic project underwriting it: the Gelephu Mindfulness City, the special administrative region King Jigme Khesar Namgyel Wangchuck unveiled on Bhutan’s 116th National Day in December 2023 and which has since become the organising frame for almost everything else in Bhutanese foreign policy. GMC is an unusually large bet for a country this size — a masterplan spanning more than a thousand square kilometres of southern Bhutan along the Indian border, pitched to investors at a scale approaching $15 billion, designed around eleven mandala-inspired neighbourhoods by the Bjarke Ingels Group, and structured as a “one country, two systems” jurisdiction with its own legal code, drawing partly on Singaporean commercial law, its own executive and legislature operating under the King’s direct guidance. Its first completed sacred landmark, the Ugyen Norlha Chorten, dedicated to a manifestation of Guru Rinpoche associated with prosperity, was a deliberate signal that this is meant to be read as spiritual infrastructure as much as economic infrastructure — an attempt to make Bhutan’s Buddhist identity and its development strategy the same project rather than two competing ones.

The urgency behind that fusion is domestic and demographic as much as geopolitical. Roughly 71,000 Bhutanese — about a tenth of the country’s population — have emigrated in recent years, driven by the same pull factors reshaping small economies everywhere: better wages abroad, urban aspiration, exposure to a wider world through social media that an isolated Himalayan kingdom spent decades trying to manage carefully. Bhutan’s total fertility rate has fallen to around 1.4 children per woman, a level associated with long-term population decline. For a state whose foreign policy, security doctrine and even its signature Gross National Happiness framework have always rested on the idea that Bhutanese culture and religious identity are themselves the country’s chief strategic asset — the thing that has kept a nation of fewer than a million people sovereign between two Asian giants — a hollowing-out of that identity through emigration is not a soft social problem. It reads, in Thimphu’s own framing, as an existential one. GMC’s spiritual-economic hybrid model is meant to answer both problems with one instrument: give young Bhutanese a reason to stay by building a globally connected, high-value economic zone at home, and give the outside world’s Buddhist tourism and investment interest a specific place to land, rather than leaving Bhutan simply exporting its youth while other countries harvest its cultural cachet.

A fragile kind of leverage

It would be a mistake to read Bhutan’s Buddhist diplomacy as a bid for the kind of religious leadership India, Thailand or China itself has invested in — each of those states has poured far greater resources into monastic education, scholarly institutions and multilateral Buddhist convening than Bhutan’s more modest, temple-by-temple approach can match, and Bhutanese officials have never suggested they are trying to compete on that scale. What Bhutan appears to want instead is narrower and more achievable: enough institutional presence at Buddhism’s sacred sites, enough convening credibility, and enough diplomatic diversification beyond its overwhelming dependence on India, that the kingdom’s survival does not rest on any single relationship or any single unresolved dispute working out in its favour.

That is also, precisely, why the strategy carries real fragility. Bhutan’s neutrality on the succession question is sustainable only as long as the dispute stays where it currently is — a war of statements and legal claims rather than a live crisis with a named successor on the ground. If the next Dalai Lama is in fact identified somewhere in India, as several analysts now consider plausible, Beijing’s warnings to New Delhi about “interference” in Tibet-related matters would almost certainly extend to any Himalayan state seen as legitimising that recognition through its own religious convening — a category Bhutan’s festivals and temple-building have deliberately, if implicitly, placed it in. Bhutan’s own unresolved boundary negotiations with China, still unsettled in areas adjacent to the Doklam plateau where Indian and Chinese forces faced off in 2017, give Beijing additional leverage over how much diplomatic room Thimphu actually has whenever a genuinely hard choice arrives. The outreach documented over the past three years has been possible precisely because the vacuum it is filling has remained, so far, a vacuum of anticipation rather than a fully realised institutional rupture. The real test of Bhutan’s Buddhist diplomacy will not be this year’s temple groundbreakings or peace festivals. It will be the moment, whenever it comes, when the 14th Dalai Lama’s passing turns two competing claims to a still-empty title into two actual claimants — and Thimphu, for the first time, has to decide whether convening everyone is still an option, or whether survival now requires choosing a side.

Bhutan’s Buddhist diplomacy, then, is best understood not as a finished strategy but as a wager placed against a clock the kingdom does not control. Every temple groundbreaking, every royal visit to Ulaanbaatar or Hanoi, every prayer festival that manages to seat Dalai Lama loyalists and other Buddhist schools at the same table is another brick laid while the foundation underneath — the assumption that the succession question can remain unresolved a while longer — still holds. That assumption has an expiry date, even if nobody can name it precisely: the 14th Dalai Lama is 90, and the moment of his passing will convert a dispute conducted so far in statements, regulations and diplomatic warnings into one conducted through actual, competing claimants. When that happens, the very quality that has made Bhutan’s outreach possible — its doctrinal distance from the fight, its ability to convene without having to choose — will be tested in a way it has not yet been. Gelephu Mindfulness City, the economic engine meant to give this soft-power project material weight, faces its own test on a similar horizon: whether a $15 billion vision drawn on paper by Danish architects can actually slow the emigration of a tenth of Bhutan’s population before the country’s demographic base erodes further. Neither test can be won through diplomacy alone, and neither can be delayed indefinitely. What Bhutan has built in three years is real, and it has genuinely expanded the kingdom’s room to manoeuvre between two much larger neighbours. Whether that room survives contact with an actual, contested succession — rather than the anticipation of one — is the question Thimphu has bought itself time to prepare for, but not the power to postpone.

By : Sonalika Singh, Consulting Editor, GSDN

The war with Iran exposed a gap between Washington’s expectations before the conflict and the strategic reality that emerged after it began. What was expected to be a relatively controlled military campaign developed into a prolonged confrontation in which Iran demonstrated an ability to impose costs on U.S. forces, disrupt regional military infrastructure and threaten the economic foundations of the conflict. The central problem was not that the United States lacked military power. Rather, its planning appears to have underestimated how Iran would adapt, how vulnerable forward-deployed forces could become, and how quickly a limited operation could expand into a wider contest involving military, political and economic pressures. 

One of the most important planning errors was the tendency to generalize from the earlier 12-day Iran-Israel war. That conflict demonstrated the effectiveness of modern air power and precision strikes against Iranian targets, and it may have encouraged the assumption that a larger U.S.-led campaign could achieve decisive results quickly. But a direct confrontation between Iran and the United States was fundamentally different. Israel and the United States have different geographic positions, military structures and regional vulnerabilities. The United States operates through a network of bases, logistics hubs, aircraft, tankers, surveillance platforms and command facilities spread across the region. Iran therefore did not need to defeat American forces in a conventional sense. It only needed to make the infrastructure supporting U.S. operations sufficiently vulnerable and costly. 

This distinction became particularly important as Iran shifted its focus from Israel to the U.S. military presence in the region. American bases and associated facilities became central targets. The strategic logic was straightforward: rather than attempting to destroy the most sophisticated U.S. combat aircraft in direct engagements, Iran could attack the broader system that makes American power projection possible. Radar installations, communications nodes, runways, fuel supplies, ammunition storage, command centers and logistics facilities all became potential pressure points. This challenged an assumption that American forces could operate from regional bases with a high degree of sanctuary while concentrating offensive power against Iran. 

The vulnerability of forward bases was therefore a major weakness in the original planning concept. U.S. military strength depends partly on its ability to move large quantities of people, weapons, fuel and equipment through established regional networks. Those networks are efficient under conditions of air superiority and secure access. They become more complicated when an adversary can threaten the bases and routes on which they depend. Iran did not need to permanently eliminate these facilities to create disruption. Repeated strikes, alerts, damage, temporary closures and the need to disperse aircraft and personnel could impose costs while reducing operational efficiency. The resulting pressure was not necessarily visible through traditional measures of battlefield victory, but it affected the sustainability of the campaign. 

Another apparent miscalculation concerned Iran’s military adaptation. Iran’s missile and drone capabilities were not new, but the war demonstrated the importance of viewing them as part of a broader operational system rather than as isolated weapons. Precision strikes against military infrastructure, combined with drones, missiles and efforts to challenge air-defence and surveillance networks, allowed Iran to contest the environment in which U.S. forces operated. Even when American forces retained significant defensive and offensive capabilities, the need to intercept incoming weapons consumed resources and required continuous attention. This created an asymmetric dynamic: relatively inexpensive systems could force a technologically superior opponent to spend substantial resources on defence. 

The conflict also raised questions about the assumption that advanced U.S. air power could guarantee uncontested operations throughout the campaign. Destroying or suppressing elements of an opponent’s air-defence network does not automatically eliminate the broader challenge. Modern air defence is increasingly distributed, mobile and difficult to neutralize completely. Radar, communications, launchers, and command systems can be relocated, concealed, or reconstituted. If an adversary retains enough of this architecture to threaten aircraft and support infrastructure, the attacking side must devote additional resources to maintaining air superiority. This can complicate operational planning and extend the duration of a campaign. 

A second major weakness was the apparent underestimation of Iran’s ability to absorb military pressure. Planning that assumes rapid political or social breakdown can become dangerous when the target government can present the conflict as a struggle for national survival. Expectations of domestic instability or protests may not account for the rally-around-the-flag effect created by external attacks. Military pressure can weaken a government, but it can also encourage segments of the population to prioritize national sovereignty over domestic political grievances. In Iran’s case, the continuation of resistance demonstrated why military planners cannot treat internal political opposition as an automatic indicator of imminent state collapse. 

The same problem applies to the wider regional environment. A conflict with Iran cannot easily be separated from the network of states and armed groups connected to the country’s regional strategy. Attacks on U.S. forces created the possibility of a wider escalation involving partners and aligned groups. This increased the number of potential targets and forced Washington to consider not only operations inside Iran but also the protection of personnel and infrastructure across several countries. The regional military footprint that provides the United States with strategic reach can therefore become a liability when an adversary could threaten multiple locations simultaneously. 

The war also exposed the limits of assuming that regional partners will automatically provide unrestricted military access. Countries hosting U.S. forces have their own security concerns, domestic politics and relationships with Iran and other regional actors. During a major conflict, governments may seek to limit the use of their territory or airspace to reduce the risk of retaliation. This creates an important distinction between having military facilities in a region and having complete freedom to use them in a war. Effective planning must account for the political conditions surrounding bases, not merely their physical availability. 

Perhaps the most consequential strategic miscalculation involved the economic dimension of the conflict. Military planners can focus on targets, aircraft, missiles and bases while underestimating how quickly war affects energy markets and domestic economies. The possibility of disruption around the Strait of Hormuz was particularly significant because of its importance to global energy flows. Any sustained threat to shipping through the Strait can increase oil prices, insurance costs and transportation risks. Higher energy prices can then feed into inflation and increase political pressure at home. A military campaign that appears manageable in operational terms can therefore become far more difficult when its economic consequences accumulate. 

This highlights a broader problem with measuring success in a modern war. Destroying enemy targets is only one component of strategic effectiveness. A campaign must also consider whether the opponent can continue fighting, whether military access can be sustained, whether economic costs remain manageable, and whether political objectives remain achievable. If the United States can inflict severe damage but cannot prevent the adversary from imposing persistent costs, the relationship between tactical success and strategic success becomes uncertain. 

There are also lessons about decision-making itself. Complex military operations require commanders and policymakers to test assumptions rather than simply reinforce them. If early assessments strongly favor a short campaign, there is a risk that contradictory intelligence will be discounted or interpreted as temporary resistance. Effective planning requires serious consideration of alternative scenarios prolonged missile attacks, attacks on bases, disruption of logistics, restrictions by regional partners, economic shocks and the possibility that the adversary adapts faster than expected. The ability to challenge optimistic assumptions is especially important when political leadership has already committed itself to a particular strategic narrative. 

The Iran war therefore raises a larger question about the sustainability of the U.S. model of power projection. For decades, American military strategy has benefited from an extensive network of overseas bases and logistical infrastructure. This system provides reach, speed, and flexibility, but it also creates identifiable dependencies. An adversary that cannot match the United States aircraft for aircraft may instead target the infrastructure that allows those aircraft to operate. The challenge is not unique to Iran. Other major powers could study the same vulnerabilities and develop their own approaches to disrupting forward-deployed forces. 

The implications extend beyond the Middle East. The experience offers lessons for any future confrontation involving a technologically sophisticated adversary with missiles, drones, cyber capabilities, long-range fires, and the ability to target logistics. Dispersed forces, hardened infrastructure, mobile command systems, resilient communications, protected fuel and ammunition supplies, alternative logistics routes and greater reliance on unmanned systems may become increasingly important. So will the ability to sustain operations without depending excessively on a small number of vulnerable bases. 

Diplomacy is another part of the lesson. Military planning often treats diplomacy as something that follows from battlefield developments, but in a geographically complex conflict, political arrangements can directly affect military effectiveness. Access to agreements, regional de-escalation mechanisms, communication channels, and contingency planning with host governments can reduce the risk that military operations become constrained by political developments. The ability to end a conflict on acceptable terms is also part of strategic planning and should be considered before hostilities begin. 

Ultimately, what went wrong in U.S. planning was not simply an underestimate of Iranian military capability. It was a broader mismatch between the assumptions of a short, controlled campaign and the realities of a contested regional war. Washington appears to have underestimated Iran’s ability to shift the focus of the conflict toward U.S. vulnerabilities, sustain missile and drone pressure, exploit the dependence of American forces on regional infrastructure, and generate wider economic and political costs. 

The United States retained substantial military advantages and the ability to conduct powerful offensive and defensive operations. Yet the war demonstrated that overwhelming technological superiority does not automatically translate into control over the strategic environment. Iran did not need to defeat the United States symmetrically. By targeting the foundations that support American power projection, it could impose costs and complicate the campaign. 

The broader lesson is therefore about expectations. The ability to start a war is not the same as the ability to control its duration, geography, or consequences. Future U.S. planning will need to account more carefully for adversary adaptation, base vulnerability, regional political constraints, economic interdependence and the possibility of prolonged conflict. The Iran war shows that in modern warfare, the decisive question is not only what an army can destroy, but whether it can sustain its own system of power while preventing the opponent from changing the terms of the conflict.