By: Lt Col JS Sodhi (Retd), Editor, GSDN

In the succeeding 24 years after India got independence and Pakistan emerged as a new nation in 1947, the two neighbours in South Asia went to war thrice with each other in 1947-49, 1965 and 1971, with Pakistan getting defeated in each of these three wars. In the 1971 War, Pakistan suffered a crushing defeat resulting in Pakistan being split in two nations with the emergence of Bangladesh on December 16, 1971.

Clearly, Pakistan realised at a heavy cost that would scar it permanently, that militarily it was impossible to defeat India. On January 24, 1972, a little over a month after Pakistan had lost East Pakistan, now Bangladesh, in the city of Multan in the Punjab province of Pakistan, a conference was held, presided over by the Pakistani Prime Minister Zulfikar Ali Bhutto which came to be known as the Multan Conference.

The Multan Conference was the strategic planning session for Pakistan’s military establishment and in it three important decisions were taken for Pakistan’s future. One, Pakistan would go nuclear. Two, Pakistan will wage a war for Jammu & Kashmir at a suitable time. Three, Pakistan would bleed India with attrition through low-intensity conflict.

On July 05, 1977, General Zia-ul-Haq, the Chief of the Army Staff of the Pakistan Army, seized power in a coup d’etat by over-throwing Zulfikar Ali Bhutto, and anointed himself as the Chief Martial Law Administrator. The same year, the earlier decision taken in the Multan Conference of bleeding India with attrition through low-intensity conflict was formalised as a military doctrine called “Bleed India with a Thousand Cuts” and is till date taught to mid-level officers of the Pakistan Army, Navy and Air Force undergoing the Staff Course in the Command and Staff College, Quetta.

Pakistan first put to use this military doctrine of “Bleed India with a Thousand Cuts” in Punjab, India where it supported terrorism from 1980 till 1995 when terrorism was wiped out from this border state of India. Terrorism in Punjab that lasted for 15 years saw 13,442 civilians and security forces personnel being killed.

As terrorism was waning in Punjab, in end-1989 Pakistan started supporting terrorism in another border state of India, Jammu & Kashmir where terrorism still continues for over 36 years. Till 2024, total of 42,143 civilians and security forces personnel have been killed in Jammu & Kashmir due to the ongoing terrorism.

Pakistan has a long history of being funded by the global monetary institutions because of its precarious economy. Part of the international loans is channeled by Pakistan to the terrorist organisations.

On April 22, 2025, Pakistan-armed and trained terrorists killed 26 male tourists in Baisaran Meadows, a picturesque and popular tourist spot in Pahalgam, Jammu & Kashmir based on religious profiling. Amongst these 26 dead were 25 Indian citizens and one Nepali citizen.

India struck back at Pakistan militarily in the wee hours of May 07, 2025. In the 88-hour India-Pakistan Conflict that ensued, India destroyed nine terrorist training centres in Pakistan and Pakistan Occupied Jammu & Kashmir in a military strike called Operation Sindoor, apart from damaging 20% of the infrastructure of the Pakistan Air Force. The details of this military operation are in a podcast by the author.

As Operation Sindoor was in full force and fury by India, and Pakistan had launched the counter-offensive called Operation Bunyan um-Marsoos, came the news that the International Monetary Fund, a major financial agency of the United Nations, has sanctioned loan worth US$ 2.4 billion to Pakistan.

And if this wasn’t enough, soon after the India-Pakistan Ceasefire came into effect at 5 pm on May 10, 2025 as the 59-member Indian delegation was touring 32-nations in seven-groups, to apprise the world of Pakistan’s complicity and culpability in supporting terrorism in India and the spectacular victory of India over Pakistan in the 88-hour conflict, the World Bank sanctioned US$ 40 billion loan to Pakistan on May 31, 2025 and the Asian Development Bank approved US$ 800 million loan to Pakistan on June 03, 2025.

The World Bank headquartered in Washington D.C., like the International Monetary Fund (IMF) are totally controlled by the USA, while the Asian Development Bank (ADB) with its headquarters in Manila, Philippines too has a strong tilt towards USA.

In the World Bank, the USA has 49.98% voting power, while both Russia and China have 2.61% each and India has 2.53% voting power.

USA has 17.42% of the voting rights in the IMF while Russia has 2.71% and China has 0.37%. The other members of the four-nation Quad which includes the USA, Japan, India and Australia, have voting percentage in the IMF as Japan with 6.47%, India 2.75% and Australia with 1.38%. Thus, the Quad nations have a total of 28.02% voting share in the IMF.

As of December 31, 2020 the USA and Japan control 15.571% of the shares of the ADB while China controls 6.429%, India controls 6.317% of the shares and Australia 5.773%. The Quad nations in the ADB control 43.232% voting shares.

Clearly, the USA is the most dominant player in all the three biggest global financial institutions the World Bank, the IMF and the ADB. And if the combined voting power of the four-nation Quad is taken, then the Quad is a reckonable force in all the three major international monetary institutions.

Pakistan has 80 terrorist groups operating with over 40,000 operatives who are waging the war on India from the Pakistani soil. India has on numerous occasions submitted documents and dossiers to Pakistan of these terrorist groups, apart from raising the issue of Pakistan’s support to terrorism in various international forums including the United Nations.

And yet, Pakistan with ease got the loans from these three monetary institutions after its armed and trained terrorists killed 26 persons in Pahalgam, India on April 22, 2025. This is the curious case of global funding of Pakistan even as it supports terrorism. 

It is no brainer that both money and religious indoctrination are the two biggest factors on which terrorism thrives. And if the financial supply chain is severed, the religious indoctrination can’t last long.

Pakistan is the only country in the world that has good relations with all the three superpowers ie USA, Russia and China. A recent article in this publication explains this issue in detail.

Sample the following two statements by senior US officials in the recent past. On October 21, 2011, the US Secretary of State, Hillary Clinton while on a visit to Pakistan remarked in reference to terrorism “You can’t keep snakes in your backyard and expect them to only bite your neighbour”. On October 15, 2022, Joe Biden the US President stated that Pakistan is one of the most dangerous nations in the world.

Also, the USA had selective amnesia when it played the pivotal role in Pakistan getting the loans from the World Bank, the IMF and the ADB after the Pahalgam terrorist attack, that the world’s most dreaded terrorist Osama bin Laden, responsible for the 9/11 World Trade Centre terrorist attacks that killed 2977 American citizens, was killed on May 02, 2011 in Abbottabad, Pakistan by the US Special Forces.

The other Quad nations Japan and Australia too did not stand with India to oppose the loans to Pakistan from the World Bank, the IMF and the ADB.

The world has to stop funding Pakistan. Till Pakistan gets monetary aid, it will funnel money to the terrorist organisations which have been carrying out death and destruction in India for the past 45 years.

Money after all, is the most powerful weapon in the world.

Milton Friedman’s quote needs no reemphasis in the context of Pakistan’s global funding and its support to terrorism “Money is a very powerful thing, which you hardly notice when it goes right, but which can create havoc when it goes wrong”.

By: Sonalika Singh, Research Analyst, GSDN

The suspension of the Indus Waters Treaty by India in 2025 has emerged as a landmark development in South Asian geopolitics, raising critical questions about international water diplomacy and bilateral relations between India and Pakistan. The treaty, signed in 1960 with the mediation of the World Bank, was designed to fairly allocate the waters of the Indus River system between the two nations following the 1947 Partition. For over six decades, it withstood wars, political upheaval, and numerous regional crises, serving as a rare example of sustained cooperation in an otherwise volatile relationship.

India’s decision to suspend the treaty came in the wake of a deadly terrorist attack in Pahalgam, Jammu and Kashmir, on April 22, 2025 in which Pakistan-armed and trained terrorists killed 26 persons on the basis of religious profiling. Accusing Pakistan of supporting cross-border terrorism, India invoked national security concerns as justification for halting the flow of water to Pakistan from dams and river systems under its control. This unprecedented move has not only intensified tensions between the nuclear-armed neighbors but also raised alarms over the weaponization of water as a strategic tool. The suspension has far-reaching consequences threatening Pakistan’s water security, challenging international norms, and potentially destabilizing the fragile peace in a region already grappling with climate stress and political uncertainty.

The 1947 partition of British India divided the Indus River basin between the newly formed nations of India and Pakistan. As a result, Pakistan became the lower riparian state, reliant on water flows originating in India. Crucially, key irrigation headworks Madhopur (on the Ravi River) and Ferozepur (on the Sutlej River) fell within Indian territory. This geographical shift led to immediate disputes over water access and usage.

Following the expiration of the Standstill Agreement on April 1, 1948, India began to withhold water supplies to Pakistan from the eastern rivers. This sudden disruption created an acute water crisis in Pakistan’s Punjab province. To avoid escalation, both nations signed an interim Inter-Dominion Agreement on May 4, 1948. Under this accord, India agreed to continue supplying water to Pakistan in return for compensation until a permanent solution could be reached.

In 1951, unable to secure a lasting resolution, Pakistan took the dispute to the United Nations, accusing India of deliberately interrupting its water supply. In response, the World Bank under the leadership of President Eugene Black offered to mediate. This led to a series of technical negotiations and diplomatic discussions involving both countries, aiming for a sustainable, long-term water-sharing framework.

After nearly a decade of intensive negotiations, the Indus Waters Treaty was signed on September 19, 1960. The signatories included Indian Prime Minister Jawaharlal Nehru, Pakistani President Ayub Khan, and World Bank representative W.A.B. Illiff. Although signed in September, the treaty was applied retroactively from April 1, 1960.

The Indus Waters Treaty divided the Indus River system between India and Pakistan in a way that granted India control over the three eastern rivers Ravi, Beas, and Sutlej while Pakistan received exclusive rights to the three western rivers Indus, Jhelum, and Chenab. To ensure the effective implementation and ongoing administration of the treaty, the Permanent Indus Commission was established as a bilateral body responsible for maintaining regular communication between the two countries, sharing data on water flows and development projects, and resolving disputes through dialogue and technical consultations. Over the decades, the treaty has been widely recognized as one of the most successful and enduring international water-sharing agreements, withstanding periods of war and heightened diplomatic tensions between India and Pakistan.

The treaty permits India to construct storage facilities and run-of-the-river hydroelectric projects on the western rivers, provided they do not adversely affect Pakistan’s water rights. Over the decades, the Indus Waters Treaty has withstood numerous challenges, including three wars, serving as a rare example of sustained cooperation between the two nations.

The immediate trigger for India’s suspension of the Indus Waters Treaty was a terrorist attack near Pahalgam in Jammu and Kashmir on April 22, 2025, which resulted in the deaths of 26 individuals. India accused Pakistan of supporting state-sponsored terrorism, leading to the decision to place the treaty in abeyance. The Indian government stated that the suspension would remain in effect until Pakistan ceases its support for cross-border terrorism as “blood and water cannot flow together”. This move has significantly strained bilateral relations and heightened tensions in the region.

Following the suspension of cooperation under the Indus Waters Treaty, India undertook several actions that have heightened tensions and disrupted the established water-sharing arrangements. One significant move was the release of water from the Uri Dam into the Jhelum River without prior notification to Pakistan, resulting in unexpected downstream flooding. Additionally, India closed the Baglihar Dam on the Chenab River, causing a substantial reduction in water flow to Pakistan. Further escalating the situation, India announced plans to halt the flow of water through the Kishanganga Dam on the Neelum River, which would further diminish Pakistan’s water supply.

Pakistan has frequently faced accusations of involvement in terrorism through its support of various designated terrorist organizations. These allegations have been made by several countries, including its neighbours Afghanistan, Iran, and India, as well as by the United States, the United Kingdom, Germany, and France. The accusations pertain to Pakistan’s support for terrorist activities both within South Asia and globally.

For over 45 years, Pakistan has been widely accused of sponsoring and supporting terrorism in India, particularly in the region of Jammu and Kashmir and earlier in Punjab. Successive Indian governments and intelligence agencies have pointed to Pakistan’s deep-rooted involvement in cross-border terrorism through state-backed groups such as Lashkar-e-Taiba, Jaish-e-Mohammed, and Hizbul Mujahideen.

In 2008, Daniel Byman, a professor and senior analyst at the Center for Middle East Policy, described Pakistan as potentially the world’s most active state sponsor of terrorism. A decade later, in 2018, former Pakistani Prime Minister Nawaz Sharif suggested that elements within Pakistan’s establishment may have played a role in the 2008 Mumbai attacks, carried out by Lashkar-e-Taiba.

During a 2019 visit to the United States, Pakistani Prime Minister Imran Khan admitted that 30,000–40,000 armed terrorists were operating on Pakistani soil. He further stated that previous governments had concealed this reality from the U.S. for over 15 years during the War on Terror.

The terrorist attack in Pahalgam, Jammu and Kashmir, claimed the lives of at least 26 civilians. While the attack was initially claimed by ‘The Resistance Front’, a claim later retracted India accused Pakistan of orchestrating the assault. Pakistan denied any involvement.

Pakistan’s Defence Minister, Khawaja Muhammad Asif, has also reportedly acknowledged that the country supported terrorist groups for over three decades, calling it a strategic mistake linked to U.S.-led foreign policy decisions.

In response to India’s suspension of the Indus Waters Treaty following the Pahalgam attack, Pakistan strongly condemned the move, calling it a violation of international law and a direct threat to its water security. The Pakistani government urged India to reverse the decision, emphasizing the treaty’s critical role in ensuring regional peace and stability.

Pakistan’s concerns are compounded by existing water scarcity issues, exacerbated by climate change. The country is already facing severe water shortages, with over 10 million people (about half the population of New York) lacking access to clean drinking water following the catastrophic 2022 floods. The suspension of the Indus Waters Treaty has further intensified these challenges, threatening the livelihoods of millions, thus hitting Pakistan where it hurts the most. Clearly, Pakistan is now feeling the real heat of perpetrating terrorism in India for the last 45 years.

The Indus Waters Treaty does not contain provisions for unilateral suspension by either party. Article XII (3) of the treaty allows for modifications through mutual agreement, but unilateral actions are not permitted. India’s suspension raises questions about the treaty’s legal enforceability and the mechanisms available for dispute resolution. The World Bank, which played a pivotal role in facilitating the treaty, has stated that its role is limited to that of a facilitator and has refrained from intervening in the current dispute.

The suspension of the Indus Waters Treaty carries significant strategic and environmental implications for both India and Pakistan. India’s recent actions, such as unannounced water releases and dam closures, have been interpreted by Pakistan and international observers as a deliberate effort to weaponize water using it as a tool of political and strategic pressure. This echoes historical practices where control over water was wielded to subdue adversaries, raising serious concerns about regional stability.

Experts caution that manipulating river flows can severely impact agriculture, particularly in Pakistan where millions depend on the Indus River system for irrigation and drinking water. Such disruption not only threatens food security but can also lead to lasting ecological damage, including soil degradation and reduced biodiversity. Compounding the issue is the growing impact of climate change. Both countries are experiencing shifting weather patterns, melting glaciers, and declining river flows factors that the original treaty, signed in 1960, does not adequately address. These evolving environmental realities highlight the urgent need to modernize the Indus Waters Treaty to include provisions for climate resilience and sustainable water management. Without cooperative adaptation, the treaty risks becoming obsolete, further intensifying tensions and undermining a historically successful framework for peaceful water sharing.

Pakistan has formally appealed to India to reconsider its decision to suspend the Indus Waters Treaty, emphasizing the treaty’s significance for regional stability and the well-being of millions who depend on the Indus River system.

Pakistan’s National Security Committee (NSC) termed India’s action an “act of war,” asserting that any attempt to stop or divert water allocated to Pakistan under the Indus Waters Treaty would be met with a robust response. The NSC emphasized that water is a vital national interest for Pakistan and a lifeline for its 240 million people. Pakistan’s Defence Minister, Khawaja Asif, warned that India cannot unilaterally suspend the treaty, noting the World Bank’s role as a key stakeholder in the agreement. In response, Pakistan is preparing to take legal action, including raising the issue at the World Bank, the Permanent Court of Arbitration, or the International Court of Justice, arguing that India has violated the 1969 Vienna Convention on the Law of Treaties. Additionally, Pakistan plans to issue a formal diplomatic notice to India challenging the suspension. The situation underscores the critical importance of the Indus Waters Treaty and the need for both nations to engage in dialogue to address concerns and uphold their commitments.  

Treaty modernization is also crucial to address contemporary challenges, including climate change and environmental sustainability. Amending the Indus Waters Treaty to incorporate provisions that account for these factors can ensure its relevance and effectiveness in the current geopolitical and environmental landscape. Experts suggest integrating more frequent periodic reviews, involving environmental and climate experts in monitoring, and developing neutral data exchange processes to strengthen the treaty’s framework.

The suspension of the Indus Waters Treaty has brought India and Pakistan to a crucial crossroads. While the immediate prospects for resolution appear grim, the moment calls for courage, diplomacy, and vision. Renewed dialogue, international engagement, and treaty reform could transform this crisis into an opportunity for lasting peace and cooperation in one of the world’s most volatile regions.

India has given Pakistan to choose one option only – either support terrorism or ensure water for its 240 million citizens. The choice now solely rests on Pakistan.

By: Priya Naik, Research Analyst, GSDN

Pakistan’s geopolitical significance has been shaped by three distinct phases of superpower engagement, each reflecting shifting global power dynamics and regional security imperatives. From Cold War alliances to post 9/11 counterterrorism partnerships, the external powers have used Pakistan’s strategic location and military capabilities to advance their interests in South Asia and beyond.

The U.S.-Pakistan alliance emerged as a cornerstone of Washington’s Cold War containment strategy. In 1954, Pakistan signed the Mutual Defence Assistance Agreement with the United States, formalising military cooperation aimed at countering Soviet influence. This partnership led to Pakistan’s inclusion in the Southeast Asia Treaty Organisation (SEATO) in 1955 and the Central Treaty Organisation (CENTO) in 1959, despite Pakistan’s geographic distance from these regions. These alliances provided the U.S. access to military bases near Soviet borders, including Peshawar Air Base, which hosted U-2 spy planes monitoring USSR activities.

Pakistan’s value stemmed from its position as a “frontline state” bordering Afghanistan and Soviet Central Asia. The CIA’s Operation Cyclone (1979–1989) epitomised this relationship, with Pakistan’s Inter-Services Intelligence (ISI) channelling US$ 630 million annually in U.S. and Saudi funds to the Afghan mujahideen fighting the Soviet forces. This collaboration transformed Pakistan into a conduit for Western arms, including Stinger missiles, while reinforcing military authoritarian governance under General Zia-ul-Haq.

The Soviet withdrawal from Afghanistan in 1989 and the USSR’s 1991 dissolution abruptly reduced Pakistan’s strategic utility. U.S. aid plummeted from US$ 4.2 billion in the 1980s to US$ 5 million by 1993, with sanctions imposed after Pakistan’s 1998 nuclear tests. The Pressler Amendment (1990) halted military sales, reflecting Washington’s prioritisation of non-proliferation over alliance politics.

This period saw Pakistan pivot toward China and Saudi Arabia for security partnerships, while its support for Taliban factions in Afghanistan drew international condemnation. The 1999 Kargil conflict further strained U.S. ties, as the Clinton administration pressured Pakistan to withdraw forces from the PoJK (Pakistan Occupied Jammu & Kashmir).

The September 11 attacks revived Pakistan’s strategic importance. Under U.S. pressure, General Pervez Musharraf abandoned support for the Taliban, granting the Pentagon access to airbases for Operation Enduring Freedom. Between 2001 and 2010, Pakistan received US$ 18 billion in U.S. aid, including US$ 10 billion for counterterrorism operations. The partnership enabled the capture of 689 Al-Qaeda operatives, including Khalid Sheikh Mohammed, but fuelled domestic unrest over drone strikes and sovereignty violations.

Post-2011, tensions resurfaced over Pakistan’s alleged support for Afghan Taliban factions. However, the 2021 Taliban takeover reinforced Pakistan’s role as a regional stabilizer, with the U.S. relying on Pakistani mediation during evacuation efforts1. China’s Belt and Road Initiative investments, particularly the US$ 62 billion China-Pakistan Economic Corridor, have concurrently deepened Islamabad’s ties with Beijing, illustrating Pakistan’s “multi-alignment” strategy in the 21st century.

This historical arc demonstrates how superpowers have alternately embraced and distanced themselves from Pakistan, contingent on evolving security paradigms. The country’s enduring role as a geopolitical pivot ensures its continued relevance despite cyclical crises in international partnerships.

The United States and Pakistan

The relationship between the United States and Pakistan represents one of the most enduring yet complicated strategic partnerships in global politics, spanning over seven decades through periods of intense cooperation and significant tension. Despite fluctuating dynamics, Pakistan has maintained its position as a critical frontline state in counterterrorism efforts, providing essential access to Afghanistan during the War on Terror while receiving substantial military and economic assistance from the United States. Recent developments indicate a shifting focus in the relationship, with the U.S. pivoting toward the Indo-Pacific region while maintaining counterterrorism cooperation with Pakistan. However, persistent concerns regarding Pakistan’s alleged dual approach toward militant groups, particularly along the Afghanistan border, continue to create friction in bilateral relations, even as both nations acknowledge the strategic necessity of their partnership in addressing regional security challenges.

• Pakistan as a Frontline State in Counterterrorism

Pakistan has established itself as a crucial frontline state in the global war against terrorism, particularly following the September 11 attacks that fundamentally altered the international security landscape. In the aftermath of these attacks, Pakistan positioned itself at the forefront of counterterrorism efforts, providing critical intelligence sharing, logistical support, and military operations that proved invaluable to United States security objectives in the region. This partnership has come at a significant cost to Pakistan, with the country suffering casualties exceeding 8,500 military personnel and approximately 35,000 civilians in terrorism related violence over the years. The Pakistani government under President Musharraf took decisive action by banning several militant terrorist organisations and detaining thousands of extremists, demonstrating a commitment to rooting out terrorist networks within its borders. These actions directly facilitated American counterterrorism operations and contributed significantly to the capture of high-value Al-Qaeda and Taliban targets, underscoring Pakistan’s strategic value as a partner in combating global terrorism4.

The enduring importance of Pakistan in counterterrorism efforts is further reinforced by ongoing bilateral security dialogues and cooperative initiatives. Senior officials from both nations continue to emphasise the importance of expanded counterterrorism collaboration, including exchanges of technical expertise, investigative and prosecutorial assistance, and border security enhancements. Pakistan’s extensive knowledge of local terrain, cultural contexts, and regional dynamics provides unique advantages that complement American technological and intelligence capabilities, creating a synergy that has proven effective in addressing terrorist threats. This strategic partnership has evolved to address emerging security challenges, with Pakistan adapting its counterterrorism approach to confront more sophisticated and diverse threats while maintaining alignment with broader international security objectives.

• Foreign Military Financing and Coalition Support Funds

The United States has maintained a substantial program of military assistance to Pakistan, primarily through Foreign Military Financing (FMF) and Coalition Support Funds (CSF), which have been instrumental in building Pakistan’s counterterrorism capabilities. These funding mechanisms have enabled Pakistan to acquire advanced military equipment, enhance training programs for security forces, and develop specialised counterterrorism units capable of addressing complex security challenges. The financial support has been particularly crucial for Pakistan’s military operations in the tribal areas along the Afghan border, where the terrain and operational environment present unique challenges requiring specialised equipment and tactics. This assistance has facilitated Pakistan’s ability to conduct sustained counterterrorism operations against militant groups that pose threats to both regional stability and American security interests.

Coalition Support Funds have served as a reimbursement mechanism for the costs incurred by Pakistan in supporting U.S.-led counterterrorism operations, reflecting the American recognition of Pakistan’s role as a frontline state. These funds have covered expenses related to military operations, logistical support, and the deployment of Pakistani forces in security operations aligned with broader counterterrorism objectives. The financial assistance has been accompanied by technical support, including the provision of border security infrastructure and specialised training programs designed to enhance Pakistan’s capacity to monitor and secure its porous western border with Afghanistan. This comprehensive approach to military assistance has aimed not only at addressing immediate security threats but also at developing sustainable counterterrorism capabilities that can function independently of direct American involvement.

• USAID Programs and Economic Support

Beyond military assistance, the United States has implemented extensive economic support programs through USAID that target development challenges and socioeconomic factors contributing to instability in Pakistan. These initiatives have focused on critical sectors including education, healthcare, energy, and governance, with the dual objectives of promoting economic growth and addressing underlying conditions that can foster extremism. The economic assistance has sought to capitalise on Pakistan’s population of over 240 million people, which represents not only a significant market for American businesses but also a demographic that requires educational and economic opportunities to resist radicalisation. Projects have included infrastructure development, vocational training programs, and investments in renewable energy, all designed to strengthen Pakistan’s economic resilience while fostering closer bilateral ties.

The economic partnership between the United States and Pakistan has extended beyond direct aid to include trade relations, with the U.S. maintaining its position as Pakistan’s largest trading partner. This commercial relationship has created opportunities for technology exchange, investment, and market access that complement the direct assistance provided through official development channels. Despite fluctuations in the overall bilateral relationship, economic assistance programs have provided a degree of continuity and demonstrated an American commitment to Pakistan’s development and stability that transcends periodic tensions in other aspects of the relationship.

• Balancing India-Pakistan Interests

The United States has faced persistent challenges in balancing its relationships with Pakistan and India, two nuclear-armed neighbours with a history of conflict and mutual suspicion. This balancing act has become increasingly complex as the United States has pursued closer strategic ties with India while attempting to maintain its longstanding security partnership with Pakistan. For Pakistani policymakers, American engagement with India raises concerns about regional power dynamics and the potential impact on Pakistan’s security interests, particularly regarding disputed territories like Kashmir. These concerns have influenced Pakistan’s strategic calculations and occasionally affected its willingness to align fully with American counterterrorism priorities, especially when these are perceived as potentially strengthening India’s regional position.

Pakistan’s status as a nuclear-armed state has added another layer of complexity to the relationship, with the United States attempting to promote responsible nuclear stewardship while acknowledging Pakistan’s security concerns vis-à-vis India. Pakistan has positioned its nuclear capabilities as a means of deterrence in an unstable region rather than as leverage for aggression, a stance that aligns with American interests in maintaining strategic stability but also reflects Pakistan’s perception of existential threats from its larger neighbour. The nuclear dimension has elevated the strategic importance of the U.S.-Pakistan relationship while simultaneously introducing additional complications regarding non-proliferation objectives and regional security dynamics.

The challenge of balancing these competing interests has led to a relationship characterised by periods of close cooperation interspersed with significant tensions and mutual frustration. American policymakers have struggled to reconcile strategic objectives that sometimes pull in different directions, seeking to maintain counterterrorism cooperation with Pakistan while developing a strategic partnership with India focused on broader regional and global challenges. For Pakistan, this balancing act by the United States has created uncertainty about long-term American commitment and occasionally fuelled perceptions that Pakistan’s sacrifices and strategic value are underappreciated in comparison to the growing U.S.-India relationship. These dynamics have required careful diplomatic management to prevent misunderstandings and maintain productive engagement on shared security concerns despite competing regional interests.

• Shifting U.S. Focus Toward Indo-Pacific and Implications for Pakistan

The United States has been strategically pivoting toward the Indo-Pacific region, reflecting growing concerns about China’s rising influence and the changing global power dynamics. This strategic reorientation has significant implications for Pakistan, which must navigate an evolving security landscape where its traditional importance in American counterterrorism efforts may be overshadowed by broader geopolitical considerations. The shift has been accompanied by a deepening U.S.-India strategic partnership, creating potential challenges for Pakistan’s regional standing and its relationship with the United States. Pakistani policymakers are increasingly cognizant of the need to diversify international partnerships and adapt to a changing strategic environment where American priorities may be less centred on South Asia than during the height of the War on Terror.

Despite this shifting focus, Pakistan maintains strategic relevance to American interests through its unique geographical position and potential role in regional stability. Pakistan’s proximity to China, India, Iran, and Afghanistan continues to provide it with significant diplomatic leverage and strategic importance in addressing regional challenges. The country’s relationship with China, particularly through the China-Pakistan Economic Corridor (CPEC), introduces another dimension to the evolving regional dynamics and American calculations regarding Pakistan’s strategic value. As competition between the United States and China intensifies, Pakistan’s position at this geopolitical intersection may acquire renewed significance, albeit in ways that differ from its traditional role as a frontline state in counterterrorism efforts.

The implications of this shifting focus for Pakistan include potential reductions in American military assistance and changing parameters for bilateral security cooperation. This transition has prompted Pakistan to reconsider its strategic options and explore alternative partnerships, while still seeking to maintain productive engagement with the United States on issues of mutual concern. The evolution reflects broader changes in international relations and regional security dynamics, requiring adaptability from both nations to preserve the elements of their partnership that continue to serve shared interests. Pakistan’s response to this shifting landscape will significantly influence the future trajectory of U.S.-Pakistan relations and determine whether the partnership can successfully transition to address new challenges despite changing strategic priorities.

China and Pakistan

The China-Pakistan relationship stands as one of the most resilient and multifaceted strategic partnerships in modern international relations, forged through seven decades of geopolitical upheavals and mutual strategic calculations. Rooted in shared security concerns following the 1962 Sino-Indian War, this alliance has evolved into a comprehensive framework encompassing military cooperation, nuclear proliferation, infrastructure megaprojects, and coordinated efforts to counterbalance India’s regional ascendancy. The China-Pakistan Economic Corridor (CPEC), valued at US$ 62 billion, epitomises this deepening integration by physically linking China’s Xinjiang province to Pakistan’s Gwadar Port on the Arabian Sea, while simultaneously addressing Pakistan’s chronic energy shortages and infrastructure deficits. This partnership, however, transcends mere economic interests, functioning as a geostrategic counterweight to India and a critical node in China’s Belt and Road Initiative (BRI), even as both nations navigate the complexities of great power competition and shifting regional dynamics.

• Post-1962 Sino-India War Foundations

The 1962 Sino-Indian War fundamentally reshaped Asia’s geopolitical landscape, creating the conditions for China and Pakistan to establish their “higher than the mountains” partnership. Following its military defeat, India sought Western assistance to modernise its armed forces, prompting China to cultivate Pakistan as a strategic counterweight. This alignment crystallised with the 1963 Boundary Agreement, which resolved territorial disputes in Kashmir’s Aksai Chin and Gilgit-Baltistan regions. By demarcating borders through “mutually beneficial adjustments” that preserved both nations’ administrative control, the agreement eliminated a potential flashpoint while establishing Pakistan as China’s primary South Asian partner.

China’s support during Pakistan’s 1965 and 1971 wars with India cemented this partnership. During the 1965 conflict, China mobilised troops along the Sikkim border, forcing India to divert military resources from Pakistan’s western front. This intervention, coupled with substantial arms transfers including MiG-19 fighters, demonstrated Beijing’s willingness to directly bolster Islamabad’s defence capabilities. The relationship reached its zenith in 1972 when China cast its first UN Security Council veto to block Bangladesh’s admission, a dramatic show of solidarity following East Pakistan’s secession. These actions established the template for China’s “all-weather” commitment, contrasting sharply with the United States’ arms embargoes during Pakistan’s moments of crisis.

• Evolution of Military and Nuclear Cooperation

The partnership’s military dimension intensified following India’s 1974 nuclear tests, with China initiating covert technology transfers that laid the groundwork for Pakistan’s nuclear program. Declassified intelligence assessments reveal that Chinese assistance included uranium enrichment technology, centrifuge designs, and critical missile components, enabling Pakistan to detonate its first nuclear device in 1998. This proliferation network, operated through entities like the Pakistan Atomic Energy Commission (PAEC), transformed South Asia’s strategic balance by providing Islamabad with a credible nuclear deterrent against India’s conventional military superiority.

Contemporary defence cooperation has expanded to include joint weapons production, exemplified by the JF-17 Thunder multirole fighter. Developed collaboratively by Chengdu Aerospace Corporation and Pakistan Aeronautical Complex, over 70% of the jet’s components are now manufactured in Pakistan, showcasing technology transfer commitments. The partnership has recently entered hypersonic weapons development, with Pakistan test-firing the Chinese-designed CM-400AKG missile-capable of Mach 4.5 speeds-aboard JF-17 platforms, directly countering India’s S-400 air defence systems.

• BRI’s Flagship Project

CPEC constitutes the operational core of China’s Belt and Road Initiative, accounting for 20% of BRI’s total investments as of 2024. The corridor’s US$ 62 billion portfolio spans 32 energy projects, 2,700 km of highways, and 1,872 km of rail networks, designed to slash China’s Middle East oil transport distance from 12,000 km to 2,395 km. This infrastructure web positions Gwadar Port-capable of handling 100,000 DWT vessels-as China’s “western oil lifeline,” bypassing the vulnerable Malacca Strait chokepoint that carries 80% of Beijing’s energy imports.

The economic calculus extends beyond logistics: CPEC’s 22 Special Economic Zones (SEZs) aim to relocate Chinese manufacturing capacity to Pakistan, leveraging Islamabad’s Generalised System of Preferences (GSP+) status with the EU. Initial successes include the Rashakai SEZ, where Chinese firms have established textile and automotive plants exporting to European markets duty-free. However, security challenges persist, with the Pakistan Army deploying 15,000 personnel exclusively for CPEC protection, reflecting the project’s strategic prioritisation.

Gwadar’s transformation from a fishing village to a deep-water port exemplifies CPEC’s strategic ambitions. The port’s 2023 expansion, featuring 32 new berths and -18 meter draft capabilities, enables it to service supertankers carrying Qatari LNG and Saudi crude to Xinjiang via the 3,000 km China-Pakistan Pipeline. This infrastructure directly challenges India’s regional maritime dominance, providing China with naval access just 400 km from the Strait of Hormuz through which 21 million barrels of oil transit daily.

• Armaments Co-Production Ecosystem

China’s defence exports to Pakistan surpassed US$ 6.4 billion in 2023, making Islamabad Beijing’s second-largest arms client after Saudi Arabia. This trade extends beyond transactions into integrated production networks:

1. Aerial Platforms: The JF-17 Block III, equipped with Chinese KLJ-7A AESA radars and PL-15E missiles, provides Pakistan with 4.5-generation capabilities rivalling India’s Rafale jets. PAC Kamra’s production lines now manufacture 25 fighters annually, with 60% indigenous content.
2. Naval Systems: Karachi Shipyard’s construction of four Type 054A/P frigates-armed with CY-1 anti-submarine missiles-marks Pakistan’s induction of blue-water capabilities, countering India’s aircraft carrier groups.
3. Missile Technology: The recent test of the Shaheen-V ICBM, derived from China’s DF-26, grants Pakistan a 4,750 km strike range covering all Indian territories and Diego Garcia, the U.S. military hub.

This cooperation extends into dual-use technologies, exemplified by the Chashma-5 nuclear power plant. Utilising China’s Hualong One reactor (HPR1000), the US$ 3.5 billion project provides 1,200 MW of electricity while advancing Pakistan’s civil nuclear expertise potential pathway for military applications.

• Cybersecurity and Space Collaboration

The 2022 China-Pakistan Space Cooperation Agreement has borne fruit with the 2024 launch of PAKSAT-MM1, a dual-use communications satellite providing 5G coverage across CPEC routes. Jointly developed by CAST and SUPARCO, the satellite’s synthetic aperture radar capabilities enable real-time CPEC security monitoring while enhancing Pakistan’s reconnaissance capacities along the LOC.

Parallel advancements in cybersecurity include the National Cyber Emergency Response Team (PakCERT), modelled on China’s CNCERT. This collaboration has thwarted 12,000+ cyberattacks on CPEC infrastructure since 2020, utilising AI algorithms developed by Huawei’s Lahore R&D centre.

• The India Factor

China’s partnership with Pakistan has always served as a strategic hedge against India, a calculus evident in three historical phases:

1. 1962-1971: Direct military support during India-Pakistan conflicts, including arms transfers and border mobilisations.
2. 1980s-1990s: Nuclear and missile technology transfers to offset India’s conventional superiority post-1971.
3. Post-2000: Economic statecraft through CPEC to encircle India via Gwadar and PoK infrastructure.

This containment strategy intensified following India’s 2020 Ladakh standoff with China, prompting Beijing to fast-track CPEC’s western alignment highway network traversing Gilgit-Baltistan and Pakistan Occupied Jammu & Kashmir (PoJK). India’s protests over territorial sovereignty have been dismissed, with China arguing these are “legitimate economic activities” in Pakistan-administered regions.

• The Quad Countermeasure

China perceives the U.S.-India-Japan-Australia Quad alliance as an Indo-Pacific containment strategy. CPEC and Gwadar directly counter this by:

1. Naval Positioning: Gwadar’s 2024 expansion includes a Chinese-operated naval maintenance facility, enabling PLAN submarines to operate in the Arabian Sea without returning to Hainan, a 7,000 km reduction in deployment range.
2. Energy Security: The China-Pakistan Pipeline transports 18% of China’s Iranian oil imports via Gwadar, circumventing U.S. sanctions enforcement in the Persian Gulf.
3. Economic Interdependence: 82% of the CPEC workforce are Pakistani nationals, creating local stakeholders resistant to Indian-led initiatives like the India-Middle East-Europe Economic Corridor (IMEC).
4.  

Russia and Pakistan

Russia and Pakistan, once considered distant players in international relations, have developed increasingly substantial ties over the past decade. This transformation represents a significant shift from their historically cold relationship during the Soviet era and early post-Soviet period. The partnership now encompasses military cooperation, counterterrorism efforts, economic collaboration, and strategic alignment on regional issues. This evolution reflects broader geopolitical changes in South Asia and the recalibration of both nations’ foreign policy objectives in a multipolar world.

The relationship between Russia and Pakistan has undergone a remarkable transformation since 2010, marking a significant shift from their previously limited engagement. This recalibration began against the backdrop of changing regional dynamics and evolving strategic priorities for both nations.

• Policy Reversal and Diplomatic Warming

In 2010, Russian Prime Minister Vladimir Putin initially maintained distance from Pakistan, stating that Russia was against developing strategic and military ties with Pakistan because of Russia’s desire to emphasise strategic ties with India. However, a notable policy reversal occurred in 2011 when Putin publicly endorsed Pakistan’s bid to join the Shanghai Cooperation Organisation (SCO) and acknowledged Pakistan as “a very important partner in South Asia and the Muslim world” for Russia. This diplomatic warming represented Moscow’s recognition of Pakistan’s strategic importance in the region and signalled a willingness to develop a more multifaceted relationship.

The diplomatic engagement continued to strengthen with Russia’s strong condemnation of the 2011 NATO strike in Pakistan, with the Russian foreign minister declaring it “unacceptable to violate the sovereignty of a state, even when planning and carrying out counter-insurgent operations”. This statement aligned with Pakistan’s position and demonstrated Russia’s support on matters of territorial sovereignty.

• High-Level Exchanges and Institutional Frameworks

The post-2010 period witnessed a significant increase in high-level exchanges between Moscow and Islamabad. In October 2012, Pakistan’s army chief General Ashfaq Parvez Kayani visited Moscow, where he received a warm reception from Russia’s Defence Minister Anatoly Serdyukov and Ground Forces Commander-in-Chief Colonel General Vladimir Chirkin.

A crucial institutional development occurred on August 31, 2013, when Pakistan and Russia concluded their first strategic dialogue at the foreign secretary’s level in Moscow. The Pakistani delegation was led by Foreign Secretary Jalil Abbas Jilani, while Russia’s First Deputy Minister of Foreign Affairs, Vladimir Georgiyevich Titov, represented the Russian side. This dialogue established an institutional framework for building closer relations through discussions on cooperation in political, economic, defence, and other sectors.

• Shared Concerns Over Terrorism

Both nations recognised the need for collaborative approaches to address extremist threats that could destabilise the region. The SCO’s Regional Anti-Terrorist Structure (RATS) became an important platform for enhancing collaborative efforts in countering extremism and terrorism.

Following Pakistan’s admission to the SCO, cooperation intensified further. The Special Representative of Pakistan for Afghanistan, Mohammad Sadiq, noted after his visit to Moscow on September 9, 2022, that both sides share similar views on the situation in Afghanistan and plan to continue consultations on this issue in the future. This alignment on Afghanistan policy represents a critical area of convergence in their foreign policy objectives and security interests.

Joint Military Exercises and Arms Deals

A cornerstone of Russia-Pakistan military cooperation has been the “Druzhba” (Friendship) joint military exercises. These exercises were initiated in 2016 and have continued regularly, with six editions held alternately in Pakistan and Russia. The most recent iteration, “Druzhba VII,” commenced in October 2024, demonstrating the ongoing commitment of both nations to this military partnership. These exercises focus primarily on counterterrorism capabilities, with special forces from both nations participating in counter-terrorism drills under the umbrella of the Shanghai Cooperation Organisation as well.

Security analyst Umair Aslam highlighted that “Counterterrorism is a major domain in which militaries from Pakistan and Russia have been working together for the past few years”. These exercises serve multiple purposes: enhancing interoperability between the armed forces, sharing tactical expertise, and signalling to the international community the deepening defence ties between Moscow and Islamabad.

• Strategic Arms Deals and Military Equipment Sales

In 2015, Pakistan and Russia signed a landmark defence agreement that included the sale of four Mi-35 ‘Hind E’ attack helicopters to Pakistan. This deal marked a crucial milestone as it represented the first major arms transfer from Russia to Pakistan in the post-Cold War era.

The military-technical cooperation has historical roots that were revived in the modern context. In 1996, Russia for the first time signed an agreement on the supply of multi-purpose Mi-17 helicopters to Pakistan, and from 1996 to 2004, the Russian Federation supplied approximately 70 helicopters to Pakistan. This cooperation was expanded under newer agreements, with Moscow supplying Pakistan with a batch of Mi-35 attack helicopters and signing contracts to deliver anti-tank systems, air defence weapons, and small arms as of early 2021.

Pakistan has also shown interest in purchasing additional Russian military hardware, including another 10-12 Mi-35 helicopters and potentially multi-purpose Su-35 fighters with longer range capabilities than the Chinese JF-17s currently in service with the Pakistani Air Force. Although reports from 2018 suggested Pakistan had finalised a contract for the purchase of 54 SU-35 fighters, this information was not confirmed.

The defence partnership extends beyond equipment sales to include military education and training. On August 7, 2018, during the visit of Russian Deputy Minister of Defence Alexander Fomin to Pakistan, a contract was signed providing Pakistani servicemen with the opportunity to study at universities of the Ministry of Defence of the Russian Federation. This agreement was particularly significant as it came following the first meeting of the Russian-Pakistani Joint Military Advisory Committee (JMCC) and represented a shift for Pakistan, whose officers had previously been trained primarily in the United States.

The JMCC, established in 2018 as the principal bilateral forum for defence cooperation, operates within the framework of the 2014 defence cooperation agreement between Islamabad and Moscow. This committee has become an important institutional mechanism for advancing the military partnership.

The momentum in defence cooperation continues to build. In October 2024, Air Chief Marshal Zaheer Ahmed Babar Sidhu of the Pakistan Air Force emphasised strengthening military ties with Russia through collaborative training programs, joint military drills, and industrial collaboration during a meeting with a high-level delegation led by Russia’s Deputy Defence Minister, Colonel General Aleksandr V Fomin.

• Energy and Economic Cooperation

The flagship project in Russia-Pakistan energy cooperation is the Pakistan Stream Gas Pipeline (PSGP), formerly known as the North-South gas pipeline or PakSteam. This ambitious infrastructure project involves constructing a 1,100 km pipeline stretching from the port city of Karachi to Kasur in Punjab. With an estimated cost of approximately US$2.25 billion as of 2021, the project represents a significant investment in Pakistan’s energy infrastructure.

The history of this project reflects the evolving nature of Russia-Pakistan relations. Initially, the Pakistani government signed an agreement in 2015 under which Russia would build and operate the pipeline for the first 25 years before transferring ownership to Pakistan. However, implementation was delayed, and the agreement was later renegotiated under the government of Imran Khan. The new ownership structure gave Pakistan a 74% equity stake, with Russia retaining 26%, making Pakistan the majority owner from the outset. This renegotiation had the added benefit of avoiding potential violations of U.S. sanctions against certain Russian corporate entities.

The pipeline project is particularly significant for Pakistan, which faces acute energy shortages, especially during winter months when demand for gas soars and the country relies heavily on imports. President Vladimir Putin has confirmed that pipeline gas supplies to Pakistan are possible, and that part of the necessary infrastructure has already been created.

• Trade and Humanitarian Assistance

The relationship has also included humanitarian and trade dimensions. Following catastrophic floods in Pakistan in 2022 and the resulting threat of food shortages, Russia offered to supply wheat to Pakistan in addition to gas supplies. This gesture highlighted the multifaceted nature of the relationship beyond pure strategic calculations.

Both nations have expressed their commitment to expanding trade relations. During high-level dialogues, Pakistan and Russia have agreed to increase high-level contacts, coordinate positions on regional and international issues, and expand trade and investment relations, particularly in energy and power generation1. While the volume of bilateral trade remains relatively modest compared to their respective trade with other partners, there is recognition on both sides of significant untapped potential.

• Russia’s South Asian Balancing Strategy

Russia’s engagement with Pakistan must be understood in the context of India’s growing strategic partnership with the United States. As New Delhi has moved closer to Washington, Moscow has sought to diversify its relationships in South Asia, though it continues to maintain its historically strong ties with India. Russian officials have explicitly stated that “increasing military cooperation between Islamabad and Moscow would not negatively impact Russia’s ties with India”, indicating Russia’s careful balancing act in the region.

This approach reflects Russia’s broader foreign policy objective of maintaining influence in multiple theatres and avoiding excessive dependence on any single partner. By developing ties with Pakistan while preserving its relationship with India, Russia aims to maintain strategic flexibility and leverage in South Asia.

• Pakistan’s Multi-Vector Foreign Policy

From Pakistan’s perspective, the warming of relations with Russia represents a strategic diversification from its traditional reliance on the United States and China. Following periods of strained relations with the U.S., particularly over Afghanistan and counterterrorism policies, Pakistan has sought to expand its diplomatic and strategic options.

As Admiral Naveed Ashraf, Chief of the Naval Staff, expressed, “Pakistan greatly values its relations with the Russian Federation and desires to forge a long-term, multi-dimensional partnership with Russia.” This statement reflects Pakistan’s aspirations for a more balanced foreign policy that reduces vulnerability to shifts in any single bilateral relationship.

Why Superpowers Continue Supporting Pakistan Despite Challenges

Pakistan’s enduring strategic value to global powers stems from a confluence of geographic, military, and geopolitical factors that outweigh concerns about its internal instability or regional tensions. Superpowers such as China, the United States, and Russia prioritise engagement with Pakistan due to its unique position at the crossroads of South Asia, Central Asia, and the Middle East, coupled with its nuclear capabilities and influence in Islamic multilateral forums.

• Geostrategic Location as a Regional Pivot

Pakistan’s borders with China, India, Iran, and Afghanistan make it a critical node for regional security and connectivity. Its proximity to the Arabian Sea via Gwadar Port—a linchpin of the China-Pakistan Economic Corridor (CPEC)—offers China direct access to Indian Ocean trade routes, reducing reliance on the vulnerable Malacca Strait. For Russia, Pakistan serves as a gateway to warm-water ports and Central Asian energy markets, while the U.S. historically leveraged Pakistani territory for counterterrorism operations in Afghanistan. The 909 km Iran-Pakistan border, though occasionally tense due to cross-border militancy, also positions Pakistan as a buffer state between Iran and India. This role attracts attention from powers seeking to manage Shia-Sunni or Indo-Iranian rivalries.

• Nuclear Deterrent and Risk Management

As the world’s fifth-largest nuclear arsenal holder, Pakistan’s “massive retaliation” doctrine and evolving tactical nuclear capabilities demand international engagement. Despite concerns about the security of its warheads, highlighted by incidents like the recent 2025 border attacks, superpowers prioritise dialogue to prevent escalation in South Asia. China’s assistance in modernising Pakistan’s nuclear infrastructure and the U.S.’s emphasis on safeguarding Pakistan’s Strategic Plans Division (SPD) reflects efforts to mitigate risks of unauthorised access or regional conflict.

• Influence in the Muslim World

Pakistan’s stature in the Organisation of Islamic Cooperation (OIC), where it is the second-largest member by population, amplifies its diplomatic clout. This influence helps superpowers like China and Turkey align with Muslim-majority nations on issues such as Kashmir, while Saudi Arabia relies on Pakistani military support for regional security initiatives. Pakistan’s role as a nuclear-armed Islamic state also provides symbolic value to allies seeking to counterbalance India’s growing global prominence.

• Regional Balancing Against India and Iran

China’s support for Pakistan is evident in arms deals, CPEC investments, and diplomatic backing at the UN, directly counters India’s regional dominance. Similarly, U.S. military aid to Pakistan, though reduced post-2011, historically aimed to prevent outright Indo-Pakistani conflict. Russia’s recent arms sales to Pakistan, including Mi-35 helicopters, signal a diversification from its traditional India-centric South Asia policy, driven by New Delhi’s deepening ties with Washington. Meanwhile, Pakistan’s tensions with Iran over border security and sectarian proxies create opportunities for external powers to mediate or exploit this rivalry.

In conclusion, Pakistan’s geopolitical indispensability, nuclear deterrence, Islamic leadership, and role in regional power dynamics compel superpowers to maintain alliances despite governance challenges or security risks. As competition in South Asia intensifies, this strategic calculus is unlikely to diminish.

By: Nabhjyot Arora, Research Analyst, GSDN

The United States (US) and The People’s Republic of China (China) stepped back from trade decoupling, as the US reduced tariffs from 145 percent to 30 percent, however, the 50 percent tariffs remain on goods exported from China.

China is reducing the tariffs to 10 percent from 125 percent based on the talks organized in Geneva. It was predicted by “The World Trade Organization (WTO)” that the US-China trade could fall by more than 80%, where decoupling includes a separation of ties and dismantling of trade and investment relations.

Modifications in Tariffs

Tariffs imposed before April 02, 2025, known as the “de-minimis rule” would continue, however, ease of tariffs can be attributed to:

• Raising of the US Treasury Yield to 4.5%
• Loss of credit ratings
• Debt ceiling crisis in the US

High debt in the US could result in a default by August 2025 if Congress fails to act. The tariff modifications include the following:

The United States will:

(i)                  Modify the application of the additional ad valorem rate* of duty on articles of China (including articles of the Hong Kong Special Administrative Region and the Macau Special Administrative Region) set forth in Executive Order 14257 of 02 April 2025, by suspending 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining ad valorem rate of 10 percent on those articles pursuant to the terms of said Order; and

(ii)                 Removing the modified additional ad valorem rates of duty on those articles imposed by Executive Order 14259 of April 08, 2025 and Executive Order 14266 of April 09, 2025.

Ad valorem: An ad valorem rate refers to a tax or duty based on the assessed value of an item.

Role of China in the Modification of Tariffs

China will make the following modifications:

(i)                  Modify accordingly the application of the additional ad valorem rate of duty on articles of the United States set forth in Announcement of the Customs Tariff Commission of the State Council No. 4 of 2025, by suspending 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining additional ad valorem rate of 10 percent on those articles, and removing the modified additional ad valorem rates of duty on those articles imposed by Announcement of the Customs Tariff Commission of the State Council No. 5 of 2025 and Announcement of the Customs Tariff Commission of the State Council No. 6 of 2025; and

(ii)                 Adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025.

Fentanyl Tariffs in China

China is still under “Fentanyl Tariffs” which were imposed in February 2025 and March 2025, however, there is a possibility of a reduction or halt in tariffs after the 90-day lapses. The 90 days is based on the “Geneva Talks” which states that reciprocal tariffs could be based on negotiations with other countries, with the possibility that the US could impose prohibitive tariffs on China. High tariffs could result in adding products including electric vehicles, steel and aluminium, and rare earth minerals to the controlled export list.

China initiated an anti-dumping probe into chemical firm DuPont’s <Dupont De Nemours Inc>, in addition to, the blacklisting of the US defense and tech firms. Elimination of firms from the list which barred trade and investment in China, in addition to the elimination of countermeasures, and stalling anti-dumping investigations could revive trade between the two countries.

The US-China Contention & Drug Transit

The fentanyl crisis is a point of contention between the two countries, where Beijing considers the US responsible for the crisis. The US kept 20% of tariffs in place citing the inaction of Beijing in stopping the export of chemicals used in protection of the opioid. The synthetic drug is manufactured from a combination of chemicals, which was approved by the US regulators in medical settings as a pain reliever in the 1960s.

Fentanyl, however, emerged as a key drug responsible for opioid overdose deaths in the US; it is mixed with illicit drugs, which resulted in the expansion of global supply chains making it harder for law enforcement and policymakers. The chemicals are reported to be sourced by traffickers and turned into finished products in labs in Mexico, before being smuggled into the US. The drug transit is undertaken via the northern border of Canada and the southwest border of Mexico, in addition to the sea routes or checkpoints.

Sinaloa Cartel & Money Laundering

China is not the key source of illicit fentanyl supply to the US; however, it is the key supplier of precursor chemicals used in the production. Any imposition of export controls by Beijing could disrupt global pharmaceutical supply chains. Mexico is reported to be the hub of supply of the drug, where the Sinaloa Cartel undertakes tactics to conceal shipments that incorporate chemicals amongst legitimate goods, mislabelling of containers, and shipping via third-party countries.

The US initiated domestic enforcement of regulations to contain drug smuggling and money laundering, in addition to, increased surveillance. China classified fentanyl as a narcotic in 2019, however, trade in chemicals involved in the manufacturing of the drug remains unrestricted, which could potentially result in evading the law.

Encrypted platforms and cryptocurrency payments are misused to undertake illicit transit of drugs, which is backed by “The House of Representatives Committee Report on China” stating that “subsidies in the form of value-added tax rebates are provided to companies which manufacture and fentanyl and synthetic narcotics outside the country.”

Role of World Trade Organization (WTO)

China dismissed the accusations and scheduled fentanyl analogs as controlled substances in 2019. The Embassy of China in Washington undertook a special campaign to control the illegal smuggling, manufacturing, and trafficking of fentanyl in cooperation with the US authorities. A counter-narcotics group was formed to work on curbing fentanyl production and export; however, concealment of financial transactions, bureaucratic procedures, and money laundering pose a challenge to contain the crisis.

China, in addition, filed a lawsuit at the World Trade Organization (WTO) against the US tariffs and implemented countermeasures. China has established legal and administrative systems for scheduled precursor chemicals, where authorities expand the control list of precursors of fentanyl-related substances and supervise their production, sales, purchase, transportation, and export. The customs departments proceed with export clearance with declaration documents and the export permit, there have been no reports of recorded applications for export or selling of fentanyl-related substances abroad by Chinese enterprises. (The Embassy of the People’s Republic of China in New Zealand).

The WTO can undertake active measures against trade protectionism and align multilateral frameworks. The International Monetary Fund (IMF) cautioned that the US growth could fall below the baseline forecast of 2.2% in 2025, where increased protectionism could result in high unemployment, and dampen domestic consumption. The Peterson Institute for International Economics stated that 90% of the costs from the US tariffs on China harm businesses operating in the US, and any escalation of the tariff war could reduce global growth by 0.8% points in 2025 and 1.3% points in 2026 as per the IMF 2025 Global Economic Outlook.

Role of India – Trade Deal & Tariff Exemptions

India is known as the “Pharmacy of the World” and supplies vaccines and medicines on a global scale, however, India’s Anti-Terrorist Squad (ATS) reported exporting illicit fentanyl to Mexico and Guatemala. The US Department of Justice indicted pharmaceutical companies in India for importing ingredients to make illicit fentanyl.

The ATA Report introduced complexities in the US-India trade relations, which could lead to enactment of targeted tariffs. The US was India’s largest trading partner in 2024, accounting for USD120 billion of bilateral trade, however, a lack of regulatory procedures poses a risk to the reputation of pharmaceutical industry manufacturing and exports. There has been an escalation in the movement of manufacturers from China to India, relocating operations due to weaker regulations and challenges in monitoring.

The US-India discussions have moved to the evolving military and security situation in the Indo-Pacific, operating around “Operation Sindoor”, with any disruptions on tariffs on halt until August 2025. India and the US are undertaking a bilateral trade pact by July 08, 2025, reiterating a mutually beneficial trade agreement to boost investment and manufacturing in India.

New Delhi put forth the demand of undertaking an interim deal for a full exemption of 26% reciprocal tariffs imposed by the US on Indian goods, which is currently under suspension with exporters to pay only 10 percent of the baseline tariff until July 09, 2025. New Delhi seeks permanent suspension of tariffs, which is based on the approval of the Congress to reduce the tariffs below the Most Favoured Nation (MFN) rate, however, the administration holds the executive authority to lift reciprocal tariffs, New Delhi, meanwhile, offered to drop all tariffs on the US goods.

By: Anuraag Khaund, Guest Author

As the western front of India remains at boil in the aftermath of Operation Sindoor, further west in Afghanistan, a new strategic re-alignment was being attempted. On 21 May, Beijing was witness to the coming together of the Foreign Minister of China Wang Yi, Pakistan Deputy Prime Minister and Foreign Minister Mohammad Ishaq Dar and the Acting Foreign Minister of the Taliban regime in Afghanistan Mawlawi Amir Khan Muttaqi on the occasion of the informal China, Pakistan, and Afghanistan Trilateral Foreign Ministers’ Meet. The meeting coming on the heels of the recent India-Pakistan conflict as well as in the immediate aftermath of the first ministerial level contact between Indian External Affairs Minister (EAM) Dr S Jaishankar and his counterpart in the Taliban regime has raised eyebrows regarding the said trilateral meeting.

Most voices have raised concerns whether the latter is an attempt to rope in Afghanistan or specifically the Taliban to be a part of the China-Pakistan axis aimed at encircling India which now also includes a hostile Bangladesh. What further vitiates the above sentiment are some of the outcomes of the Trilateral Meeting which appear inimical to India’s strategic and security interests. Foremost amongst them is the elevation of diplomatic ties between Pakistan and Afghanistan including exchange of ambassadors under the aegis of Chinese facilitation and the promotion of the extension of the China-Pakistan Economic Corridor (CPEC) into Afghanistan thereby making Kabul a part of the Belt and Road Initiative (BRI). Such actions are aimed only at embedding the Taliban regime into the China-Pakistan strategic nexus and political- economic networks but also undermining India’s position in Afghanistan and the broader sub-continent.

The unprecedented show of solidarity exhibited by the Taliban in its condemnation of the Pahalgam terror attack labelling it as ‘undermining regional security and stability’ has rattled Pakistan, especially its military- intelligence establishment which once welcomed the Taliban’s capture of Kabul in 2021 as the return of its ‘strategic depth’ in Afghanistan. However, such hopes were dashed with the rise in tensions between the new Afghan rulers and their former patrons which culminated in the airstrikes and cross border skirmish of December 2024. The eruption of conflict was paralleled by the increase strategic outreach  undertaken by India as seen in the meeting between Foreign Secretary Vikrant Misri and Muttaqi in UAE during January 2025 which was preceded by the Indian interactions with figures such as Acting Defense Minister Mullah Yaqoob and the presence of an Indian ‘technical team’ in Kabul since 2022 to maintain New Delhi’s engagement with the Afghan people. Such strategic alignment and the resultant strengthening of India’s position in Afghanistan coupled with strained ties with Taliban would have rendered Pakistan into a disadvantageous position and faced with the prospect of conflict on its eastern as well as western fronts.

Hence, the elevation and strengthening of diplomatic ties through the exchange of ambassadors would not only strengthen the channels of communication between Islamabad and Kabul but also create stakes especially for the Taliban regime in maintaining a stable bilateral relationship. The exchange of ambassadors would further elevate the level of Pakistan’s relationship with the Taliban as compared to the junior technical level Indian presence. For China, the cessation of hostilities between Pakistan and Afghanistan is crucial not only for its interests of stability along its borders with the latter two and the protection of investments like CPEC but also the undermining of Indian opportunity to bolster its position by exploiting the tensions between Kabul and Islamabad.

The extension of the CPEC into Afghanistan not only reflects the long-standing Chinese interest in enhancing its economic footprint in Afghanistan through connectivity and cooperation projects but also ulterior strategic designs specifically aimed at India. Firstly, the above extension  into Afghanistan would transform the Taliban into a stakeholder in the CPEC which passes through the Gilgit- Baltistan area of Pakistan-occupied Kashmir (PoK) thereby complicating Indian calculations and any actions regarding the area. In addition, the inclusion and participation of Afghanistan in the CPEC would allow Kabul access to the port of Gwadar thereby affecting the prospects of Chabahar as an alternative outlet for Afghan international trade while also diluting its strategic value in enhancing India-Afghanistan economic and humanitarian linkage and connectivity.

At the same time, the embedding of Afghanistan into CPEC by extension, the BRI would also allow Beijing greater influence over the Taliban which it can be used to achieve objectives ranging from unfettered access to Afghanistan’s reserves of Rare Earth Elements (REE) to facilitating Pakistan’s proxy war with India. Reportedly, intelligence agencies have raised concerns that the above expansion of the CPEC and the construction of logistical hubs in Afghanistan could lead to the creation of a ‘Terror Corridor’ allowing Pak-supported outfits as well as ideological bedfellows of the Taliban like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammad (JeM) along with groups based on Afghan soil such as the Islamic State Khorasan Province (ISKP) to send militants over to Jammu & Kashmir (J&K) along with the cross-border funneling of weapons, funds and drugs. All of these occurring under the plausible deniability of China and in collusion with Pakistan and a pliant Taliban regime bound into a relationship of dependency with both Islamabad and Beijing through Gwadar and CPEC. Such fears are not unfounded given the threat issued by the Afghanistan based outfit Al- Qaeda in the Indian Subcontinent (AQIS) in the aftermath of Operation Sindoor and a Pakistan seeking to settle scores after its humiliation in the current conflagration with India.

The extension of the CPEC also lays the possibility for its joining with the strategic Wakhan Corridor sharing borders with Pakistan (PoK) as well as China and Tajikistan. While attitudes of both China and the Taliban are at odds vis-a-vis the feasibility and safety of the aforementioned corridor, yet the possibilities created by a pliant Taliban regime and an economically interconnected non-hostile Af-Pak landscape might tempt Beijing to link CPEC with Wakhan thereby creating another outlet for the Terror Corridor utilizing the proximity to PoK. From Chinese perspective, security challenges such as the Uyghur militants and ISKP could be managed by exploiting Taliban’s conflict with the latter  as well as using the ‘good offices’ of Pak sponsored groups like JeM in re-directing the accumulated ‘jihad momentum’ towards India through the CPEC-Wakhan into J&K.

The above-described situation, undoubtedly would put India in a tight spot critically affecting its foothold in an already constrained space in the Af-Pak region. The ‘restriction of Indian influence in Afghanistan’s political and security landscape’ as being the aim of the trilateral meeting was also confirmed by local media outlets. Hence, there should be no qualms about the urgency of India to step up its game to counter the nefarious designs of the China- Pakistan ‘iron brotherhood.’

First and foremost is the need to urgently expedite the development of the Chabahar port and the related infrastructure such as the railway line connecting the port to the city of Zahedan along the Iran-Afghanistan border and further extension of the same to Zaranj in Nirmuz province of Afghanistan. The swift completion of the above railway stretch from Zaranj to Chabahar will facilitate seamless utilization of the port and accomplish Afghanistan integration into the International North South Transport Corridor (INSTC) connectivity project spearheaded by India, Iran and Russia. In addition, New Delhi should also emphasize the benefits and advantages offered by Chabahar and the INSTC vis-a vis CPEC especially in terms of stability and security. Given the frequency of insurgent attacks and blasts along the CPEC and its transit through the restive province of Balochistan, the Taliban’s quest for international trade and commerce would be better suited by Chabahar and the Zahedan-Zaranj line. Iran should also be roped in to highlight the advantages and benefits of the same not only because of Iranian stakes in Chabahar but also the because of shared concerns regarding the re-emergence of a Pakistan-controlled or aligned Afghanistan given the strained relations between Tehran and Islamabad over Pakistani support for anti-Iran militants.

 While concerns might arise due to the Trump administration’s rescinding of the earlier sanction-waiver on Chabahar in February 2025 as well as the uncertainty over the future shape of US-Iran ties in the midst of the Gaza conflict and nuclear talks, India should not budge and remain steadfast in the pursuance of its own interests and issue-based alignment with Iran as an exercise of New Delhi’s strategic autonomy vis a vis Washington and Tehran. The practice of strategic autonomy by India without any hesitation for apparent American displeasure or ire is justified in light of the hastily Trump imposed ceasefire in the aftermath of Operation Sindoor and the facilitation of IMF bailout to Pakistan despite evidence of its usage in funding terrorism by Islamabad. Not to mention the detrimental effects to Indian interests in Chabahar on adhering to US preferences. Even as American military assistance for Pakistan continues unabated along with the signing of lucrative cryptocurrency deal between Trump and Islamabad. Faced with such blatant disregard of Indian interests, should New Delhi reciprocate?

Coming to US again, its reviewing of whether to designate the Afghan Taliban as a ‘Foreign Terrorist Organisation’  is itself an indication of Washington according primacy to national interest over the concerns of others or the wider international community. Similarly, Trump’s outreach to Syrian interim president Ahmed-al Sharaa, a former US Specially Designated Global Terrorist and the lifting of sanctions upon Syria again underlines the importance attached to pragmatism and strategic interest over consideration of norms or perceptions of others. Hence, it would be duplicity on the part of US to call out India over the pursuance of its own strategic interests regarding Iran. Moreover, the Trump’s administration’s quest of re-establishing its presence in the Bagram air base and the seeking of ‘limited intelligence presence’ ( intelligence cooperation) in Taliban ruled Afghanistan have no chance of fructifying with a Kabul under the control of China and Pakistan. Therefore, it would be in America’s own interest to allow the strengthening of India’s footprint in Afghanistan which is only possible through successful execution of strategic projects such as Chabahar and the INSTC. Vice-versa US presence as a counter to Chinese influence in Afghanistan would also benefit India.

Finally, in view of the fluid and unstable nature of the variables affecting India’s Afghan interests, it would be not be wise for New Delhi to keep all its eggs in one basket or bank only upon a single actor (Taliban regime)− a mistake repeated during the Afghan republic era of Ashraf Ghani and Hamid Karzai administrations. Simultaneous to its incremental engagement with the ruling Taliban regime, New Delhi should also reach out and establish contacts with the exiled anti-Taliban resistance groups such as the National Resistance Front (NRF)  based in Tajikistan and led by Ahmad Massoud. In this regard, India can draw upon its legacy of providing support to the erstwhile Northern Alliance, the earlier anti-Taliban resistance from 1996-2001 led by Ahmad Shah Massoud, the father of the current NRF leader.

In addition, New Delhi should also utilize the goodwill towards India present among prominent members of the resistance such as ex Afghan Vice President Amrullah Saleh as evident in the latter’s vocal support for India’s conduction of Operation Sindoor against Pak-based terrorism. However, India should double down in its efforts before it is outmaneuvered by Pakistan whereby Islamabad was reportedly exploring channels of communication with the NRF as well as partnership with Tajikistan aimed against the Taliban in the immediate aftermath of the December 2024 border clash.

Let not the winds blowing from the Hindukush and Pamirs blow us away from the soil of Kabul as we hold on.