Diplomacy reset: Bhutan outreach, Canada rapprochement, Trump's H-1B rethink

As India grapples with an increasingly hostile neighbourhood, the Himalayan kingdom stands out as a textbook model of good neighbourliness—and as a prime example of how a smaller nation can navigate relations with a larger one through trust and transparency.

The two nations have long shared warm and friendly ties that span religion and culture—through the shared bond of Buddhism—to currency, with Bhutan’s ngultrum pegged to the Indian rupee; to security, where an Indian Military Training Team led by a major general trains the Royal Bhutanese Army and the Royal Bodyguard; and to energy, with hydropower generation that meets Bhutan’s needs and sends the surplus to India.

Credit goes to leaders on both sides who have remoulded ties to suit the times with delicacy and sagacity. A case in point: India no longer “guides" Bhutan on foreign policy and defence matters. That word, part of the 1949 peace and friendship agreement, was replaced in the amended 2007 text with “mutual respect for each other’s independence, sovereignty, and territorial integrity."

India and Bhutan have also agreed not to let their territories be used against each other. Adding a new dimension to the partnership, New Delhi announced plans in September to link Bhutan to the Indian states of Assam and West Bengal by rail at a cost of ₹4,033 crore.

Modi’s visit was thus a well-judged gesture, celebrating the architect of several key chapters in India-Bhutan ties, including the currency peg and hydropower cooperation.

For the uninitiated, Jigme Singye Wangchuck, known as K4, as the fourth king is often referred to, is the father of Bhutan’s present monarch, Jigme Khesar Namgyel Wangchuck.

He worked with many Indian prime ministers, starting with Indira Gandhi and continuing through Manmohan Singh. In 2006, he abdicated in favour of his son after having led Bhutan for more than three decades.

Although retired, he is deeply revered by the Bhutanese people. More importantly, his son still turns to him for counsel.

With India’s ties with Bangladesh fraying and relations with Myanmar in limbo due to the ongoing civil war, New Delhi’s engagement with two neighbours on its eastern flank is clearly out of kilter. All the more reason, then, to ensure that ties with Bhutan remain on their best footing.

India-Canada ties on the mend

From model ties to resetting ties.

External affairs minister S. Jaishankar visited Canada this week, coinciding with a trip to India by Maninder Sidhu, Canada’s minister of export promotion, international trade, and economic development.

These back-to-back visits follow Canadian foreign minister Anita Anand’s trip to New Delhi in October, along with other recent interactions. The two sides have also reappointed their respective high commissioners.

The reset comes after a decision to restore ties taken when Modi met his new Canadian counterpart, Mark Carney, in Kananaskis in June.

US President Donald Trump’s tariffs and Mark Carney’s election have spurred the rapprochement process, following a sharp deterioration in ties in 2023 when Canada accused India of involvement in the killing of Canadian national Hardeep Singh Nijjar on Canadian soil.

Security of Canadians is an issue on the table, but equally important is strengthening trade and economic ties. Canadian pension funds are looking at newer opportunities besides China and the US (after Trump imposed 25% tariffs on imports from Canada); India is a natural choice.

Besides, there are opportunities in energy with Canadian firms looking to diversify export markets, with Trump slapping an extra 10% levy on energy imports. Currently, most of Canada’s oil is exported to the US.

India, too, has felt the impact of Trump’s tariffs, facing a hefty 50% levy. Shared adversity, it seems, can provide the momentum for nations to rethink and reset their ties.

Longest US government shutdown comes to an end

Onto another settlement.

The US government shutdown, caused by a budgetary standoff between Democrats and Republicans, finally ended this week. Lasting 43 days, it was the longest in history.

The question of who “won"—Republicans or Democrats—remains unclear. Trump did not concede much. If anything, he did acknowledge that last week’s Republican losses in mayoral and gubernatorial elections in New York, New Jersey, and Virginia were partly due to the shutdown.

As President, Trump was widely seen as doing little to break the deadlock, which stalled the food assistance programme that supports some 42 million Americans. This episode is likely to reinforce perceptions of him as a politician unconcerned with the poor and vulnerable.

At the same time, the prolonged shutdown may not help Democrats either, especially if the public perceives them as responsible for the impasse.

In any case, the eventual agreement offers a glimmer of hope that even entrenched partisan differences can sometimes push Democrats and Republicans to work together.

Trump’s U-turn on H-1B visas, immigration, and tariffs?

The mercurial president, however, seems to be rethinking some of his moves vis-à-vis India.

In an interview, he reportedly said the US needs to bring in skilled labour; it can’t simply repurpose long-term unemployed Americans for complex roles in manufacturing and defence without extensive training. Could this signal a rethink on H-1B visas and immigration?

What prompted this apparent change of heart?

Remember, this is the same Trump who, in September, issued the “Restriction on Entry of Certain Nonimmigrant Workers", touted as the first step towards a cleanup of the flawed H-1B programme. New applications, submitted after 21 September, had to be accompanied by an additional $100,000 payment as a condition of eligibility.

Given that most of the H-1B visas are snapped up by Indian IT professionals, the move was widely seen as targeting Indians, shattering the hopes of many young Indian professionals.

He also indicated his administration could soon reduce the 50% tariffs on India.

But Trump is prone to flip-flops, so it would be prudent to wait and see how this develops. After all, these statements don’t yet constitute policy. The true litmus test will be whether Trump revokes his proclamations—something that seems unlikely. More likely, he may eat his words if his MAGA base protests.

Elizabeth Roche is an associate professor at O.P. Jindal Global University, Sonipat, Haryana.