🛕 Baku to business

External Affairs Minister S. Jaishankar held talks with Azerbaijani President Ilham Aliyev and Foreign Minister Jeyhun Bayramov in Baku on Friday, on his first bilateral visit to Azerbaijan. The trip follows Prime Minister Narendra Modi’s meeting with Aliyev at the Shanghai Cooperation Organisation (SCO) summit in Bishkek on September 1.

On the table: The two sides agreed to exchange trade delegations and to deepen coordination on the International North-South Transport Corridor (INSTC), a 7,200-km freight route linking India to Russia and Europe through Iran and Azerbaijan. Jaishankar asked Baku to resume sending professionals to the Indian Technical and Economic Cooperation (ITEC) training programme, and invited Bayramov to visit India. He also thanked Azerbaijan for helping evacuate Indian students from Iran earlier this year (we covered it here).

The rift: In May 2025, Baku publicly backed Pakistan during Operation Sindoor, which India described as strikes on terrorist infrastructure in Pakistan after the Pahalgam terror attack. At the September 2025 SCO summit in Tianjin, Aliyev accused New Delhi of blocking Azerbaijan’s bid for full SCO membership. India never publicly confirmed a veto. The SCO admits new members by consensus, so a single member can block entry. The first senior-level contact after the rift came in April, at the two foreign ministries’ first consultations since 2022.

Islamabad next: Asked on Friday whether India would now back Azerbaijan’s SCO bid, the Ministry of External Affairs spokesperson said: “As far as the SCO membership is concerned, this is something that is part of SCO, and these discussions have to happen there.” Pakistan, which took over the SCO’s rotating chairmanship in Bishkek, will host the next leaders’ summit in Islamabad in 2027. Jaishankar last travelled to Islamabad in October 2024, for an SCO meeting of heads of government, and Modi has not visited Pakistan since a brief stopover in Lahore in December 2015.

Maldivian President Mohamed Muizzu wrapped up a three-day state visit to Islamabad, signing 20 MoUs with Pakistan to expand ties across defence, maritime security, trade, and education.

What happened: Muizzu and Pakistani Prime Minister Shehbaz Sharif oversaw the exchange of Memorandums of Understanding (MoUs), aiming to boost bilateral trade from USD 13.9 million to USD 200 million within two years. The agreements focus heavily on naval capacity, joint maritime patrols, and defence training.

Reviving SAARC: During his visit, Muizzu pushed for regional integration by calling for an early resumption of the South Asian Association for Regional Cooperation (SAARC) summit. The leaders' summit has been stalled since 2014, when the planned 2016 gathering in Islamabad was postponed after India and several other members withdrew due to India-Pakistan tensions.

New Delhi’s pushback: In response to a question about Muizzu’s call to revive SAARC, External Affairs Ministry spokesperson Randhir Jaiswal reiterated that India is in favour of enhancing regional connectivity but indirectly pointed the finger at Pakistan as the party responsible for keeping SAARC stalled. Jaiswal did not comment on the MoUs, only saying that India will “keep a close watch.”

RBI finalises leverage rules, rejects foreign banks’ plea: The Reserve Bank of India (RBI) issued final rules on Friday aligning bank leverage requirements with the Basel Committee on Banking Supervision’s 2017 standard, effective April 1, 2027. Domestic systemically important banks (D-SIBs) must hold core capital of at least 4 per cent of total exposure, and other banks 3.5 per cent. Indian branches of global systemically important banks (G-SIBs) must hold 3.5 per cent plus any buffer set by their home regulator. The RBI turned down foreign banks’ requests to cut that to the Basel floor of 3 per cent and to delay the rules. Branches that fall short will face limits on payouts, including sending profits home.

Home-built submarine propulsion module enters second testing phase: The Defence Research and Development Organisation (DRDO) began the second setting-to-work phase of its home-built air-independent propulsion (AIP) module on Saturday at Larsen & Toubro’s Hazira yard in Gujarat. The fuel-cell system lets diesel-electric submarines stay submerged for longer. Once it clears power-generation trials to Navy protocols, Mazagon Dock Shipbuilders will fit it on a Kalvari-class submarine in early 2027.

Indians killed in Dammam airport attack; pilgrims still stranded: Indian nationals were killed and several were injured in an attack on King Fahd International Airport in Dammam, eastern Saudi Arabia, Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal said on Friday, without giving a toll. About 3,000 Umrah pilgrims stranded by the suspension of Indian flights have returned home over the past week, he said, and more departures are being arranged. All 14 Indians aboard a dhow in Houthi-held Hodeidah, Yemen, are safe. Asked about reports that India had refused clearance for Iranian cargo flights carrying medicines, Jaiswal said India continues to help send life-saving medicines to Iran despite flight disruptions.

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