POLITICSMarch 3, 2026

Terrorism and political unrest undermine stability in South Asia

Husain Haqqani

Reading time: 10 min

South Asia is grappling with geopolitical tensions, political unrest and demographic pressures, all of which are straining the region’s stability.

Over the last three years, South Asia has seen one war, three changes of government by violent means and numerous terrorist incidents. This year, several factors including Pakistan’s tense relations with India and Afghanistan, elections in Bangladesh and Nepal, and the impact of global economic uncertainties, will continue to challenge the region’s stability.

Even at the best of times, South Asia has seldom enjoyed continued stability. Apart from India, the region’s countries have largely oscillated between dictatorship and semi-democratic rule. With limited avenues for legitimate political dissent, social, ethnic and religious tensions have led to periodic violent political protests. Long-running insurgencies and conflicts have also left their brutal mark. While terrorism may no longer be as high on the radar for Western countries as it once was, it remains a key security risk in this part of the globe.

Afghanistan, Nepal and Sri Lanka are still recovering from decades-long civil wars. Bangladesh, amid its own political unrest, has to also contend with the spillover from the ongoing civil war in Myanmar. Moreover, the shadow of the conflict between nuclear-armed India and Pakistan looms large. Alongside their history of four wars and numerous border skirmishes, the two regional giants are also engaged in competition for influence over their smaller neighbors, in which partnership with China enables Pakistan to compensate for its smaller size.

With over 2 billion people, South Asia is the world’s most populous region. It has one of the youngest populations and tremendous economic potential. But all South Asian economies face structural challenges, and several have high debt burdens. Their demographic dividend has become a threat due to decades of underinvestment in human capital and insufficient economic growth. Unemployed and disillusioned young people were at the forefront of protests that toppled governments in Sri Lanka (2022), Bangladesh (2024) and Nepal (2025).

On the Freedom House Fragile States Index, which measures a state’s institutional capacity to handle various forms of pressure, every South Asian nation falls under the warning category. Afghanistan (103.9) and Myanmar (100) are at the top of the list, whereas India ranks the lowest (72.3), reflecting its relative stability.

Afghanistan leads in a host of shortcomings, such as indicators of state illegitimacy, uneven economic development and demographic pressures. Among South Asian states, Pakistan (91.7) ranks second-worst in factionalized elites, behind Bangladesh (85.9), as well as in group grievances. Pakistan’s security challenges tied to the insurgency in Balochistan and the terror attacks by the Tehrik-e-Taliban Pakistan (TTP) are tied to issues of economic marginalization and human rights violations.

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Facts & figures

Map of South Asia

Myanmar has long remained high on the Fragile States Index due to political, ethnic and gender discrimination concerns. The 2021 military coup, the Rohingya refugee crisis and the civil war have only worsened the humanitarian situation and deepened existing divisions. Nepal (78.0) is lower on the Fragile States Index, yet last year’s protests and political unrest underscored the unpredictability of institutions within most of the countries in the region.

Even India, the most stable nation in South Asia, has seen an uptick in fragility metrics. Over the last decade, there has been a rise in religious and political polarization, particularly between the majority Hindu community and the minority Muslim community. India’s southern states, which perform better on human development and economic growth and have controlled population growth, are concerned that redrawing parliamentary seats based on census data could reduce their political representation.

Demographics and economics

Some 68 percent of India’s population and 59 percent of Pakistan’s population fall within 15 and 64 years of age. In Nepal, 56 percent of the population is under 30 and by 2028, Bangladeshi youth will account for 50 percent of the working-age population.

Unfortunately, most countries in the region have not invested sufficiently in human capital over the years. Their Human Development Index rankings are far lower than those of their peers in East and Southeast Asia. Literacy rates have improved in India and Bangladesh, but still lag in Afghanistan, Pakistan, Nepal and Myanmar. Pakistan has one of the highest out-of-school child populations in the world.

These countries have a large labor force, but their avenues for employment are few. Unemployment rates are high, especially for the young. Youth unemployment stands at 20.8 percent for Nepal, 16 percent for India, 11.5 percent for Bangladesh, and 9.9 percent for Pakistan. India, with gross domestic product (GDP) growth of 6.5 percent in 2024 and a 600 million-strong labor force, still does not create as many jobs as required. Pakistan’s economic growth rate of 3 percent is insufficient for a country of 240 million with a large young population.

Jobs in each South Asian country are concentrated in a specific sector – agriculture for India, tourism in Nepal and Sri Lanka, the garment industry in Bangladesh – and a shock to that one sector can result in major job losses. The Covid-19 pandemic, for instance, saw an erosion of jobs in agriculture, tourism and garment manufacturing, adding to unemployment woes. Pursuit of jobs abroad has been an outlet for some, but is hardly a substitute for domestic job growth.

Almost a quarter of Nepal’s population works abroad, sending remittances that account for a third of the country’s GDP. The same is true for other countries, with remittances received in 2024 accounting for $138 billion in India, $35 billion in Pakistan and $27 billion in Bangladesh. With many host countries limiting immigration, this avenue for employment may not grow forever.

Several South Asian countries – including Pakistan, Bangladesh and Nepal – have high debt burdens and have taken multiple bailout loans from the International Monetary Fund. They are also part of China’s Belt and Road Initiative and are heavily indebted to China. While none of them may default anytime soon, the example of Sri Lanka, which defaulted in 2022 resulting in major political turmoil, looms over these countries.

Politics and identity

Nepal’s unrest last year may have taken many by surprise, but the country has faced political instability for a long time. After two decades of civil war, monarchical rule ended in 2008. Since then, Nepal has had 14 governments with average tenures of only 16 months. Political stability and accountability have both proven hard to achieve. Although social media laws ignited the protests that resulted in the resignation of the prime minister in September 2025, the roots of unrest lay in years of economic distress, lack of employment opportunities and rampant corruption.

Similarly, the catalyst for the 2024 student-led protest in Bangladesh was anger over a non-meritocratic quota system, which helped take the lid off deep-seated economic and political dissatisfaction. Political repression, and the limiting of power and economic opportunities to a small elite that has lost touch with most of the people, are phenomena visible throughout South Asia. Identity politics and ethnic divisions also constitute one of many destabilizing factors across the region.

For instance, in Pakistan, a strong state has imposed an Islamic identity on a multi-ethnic population, leading to resentment and resistance among the Baloch, Pashtun, Sindhi, Muhajir, Saraiki and Kashmiri populations. In addition to the long-running insurgency in the resource-rich Balochistan region, other provinces have also sought greater autonomy and the decentralization of power. Adding to Pakistan’s instability is the radicalization of significant portions of society by Islamist outfits and radical groups that seek to overturn the state.

Pakistan also hosts a large refugee population from Afghanistan, as well as internally displaced persons who have fled either due to the insurgency in the northwest or in response to humanitarian disasters. Afghanistan remains profoundly unstable, even after the return to power of the Taliban in August 2021. The TTP – also known as the Pakistani Taliban – maintains safe havens inside Afghan territory, and its attacks against Pakistani security forces frequently result in border clashes between the two neighbors. Furthermore, the Taliban faces the Islamic State Khorasan Province (IS-KP) and other splinter groups, all of whom seek control over the largely ungoverned spaces inside Afghanistan.

For a country that occupies most of the South Asian landmass, has long-standing insurgencies and borders countries that are unstable, India has managed to remain remarkably stable politically. Its democratic system generally subsumes groups with grievances without them having to take up arms. Yet, India does face an insurgency in Kashmir and in parts of its northeast, as well as the Maoist-Naxalite challenge in several states in its central and eastern areas. Although terrorist attacks are less common today than they were in the 1990s, the April 2025 attack that resulted in the brief May war with Pakistan serves as a reminder that terrorism remains a source of concern.

Pakistan’s competition with India has resulted in its intelligence service, working in coordination with China, supporting groups opposed to Indian interests in other South Asian countries. In Bangladesh, former Prime Minister Sheikh Hasina Wajid’s Awami League maintained close ties with India. Its toppling from power after more than a decade of tight control has opened the way for Bangladeshi Islamist parties supported by Pakistan.

The economic progress under Sheikh Hasina’s government proved insufficient to keep instability at bay forever. Her party was banned by the military-backed interim government from the February 2026 elections, creating political tension during and after the vote. The Muslim-conservative Bangladesh Nationalist Party (BNP) emerged as the winner, with the election proceeding largely peacefully despite earlier unrest.

Nepal’s upcoming elections on March 5 are similarly unlikely to resolve the country’s economic distress and political factionalism. Anti-India sentiment, allegedly fostered by China and Pakistan, will also remain a destabilizing factor for the landlocked country, which is heavily economically dependent on India.

Read more by Husain Haqqani

• Stability eludes Bangladesh as election date is set
• Sri Lanka’s new president looking for parliamentary backing
• Nepal’s political and economic uncertainty likely to continue

In India, where election results are generally accepted by all parties, Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) has held power at the federal level and has won several state elections over the last decade. But its grip on power has been less effective since the 2024 parliamentary election. India’s economy is not growing as fast as needed, and economic disputes with the Trump administration are limiting its exports and creation of employment opportunities.

Mr. Modi remains popular; his hardline stance towards Pakistan – whom he accuses of fostering terrorism – has helped him maintain public support. But that position, and the inflexibility of Pakistan’s military strongman Field Marshal Asim Munir, may also fuel persistent India-Pakistan tensions. This confrontation amplifies the other factors already destabilizing the region.

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