Explained : The political economy of unrest in India’s backyard – Firstpost and Its Impact

Since 2022, India’s neighbourhood has lurched from one crisis to another: fuel queues in Colombo, midnight curfews in Dhaka, and campus marches in Kathmandu. South Asia’s protest cycles were not sudden squalls but slow-moving fronts. India’s neighbours were not facing isolated ruptures; the same pressure points were playing different notes in the three capitals.

Let us begin digging where household arithmetic turns into political consequence: prices and prospects. In Sri Lanka, inflation surged through 2022, peaking near 70 per cent year-on-year. World Bank estimates suggest poverty almost doubled in a single year, from about 13 per cent to 25 per cent of the population. Queues that began outside fuel pumps and pharmacies reached the city centre. Demonstrators broke through barricades and stormed the President’s House.

Images from the presidential pool and the prime minister’s burning residence became visual shorthand for a state coming apart. On July 13, 2022, the president fled the country and resigned. Since then, an IMF programme and a changed political landscape have steadied Sri Lanka’s fundamentals: inflation is under control, and, after two years of contraction, the economy grew around 5 per cent in 2024. Yet the scars remain; once families have lived through empty shelves and queues, general distrust outlasts any recovery graph.

In Nepal, the spark was a social-media ban. In September 2025 the government blocked 26 major platforms, citing fake identities and hate speech. Gen-Z organisers moved from campus chats to the streets within hours; marches spread across districts, and security forces retaliated. By the time the ban was lifted and Prime Minister KP Oli resigned, more than 70 people were dead, over 2,000 injured, and damage was estimated at about $586 million.

An interim government led by former chief justice Sushila Karki is now overseeing a transition to elections due on March 5, 2026. A constitution adopted in 2015 and years of coalition rule could not paper over demands for jobs, clean governance and meaningful voice in decision-making. What began as a dispute over platforms mutated into a dispute over power, and it left behind a political system more brittle than before.

Across the border in Bangladesh, a digitally fluent generation turned a court order into a national reckoning. In mid-2024, after a ruling restored a controversial civil-service quota, students marched off campus and into the streets. Protests spread nationwide, halting classes and disrupting transport and factories.

The state responded with curfews, army deployment and an internet blackout. The shutdown splintered coordination but fixed nothing, buying only a few days of quiet at a steep price in lives, legitimacy and growth. A UN fact-finding mission later estimated that around 1,400 people were killed in the July-August crackdown and documented serious human rights violations by security forces. Within a week the Supreme Court cut the quota to 5 per cent, a legal reset that arrived alongside an estimated $1.2 billion in losses.

Sheikh Hasina was forced out of office in August 2024, and an interim administration led by Nobel laureate Muhammad Yunus was sworn in, tasked with steering the country towards a February 2026 general election and a simultaneous referendum on the package of state reforms. Months after that transition, law and order remain deteriorated.

The assassination of youth leader Sharif Osman Hadi, followed days later by the shooting of another organiser, has unleashed a fresh wave of marches and street clashes. Mobs have torched the offices of Prothom Alo and The Daily Star, briefly trapping journalists inside; a Hindu youth has been lynched in Mymensingh – a grim reminder that minorities and journalists often absorb the sharpest blows during unrest. Bangladesh is no longer in the first blaze of uprising; it is living in a long, volatile aftershock as it stumbles towards February’s polls.

Read together, the region does not present a single-cause story, but an underlying sequence is recognisable. Macroeconomic stress squeezes household budgets; large, online and often underemployed youth cohorts convert frustration into organised action. Additionally, when trust in institutions is low and governments treat digital shutdowns as the end-all, be-all solution, they often act as accelerants instead.

The way out begins with recognising these warning signs early. If there is a distilled lesson for policymakers, investors and people from these noisy years, it is threefold.

First, macroeconomic repair is political oxygen, as Colombo’s slow but visible stabilisation shows.

Second, youth is a structural force, not a seasonal one; demography becomes a dividend only when the right opportunities exist; otherwise, it can be fuel for unrest.

Last, digital policy now sits at the intersection of economics and politics. Curfews may be temporary instruments of public order, but internet shutdowns are read, by citizens and markets alike, as a clear signal of institutional panic and heightened risk.

A brief ledger on India’s role belongs here, as New Delhi’s interests are inseparable from the neighbourhood’s stability. During Sri Lanka’s worst months in 2022, New Delhi extended close to four billion dollars in credit lines, currency support and supplies, keeping essentials moving long enough for an IMF programme to stabilise the collapse.

In the power sector, India’s grid enabled the first trilateral flow of up to 40 MW of Nepali hydropower to Bangladesh, turning geography into a functioning corridor. Across crises, India has backed stability, prioritising continuity and containment over leverage, often with slow returns and little applause.

Dissent is indispensable to democratic life; the neighbourhood will keep arguing – over prices, over place, over promise. The Asian century will be built on the unglamorous work of stability – institutions that hold, rules that endure, and societies that can argue without breaking. In a region as entangled as India’s, that steadiness is not a luxury; it is the currency by which ordinary life proceeds and the foundation on which any larger ambition must rest.

(Maitridevi Sisodia is a civil servant and an award-winning author. She is passionate about women empowerment, heritage conservation and social equality. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.)