One of the key tools for achieving India's stated ambition of stopping national fragmentation in the Northeast is the Armed Forces (Special Powers) Act (1958) (AFSPA). This article assesses Indian Government efforts to manage the parts of the Indo-Burmese borderlands that are subject to this law. It compares the approaches of governments on the Burmese and Indian sides of the frontier and interrogates the financial incentives that complement security policies in their shared borderlands. Economic incentives for ceasefire and disarmament are, I argue, part of a portfolio of pacification and reintegration strategies that are premised on the controlled ambiguities of the borderlands. As such, I argue that the impunities allegedly at the heart of the AFSPA are matched by the freedom of the Indian Government to funnel resources into paying off its enemies. In the Indian case, the wider environment in which the AFSPA is implemented cannot be ignored if a full analysis of its 50 years of operation is to be offered. The implementation of surrender agreements in the ambiguous space of the Indo-Burmese borderlands exemplifies how the Indian Government has prioritised national cohesion above legal, political or economic consistency.