He was frequently occupied with external affairs during his tenure. He handled the Panjdeh Incident of 1885 in Afghanistan, in which Russian forces encroached into Afghan territory around the Panjdeh oasis. Britain and Russia had for decades been engaged in a virtual cold war in Central Asia and India, known as the Great Game, and the Panjdeh incident threatened to precipitate a full-blown conflict. Dufferin negotiated a settlement in which Russia kept Panjdeh but relinquished the furthest territories it had taken in its advance. His tenure also saw the annexation of Upper Burma in 1886, after many years of simmering warfare and British interventions in Burmese politics.