The Pahalgam incident on April 22 has evoked a hysterical reaction from India, which has attacked the Pakistani and Kashmir hoe that kill innocent civilians, including children, and damaging the works Neelum-Jhelum Hydel. Five minutes from the pahalgama attack, the Indian media began to point out the fingers in Pakistan claiming that the terrorist attack had allowed. Two weeks later, India attacked without providing a pinch of evidence of Pakistan’s alleged participation. The purpose of this article is to urge those responsible for formulating Indian policies to avoid prolonging their actions, since political, social and economic costs for their own country are substantial and, on the other hand, examine their political position dispassionately.
India occupies the fifth place among global economies and has an impressive history of rapid economic growth, which has taken several hundreds of millions of poverty. It is one of the main exporters of the world of IT and services enabled for you, and aspires to become an economy developed by 2047, with the size of its economy that is expected to range between $ 23-35 billion. This requires an uninterrupted and continuously ascending movement growth curve. India is also working hard to become a permanent member of the UN Security Council and is among a group of developing countries that leads the movement towards a multipolar world with the expanding role of the BRICs.
Given this wide range of ambitions, any attempt to interrupt regional peace through kinetic or non -kinetic actions will derail it from its chosen path. Pacific and cordial relations with neighboring countries, on the other hand, would improve the prospects of achieving these ambitions.
There have been past instances, as in the confrontation of 2001-02, when Indian political leaders made sensible decisions and withdrew from the path of prolonged confrontation. The Indian troops mobilized in large quantities in 2001-02 along the border of Pakistan and, as Zahid Hussain recently pointed out, “there was an imminent threat of a complete war between the two countries, but also the sanity prevailed. Not only the war was avoided, but also a more substantive peace process between India and Pakistan was also witnessed.”
The economic costs of military adventures, along with at least six other channels, can negatively affect the path of the path of India towards prosperity and influence as a regional power. The high risk perception, trade routes and supply chain interruptions and uncertainty about the future would activate the outstanding channels below.
Any attempt by India to interrupt regional peace will derail it from its chosen path.
Military adventure cost: Foreign affairs forums on the economic impacts of a large-scale war of India-Pakistan estimate that the daily cost of mobilizing operations could reach $ 670 million with broader economic losses that can reach $ 17.8 billion, which is equivalent to a 20 percent GDP contraction for four weeks of conflict. According to Antonis Bhardwaj, a conventional War of India-Pakistan in the short term could cost between INR14.6bn and INR50bn per day in direct military expenses. A prolonged conflict, which represents broader macroeconomic impacts, could lead to economic losses greater than $ 17.8 billion per day.
Global Capacity Centers: 1,800 offshore corporate offices owned by hundreds of multinational companies abroad operate in India; They generated earnings of $ 65 billion in 2024. In recent years, more than 150 GCC have provided back-offend, legal, accounting, engineering, design, product development, consulting and architects, and act as R&D centers D. Many other corporations are thinking of following their example. The directors of the existing and planned centers may have doubts if political tensions or cross -border incursions continue occasionally.
Tourism: India receives 10 million tourists every year registering a growth rate of 20 percent, contributing $ 30 billion in currency profits. The tourism industry has a high multiplier effect in local economies and is a significant source of employment in hospitality, transportation, entertainment, crafts and many other auxiliary services. Empirical evidence shows that there is a fall in tourist visits even if there is an appearance of disturbance, violence or threat in the host country. Therefore, this annual growth of 20pc can be lost in tourism.
Financial Markets: External capital flows, FDI, foreign portfolio investment, external commercial loans, non -resident Indian deposits and workers’ remittances have contributed to the accumulation of large foreign exchange reserves and have financed the large excess capital flows above those necessary to finance the deficit of the current account. Foreign investors have approximately $ 800 billion in Indian shares, approximately 16 percent of Indian market capitalization. Foreign funds are not insensitive to the broader political and economic ecosystem. The financial markets would experience capital flight. Moody’s Analytics estimates that possible foreign investment exits of $ 10-15 billion would take place within the first month of conflict.
Defense expenditure: India has assigned $ 78.7 billion in the budget for fiscal year25 for defense. Many voices begco that the assignments increase even more to modernize and update equipment. A greater perception of threats of incursions, war or skirmishes in LOC or international borders can, in fact, result in larger budgetary assignments for defense. In a country where 800 million people still receive subsidized food rations, it would be unfortunate if resources deviate from well -being to military goods.
Direct foreign investment: India is one of the main FDI receptors with an accumulated amount of $ 1.05tr. These flows have increased 20 times since fiscal year 2001 to fiscal year 2001 from $ 237 million in 1990 to $ 71 billion 2024. The RBI Bulletin has observed that India is prepared to benefit from the realignments of the supply chain, diversified FDI sources and the commitment to global investors seeking resilience and scale, given its already established commercial links. These links and realignments would be at risk of rupture if confidence in the economy hesitates as a result of worsening cross -border skirmishes.
Indo Water Treaty: The unilateral suspension of the IWT is barely justifiable for moral and legal reasons. Given the growing dangers of climate change, the two countries together with China and Bangladesh must negotiate an agreement where food safety, water availability and energy needs of lower riverside countries are guaranteed. A possible humanitarian crisis should be avoided, by which India would be blamed.
Many neutral observers have opined that, given Pakistan’s struggle to put on his way to the economy, their fight against TTP and Bla terrorism and their prohibition of the HKKAR-TAIBA and other extremist groups and the prosecution of their leaders, it is highly ingredient that is pleased in the wars of Proxy.
The writer is the author of the development routes: India, Pakistan and Bangladesh 1947-2022.
Posted in Dawn, May 10, 2025
