According to The News, beyond respected international outlets like Bloomberg, several Indian economists, American financial intelligence firms, former members of India’s National Security Council, and expatriates associated with global risk consultancies observed during the recent brief yet intense Pakistan-India conflict that India stood to lose significantly more economically than Pakistan in the event of a prolonged war.
Reports from Indian media indicated that investors in the country suffered losses of approximately $83 billion, equivalent to PKR 23.5 trillion, within the initial 48 hours of hostilities, as markets experienced a sharp downturn. This represented a substantial shock to India’s $4.19 trillion economy, which is underpinned by $821 billion in exports and boasts a considerable Foreign Direct Investment (FDI) stock of $514 billion.
Standard & Poor’s (S&P), the prominent US-based financial intelligence and credit rating agency, cautioned that a protracted conflict could erode India’s attractiveness to foreign investors, particularly those aiming to expand their operations and diversify their supply chains.
Bloomberg News, based in New York with over 2,300 staff globally and a sister concern of Messrs Bloomberg L.P (a privately held financial, software, data, and media company), along with Bloomberg Television, Bloomberg Radio, and Bloomberg Businessweek, etc., reported: “While militarily both countries have the capacity to inflict untold damage, in economic terms, India increasingly has much more at stake. India’s surging gross domestic product is now more than eight times the size of Pakistan’s, according to the World Bank, a gap that has roughly doubled since the turn of the century.”
The media outlet further noted: “The economic disparity between the neighbours only looks set to get wider still. Prime Minister Narendra Modi is aiming to position India as a winner from the US-China trade fight, attracting more foreign companies like Apple Incorporated to shift production to India.”
“Just this week, India cut a trade deal with the UK and continues moving faster than other nations on sealing a pact with President Donald Trump to lower tariffs,” it stated.
Bloomberg further opined: “If India and Pakistan ever were to strike a peace deal, the potential for economic gains is massive. Together, they account for about 20% of the world’s population and have mutually understandable languages. Although they share a 2,000-mile (3,200-kilometre) border, trade between them was minuscule at $322 million last year.”
Bloomberg News then quoted Bhashyam Kasturi, a former director of India’s National Security Council Secretariat, as saying: “For the moment, we do not know how Pakistan will react, but India has more to lose.”
The media house also featured the views of another Indian, Abhishek Gupta, working for its media group: “India has a lot at stake if any escalation on the border with Pakistan goes out of control and leads to a broader conflict. That may dent investors’ confidence in India as a safe haven from Trump’s tariffs, and capacity constraints at the political level may shift the focus away from the economy.”
According to Pramit Pal Chaudhari, South Asia practice head at the New York-based Eurasia Group, a noted American political risk consultancy, although Pakistan’s economic woes had diminished its relevance on the international stage, it still possessed the potential to disrupt India’s efforts to become an export-oriented nation that was a key component of the global supply chain, especially as it sought to attract companies from China. Pramit Pal contended: “This adds to your risk premium. For India, these add to the image that you don’t want.”
