India, Pakistan edge towards a conflict neither can afford: report

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India and Pakistan have been closest to the military conflict over the years after the devastating attack on Indian tourists in Kashmir last month. According to Bloomberg, these turmoil cannot come in the worst time for the economies of both countries armed with nuclear weapons.

For India, intense negotiations with the United States have created a crisis that New Delhi hopes that US President Donald Trump will save it from the so -called mutual rates. Indian Prime Minister Narendra Modi is counting on an agreement to strengthen India’s pitch for global investors that it is a refuge from Trump’s trade war.

Pakistan, on its own, is pulling itself out of an economic crisis that brought it closer to bankruptcy – which helped Billion 7 billion International Monetary Fund Loan Program. The government has been moving forward with its most serious economic reforms in decades to get more relief.

Attacks in Hold Kashmir, which the Modi government has labeled a terrorist process, is now forcing the two countries to remove their attention from these economic priorities and to attract the Himalayan region to hostility for decades.

“This happened at that moment,” said Eliasia Garcia Hero, chief economist at Natics, said. This is very unfortunate. ” Especially for New Delhi, “for India, all of this will be postponed globally.”

After the attack in Jammu and Kashmir on April 22, relations between the two countries have reached a lower place, killing 26 civilians. India blames the massacre of Pakistan, which refuses to join.

On Sunday, Indian Defense Minister Rajnath Singh said that India would respond “properly” to the massacre. Pakistan has pledged to respond to any attack, and on Monday, we tested the missile from level to the second time in recent times. She said she would formally inform the UN Security Council of the situation.

The dangers of conflict

For India, the potential threats to the military conflict are high. Modi has been preparing India as an investor friendly destination and a stronghold of stability in Asia as it has long increased trade barriers. Early signs are emerging that India could be a major benefit to Trump’s trade war, with multinational firms like UBSAG and Apple Ink transferred their operations to the South Asian country.

According to US Treasury Secretary Scott Basant, a controversial dispute could also withdraw from New Delhi’s efforts to secure a bilateral trade agreement with the United States. The result is “very close”. Garcia Hero said that if India emerges as an aggressor, it could disrupt separate agreements that India wants to attack with the European Union and the United Kingdom.

The military conflict is also a threat to India’s chief regional rival and Pakistan’s long -time supporter China. After the attack, Beijing said it was “Pakistan’s Iron Claude friend and the Strategic Cooperative Partner of every season” and “fully understands Pakistan’s legitimate security concerns.”

Imtiaz Gul, executive director of the Center for Research and Security Studies in Islamabad, said that for India, a long conflict is very low. “They know that once they grow in the arms, it will create uncertainty and they will not threaten their economy for a day,” he said.

The long -term threats to Pakistan are also intense for Pakistan. The country is trying to rebuild its scattered economy after approaching the default in 2023. Islamabad is working to retrieve the pending pending at 29 % of the mutual rates imposed by the Trump administration.

The country has said that it will send a trade delegation to Washington in the coming months, so that Pakistan’s largest export market, its trade gap with the United States, can be eliminated. The economy is stable – inflation is low – but only after the fastest wave of prices in history. Pakistan’s debt, only border line is manageable, regular relief from China, Saudi Arabia and the United Arab Emirates is permanent.

“From a market point of view, Pakistan looks weak,” said Philip McCullus, an independent strategy in Asia, Robco.

Recovery of markets

Even despite the tensions, stock markets in India have shown flexibility after the Kashmir invasion. On Friday, the Indian benchmark NSE Nifty 50 index climbed a new height for one year, while the Indian rupee reached the peak of seven months. Pakistan’s central benchmark has also suffered from the losses after the attack.

“There is a lot of talk between the two sides,” said Suleiman Rafiq Mania, an independent wealth manager in Karachi. He said that although limited military strikes remain a possibility, no country wants a controversial dispute, adding that none of his clients are getting out of their domestic stock.

“I think, in the next few weeks, will be very significantly dial down,” he said.

Anant Bagchi, chief executive of Anant Aspian Center in New Delhi, Ananta Bagchi, said that in the end, India may feel that despite the economic dangers, it may have little choice, except for retaliation.

“This attack is a fundamental strike in India. Therefore, there is no option to answer,” he said. “India cannot be seen as keeping the economy ahead of its national security concerns.”