On the Brink: India vs. Pakistan

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Are we on the brink of an existential war between two nuclear-armed powers? I don’t refer to the U.S. and China over Taiwan nor the U.S. and Russia over Ukraine. I’m referring to India and Pakistan. That’s the most dangerous corner of the world today. And the answer to the existential question is yes.

The immediate cause of the new war between India and Pakistan involving the disputed regions of Jammu and Kashmir has been widely reported. The initial event was a terrorist attack on April 22 that killed 26 Indians, mostly tourists in Pahalgam located in Kashmir. Indian intelligence determined that the terrorists were based in Pakistan and supported by the Pakistani intelligence service (ISI). The Indian response was a combined drone, fighter jet, and missile attack on terrorist bases in Pakistan.

I have visited both India and Pakistan many times, including a two-week visit to India this past February. My trips to Pakistan have included Lahore, which is not far from the disputed regions. This gives me a good feel for the cultures and politics of the two adversaries. Most observers treat these places from a more remote perspective.

The Relationship: It’s Complicated

Context is critical in understanding the dangers of the current conflict. It’s true that India and Pakistan are countries today, but that’s a relatively recent development. Independence only occurred in 1947. For millennia, India did not exist as a country. It was a subcontinent ruled by a succession of emperors, kings, warring sects and colonial invaders.

India was ruled by the Mauryan Empire in the third century BC, including its two most powerful emperors, Chandragupta (c.297 BC) and Ashoka (c.260 BC). The Tughlaq Dynasty (c.1335 AD) ruled most of present-day India, not including a large area along the Bay of Bengal.

The Mughal Empire (1526-1858), including Akbar and Shah Jahan (builder of the Taj Mahal), ruled northern India but had limited control of the Deccan, a large plateau in the south-central region. Even the British Empire in India (1757-1947) did not rule the entire subcontinent but relied on “princely states” ruled by local maharajas to hold sway. The point is that India was never a country until 1947 and Pakistan was a political creation hived off from India at the same time.

The result was a lot of unfinished business in the form of uncertain borders and disputed regions. The most prominent examples of this are the provinces of Jammu and Kashmir in the north, adjacent to the Hindu Kush and Karakoram Mountain ranges that separate them from China and Afghanistan. Both India and Pakistan claim sovereignty. Each disputes the other’s claim. The status of Jammu and Kashmir is complicated by the fact that it was a princely state until 1953 and there remains a strong movement for autonomy and independence to this day.

An even broader context reveals that the current dispute is just the latest in a long line that goes back to independence in 1947. The first Indo-Pakistan War occurred in 1947-1948 and involved the status of Kashmir and an effort to force the Maharaja to choose India’s side in the dispute. The Indo-Pakistan War of 1965 also involved Kashmir. Other Indo-Pakistan wars were fought over Kashmir in 1999 (the first involving both rivals armed with nuclear weapons), and from 1984-2003. The current war is the latest in a long line, but the most dangerous yet for reasons described below.

A Shorter Path to Nuclear War

One of the most perilous and uncertain aspects of this latest Indo-Pakistan war is the extent to which new weapons and tactics are being used. Drones, satellite surveillance, artificial intelligence, high-speed surface-to-surface missiles (some of which are nuclear-capable) and advanced fighter jets have all been deployed in the past few weeks. None of these systems were widely used or even available during the last conflict over the Siachen glacier in Kashmir, which was resolved by a ceasefire in 2003.

Since the use of these advanced systems is new in Indo-Pakistan conflicts, the consequences of their use and the escalatory dynamics are new as well. It is reasonable to say that escalation happens faster when more advanced systems are deployed because of the need to respond in kind or deploy advanced defenses, which means the path to nuclear war is shorter than it has ever been.

Another risk factor that increases the danger of nuclear war is that strikes are taking place deep inside Pakistan itself. In the past, disputes about Kashmir were often confined to Kashmir itself. (A major conflict, the Indo-Pakistani War of 1971 did not involve Kashmir because it was a war of independence in Bangladesh, formerly East Pakistan. That war was fought mainly in Bangladesh but India intervened on behalf of the Bangladeshis because over 10 million refugees from there had taken refuge in India). In the current situation, India attacked Pakistani air bases in Rawalpindi, close to Pakistan’s capital of Islamabad. Pakistan has also attacked Indian air bases far from Kashmir.

This combination of advanced weaponry, technology and attacks outside Kashmir push both sides to a wider war despite the local origin of the terrorist attack that triggered the conflict.

Dangerous Water Wars

Nuclear war is not the only path of escalation. The other basis for escalation is water. India and Pakistan rely on major river systems that have their origins in the glaciers and tributaries of the Hindu Kush, Karakoram and Himalayan Mountain ranges.

The Indus River begins near Nanda Parbat on the western edge of the Himalayas and flows mainly through Pakistan before ending in the Arabian Sea near Karachi. It provides over 80% of Pakistan’s water for irrigation and over 30% of Pakistan’s hydroelectric power. But it begins in India and flows through Kashmir. For now, India has suspended a treaty with Pakistan that governs water usage and sharing. This leaves India free to build new hydroelectric projects that will deplete Pakistan’s water supply in the future.

India is not immune from water blackmail. India itself relies on the Brahmaputra River for much of its water. The Brahmaputra had its source in a tributary controlled by China, which is a close ally of Pakistan. If India cuts off Pakistan’s water, China can assist Pakistan by cutting off India’s water in part. All of the upstream powers need more water themselves, given the need for hydroelectric power in growing economies. Water wars are not unknown and can quickly turn to shooting wars. Of course, China is also a nuclear power.

A Shaky Ceasefire

One ray of hope was that India and Pakistan announced a ceasefire on May 10th. Trump claimed credit for bringing the two sides together, but India denied that any intervention by the White House was involved. It may be the case that Trump and U.S. Secretary of State Marco Rubio did play a constructive role but India felt it had to downplay that involvement because of its own nationalist posture and the desire to appear to have the upper hand in the conflict, something India calls escalatory dominance. In fact, the Indian economy is ten times the size of Pakistan’s and its population is close to six times greater.

Unfortunately, India accused Pakistan of violating the ceasefire within hours of its announcement. The situation along the line of contact in Kashmir remains unstable as of this writing.

If this latest conflict escalates to the brink of nuclear war or a nuclear attack actually takes place, it’s not inconceivable that the U.S. (or perhaps a joint U.S.- Russia mission) would attack and destroy both the Pakistani and Indian nuclear weapons system in a way that did not set off a nuclear explosion (radiation leakage may be an unavoidable byproduct of such a raid but it would be localized).

The purpose would not be to choose sides in the conflict. The purpose would be to eliminate an existential threat to the human race. A game theoretic approach might call for this outcome to be communicated to India and Pakistan in advance to avoid escalation in the first place.

With trade and tariff wars in full swing, the last thing the world needs is a shooting war between two nuclear-armed powers. Still, that’s where we are. The best hope is that a ceasefire will hold and steps can be taken to mitigate terrorist attacks, if not the entire Kashmiri territorial dispute. But Pakistan’s politics are perennially unstable and India’s ruling party has staked out a nationalist pro-Hindu platform. Those realities make compromise more difficult.

While Trump is trying to unwind conflicts in Ukraine and the Middle East and avoid new ones, this may be one conflict where U.S. mediation and leverage are required. Meanwhile, investors would be prudent if they reduced their exposure to risky assets like stocks and increased their allocations to safer assets including Treasury notes, cash and gold.

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