Aftermath of Pahalgam Terror Attack

At a time when global collaboration is the need of the hour and countries sharing boundaries gain more from economic exchanges, the terror attack at Pahalgam by terror outfits with links to Pakistan’s Lashkar-e Tayaba have managed to sour relations between India and Pakistan to a point of no return. The Pahalgam event led to immediate action on the part of both countries. India abrogated the 1960 Indus Water Treaty and closed the Integrated Check Post (ICP),the only land crossing station at Attari which is also the only trading point between India and Pakistan. Pakistan’s Power Minister Awais Lekhari said in a post on X that India’s reckless suspension of the six decades old Indus Water Treaty mediated by the World Bank is an act of warfare. The Indus Water Treaty split the Indus River and its tributaries between the neighbours and regulated the sharing of water. It had withstood two wars between the two neighbours since then and undergone severe strains in ties at other times. Since India is an upper riparian country the breakdown of the treaty would have devastating impacts on Pakistan the lower riparian country as it depends a lot on these rivers for its irrigation, farming and power generation.
While India and Pakistan do not engage in much direct trade, Pakistan relies heavily on imports from India particularly vegetables, fruits, soybeans, poultry feed along with raw materials for pharmaceuticals. Estimates suggest that nearly 50% of medicines manufactured in Pakistan utilise raw materials sourced from India. These developments could have a significant impact on Pakistan’s economy. But that is not a one-sided loss. Indian farmers growing cotton and other agricultural products may suffer from the closure of this trade route, especially in the Amritsar-Attari region. In fact, Pakistan’s economy is already heavily aid-dependent and the impact on that country could be far more than it can envisage.
As an act of retaliation, Pakistan has now closed its airspace to Indian carriers. This means that they would now have to alter their flight paths. While most westbound flights to destinations in Central Asia, West Asia, Europe, the UK, and North America use Pakistan’s air space, departing flights from India’s northern airports, such as Amritsar, New Delhi, and Lucknow now have to do a detour via Gujarat or Maharashtra before turning west. Naturally this means more fuel use and hence more expensive air fares. This was evidenced in 2019 when as a consequence of the Balakot airstrikes, Indian carriers suffered losses to the tune of Rs 550 crore between February and July 2019. This tit-for-tat action between the two countries could have long term economic impacts for both. It is time for Pakistan – an aid dependent country to realise that its support for the terror architecture in its soil to give India the thousand cuts – an agony carried over from the Partition years is no longer tenable. Economics decides the progress of nations and for that peace and co-operation are fundamental tenets.