The violation of Pakistan’s airspace by Indian fighter jets on Tuesday and Pakistan’s responsible and restrained retaliation for the act of aggression by shooting down two Indian jets and the arrest of two Indian pilots on Wednesday have badly rattled the stock markets on either side of the border — with general elections in India tentatively scheduled for April-May. The tumbling of stock markets in India and Pakistan is in contrast to the uptrend at global bourses in response to easing of the trade tension between the US and China.
Moreover, the limited air strikes have for sure caused losses in billions of rupees on both sides as the two countries had to close their airspace for commercial flights. The airports in Lahore, Faisalabad, Multan, Sialkot, Islamabad and Karachi were closed for commercial flights and the Pakistan Civil Aviation Authority declared an aerial emergency. If the situation worsens, this may result in losing the services of and the revenues international airlines bring, as they might cease their operations in the two leading economies of the region.
There was already little direct cross-border trade between the two countries. The escalation in tensions has brought the nominal trade to a standstill. Indian traders have cancelled cement import consignments from Pakistan, reasoning that their government has increased import duty by 200 per cent on imports from this country. In addition to this, India withdrew the Most-Favoured Nation (MFN) status from Pakistan following the Pulwama incident without investigating who was behind the attack.
If there is a full-fledged war, it would have highly disastrous consequences for both the countries rendering millions of people internally displaced, orphans and widows on either side of the border. So India should accept Pakistan’s peace and talks offer considering the fact that both countries possess nuclear weapons.
Published in The Express Tribune, February 28th, 2019.