6 Critical Wildcards as India and Pakistan Face Off
Without saying it, India and Pakistan are now at war
“What was supposed to take weeks to escalate is happening in hours.”
The border between India and Pakistan is on fire. After launching missiles on Pakistani terror sites on May 6th, in the past 24 hours, India moved forward with drone strikes in Pakistan, including destroying an air defense system in Lahore. This has erupted in a fierce battle between New Delhi and Islamabad, including reports that India’s navy has struck ports in Karachi, Pakistan launching missiles at India, and India claiming it has shot down three Pakistani fighter jets, along with a Pakistani AWAC.
This last part is particularly important, as India says it destroyed an F-16 operated by the Pakistani Air Force. However, F-16s were sold to Pakistan by the US on the condition that they would not be used against India.
By all measures, India and Pakistan are now at war for the first time since 1999, even without any official declaration.
Some of the consequences of a fresh India-Pakistan war were covered last week.
But, as the situation becomes volatile, and with no guardrails in place, the war must be looked at through a very different lens. Every global stakeholder must approach what is taking place in South Asia as a permanent shift in the Asian landscape that can draw in world powers and unleash global effects.
As the war accelerates, six critical wildcards should be on everybody’s mind.
SIX CRITICAL WILDCARDS 👇
Shipping through the Arabian Sea-Indian Ocean: Over $6 trillion in goods passes through the Indian Ocean every year (along with over 80% of seaborne trade). As India and Pakistan collide, parts of the Arabian Sea and Indian Ocean could become battlefields, representing a new kind of “Red Sea” in Asia. As the fighting between India and Pakistan quickly expands from the air to the ground and sea, the Arabian Sea and Indian Ocean, in particular ports or critical Indian or Pakistani-operated vessels, could become targets. Consider that India imports over 85% of its oil and over 50% of its natural gas, of which a growing percentage is liquified natural gas (LNG), exported via tankers (sea). If Pakistan loses the war, it may strike India’s oil and gas supply chain at sea, in the process, putting critical maritime trade lanes in the crosshairs. Equally important, if the fighting escalates, India may decide to blockade Pakistani ports, or inspect foreign vessels, once again drawing in global shipping.
Involvement by China: During the buildup to India’s expected retaliation against Pakistan for the Pahalgam terrorist attack, a video began circulating showing the Chinese holding drills in the Himalayas. This was viewed as Beijing’s support for Pakistan, however, this video was later proven to be old. For now, China remains quiet and is not explicitly involving itself in aiding Pakistan. As mentioned before, China needs to balance its relationship with India carefully, as Beijing is locked in an economic war with Washington. If the US is walled off, China needs markets like India more than ever. However, as geopolitics trumps economics, Beijing is likely to enter the conflict in some capacity if the fighting escalates past a certain point. One of these “points” is if Chinese investments in Pakistan come under fire, like expansive railway networks China is building to connect the ports of Karachi and Gwadar with China and Central Asia. Whether these projects are attacked directly, or the fighting begins to destabilize the environment they depend on, China will not sit quietly as billions of dollars sit paralyzed. China has a variety of options to pressure New Delhi, like moving Chinese soldiers into Indian territory to divert resources and attention, or taking an economic approach and threatening to shudder certain critical exports. Either way, the India-Pakistan war could define the future of the India-China relationship.
Blowback across the Islamic world against India: Just before the Indian missile strike on Pakistan, a Turkish warship docked in Karachi. In the face-off with India, Ankara was continuing to stand behind Islamabad, upholding long-standing ties. However, India’s strike, which targeted a terror site in a mosque, is likely to shake parts of the Muslim world. Countries like Turkey, and others in Asia, Africa, and even Eastern Europe, may view India’s actions as unacceptable. A similar tone that was struck towards Israel by the Muslim world, may soon be struck towards India. Of course, India’s relationship with nations, defined by its economic size, is a world apart from Israel’s. However, in a world where nations are divergent, and prepared to sever alliances and relationships, some Islamic nations could walk away from India. India’s operations against Pakistan could be interpreted as going too far or putting many innocent Muslim lives at stake, creating real anger and fury in Islamic capitals.
America observes from the sidelines: The recent comments from US President Donald Trump, when asked about the flareup between India and Pakistan, show that the situation in South Asia is not high on the US priority list. However, as narrow surgical strikes snowball into an all-out war, Washington will be forced to enter the fold. But, it may be too late for America to show its leadership. A a war in South Asia challenges Trump’s narrative that if he were President in 2022, the Ukraine-Russia conflict would have never started. Now, a war has begun on Trump’s watch. And America appears to be more like an observer on the sidelines than an active participant in trying to broker a ceasefire. This is a defining moment for the US. Is this America’s new behavior towards wars with America First? Or is this a sign of the US losing control of how the world works? For the first time, a major conflict has begun where the US is not playing any real role, and where the choices of other nations, like China, Russia, and parts of the Middle East, matter more.
Global supply chain rethink toward India: Just as world powers face a big question as to where they stand on the India-Pakistan war, so too, the world of business must make difficult decisions. As supply chains leave China for India, a big question is whether global firms are comfortable investing in an Indian market that is now at war. The steps India is taking, like cutting Pakistan’s access to the Indus River or striking the Karachi port, along with Islamabad and Peshawar, point to the current India-Pakistan flareup being a protracted fight. What businesses have been doing, like Apple moving US-centric iPhone supply chains to India or European machinery firms doubling down on India to offset the US-China fight, now has to be rethought. The Indian market is completely changing and is vulnerable. Can global firms operate in India if drone strikes become a regular phenomenon like they are in Ukraine or Russia? Will seaports or airports in India be struck by Pakistan in a consistent way over weeks or months? Companies now need a new geopolitical strategy, and this may include pausing projects and diversifying supply chains and production in the Indian market. Or, adapting to the climate of war.
The UN becomes obsolete? The United Nations (UN) was already in hot water after the Russian invasion of Ukrane. Then, October 7th happened, and many began to question the UN’s overall effectiveness and relevance. Now, a new India-Pakistan war may be the final nail in the coffin, as many begin to accept that the UN can no longer uphold peace and stability and resolve disputes/tensions, its raison d'etre. The India-Pakistan war could spell the end of the UN as the world knows it, and the rise of nations resolving tensions in unilateral (i.e. the US-Russia talks in Saudi Arabia) or tribal forums or new institutions rising like China’s “Global Security Initiative,” which is effectively a “mini-UN” in the waiting. With the UN shaking off balance, big questions emerge about the broader Western architecture. With Trump putting the World Trade Organization (WTO) in shaky waters, and the India-Pakistan war pulling the rug from under the UN, the Western-world order underpinned by institutions is falling apart. Add to this, questions around the IMF, which has become the main financier in recent times for Pakistan. As the US credit rating agency Moody’s warns tensions with India could eat into Pakistan’s economic growth, and as India cautions the IMF on future bailout packages for Islamabad, the IMF will have to walk a new geopolitical tightrope. An institutional breakdown, akin to a domino effect, is beginning, accelerated by the India-Pakistan war. And, as this occurs, Pakistan faces another headache, as institutions it depends on may begin to act differently.
CONCLUSION
The fresh India-Pakistan fighting is worsening at an unprecedented clip. What was supposed to take weeks to escalate is happening in hours.
There are many big questions now, some of which are above (wildcards). Two others: what will global powers do, like France, Japan, and Saudi Arabia? And second, what will countries like Bangladesh do (in support of Pakistan) or will there be an internal revolt in Pakistan (against the military and government)?
For now, there is more grey than clarity. But the wildcards represent how global and serious the fighting between two nuclear-armed powers is.
The old status quo between India and Pakistan, which has existed for almost 20 years since the last war in 1999, is dead. When the fighting ends, South Asia will not be the same. India and Pakistan are pushing their nations, the region, and the world into a new chapter.
And once again, war has become the new status quo.
-ABISHUR/MR. GEOPOLITICS
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