Mired in economic and internal crises, Pakistan is primed for normalization and trade with India—but Narendra Modi’s Hindu nationalist government is failing to seize the chance.
Narendra Modi at an event in Kolkata, West Bengal, March 2024 -- public domain image
By Salman Rafi Sheikh
When Narendra Modi returned to power for a second term in India with a landslide victory in 2019, his government acted swiftly. Just months after the election, the Modi government abrogated Article 370 of the Constitution of India. In doing so, it stripped the special constitutional status conferred on Jammu and Kashmir, India’s only Muslim-majority state, and downgraded its status from a state with its own elected assembly to a union territory administered by the central government in Delhi. The move disrupted the tremulous status quo that India and Pakistan had been holding on to in Kashmir for decades: India demanding that Pakistan withdraw from the north and west of Kashmir, which are under Pakistan’s administration, and Pakistan demanding a referendum to determine who administers the whole territory, with both parties holding steadfastly to the Line of Control. Angered by the Modi government’s move, Pakistan retaliated by suspending trade ties with India.
Until recently, Pakistan’s position vis-à-vis India emphasized a resolution to the Kashmir issue as a prior step to movement on any other matters. Now, with Pakistan in a dire economic crisis, no prospects of a softened stance from India, and a possible third term as prime minister for Modi after India’s looming general election, Pakistan might be forced to seek a resumption of trade ties while putting Kashmir on the backburner.
Ever since Modi became India’s prime minister in 2014, there has always been anticipation in Pakistan—heightened during each Indian election season—that the Modi government will mobilize anti-Pakistan rhetoric to energize its base. In April 2019, at a campaign rally in Rajasthan before the last general election, Modi announced his readiness to use India’s nuclear weapons against Pakistan. “Have we kept our nuclear bomb for Diwali?” he asked the crowd. Pakistan immediately denounced the remarks as “highly unfortunate and irresponsible” and a foreign office spokesperson called out Modi’s use of such “rhetoric for short-term political and electoral gains, with complete disregard to its effects on strategic stability in South Asia,” rightly deeming it “regrettable and against norms of responsible nuclear behavior.”
Modi deployed similar hyperbole while talking about a cross-border commando operation in 2016 and an air raid on Pakistan’s territory in early 2019 that New Delhi claimed to have conducted in retaliation for militant attacks on the Indian military in Jammu and Kashmir. The discussion around these operations, which Modi called “surgical strikes,” had more political significance in India than actual military significance between India and Pakistan. By now they have even become the subjects of Bollywood movies, making them part of popular discourse in Modi’s favor.
Just this month, the Guardian reported that intelligence officials from both countries had alleged that India had a policy of targeting terrorists on foreign soil, with 20 individuals killed in Pakistan since 2020. While India denied the report, its defense minister, Rajnath Singh, said that if “any terrorist will try to disturb India from Pakistan, we will give muh tod jawaab” (“a jaw-shattering answer”). He added, “If needed, Pakistan mein ghus ke maarenge” (“If needed, we will infiltrate Pakistan and kill them”). Coming into another election season, Singh was repeating Modi’s tough-on-terror rhetoric from the “surgical strikes” in 2019. In Pakistan, the report escalated fears over Indian conduct, further weakening the prospects of a normalization of ties between India and Pakistan—something that would entail a demilitarization around Kashmir, an end to cross-border support for militancy by both countries and greater exchanges between Indians and Pakistanis via relaxed visa regimes as well as increased trade and cooperation.
The anti-Pakistan imperatives of Modi’s regional policies, in Pakistan’s view, are part of a broader anti-Muslim domestic politics that has defined the ruling Bharatiya Janata Party (BJP) under Modi. Hindu nationalists have set Indian Muslims up as their hapless punching bags at home, and Pakistan, with its Muslim majority and acrimonious history with India, fills the same role on the regional stage. A recent report by India Hate Lab, a research group based in Washington, D.C., showed 668 recorded incidents of hate speech targeting Muslims in India in 2023. Of these events, 255 came in the first half of the year and 413 in the second half—marking a 62 percent increase in the build-up to the general election, with the majority of all these incidents taking place in Indian states with BJP governments in power. The dominant view in Pakistan is that this trend, and a corresponding inflammation of anti-Pakistan sentiment, will grow further as the Indian election gets underway in April and May, and also if—or if prevailing predictions are correct, when—Modi wins his third consecutive term.
With this anticipation, Pakistan’s policymakers think that an India that continues under Modi will not be willing to engage with Pakistan vis-à-vis Kashmir, and will likely increase its support for militant groups operating against the Pakistan state, including the Tehrik-i-Taliban Pakistan and Baloch separatist outfits. Almost five years after Article 370 was done away with, and with the Supreme Court of India since having dismissed all legal challenges to the validity of the action, the idea of Kashmir as a Delhi-administered region without its earlier special protections and limited autonomy has become deeply entrenched and institutionalized in India. Pakistan cannot realistically expect the Indian state to reverse this position. It will be extremely difficult, if not impossible, for even a non-BJP government to undo this change for fear of popular backlash, and also because of the court’s judgment declaring that Kashmir has no internal sovereignty that sets it apart from other states and territories.
The Track II channel of diplomacy between India and Pakistan, which entails non-official meetings between retired officials and academics of the two countries, and in earlier decades was vaunted as a source of hope for peace, has also not been able to yield any meaningful results in the Modi years. Not only has it failed to move the needle on the issues of Kashmir and terrorism, but it has not even done so on reopening official channels for dialogues and using diplomacy to resolve conflicts.
With the Indian state locked in on its stand on Kashmir, Pakistan is pushing for a new status quo mirroring the Sino-Indian model of bilateral ties. Broadly, this would mean opening up trade without necessarily pushing for a prior resolution of outstanding territorial disputes. For decades, and despite some clashes in mutually disputed zones in recent years, India and China have been able to steadily carry out and expand bilateral trade, whose present value stands at around $136 billion per year. A 2018 World Bank estimate showed that India-Pakistan trade could grow to $37 billion per year if the right conditions materialize. Pakistan, which has been on the verge of complete economic collapse for the last few years, cannot ignore the critical importance to its future of trade with India, and Islamabad has been trying to find a way to realize its promise.
When the pandemic hit, Pakistan resumed imports of pharmaceuticals from India, nine months after it suspended all trade with this neighbor. As its economic situation has deteriorated, it has lifted more restrictions to avail itself of cheap Indian goods. This March, Pakistan’s foreign minister, Ishaq Dar, promised to “seriously look into matters of trade with India.” It bears emphasizing that it is not just Pakistan that stands to gain: India could gain massive new markets in Pakistan, and resources to further fuel its growth. If anything, with its superior economy, India would secure the majority of the projected $37 billion worth of bilateral trade—and all the political and diplomatic leverage that would also come with it.
Even for the Pakistani military, a minimal normalization of ties with India that can help change the country’s economic situation, so long as it comes without an overt compromise on Kashmir, is not necessarily a tough bargain. Any subsequent boost to bilateral trade, which could involve the Pakistani military’s approval and even participation through its large business holdings, could help the military recover from the recent domestic backlash to its involvement in and manipulation of Pakistan’s politics. In addition, if trade can reinforce peace on the border, this might allow the Pakistani military to focus more clearly on dealing with the resurgence of religious and nationalist militancy that has recently gripped parts of Khyber Pakhtunkhwa and Balochistan provinces.
For Pakistan, therefore, there are definite advantages to adopting the “Sino-Indian” framework, but the key question is whether India, led by Modi and the BJP, will be willing to work with Pakistan to develop such a framework. As a corollary, Pakistan should also ask what it can do to convince India to pursue this model of bilateral relations.
The optimistic view is that there is already a base to work from. For more than three years, since February 2021, India and Pakistan have observed a ceasefire along the Line of Control—making this one of the longest-lasting ceasefires in the history of both countries and showing how negotiated settlements are possible not only to achieve but also to sustain. This ceasefire was instituted by the Modi government on India’s side, and there is reason to hope it will remain if a fresh Modi-led administration returns to power. In that eventuality, Pakistan can hope that a new Modi government can also be convinced to resume trade relations.
What Pakistan can do to maximize the probability of this is to eliminate any existing support for militant groups seeking the independence of Indian-administered Kashmir. For many years, New Delhi has consistently accused Pakistan of supporting terrorism, and the fact that many Pakistan-based militant groups seek Kashmir’s independence reinforces this claim. In 2022, Pakistan showed India it was serious about the issue when it sentenced Hafiz Saeed, the co-founder of the militant organization Lashkar-e-Taiba, to 31 years in prison on charges of financing terror. A larger and decisive break away from these groups might signal Pakistan’s readiness to positively engage with India.
Pakistan should also be watching how India has recently shifted its focus in regional relations away from the beleaguered South Asian Association for Regional Cooperation (SAARC) and towards the newer Bay of Bengal Initiative of Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). BIMSTEC, headquartered in Dhaka, includes all the SAARC countries except Pakistan, Afghanistan, and the Maldives, and also includes Myanmar and Thailand. Leaving behind the western flank of the Subcontinent, and the India-Pakistan quarrels that have so often hobbled SAARC, BIMSTEC is being pitched as an alternative to SAARC and a mechanism to temper China’s influence over the region. BIMSTEC states supported Modi’s withdrawal from the SAARC summit scheduled for late 2016 in Islamabad, which India saw as a diplomatic victory over Pakistan.
BIMSTEC has its own limitations, but its development merits Pakistan’s attention, especially in what it says about the future of SAARC. For all its problems, SAARC offers a potential space for Pakistan to engage with India in pursuit of normalization and trade. Pakistan’s diplomats may do well to see how its fortunes could be revived.
Where things go next will only be clear after the Indian election. A strong BJP government might not feel the need to sit at a negotiating table with Pakistan, for reasons including its deeply entrenched anti-Pakistan and anti-Muslim politics—or, optimistically, a Modi completely assured of his domestic unassailability might feel he has the room to push for improved ties. There is no hiding, however, that this latter scenario is a remote possibility at best, as is the general possibility of a Sino-Indian-style relationship between India and Pakistan. There is a crucial difference between India’s ties with Pakistan and its ties with China: India and China do not have a communal angle to their territorial conflict. Even if Pakistan wants to move away from its reliance on non-state actors in Kashmir to achieve meaningful improvement in the bilateral relationship, a Modi-led India, with its institutionally cultivated hate against Muslims and Pakistan, is unlikely to take any step that can undermine its political standing at home.
If Modi’s India continues to relentlessly pursue its Hindu nationalist ideals, with an aggressive antipathy towards Muslims and a suppression of the fundamental rights of the Indian Muslim community, it will be equally politically difficult for Pakistan’s government to seriously advocate for improved trade and relations, despite its economic desperation.
Salman Rafi Sheikh is an assistant professor of politics at Lahore University of Management Sciences.
Himal Southasian/Globetrotter
This article is part of “Modi’s India from the Edges,” a special series by Himal Southasian presenting Southasian regional perspectives on Narendra Modi’s decade in power and possible return as prime minister in the 2024 Indian election. The article is distributed in partnership with Globetrotter.
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