India’s Economic Jabs Against Pakistan Escalate Tensions

As diplomatic tensions heighten, India seeks to economically weaken Pakistan while considering military action.

Amid increasing military tensions, India is pursuing additional strategies to pressure Pakistan, taking a multifaceted approach to undermine its neighbor economically while justifying potential military action. This week, amidst plans for military strikes described as retaliation for a recent terrorist attack in Kashmir, Indian officials are making diplomatic moves to stymie crucial foreign aid to Pakistan.

On May 9, the International Monetary Fund (IMF) is set to convene a board meeting that could shape Pakistan’s financial future. Reports suggest that Indian representatives may advocate against extending a vital $7 billion loan to Pakistan, which is essential for stabilizing its economy and supporting essential public services. While Indian officials remain tight-lipped about specific strategies, speculation indicates India may attempt to target other forms of financial assistance that Pakistan relies on.

In conjunction with its financial maneuvers, India is also employing softer power tactics to intensify pressure on Pakistan. Following the aforementioned attack in Kashmir, the Indian government has tightened internet controls, diminishing the visibility and reach of Pakistani artists, musicians, and athletes within Indian digital spheres—a move reminiscent of its earlier blockade of Chinese apps. Additionally, India announced a cessation of trade activities with Pakistan, despite the current trade volume being relatively low, predominantly consisting of sugar, pharmaceuticals, and chemicals.

An especially provocative move by India was its recent withdrawal from a long-standing river-sharing agreement, which had provided Pakistan with critical water resources since 1960. This decision drew sharp condemnation from Islamabad, labeling it an act of aggression.

As regional tensions continue to simmer, India appears poised to combine military preparedness with a concerted effort to economically destabilize Pakistan, indicating a potentially turbulent future in South Asian geopolitics.