(Bloomberg) -- As Asia’s most acrimonious rivals face off, the fate of a captured Indian Air Force pilot may hold the key to whether -- and how -- each side is able to step back from broader conflict.
India and Pakistan, which have fought three major wars since the bloody partition of 1947, regularly exchange artillery and small-weapons fire across a disputed border. But the situation that flared up earlier this month escalated dramatically into Wednesday, with the loss of an Indian MiG 21 fighter jet and the pilot later paraded on Pakistani television.
While the U.S., Russia and China are all calling for calm, domestic political pressures make it far from easy for either side in the conflict to back down. India’s Prime Minister Narendra Modi must contest a general election within weeks, while his counterpart, Imran Khan, faces a military that is seeking to assert its dominance when Pakistan is in the eye of a financial and economic storm.
The full political fallout of the exchanges remains unclear, but it’s evident that the capture of a pilot “complicates matters and will heighten tensions,” said Sandeep Shastri, a political scientist and Pro Vice Chancellor at Jain University in Bangalore.
Neither country can afford a full-blown conflict, yet neither leader can afford to look weak -- all the more so with their publics whipped into a nationalist frenzy.
Still, in an address to the nation, Khan called for India-Pakistan talks to resolve the situation, saying that “better sense should prevail.” A Pakistani official in Washington said his country wants peace and dialogue with India to avoid escalation and confrontation, but he said India must help resolve the underlying conflict over Kashmir.
That may in part reflect Pakistan’s greater exposure to the financial and economic fallout. Pakistan’s benchmark stock index plunged as much as 3.8 percent in Karachi, while India’s S&P BSE Sensex was down a mere 0.2 percent in Mumbai after gaining earlier in the day.
Any sense of optimism in New Delhi at Khan’s conciliatory stance was undermined by the appearance shortly later of the downed Indian pilot on television, thanking the Pakistani Army for rescuing him from a mob. India’s Foreign Ministry promptly objected to “Pakistan’s vulgar display” of air force personnel “in violation of all norms of International Humanitarian Law and the Geneva Convention.” It demanded the “immediate and safe return” of the pilot.
The Pakistani official in Washington, who spoke on condition of anonymity, said the pilot in custody is being treated well and isn’t under duress. Modi, who must contest a general election within weeks, is drawing political capital by using Pakistan as a punching bag, the official said.
The Pentagon said in a statement Wednesday that Acting Defense Secretary Patrick Shanahan’s “focus is on de-escalating tensions and urging both of the nations to avoid further military action.”
The latest incident “puts enormous pressure on the Modi government in India to continue pressing ahead with the cycle of retaliation,” said Pratyush Rao, associate director for India and South Asia at consultancy Control Risks.
Indian and Pakistani fighter jets engaged each other early on Wednesday in one of the most serious military confrontations in the fifty years since the 1971 Indo-Pakistani War. India and Pakistan each shut parts of their respective airspace in the wake of the action.
While skirmishes between both sides are not uncommon, particularly in the disputed Kashmir region in the north, the geopolitical importance of the actors is changing. Pakistan is the main conduit to Afghanistan and enjoys at least nominally good relations with China, while India is aligned with the U.S. and has ambitions to become a true global power.
India in particular has transformed since the two countries last faced off in 1999. Now the world’s fastest growing major economy, India’s population of some 1.3 billion is forecast to overtake China’s to become the world’s largest by 2024.
New Delhi and Islamabad both say publicly they don’t want the situation to escalate. But domestic politics suggest India and Pakistan may continue to spar regardless. Modi, a Hindu nationalist, is facing a stiffer contest for re-election this spring than had been projected even a few months back, as he reaches out to his country’s more than 875 million voters at a time of weak job growth. The apparent capture of a pilot exacerbates his dilemma.
On the ground, tensions have run high ever since India blamed Pakistan for a suicide bombing in Kashmir on Feb. 14 that killed 40 Indian paramilitary troops. Some Indian hotels put up signs saying Kashmiris weren’t welcome, while a sitting state governor urged Indians to boycott the state and Kashmiri businesses. After India’s retaliatory airstrikes on Tuesday, an Indian burger chain offered a celebratory 20 percent discount.
The early morning raid, when Indian fighter jets crossed into its neighbor’s airspace and bombed what India said was a major terrorist training camp, “was done purely in self defense,” said G.V.L. Narasimha Rao, a lawmaker and spokesman for Modi’s ruling Bharatiya Janata Party. “India does not have any intention to escalate the fight.”
Modi and his government now find themselves in a bind: Unable to concede and yet constrained in its actions by Pakistan’s apparent capture of a pilot, said Michael Kugelman, a senior associate for South Asia at the Wilson Center in Washington.
“The bottom line,” he said, is that “Modi can’t afford politically to accept the olive branch that Pakistan has now extended to him.”
For his part, since coming to power last year on a ticket of transforming his nation, Imran Khan has repeatedly called for peace talks with India -- while running up against a grinding economic malaise that forced him to try to raise funds from China, Saudi Arabia and the United Arab Emirates. His government is also negotiating Pakistan’s 13th International Monetary Fund bailout since the late 1980s. President Donald Trump’s decision to cut some $2 billion in U.S. security aid has also squeezed Pakistan’s defense funding.
Fear of Indian dominance continues to dictate strategy in a military that has directly ruled Pakistan for almost half its 71-year history. The army is the nation’s most dominant organization and has long been seen as one of the main obstacles to peace with India. The latest flare-up will likely help boost its case for more spending, said Kamal Alam, a visiting fellow at the London-based Royal United Services Institute for Defence and Security Studies.
It’s just possible that there’s already been an end to the military action, with honor maintained on each side leading to international mediation, said Katharine Adeney, director of the University of Nottingham Asia Research Institute. There’s a caveat, however. “It really depends on how Pakistan uses the captured soldier,” she said.
(Updates with Pakistani official’s comments and Pentagon statement starting in sixth paragraph.)
--With assistance from Glen Carey.
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