How India won the economic war against Pakistan
What should have been a day of celebrations after securing Britain's biggest trade deal since Brexit with India was quickly overshadowed.
Hours after London and New Delhi announced the historic agreement, it became clear that the world's fastest-growing large economy had struck its neighbour, Pakistan, killing dozens.
The military strikes have brought the two nuclear-armed countries to the brink of war, extending a long-standing dispute over the Himalayan region of Kashmir.
The escalating tension comes after a remarkable divergence in economic fortunes for the two neighbours, which experts say has played a role in inflaming tensions.
At the start of the century, living standards in Pakistan were slightly higher than in India. But over the last three decades India has experienced a growth miracle that could one day make it the world's largest economy.
Living standards in India are today a third higher than in Pakistan, after jumping ahead at the end of the 2000s. Meanwhile, Pakistan is a melting pot of crises.
The divergence has only added to the simmering tensions between the two rivals.
'We used to talk about India and Pakistan in the same breath,' says Tim Willasey-Wilsey, a professor at King's College London who served for 27 years with the Foreign and Commonwealth Office, including in Pakistan.
'When I was there in the 1990s, they had about the same GNP per capita [output per head]. Now, they're just vastly different. India is an emerging power. Pakistan is struggling. I think this is part of the problem. I don't think Pakistan have fully woken up to the new reality.'
India's economic might is demonstrated by the fact Western nations such as Britain are queuing up to sign trade deals, ignoring inconvenient facts like the country's burgeoning trade with Russia.
It is clear why Labour would be willing to turn a blind eye: children born today are likely to live to see India become the world's biggest economy. It is a rising economic power, links to which could prove hugely lucrative.
'Based on figures from the end of last year, India is to overtake the US in 2087 and China in 2097,' says Pushpin Singh, a senior economist at the Centre for Economics and Business Research. 'This assumes that China will overtake the US at some point as well. So by the end of the century, they will be the world's biggest economy.'
India's growing middle class is already proving an engine of economic growth, as many Western countries have outsourced roles in sectors like IT to the country.
What is behind its rise?
'They deregulated the economy in 1990 and have never looked back,' says Willasey-Wilsey. 'They're developing more and more. As more international companies move out of China and choose India instead, the prospects really look quite good.'
As well as deregulating, India also invested heavily in infrastructure: road, rail and renewable energy.
'A lot of massive infrastructure projects have happened, especially under the Modi government. With a huge population, you also have a huge middle class, and infrastructure especially being concentrated initially in the urban areas, you're seeing a lot of migration from rural to urban areas,' Singh says.
Infrastructure has also become a symbol of the rising tension between the two countries. India has pushed forward the start date of four hydro-power projects in the Kashmir region, sparking fears it will lead to less water downstream. Water levels in Pakistan's Chenab River have already fallen by 60pc, threatening its agriculture. India has also suspended a 65-year-old water-sharing treaty between the two countries.
India's success stands in stark contrast to its debt-bloated, struggling neighbour.
'You would expect Pakistan to be performing the same way as India, given the geographical proximity, similar kind of cultures, and obviously they were once within the same kind of country, to say it very crudely,' Singh says.
Modern-day India and Pakistan were born out of the partition of British India in 1947. For several decades, Pakistan was the more successful economy. But political instability, profligate borrowing and less favourable demographics mean it is today among the world's poorest countries.
'There is a huge reliance on external debt in Pakistan, which is very much a function of the governance. It hampers quite a bit of economic progress,' says Singh.
As a result, two thirds of Pakistan's day-to-day spending goes to servicing its debts. The country is in the midst of a $7bn (£5.2bn) bailout deal struck with the International Monetary Fund (IMF) just last year.
Can Islamabad afford war? Pakistan would have far more to lose in that scenario given its weaker economy, Willasey-Wilsey warns.
However, Pakistan's prime minister has so far vowed to take revenge for 'every drop of blood' spilled as result of the strikes on the country. While Pakistan is far smaller, it is heavily militarised.
The two countries have been locked in dispute over the Kashmir region, effectively since partition. Both administer parts of it and conflicts have flared up over the years.
India's 'precision strikes' on nine 'terrorist camps' this week were in retaliation for the killing of 26 people in its part of Kashmir two weeks earlier. New Delhi claimed Pakistan had supported the terrorists behind the attack.
The threat of full-blown war between the two countries is worrying, given they are both nuclear powers.
'It could get very bad,' says Willasey-Wilsey. 'If Pakistan responds, then what does India do next? So it all depends on that.'
The escalation is happening at a time when the US is showing little interest in ensuring global peace. However, Pakistan's high debt levels mean other countries could force it to step away from an escalation, he says.
'India is very rich, Pakistan is very indebted. What we what really needs to happen is Saudi Arabia, UAE and Pakistan's creditors really need to turn the screw on Pakistan and say, right, this is just not going to happen.'
Simmering religious tensions and national resentments have bought the two nuclear powers to the brink of war. The best hope of averting a devastating crisis may be economic.
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