
A nasty and dangerous phase
Listen to article
The fragile ceasefire between Pakistan and India may remain intact, but tension is far from over. The two nuclear-armed neighbours, with a long history of wars and military standoffs, are now entering a new, far more perilous phase in their relationship.
Consider the post-Pulwama episode of February 2019. Despite India's airstrikes on Balakot and Pakistan's swift military response, tensions were de-escalated relatively quickly. Diplomatic ties, though briefly strained, were soon normalised. Borders remained open, and even the Indus Waters Treaty — often cited as a pressure point — was not weaponised. In fact, weeks after the military standoff, then-Prime Minister Imran Khan went so far as to express a preference for Modi's re-election, believing a hardliner like him might finally resolve the deadlock. That assumption, however, was wrong.
Today, the landscape is starkly different. After the Pahalgam attack, India took a series of unprecedented steps. It suspended the IWT for the first time since 1960, closed the Wagah-Attari border, expelled military advisers, reduced diplomatic staff, and ordered all Pakistani nationals to leave the country. Pakistan responded in kind.
Then came the events of May 6th and 7th. In a dramatic escalation, India launched missile and drone strikes deep into Pakistani territory. For the first time, the world witnessed an exchange of missiles and drones between two nuclear powers. What made matters worse was the disinformation campaign run by Indian media.
On the eve of Pakistan's counter-strike to India's so-called Operation Sindoor, Indian news outlets spread false reports — claims of Karachi Port being bombed, Indian forces entering Lahore, and even the Indian flag flying over Islamabad. These fabrications were quickly debunked by international media, which confirmed that India's attempts to set a new normal had failed. Notably, the downing of advanced Rafael jets by Pakistan remains a hot topic in global defence circles — one India refuses to acknowledge, citing vaguely that "losses are part of combat."
The broader implications of this latest flare-up are deeply troubling. Pakistan and India appear poised for their most dangerous confrontation yet. Frustrated by setbacks and international apathy, Prime Minister Modi is doubling down on aggressive diplomacy. India has dispatched bipartisan delegations worldwide to present its narrative, while simultaneously pushing for Pakistan's diplomatic and economic isolation.
One telling move came just days after the conflict: Indian External Affairs Minister S Jaishankar's visit to the Netherlands. This was no routine stopover. The Dutch have played a key role in strengthening Pakistan's maritime security, including supplying mine-hunters and offshore patrol vessels. India's goal was clear: pressure the Dutch to halt such cooperation. Similar efforts are underway with Pakistan's other economic and defence partners.
India is also believed to be leaning heavily on regional allies to discourage any financial or strategic collaboration with Islamabad. There are signs that India is lobbying behind closed doors, using economic leverage and diplomatic influence to corner Pakistan multilaterally.
Pakistan on the other hand is actively pursuing its own game plan. Together with its close allies and international partners, Islamabad is making efforts to nullify New Delhi's campaign. Despite limited resources and other challenges, Pakistan has demonstrated it could take on India both on the battlefield and diplomatic front.
While India is struggling to find answers to its miscalculation, Pakistan is looking to take advantage of the opportunity its eastern neighbour has thrown at it. The decision-makers in Rawalpindi and Islamabad, however, must not be complacent. India will not take this defeat lightly. It would resort to both covert and overt actions to undermine Pakistan. The coming months could well see the region descend into a new and even more volatile chapter — one that might push South Asia closer to a conflict of unprecedented scale.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Business Recorder
2 hours ago
- Business Recorder
Ministers propose eCommerce tax reforms
In a bid to support Pakistan's rapidly growing eCommerce sector and support small and medium enterprises (SMEs), Federal Minister for Commerce Jam Kamal Khan and Federal Minister for IT and Telecommunication Shaza Fatima Khawaja have proposed key revisions to the government's taxation and regulatory framework. The development came during a high-level meeting held to address key issues in eCommerce sector, read a statement released by the Ministry of Commerce on Thursday. 'In line with the consultative approach of the forthcoming policy, Minister of Commerce Kamal Khan announced the formation of a joint working group, with input from the IT Ministry, to gather comprehensive recommendations on taxation, vendor compliance, and digital payments,' read the statement. Is the budget changing how government views e-commerce? The group's findings will be formally presented to Prime Minister Shehbaz Sharif for final consideration. The federal government, in its budget presentation for fiscal year 2025-26 on Tuesday, announced a 5% withholding levy on payments made to domestic and international digital vendors (e.g., Amazon, Google, Facebook, Netflix, Daraz, Temu, PakWheels) for goods or services delivered to Pakistani consumers. Moreover, an 18% standard VAT is being proposed for online marketplaces facilitating the sale of both goods and services (e.g., Daraz, OLX, Zameen, PakWheels), which aims to standardise tax treatment and close revenue gaps—especially for platforms acting as intermediaries. Meanwhile, during the meeting on Thursday, Kamal confirmed that eCommerce Policy 2.0 is in its final stages of internal review and will soon be submitted for cabinet approval. Pakistan's eCommerce sector has witnessed rapid growth, reaching a market size of $7.7 billion in 2024, with projections estimating a 17% compound annual growth rate through 2027. The ministers reiterated their commitment to fostering an inclusive, competitive, and digitally empowered trade ecosystem, and arising issues faced shall be addressed at the highest level.


Business Recorder
3 hours ago
- Business Recorder
Saudi Crown Prince MBS will not attend G7 Summit in Canada
DUBAI: Mohammed bin Salman, Saudi Arabia's crown prince and de facto leader, will not attend next week's Group of Seven summit in Canada, a senior diplomat briefed on plans told Reuters on Thursday. The crown prince, widely known as MBS, did not give a reason for declining Canada's invitation to the annual gathering, the diplomat said. Saudi Arabia is not a G7 member but can be invited as a guest to its annual gathering, which will be held this year in Kananaskis in the Canadian Rockies, from June 15-17. MBS has rarely travelled internationally in recent years, and declined an invitation to the G7 Summit in Italy last year. He postponed a planned trip to Japan last year, citing concerns over the health of his father, King Salman. Indian PM Modi says he will go to Canada for G7 summit Saudi Arabia's government media office did not immediately respond to Reuters' request for comment. Canada's Globe and Mail newspaper, which first reported that MBS would not join this year's gathering, said the development may ease tensions within Canadian Prime Minister Mark Carney's Liberal party, where some members of parliament were upset that an invitation had been extended to MBS. The Saudi crown prince has come under heavy criticism for his country's human rights record. The kingdom denies accusations of human rights abuses. Leaders from Ukraine, Mexico, India, Australia, South Africa, South Korea and Brazil are expected to join for parts of the G7 Summit. U.S. President Donald Trump will also be in attendance.


Business Recorder
4 hours ago
- Business Recorder
Pakistan govt's budget steps may hinder cashless economy drive: TOAP
ISLAMABAD: As the government unveils a raft of new taxes on digital transactions and e-commerce in the federal budget, Aamir Ibrahim, chairman Telecom Operators Association of Pakistan voiced both hope and concern, warning that the measures could slow Pakistan's journey toward a cashless economy. Industry leaders, trade bodies, and associations also expressed concerns that the budget missed an important opportunity to mandate digital payment options across retail. They pointed out that many major retailers still refuse to accept digital payments in order to hide real income and evade taxes, indicating that enforcement against such practices remains insufficient. This gap, they argued, allows tax evasion to persist and undermines efforts to bring more transactions into the formal, documented economy. The Overseas Investors Chamber of Commerce and Industry (OICCI) also criticised the government for missing a crucial opportunity to broaden the tax base and document the country's vast Rs9 trillion cash-based informal economy. In a statement, the OICCI noted that while measures like the nationwide rollout of e-invoicing and expansion of POS systems are positive steps; the absence of a concrete strategy to address the informal sector and rationalise tax structures undermines efforts to create a more investment-friendly environment and advance economic formalisation. 'The budget aims to formalise online trade through digital integration and tax measures, which is a plus,' said Aamir. 'However, complexity in tax collection, the 5% levy on digital transactions with foreign vendors, and additional taxes charged by payment intermediaries risk increasing costs and discouraging digital adoption. Making digital payments more prevalent, easier, and affordable is essential for Pakistan's growth and for documenting the economy. Let's ensure policies support a truly digital Pakistan, driving transparency and compliance without undue burdens.' The new Finance Bill introduces taxes on both local and foreign e-commerce marketplaces, making online shopping costlier for Pakistani consumers. Notably, a five per cent tax will be imposed on goods purchased from foreign online marketplaces such as AliExpress and Amazon, collected by banks and payment gateways at the point of transaction. Meanwhile, local digital payments will face a tiered tax structure, ranging from one per cent to two per cent depending on the transaction amount, and courier companies will collect taxes on cash-on-delivery payments. Banks and courier services have been designated as withholding agents, required to collect and remit these taxes, and file detailed statements on all digital transactions. Online marketplaces must also ensure that all vendors are registered for sales tax, tightening compliance across the sector. Aamir acknowledged the government's intent to bring more online activity into the formal economy but cautioned that the added complexity and cost could push some businesses and consumers back toward cash and informal channels. 'We need to strike a balance between expanding the tax net and fostering digital inclusion. If digital transactions become more expensive or cumbersome, we risk undermining the very progress we've made in financial inclusion and digital transformation.' He urged policymakers to revisit the proposed levies and streamline tax collection, so that Pakistan's vision of a cashless, digitally empowered society remains within reach. 'There is still time to fix anomalies in the new budget. Let's make sure that our policies truly support a digital Pakistan, rather than create new barriers to adoption.' Copyright Business Recorder, 2025