Renowned global institutions—including Bloomberg, leading U.S. financial intelligence agencies, Indian economists, former security officials, and international risk advisory experts—have concluded that India was far more economically vulnerable than Pakistan during the recent brief but high-stakes military conflict between the two nuclear-armed neighbours. Analysts warned that had the hostilities prolonged, India would have faced disproportionately larger financial damage.
In its latest analysis, Bloomberg underlined that a peace agreement between India and Pakistan could unlock immense economic potential for the region, warning that continued tensions are exacting a heavy cost on growth, trade, and investor confidence across South Asia.
According to Indian media reports, within the first 48 hours of the conflict, Indian investors suffered losses amounting to $83 billion due to a sharp nosedive in stock markets—an economic shock for a $4.19 trillion economy. India, which boasts annual exports worth $821 billion and foreign exchange reserves of $514 billion, experienced a sudden jolt in market confidence, raising alarms among policymakers and foreign investors alike.
Meanwhile, U.S.-based financial ratings agency Standard & Poor’s (S&P) cautioned that a full-scale war would not only deter foreign direct investment in India but also derail ongoing plans to reorient global supply chains toward the Indian market—a key component of New Delhi’s economic strategy.
Global risk analysts and economists agree that the economic aftershocks of war, even if limited in duration, serve as a stark reminder of the region’s fragility. They stressed that lasting peace between India and Pakistan is not only a geopolitical imperative but also a gateway to shared economic prosperity—one that both nations can ill afford to ignore.
