07 May 2024, NIICE Commentary 9115
Gitesh Sarma

Contrary to conventional understanding India and Pakistan are engaged in a dialogue and this conversation is through the media. In August 2019, Pakistan responded to India’s action to repeal Article 370 of its Constitution, which gave special status to Jammu and Kashmir, by downgrading diplomatic ties from the Ambassador level and suspending trade ties. Since then, the Indian Supreme Court on 11 December 2023 upheld the revocation and there does not seem to be any prospect of any Indian concession or overture to Pakistan on this.

Pakistan’s economic problems increased manifold during this period, highlighting structural problems. By January 2023, Pakistan’s foreign exchange reserves had dipped to USD 4.3 billion, the lowest since February 2014 and external debt doubled from USD 65 billion in 2015 (24% of GDP) to USD 130 billion (40% of GDP). Pakistan was required to make external debt repayments of USD 73 billion between 2023 and 2025. Pakistan’s economic crisis had aggravated on account of such factors as the disruption of international supply chains by the COVID-19 pandemic and the conflict between Ukraine and Russia.

Good news for Pakistan came in October 2022, the Financial Action Task Force (FATF) removed Pakistan from its ‘Grey List’ after it took satisfactory actions to address international concerns regarding terror financing and money laundering. However, Pakistan would continue to be under the spotlight on terrorism for a long time.

The national cricket hero turned politician and leader of the Tehreek-e-Insaf (PTI) party, Imran Khan, had been favored by the army to become PM in 2018. But serious disagreements cropped up, and the PTI Government was ousted from power in April 2022, leaving Imran Khan to battle a slew of cases filed against him. In an unprecedented development, on 9 May 2023, supporters of detained PM Imran Khan attacked army installations and facilities.

Pakistan’s general elections were held on 8 February 2024. After protracted political negotiations and manoeuvring supervised by Pakistan’s all-powerful army, Shahbaz Sharif of the Pakistan Muslim League (N) was once again chosen as the PM of a government in coalition with Pakistan’s People’s Party (PPP) notwithstanding the fact that ousted PM Imran Khan’s PTI Party had done well in the elections in the face of immense challenges. Shahbaz Sharif became PM once again after his elder brother Nawaz Sharif stepped aside in his favour.

Against this backdrop, the Sharifs have underlined the need to mend ties with India. Nawaz Sharif on 9 February 2024 said that his government would try to improve relations with the neighbouring countries, which was understood to include India.

A key motivation for Pakistan to look with hope toward India is likely to be its current economic problems, although help from the International Monetary Fund (IMF) has kept it afloat. In July 2023 IMF approved a USD 3 billion bailout package over 9 months for Pakistan to help it handle its economic crisis. This included USD 1.2 billion immediate disbursement. In mid-January 2024, the second tranche of USD 700 million was released and on 29 April 2024, IMF agreed to release the final tranche of USD 1.1 billion. According to reports, in April 2024, Pakistan has made a request to the IMF for another package of USD 6-8 billion. Pakistan continues to have strategic value, and it is unlikely that countries like China, the United States, or Saudi Arabia will allow it to collapse. However, without serious economic reforms, Pakistan is likely to lurch from one crisis to another. What stands out is India’s refusal to give Pakistan an opening now.

Interestingly, on 5 March 2024 when Shahbaz Sharif was sworn in as PM of Pakistan, PM Modi posted on X: “Congratulations to Shahbaz Sharif on being sworn in as the Prime Minister of Pakistan.” While this message seemed bare minimum, it kept the lines of communication between the leaders of the two countries open. Shahbaz Sharif’s response on 7 March 2024, also through X was, “Thank you Narendra Modi for felicitations on me as the Prime Minister of Pakistan.”

On 23 March 2024, Pakistan’s new Foreign Minister Dar said that his country’s businessmen wanted a resumption of trade with India. He added, “We will seriously look into matters of trade with India.” Additionally, PM Shahbaz Sharif met with Karachi’s business community on 24 April 2024, which urged him to start trade talks with India. Prime Minister Sharif assured them he would soon invite businessmen from all across the country to Islamabad and sit with them till all the issues were resolved.

In case Pakistan was seeking an immediate expression of similar sentiments by the Indian side, that did not happen. External Affairs Minister Jaishankar had on 24 March 2024 ruled out any help to Pakistan as long as it continued to use terrorism as an instrument of foreign policy in relation to India, asserting that the mood in India now is not to overlook terrorists and it “will not skirt this problem anymore.” India will look for tangible efforts by Pakistan to dismantle its terror infrastructure and that does not look imminent.

From the Indian perspective, it is not workable to facilitate trade and other aspects, such as sports (cricket) relations, leaving Pakistan free to pursue its overall hostile approach towards New Delhi. On 3 May 2024, Pakistan’s Army Chief in fact described India as an ‘arch rival’ and pledged his country’s continued support to Kashmir using ‘moral, political and diplomatic means’.

On 4 April 2024, the British newspaper Guardian ran a story that the Indian Government conducted almost 20 assassinations in Pakistan, targeting anti-India terrorists there. The operations were said to have been conducted using UAE-based sleeper cells who hired local Pakistanis to do the targeted killings. Earlier, on 25 January 2024, Pakistan’s Foreign Secretary said, “We have documentary, financial, and forensic evidence of the involvement of the two Indian agents who masterminded these assassinations.”

What was noteworthy in this context was that India’s Defence Minister Rajnath Singh did not think it necessary to hold back when asked in an interview on 11 April 2024, and said that India would not hesitate to enter Pakistan to eliminate terrorists, should they take shelter there. Such blunt messaging may be an advance response to ideas Pakistan may have of continuing to use terror to pressurize India.

There is another dimension, which cannot be ignored. Following the Indian Government’s revocation of Article 370 in 2019, Imran Khan described PM Modi’s government as ‘fascist’ and ‘supremacist’. In December 2022, Foreign Minister Bilawal Bhutto had at UNGA referred to PM Modi as a ‘butcher’. Such intemperate language, even among countries with difficult ties, is unusual and would not be easy to forget, particularly by a Modi-Government.

Assessment

The utility of the ongoing conversation between India and Pakistan through public channels should not be underestimated. Perhaps other kinds of contact could become more active after India’s elections and the formation of a new government in New Delhi in June 2024. From the Indian perspective, genuine progress would be possible only if there is a visible and fundamental change in Pakistan’s terror-based approach towards India and that seems unlikely. The current messaging going back and forth through media channels is useful in that it may help in tempering Pakistani expectations that a boost to its economy would be possible through the resumption of trade and there would not be a need to do anything else to address India’s concerns. The ball is therefore in Pakistan’s court and time on India’s side.

Amb. Gitesh Sarma has served as Secretary (West) in the Ministry of External Affairs, Government of India. He has been Indian High Commissioner to Australia, High Commissioner to Fiji and the Pacific Islands and also Ambassador to Uzbekistan.