Economic Impact of War:
After the Pahalgam terrorist attack, a wave of panic has gripped Pakistan. With its economy already struggling, the potential threat of an attack from India has deepened these fears. Defense experts suggest that should India opt to attack, it will be an immense challenge for Pakistan to withstand for long. However, India might also face repercussions from such a conflict.
India's Defense Budget and Potential War Expenditures
Currently, India's defense budget stands at approximately 6.75 trillion rupees. According to experts, if a potential India-Pakistan war concludes swiftly, India might have to allocate up to 1.5 trillion rupees (20% of the defense budget) to cover costs.
Potential Losses for India
However, if the war is prolonged, these expenses could surge to 3 to 4 trillion rupees. This accounts only for direct combat expenses, while the indirect implications are far-reaching. Estimates suggest that a four-week-long war might lead to an economic loss of approximately $750 billion, equating to nearly 62 trillion rupees.
This loss could emanate not solely from military spending but also due to:
Significant declines in industrial production
Disruptions in commerce and trade
Exodus of foreign investors
Sharp rise in inflation
Intense pressure on tourism, services, and agriculture sectors
Human and Material Costs of War
Any war represents a grave humanitarian tragedy. In a nuclear-armed conflict between India and Pakistan, not only soldiers’ lives are at risk, but countless civilians may also suffer enormously. The impact of a potential war between these nations would extend far beyond their borders, affecting the global economy, markets, and investor confidence worldwide.
