The idea of durable India-Pakistan peace and wider cooperation in the Indian subcontinent and beyond is essentially rooted within some elements of Indian political life. The yearning for resolution of mutual hostility stems from the penchant for partial compromises that operates in Indian domestic political culture and the long shadow of a Gandhian impulse towards overcoming enmity. Pakistan, the adversarial collaborator in the aspiration, is unconvinced it is feasible. Such an idea challenges the very basis of the creation of Pakistan as a Muslim state for a community considered unable to live in equality and amity with Hindu neighbours.

An attempt to create institutional structures that promote greater engagement and indeed integration with India is perceived as a threat to the very existence of Pakistan. It is this nagging suspicion that has bedevilled efforts to promote South Asian economic integration between the two principal protagonists under the aegis of SAFTA. Pakistan also judges deeper relations with India, before resolving the dispute over J&K, a slippery slope of compromise that will entrench the status quo. In addition, the recent path-breaking work of historian Venkat Dhulipala has underlined the profoundly religious motivation that underpinned the establishment of Pakistan. Its subsequent evolution has managed to solidify the original aspiration by strengthening a militant religious identity and ideology.

In fact, the interaction between India and Pakistan is unremitting and intense, though in combat and the shedding of blood. Over a 70-year period, wars have broken out repeatedly and any pause has been an interlude before further outbreak of hostilities. Since 1999, the advent of nuclear weapons in the subcontinent has only served to starkly highlight the depth of that hostility. A militarily weaker Pakistan found the possession of nuclear weapons enabled it to wage permanent war against India. Pakistan no longer feared India’s conventional military superiority and chose to intensify an undeclared assault through terrorism and threatened nuclear retaliation if India initiated a conventional response.

Yet, a hypothetical reality can be counter-posed of the outcomes that would result if warfare ceased and peace prevailed between the two neighbours. One casualty of hostility has been trade and investment flows between the two countries that would certainly rise significantly if determined by market logic, in the absence of political constraints. The scale is hard to estimate accurately, though some sense of its scale can gauged from the level between east Punjab and the rest of India, though it would be even greater since provinces other than west Punjab alone would be involved. Pakistan would also be a transit point for entrepot transactions beyond it, both along land and sea routes. The other major benefit would arise from redeployment of scarce budgetary resources, with reductions in defence and increases in areas such as health, education and physical infrastructure. The economic gain for India would be larger absolutely, as the bigger economy, but the relative gains for Pakistan would be higher.

In turn, these changed priorities would increase economic growth and per capita incomes. Better health, superior education and improved infrastructure provision enhance the productivity gains on which such increments of income depend. The third country to benefit most from open India-Pakistan borders to trade would be Afghanistan, which would have improved access to the vast Indian market, even reducing the incentive to cultivate poppy. A collateral spinoff can be anticipated to follow of improved regional social cohesion and legitimacy for political regimes and national institutions, especially uncertain in Pakistan. In relation to the current hostile impasse between India and Pakistan, in which the threat of nuclear conflagration exists, there is huge benefit should that peril end. The absence of the threat of nuclear catastrophe would be welcomed by the entire international community, which is concerned with the consequences that would result for the entire world. 

India-Pakistan bilateral trade through official channels was US$2.67-3.00 billion (90% Indian exports) according to estimates in 2013-2016. The level of informal trade, via third countries ports, mainly Dubai and, to lesser extent, Singapore, which is not illegal and smuggling add at least another US$1 billion to the total. It is estimated that open borders for trade would raise the total to US$ 6-10 billion, though dominated by Indian exports, but often replacing more expensive Pakistani imports from other sources. According to a study by the Lahore-based Institute of Public Policy, Pakistan would also gain 100,000 jobs and its trade balance would improve. At present, Indian exports to Pakistan include jewellery, textiles, machinery and electronic appliances. Imports from Pakistan comprise textiles, dry fruits, spices and carpets. Pakistan’s denial of MFN status to India under SAFTA and an Indian list of restricted sensitive items sharply curtail the volume of trade. 

Yet the larger question is whether Pakistan will accept the degree of economic specialisation that open trade with India would entail, narrowing its industrial base to fewer consumer goods since the economies of scale enjoyed by India are much greater. Most of all, the amity implied by freer trade relations would endanger the primacy of the armed forces in Pakistani society it has dominated since the 1950s, creating an all-powerful societal nexus. The armed forces would lose legitimacy from a change in the status quo that enhanced peace and stability. More generally, peace with India and effective economic integration of the Indian subcontinent would question the identity and aspirations of Pakistan to lead the Islamic world that was the basis for its very establishment. And would Pakistan jeopardise its “all-weather” friendship with China by allowing India to redeploy substantial forces to the Indo-China border once durable peace ensued with Pakistan?

Dr Gautam Sen taught international political economy at the London School of Economics and Political Science for more than two decades.