India’s move to sever one of its few economic ties with Pakistan raises the odds of military action, as tensions soar after a bomb in Indian-administrated Kashmir last week killed 44 paramilitary policemen.
Indian Finance Minister Arun Jaitley wrote on Twitter on Saturday that the withdrawal of MFN status means basic customs duty on all goods exported from Pakistan to India has been immediately raised to 200%.
The tensions continued to build Monday. Indian police said militants killed four Indian soldiers and a civilian in a gunbattle in the Kashmir area, and Pakistan recalled its ambassador in New Delhi for consultations. On Tuesday, Indian’s top military commander in the region said Islamabad’s spy agency was involved in the bombing, while Pakistan’s foreign minister urged the United Nations to take steps to ease tensions.
Indian Prime Minister Narendra Modi on Friday vowed to avenge the killings, in an unusual show of anger that analysts see as being prompted by a general election due by May.
“By ending even those few economic ties, India and Pakistan are only left with military options if they choose to retaliate against each other in future,” a senior Western diplomat in Islamabad told the Nikkei Asian Review. “It’s important to have a variety of relations, including economic ones, between these two countries, which are both armed with nuclear weapons.”