Why India should leverage its market clout to defang Pakistan

medium120612596We are all still reeling from Pahalgam. But this is an opportune time for India to decisively target the flow of arms and funds to Pakistan. The goal should be to undermine the influence of its army chief Asim Munir, whose rabble-rousing anti-Hindu speech on April 16 could well have been a wolf-whistle for the terrorist attack on April 22.Extraordinary times call for extraordinary measures. India should press the US, Russia and China to halt arms sales to Pakistan and stop financial support to Rawalpindi. Saudi Arabia and the UAE — major funders of Pakistan — must also be asked to stop supporting a regime that enables terrorism.Unlike China and the US, India has never used its market for leverage in the global environment. India is now faced with a security challenge that should prompt it to renegotiate several deals across the board.If F-16 jet fighters are empowering Pakistan against India, Washington should be asked to refrain from those sales. This is a good time for that ask because the US is scrambling to offload Boeing jets after China returned 737 Max aircraft and cancelled future orders.Air India, eyeing quick deliveries, plans to buy some of these. But this deal could be postponed. Indian diplomats can use it as leverage to block Washington’s recent $397mn aid for Pakistan’s F-16 fleet. Though Washington has asked Islamabad not to use the fighters against India, everyone knows such conditions are never enforced.Indian experts often brush aside what they regard to be an economically broken Pakistan. But the fact is that Rawalpindi/Islamabad has managed to trick the US and China into providing assistance. Beijing has even supported its case against India at the UN. Surely, tackling Pakistan must involve dealing with countries that support it.It should be possible to financially squeeze Pakistan, which has foreign reserves worth $10.5 bn (against India’s $678 bn). One way is to talk to Saudi Arabia, the UAE and China, which recently extended $5.51bn in loans to Pakistan. Can India persuade these countries to stop the release of future instalments of funds that are used for terror-related activities?Diplomacy is a delicate balancing game, and rash moves can be counterproductive. But that should not stop New Delhi from having its say. Some moves can be unspoken and unseen. As mentioned above, Air India can simply drag its feet with regard to buying Boeing aircraft instead of making a grab of it. medium nocaptionhttp://youtu.be/RPwAtYXvfoU?si=GyYUS-grSilMVO9YThe government has, so far, responded to the 22/4 attack by suspending the Indus Waters Treaty, closing the Attari checkpost and asking some Pakistani embassy officials in New Delhi to go back. These moves are not enough. They do not cause sufficient damage. Water flow to Pakistan, for instance, cannot be stopped in a significant manner until new dams are constructed on the Indus. For starters, one way to punish Pakistan is to shut off the supply of pharmaceutical products. This is a product that China or any other source can only replace at 2-3x Indian prices.India has an advantage when it comes to dealing with tariff-hit China, Pakistan’s biggest benefactor. Beijing is desperately looking for additional markets for goods that tariff-tizzy US won’t buy. It will also suffer the loss of markets in other countries in case of an IMF-predicted global economic slowdown.China is the source of 81% of Pakistan’s arms imports. These include high-end missile systems, advanced naval frigates, reconnaissance drones and fighter jets. They are worth around $4bn, very little compared to China’s exports of $113bn worth of goods to India in 2024-25.Getting China to stop arms shipments to Pakistan may be tough, because Beijing’s purpose is to weaken India’s military position. This is the bigger reason why India should use its market clout to force concessions. It is worth asking China not to meet Pakistan’s latest request for 40 J-35A fighter jets.The bigger challenge for New Delhi is to persuade Indian companies to make sacrifices, and learn to live without some categories of Chinese goods. Alternative sources can be found even if they prove more expensive. Being overprotective of local companies is one reason why India is woefully dependent on a country that poses a border threat.Even suggesting lowering Chinese imports by 20% can make China’s leadership nervous, as the latter deals with rising unemployment and income reduction. Beijing is desperate as it stands to lose 20-25% of its $434bn worth of exports to the US, even if the Trump administration reduces the current 145% tariffs a few notches, as the American president signalled on April 22.What is required is a series of complicated bargaining using India’s market, political and cultural influence across the world. The fact that Indian-origin managers and technocrats guide and lead hundreds of companies in West Asia and the US should also count for something. What India should — and can — do is deliver Pakistan and its sponsors a palpable and long-term deterrence that an economic squeeze could effectively provide.The writer is former ToI Beijing correspondent