# India Leverages Economic Strategies Against Pakistan Amid Rising Tensions

Thu May 08 2025 18:59:36 GMT+0300 (Eastern European Summer Time)
# India Leverages Economic Strategies Against Pakistan Amid Rising Tensions

India seeks to undermine Pakistan through financial tactics while military actions loom.


New strategies emerge as India withdraws from treaties and disrupts cultural exchanges with Pakistan.

In a complex geopolitical landscape, India is intensifying pressure on its long-standing rival, Pakistan, not only through military means but also through strategic economic maneuvers. As tensions heighten following a recent terrorist attack in Kashmir, India appears poised to engage militarily while simultaneously seeking to exploit Pakistan's economic vulnerabilities.

On May 9, the International Monetary Fund is slated to convene just three blocks from the White House, where Indian officials plan to push for the denial of a critical $7 billion loan extension to Pakistan. This funding is essential for Pakistan's economic stabilization and the provision of necessary services to its citizens. Although Indian officials have remained tight-lipped about their intentions, speculations abound that Pakistan’s sources of foreign aid, beyond the IMF, might come under scrutiny as well.

In the weeks leading up to any potential military strikes, India has taken steps to weaken Pakistan’s position. Just last month, India withdrew from a water-sharing treaty established in 1960, which has long safeguarded Pakistan’s access to vital water resources. Pakistani leaders responded by labeling this withdrawal as an act of war, further inflaming regional tensions.

In a display of soft power, India is also modifying its internet regulations to limit Pakistani artists and athletes from reaching Indian audiences, mirroring past actions taken against Chinese influences after border conflicts in 2020. Additionally, India has announced full suspension of trade with Pakistan, although the current volume of trade was minimal, primarily consisting of sugar, pharmaceuticals, and some chemicals.

Despite the changing political dynamics, some Indian exporters report a lack of official communication from the government regarding these trade changes. Consequently, a few continue to honor existing contracts with Pakistani partners, raising questions about the effectiveness of the broader economic sanctions.

As both nations brace for potential conflict, India’s dual approach of military readiness coupled with strategic economic manipulation marks a new chapter in the ongoing rivalry, revealing the complexities of modern warfare that extend beyond the battlefield.

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