BEYOND the wave of triumphalism and jingoism prevailing in Pakistan and India after the recent military confrontation, cooler and saner thinking must prevail in the subcontinent. Both countries were far higher on the `escalation ladder` in the recent episode than many people realise, with previously established red lines and thresholds having been crossed by both sides in a matter of hours. To make matters worse, the Indian political leadership, having boxed itself in a narrowing space self-created by electoral expediency and hyper-nationalism, has lowered the threshold of all-out war in the face of its perceived humiliation.

The events that have led us to this `new normal` of living under an even darker shadow of nuclear war mirror the march of folly witnessed so many times in history, and captured by Pulitzer Prize-winning American historian Barbara W. Tuchman in her book of the same name. Her bottom-line? On too many occasions, states have acted contrary to their long-run selfinterest. India`s current government is pushing the country in that direction.

How did we get here? In the most recent iteration, that is. The terror attack committed in Pahalgam by a shadowy, previously unheard of `resistance` group had all the markings of an atrocity meant to inflame sectarian passions and provoke conflict. Pakistan`s response was both reasoned as well as reasonable. It called for an independent international investigation into the incident. The Indian political leadership under BJP, on the other hand, had already primed itself for upping the ante, including launching a military strike on its nuclear-armed neighbour.

As part of a wider political strategy, Prime Minister Modi`s default mode with regards to attribution for any terror attack is the presumption of Pakistan`s guilt, without the need for an impartial investigation or evidence. In stark contrast to Pakistan, where India-centred jingoism has no traction as an election strategy of mainstream political parties, an appeal to hypernationalism and religious fanaticism provides a winning platform in India, and has been cynically exploited by BJP.

It is important to note that creating a bogey-man, an imaginary external threat or the fear of `the other`, has been a widely used tactic by demagogues throughout history to justify undermining democracy at home and solidify a slide into authoritarianism.

India`s response to Pahalgam is fraught with strategic miscalculation borne out of hubris. It mistakenly thought a fragile economy and frayed internal cohesion would limit Pakistan`s ability to effectively strike back. It also overestimated its own operational capabilities on the military side, as also its diplomatic standing and ability to rally the international community to `punish` Pakistan.

In doing so, Mr Modi has unleashed a dangerous escalatory dynamic, leading to an unstable equilibrium between the two countries: neither fully a cold war nor a hot peace, but a strategic pregnant pause between intensifying conflicts.

Ironically, India stands to lose much more than Pakistan from its bizarre strategic calculus. The first casualty is India`s carefully crafted narrative with regards to Pakistan and the disputed Kashmir region. Over the years, India had managed with varying success to `de-hyphenate` itself from Pakistan, project Kashmir as a bilateral dispute, paint Pakistan as a sponsor of nonstate proxies involved in cross-border terrorist activities, and isolate Pakistan diplomatically.

By providing Pakistan with a permanent casus belli via suspension of the Indus Waters Treaty and working aggressively to dam the Indus basin waters that flow into the lower riparian, as well as by lowering the threshold of all-out war between the two nuclear-armed neighbours, India has all but ensured abiding international attention to, and eventual mediation in, the Kashmir dispute.

Expecting that the rest of the world will ignore the danger of nuclear war caused by India`s escalatory and irresponsible actions is evidence of how disconnected its political leadership has become from ground realities.

Apart from the diplomatic setback, equally damaging for India, or perhaps even more so, is the permanent harm Mr Modi`s political strategy is likely to inflict on India`s economy. While the Indian economy has not been exactly shining under Mr Modi, in large part causing the elec-toral setback BJP faced in the 2024 general elections and leading to the desperate beating of war drums witnessed recently, it is still well-positioned to gain substantially from the partial decoupling underway between the US and China. Along with Southeast Asia`s economic powerhouses such as Vietnam and Indonesia, India can potentially host supply chains for many of the advanced economies` manufacturers that have been uprooted from China, or are planning to migrate. This opportunity to attract foreign investment is potentially worth anywhere between $500 billion to $1 trillion in the medium term in my estimate, and is there either forthe taking,orforsquandering.

While India has begun to attract significant inflows of foreign direct investment over the past few years, inward FDI into India is still almost one-sixth of the foreign investment flows into mainland China at $28bn in 2023 versus $163bn. The stock of FDI in India is an even lower fraction in comparison to mainland China.

Before India fashions an even more reflexive strategy that brings the two quarrelling South Asian neighbours closer to the edge, it should draw lessons from 2002. Months of full-scale mobilisation of the two armies and a tense standoff along the border led to foreign nationals, many working in India`s IT hubs of Bangalore and Chennai, fleeing in droves on specially chartered flights. With the lengthening shadow of nuclear Armageddon on the subcontinent, it will be moot if many choose to return in the next round.

With so much at stake, India stands to lose big if it pursues its current path of confrontation.

Instead of striving to become an economic growth node for the subcontinent, peacefully coexisting and trading with its neighbours, cooperating regionally to lift millions of South Asians out of poverty and illiteracy, and by becoming a beacon of a genuine inclusive democracy, the current Indian political leadership has chosen a very different path. History will not be kind.

The writer has been a member of several past economic advisory councils under different pn~me ministers.