Latest Pakistan-India conflict cost both nations $1 billion an hour combined — economist

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Updated 14 May 2025
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Latest Pakistan-India conflict cost both nations $1 billion an hour combined — economist

  • Estimated daily losses amounted to around $20 billion per day, with Pakistan losing up to $4 billion and India as much as $16 billion a day
  • 30-day conflict would cost the countries around $500 billion combined, with over a $400 billion loss for Indian economy, economists estimate 

ISLAMABAD: A four-day military standoff between arch foes Pakistan and India last week cost both nations an estimated $1 billion an hour combined, a leading economist said this week, as a finance adviser to the government argued the conflict would have “minimal fiscal impact” for Islamabad.

Tensions between nuclear-armed neighbors India and Pakistan escalated after a deadly April 22 attack on tourists in Indian-administered Kashmir that India blamed on Pakistan, which denied involvement. On the night of May 6/7, India struck multiple sites in Pakistan that it said was “terrorist infrastructure” and Pakistan retaliated, downing five Indian fighter jets. 

Over the next four days, the two nuclear-armed rivals engaged in the worst fighting between them since 1999, pounding each other with fighter aircraft, missiles, drones and artillery fire, until a ceasefire was brokered by the US and other nations on Saturday. 

The military confrontation had in the meantime disrupted stock markets, led to airspace closures, escalated defense spending and caused economic losses amounting to billions of dollars.

Asked about the economic cost of the conflict, Farrukh Saleem, a prominent Pakistani political scientist and economist, said he estimated the 87-hour confrontation cost “about a billion dollars an hour for both countries put together,” breaking it down into estimated costs borne by either of the neighbors.

“India has a much larger army, much larger air force. Once it starts moving, once it starts mobilizing its troops, it costs about, let’s say, 12 to 20 times more for the Indian army to mobilize itself as compared to the Pakistani army,” Saleem said.

“So, when I say a billion dollars an hour, you’re probably looking at 20 percent of that being incurred by Pakistan and a good 80-85 percent by India.”




Farrukh Saleem, a Pakistani political scientist and economist, talks to Arab News in Islamabad, Pakistan, on May 13, 2025. (AN photo)

The investment in war was also different, Saleem said, comparing India’s French Rafale fighter jets to Pakistan’s Chinese J-17 Thunders and J-10cs. 

“You look at Rafale, for instance, which is the French aircraft, with its paraphernalia, it’s about $240 million apiece. India has a $16 billion investment into Rafales,” Saleem explained. 

“On the other hand, Pakistan Air Force has gone for cheaper platforms. They are either JF-17 Thunders or J-10Cs and they’re like $20-25 million.”

In terms of missiles, the Indian ballistic missile BrahMos is $3 million apiece. 

“If you’re firing, let’s say, 8 to 10 [missiles] a day, that’s 10 times $3 million, that’s $30 million in one day,” the economist said. 

Arab News reached out to the defense ministry and Pakistan’s military media wing for official estimates of the latest conflict’s cost but did not receive a response. 

But Khurram Schehzad, an adviser to the Pakistani finance minister, said the fiscal impact on Pakistan would not be large.

“The current standoff with India won’t have a large fiscal impact on Pakistan,” he told Arab News. “It can be managed within the current fiscal space, with no need for a new economic assessment.”

Schehzad said Pakistan’s economic resilience was evident from a new record at the Pakistan Stock Exchange, which on Monday posted the highest single-day gain in over 26 years, surging by 10,123 points or 9.45 percent, significantly surpassing the losses recorded last week following the Indian strikes.

“Pakistan’s measured and responsible response, in both its narrative and actions on the ground, has caught investors’ eye, alongside the potential positive spillover effect of a possible settlement in the US-China tariff issue,” he added.

But economists say the recent military standoff has already inflicted heavy financial losses on both countries.

Saleem said daily economic losses from the conflict, including stock market declines and other impacts, amounted to around $20 billion per day, with Pakistan losing up to $4 billion and India as much as $16 billion a day.

“I have tried to put things together. If this conflict had continued for 30 days, my estimate is that both countries would have lost a good $500 billion, with over a $400 billion loss for the Indian economy,” he said.

Dr. Ali Salman, Executive Director of the Policy Research Institute of Market Economy (PRIME), an Islamabad-based independent economic policy think tank, said the conflict had disrupted economic sentiment and affected investor confidence.

“Certainly, investors would not like to come into countries, whether India or Pakistan, if they are in a constant war-like situation,” he told Arab News.

He also warned that a prolonged conflict would push people in both countries deeper into poverty, noting that one in four poor people in the world lived in India or Pakistan.

“We have 27 percent of the world’s poor in just these two countries, and I believe that we need to come out of the military contest and go into an economic contest,” he added.

Another economist, Shakeel Ramay, said every war had an economic dimension and this conflict too had imposed a heavy financial burden on both economies.

“Pakistan’s military expenditure over the four-day conflict, including jets, artillery and missiles, amounted to around $1.5 billion from the national budget, by my estimate,” he said, a significant cost as the country walked a tricky path to economic recovery bolstered by an $7 billion IMF bailout.

“The good thing is our economic activities continued without interruption, retail markets operated smoothly with no shortages and trade routes remained open, all indicating that the direct economic cost was minimal,” Ramay added. 


PM Sharif reassures moral, political support to Kashmiris on Accession to Pakistan Day

Updated 19 July 2025
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PM Sharif reassures moral, political support to Kashmiris on Accession to Pakistan Day

  • Muslim-majority Himalayan region has been a flashpoint between arch-rivals Pakistan and India since independence in 1947
  • Both countries engaged in a four-day military conflict in May over an attack in the region that India blamed on Pakistan

ISLAMABAD: Prime Minister Shehbaz Sharif on Saturday reassured Pakistan’s continued diplomatic, moral and political support to Kashmiris for the achievement of their right to self-determination, Sharif’s office said, as the Kashmiri people marked ‘Accession to Pakistan Day.’

The Muslim-majority Himalayan region of Kashmir has been divided between Pakistan and India since their independence from British rule in 1947. Both countries rule parts of the Himalayan territory but claim it in full and have fought multiple wars over the disputed region.

The Accession to Pakistan Day is annually observed to commemorate unanimous adoption of a resolution on July 19, 1947 by All Jammu and Kashmir Muslim Conference in Srinagar, which called for Kashmir’s accession in view of aspirations of the Kashmiri people and their religious, geographical, cultural and economic proximity to Pakistan.

“On that day, the brave people of Kashmir passed a resolution for the accession of the state of Jammu and Kashmir to Pakistan,” Sharif said a statement issued from his office.

“A peaceful resolution of the Kashmir issue in accordance with the UN Security Council resolutions is the only guarantee of the rights of the Kashmiris and peace in the region. The government and people of Pakistan will continue to extend diplomatic, moral and political support to the Kashmiris.”

Most Kashmiris in the world observe the day to renew their pledge to complete the merger. In Azad Kashmir, wide-scale programs are organized to highlight the Kashmiri struggle and to demand their right to self-determination under UN resolutions.

This year, the Accession to Pakistan Day is being observed at a time of heightened tensions between Pakistan and India over an attack in Indian-administered Kashmir in April.

New Delhi blamed the assault, which killed 26 people, on Pakistan, an allegation denied by Islamabad. The attacked sparked four days of hostilities between the neighbors, with both sides attacking each other with jets, drones, missiles and artillery before agreeing to a United States-brokered ceasefire on May 10.

The conflict, the deadly between the neighbors in more than two decades, killed dozens of people on both sides.


Taste of exile: Beloved Afghan street food disappears from Pakistani cities amid deportation drive

Updated 19 July 2025
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Taste of exile: Beloved Afghan street food disappears from Pakistani cities amid deportation drive

  • Vendors, recipes and memories vanish as nearly a million Afghans forced to leave Pakistan
  • In Islamabad and Karachi, Pakistani customers say flavor are fading and so is a shared culture

ISLAMABAD/KARACHI: In a bustling corner of Islamabad’s F-10 Markaz, the scent of sizzling oil and green chili chutney once signaled the presence of Afghan street food.

Today, the aroma is gone and so are the stalls that created it — the hum of grills and laughter and life.

“There used to be a few [Afghan fries stalls] around my neighborhood and then one morning, they just upped and left,” said Hamza Nofil, 28, who used to daily have the crinkle-cut, ridged, and golden chips, always served with the signature green chutney.

“So, you know, it breaks my heart.”

This combination of photos shows two Afghan-run food stalls in Islamabad. (AN Photo)

The heartbreak is shared by many in Pakistan’s urban centers where those fries, and the people who served them, were part of a larger story — of exile, adaptation and community — that is now vanishing as a result of a sweeping deportation drive targeting Afghan nationals.

Since November 2023, Pakistan has expelled nearly one million Afghans as part of a crackdown on undocumented foreigners. The government has also not renewed Proof of Registration (PoR) cards for 1.4 million Afghan refugees, allowing their legal stay to lapse in June 2024.

While the policy has drawn criticism from rights groups and international powers, it is the quieter losses, of flavor, memory, and a sense of belonging, that now echo through city markets and street corners.

Among the casualties are the street food stalls, modest, smoky kitchens on wheels, where generations of Afghan refugees introduced Pakistanis to flavors from across the border: the fries dunked in secret chutney, paratha-wrapped burgers and mounds of Kabuli Pulao rice heaped with raisins, nuts and slow-cooked beef.

Shahid Ali, 22, a Pakistani vendor in F-10, said he remembered when there were six or seven Afghan fries stalls in the area, as well as those selling Afghan burgers wraps packed with shredded chicken or kebab, slathered with sauces and served in paratha.

“You won’t see any Afghans around here because the government sent them back to Afghanistan,” Ali said.

As Afghan families depart, Pakistani vendors have tried to mimic the recipes but something vital has been lost.

“We are missing them [Afghan food stalls],” said Iqra, 29, a banker who only gave her first name. “I will definitely miss them, especially their green chutney. I loved that.”

“A WORLD IS GOING”

In Karachi’s Al-Asif Square, nicknamed “Small Kabul” for its long-settled Afghan community, the losses are not just culinary. They are existential.

“The craftsmen are going, the shopkeepers are leaving,” said Sayed Abdul Wali, a 27-year-old shopkeeper. “A world is going to Afghanistan.”

This combination of photos shows Afghan dresses in Karachi. (AN Photo)

Abdul Kabir, a Pakistani who sells traditional Afghan naan flatbreads, said demand had plummeted.

“Where once three sacks of flour would be used, now we only use one,” he said. “Even the morning batch is still lying here.”

Anthropologist Saeed Husain warned of cultural erasure, saying more than flavor was being lost. He described Afghan food culture as a form of lived knowledge, passed down from generation to generation, evolving with each retelling.

“All these traditions will be lost,” Husain said. “And then we’ll just have copies, really cheap copies… all of that will be lost too now.”

Afghans began arriving in Pakistan in large numbers after the Soviet invasion of 1979, with successive waves fleeing war, drought, and political instability. In urban Pakistan, cities like Karachi and Islamabad, they became traders, laborers, mechanics, and cooks, helping build the very urban fabric from which they are now being erased.

This combination of photos shows populare Afghan Boti (left) and Kabuli Pulao (right) in Karachi. (AN Photo)

“Pakistan is a country founded in 1947 and made by refugees,” said Dr. Sanaa Alimia, author of Refugee Cities: How Afghans Changed Urban Pakistan.

The professor said Afghans were deeply woven into the economic and cultural fabric of urban centers and played a foundational role in shaping the cities of Pakistan, building homes, laying roads, running businesses — and serving food.

“There are many examples, from agricultural production and farming techniques, to mechanics, to doctors… artists, tandoor wallas, and so much more,” Dr. Alimai said.

But she cautioned against reducing the worth of Afghans to their economic value.

“Human and political rights are about protecting and valuing people irrespective of if they contribute to the economy or not.”

Back in Karachi, Mohsin, a local customer, feared not just the loss of food but of taste, tradition, and togetherness.

“If our Afghan brothers leave,” he said, “then perhaps the taste and flavor will leave too.”


Pakistan again extends airspace ban on Indian aircraft till August 24

Updated 19 July 2025
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Pakistan again extends airspace ban on Indian aircraft till August 24

  • The restriction was first imposed in Apr. as part of tit-for-tat measures by India and Pakistan after an attack in disputed Kashmir
  • The attack, which India blamed on Pakistan without offering evidence, led to a four-day military conflict between the two countries in May

KARACHI: Pakistan has extended for the third time its airspace ban on Indian aircraft until August 24, the Pakistan Airports Authority (PAA) said late Friday, amid continued tensions between the two countries.

The restriction was first imposed on Apr. 24 as part of a series of tit-for-tat measures announced by both India and Pakistan, days after an attack in Indian-administered Kashmir.

India blamed Pakistan for the assault that killed 26 tourists, Islamabad denied the allegation and called for a credible international probe into the incident. Both countries later engaged in a four-day military conflict in May.

“All aircraft operated by Indian airlines will not be able to use Pakistani airspace,” the PAA said in a statement. “The ban will remain in effect until 4:59am on August 24, Pakistan time.”

The authority said Indian-owned or -leased military and civil aircraft will also not be allowed into Pakistani airspace.

Pakistan previously extended the one-month restriction in May and June.

The restriction has forced Indian airlines to reroute their flights, resulting in increased fuel consumption, longer travel times and higher operational costs.

Air India, which operates numerous flights to Europe and North America, estimated in May that the airspace ban could lead to approximately $600 million in additional expenses over the course of a year and requested compensation from the Indian government.


Traders in Pakistan’s commercial capital strike over new ‘anti-business’ tax measures

Updated 57 min 2 sec ago
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Traders in Pakistan’s commercial capital strike over new ‘anti-business’ tax measures

  • Traders demand rollback of FBR arrest powers, limits on large cash transactions and e-invoicing
  • Karachi Chamber leads the strike, the federal trade body withdraws after talks with government

KARACHI: Businesses in Pakistan’s commercial capital of Karachi are observing a strike today, Saturday, to protest tax provisions in the country’s new Finance Act, as a growing number of trade bodies express frustration over what they say are “anti-business” measures that threaten to paralyze economic activity.

The Karachi Chamber of Commerce and Industry (KCCI), which spearheaded the strike call, said dozens of major trade and market associations from across the city had endorsed the shutdown, including those representing restaurants, motorcycle spare parts, iron and steel merchants and packaging manufacturers.

“All of Karachi will be closed,” KCCI President Muhammad Jawed Bilwani said at a news conference on Friday after an emergency meeting with market leaders.

“This is just a one-day strike for now,” he added. “But if we do not get written assurances before the next meeting, we will escalate, striking once a week, twice a week or even for entire weeks.”

Bilwani said KCCI had already conveyed its concerns to Prime Minister Shehbaz Sharif and called on the government to roll back provisions that authorize the Federal Board of Revenue (FBR) to arrest traders, impose penalties on cash transactions above Rs200,000, and enforce mandatory digital invoicing for goods transport.

“We are the ones who keep the economy running,” he said. “If our issues are not resolved, there will be no industry left in this country and we will take our businesses to Dubai.”

Saturday’s strike follows a previous warning issued by the chamber earlier this week, when it said over 50 trade associations across Pakistan had endorsed the protest. It also described the level of support as unprecedented in the country’s history.

Despite the broad show of unity in Karachi, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the country’s top business body, said on Friday it had postponed its own plans to participate in the strike after what it described as successful talks with the government.

“FPCCI President Atif Ikram Sheikh has announced the July 19 strike has been deferred following positive engagement with the government,” a statement from the federation said.

The split reflects a growing divide within the business community, with some factions seeking negotiation while others escalate their protest campaign.

Traders and transporters say the new tax provisions will burden already-struggling businesses and increase harassment by tax officials, especially in cities like Karachi, where law and order challenges, inflation and declining purchasing power have hurt commercial activity.

The KCCI has insisted that only written guarantees from the government will convince traders to call off the broader strike campaign.

Until then, Bilwani said, the protest will continue.


Pakistan, US hold new round of trade talks amid tariff tensions, eye wider cooperation

Updated 18 July 2025
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Pakistan, US hold new round of trade talks amid tariff tensions, eye wider cooperation

  • Pakistan’s finance chief, US officials discuss trade in traditional and non-traditional sectors
  • Finance ministry says both sides optimistic ongoing trade talks will yield positive outcomes

KARACHI: Pakistan and the United States explored ways to broaden their trade partnership beyond textiles, a statement released in Islamabad said on Friday, as their officials held high-level talks in Washington to finalize a trade deal and address recently imposed US tariffs.

The meeting between Pakistan’s Finance Minister Muhammad Aurangzeb, US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer followed a virtual discussion between Aurangzeb and Lutnick last month, during which both sides agreed to push negotiations forward “at the earliest.”

The talks come after the US imposed a 29 percent “reciprocal tariff” on Pakistani exports under President Donald Trump’s trade measures announced in April, a move Islamabad said could undercut its fragile, export-led recovery.

“Finance Minister Aurangzeb emphasized that the US remains Pakistan’s largest trading partner and underscored Pakistan’s interest in expanding cooperation in both traditional and non-traditional sectors, including the IT & tech sector, minerals and agriculture, to foster a mutually beneficial relationship,” Pakistan’s finance ministry said in a statement.

It added officials from both countries were pleased with the progress made so far in deepening trade and economic relations, which they described as a key pillar of the broader Pakistan-US partnership.

They reaffirmed their shared commitment to finding new ways to strengthen cooperation across all areas where both countries stand to benefit.

Nearly 90 percent of Pakistan’s exports to the US are textiles, a sector that is most vulnerable to the duties.

The US is Pakistan’s top export destination, with shipments totaling $5.44 billion in FY2024. From July 2024 to February 2025, exports rose 10 percent compared to the same period a year earlier.

Pakistan is also seeking to diversify its trade destinations and export base to mitigate risks related to its international trade.

“Both parties expressed optimism that ongoing trade talks would yield positive outcomes, benefiting the economies of both countries,” the ministry said in its statement.