The Hidden Game: Why India Should Go Slow on U.S.-Pakistan Relations and the Global Arms Economy

Poonam Sharma 

When Indian soldiers manned the border with Pakistan in the acrimonious months after the December 2001 Parliament attack, war seemed imminent. For months, the Indian army and Pakistan’s military faced off from Jammu and Kashmir to Gujarat. But no bullets were fired. Instead, what played out was an economics and military fatigue lesson: Pakistan, too poor to support the expense of a full-fledged standoff, gradually disintegrated under its own weight. By the time Indian soldiers marched back into barracks in late 2002, Pakistan was virtually bankrupt, its army demoralized.

But back home, the Indian media seldom depicted this as a strategic win. Rather, parts of the press ridiculed the Vajpayee government, asking why such huge mobilization was done if no war was fought. Today, over two decades on, India’s position is far stronger — militarily, economically, and geopolitically. But the threats it faces have changed too, and many of them do not come from the battlefield, but from the international power games around it.

At the center of these dynamics is the complicated triangular relationship between India, Pakistan, and the United States — a relationship that has again and again defined South Asia’s security landscape. And within that triangle is an even greater reality: war, or even the threat of war, is a lucrative business for the world’s arms-producing countries.

The U.S.-Pakistan relationship has been one of contradictions over the years. On the one hand, Pakistan has been America’s biggest non-NATO ally, receiving billions of dollars of military aid across the decades. Washington has provided Pakistan with F-16s, tanks, spy gear, and more, viewing it as a key player in containing Soviet expansion during the Cold War and subsequently as a frontline state against the “War on Terror.”

However, Pakistan has at the same time hosted and encouraged U.S. enemies — from housing Osama bin Laden in Abbottabad to hosting the Taliban in Afghanistan. Time and again, Pakistan has double-dealt, taking money from the U.S. while furthering its own regional interests, frequently at the expense of India.

Recent indications indicate that the U.S. has not fully abandoned this old habit. Just a few weeks ago, the US authorized  $400 million in aid to Pakistan, nominally for economic stabilization. Pakistan’s Prime Minister and military commanders have been keeping themselves busy wooing Saudi Arabia, China, and the U.S. at the same time — a tried-and-true hedging strategy to remain afloat. In the meantime, Pakistan’s Army Chief Asim Munir has made verbal salvos against India and its leaders, highlighting the fact that Islamabad still makes a part of national identity out of hostility towards India.

Conversely, India and the U.S. have never been closer. From defense ties under the Quad and foundational frameworks such as COMCASA and BECA to common concerns about China’s increasing assertiveness in the Indo-Pacific, New Delhi and Washington have found a coincidence of interests unthinkable during the Cold War.

Indo-U.S. relations have been further strengthened by trade, technology, climate, and educational cooperation. Indian-Americans are now influential in all spheres of American life, ranging from business to politics. India is viewed by the U.S. not only as an estrategico partner, but as a significant pillar of its vision for a “free and open Indo-Pacific.”

But India should not forget: the U.S. is still a global power with changing priorities. Washington might view India as a counterbalance to China, but it also has transactional relationships with Pakistan, Saudi Arabia, and other regimes whose interests frequently diverge sharply from those of India. America’s defense industry, in the meantime, feeds on global instability, selling arms to allies and adversaries alike.

Perhaps the most underappreciated but essential reality of contemporary geopolitics is the huge economic force that war fuels. World spending on the military in 2023 hit a record of $2.44 trillion, said the Stockholm International Peace Research Institute (SIPRI). The bulk of this — more than 70% — is from arms sales, defense contracts, and military technology.

The largest beneficiaries? The U.S., Russia, China, France, and Germany — the globe’s leading arms exporters. The more chaos, the greater the demand for missiles, tanks, fighter jets, drones, and bullets. And when tensions are high in trouble spots such as South Asia, the Middle East, or Eastern Europe, weapons-producing countries’ stocks soar and defense contractors cut record deals.

It’s not a coincidence that conflict in Ukraine, Gaza, and the Middle East has come at the same time as record profits for the world defense industry. With each shooting battle, each standoff, come new markets for arms, logistics, cyber security, and military advice. It’s a grim reality: where poorer countries perceive ruins, richer countries perceive dollars.

For India, this is a strategic conundrum. While it needs to be ready to counter decisively any such provocations from Pakistan, China, or otherwise, it needs also to be careful not to get entangled in conflicts that really benefit others.

A badly planned or hastily computed war serves none in South Asia — perhaps only the international arms industry. As we saw in Ukraine, the war devastated a nation but sharpened Western arms industries. Russia has also funded its war effort partially through cooperation with Iran and North Korea. At the same time, states such as the U.S. have increased arms shipments to allies, tightened grip on military supply chains, and enhanced geopolitical influence.

India’s emergence as a world power rests on the maintenance of economic growth, political stability, and technological progress. A great war, especially one on disadvantageous terms, can threaten decades of advance. War should not be waged to feed popular passion, nationalist sentiment, or media frenzy. It should be waged only when absolutely required, at a time and place of India’s choosing, with defined strategic aims.

While India monitors its outside enemies, it should not turn a blind eye towards the domestic sphere. Political opportunists, paid provocateurs, and radical groups can dismantle social cohesion internally. Those parts of the media which fuel panic or polarization can chip away at national will. Parties that have no qualms crossing every boundary to gain vote banks are equally damaging as outside enemies.

Real national security in the modern era is as much social resilience as it is a matter of military power. Citizens have to be watchful, distinguishing between propaganda and reality, and ostracizing those who will try to gain from mayhem — regardless of whether they are politicians, media sources, or foreign operatives.

India is at a time of immense hope and immense danger. Its geopolitical influence has never been stronger, and its international alliances have never been more profound. But it must walk with caution in a world where war has become a lucrative business for some and a humanitarian catastrophe for others.

To win, India needs to tighten its alliances without becoming dependent, prepare for conflict without hastening into it, and promote oneness at home even while danger threatens abroad. Only by skillfully playing this intricate game with restraint can India gain its rightful place on the world stage.