ISLAMABAD: Pakistani Deputy Prime Minister Ishaq Dar on Monday urged the international community to prevent ‘spoilers’ from obstructing its path to economic growth as Moody’s Ratings said escalating frictions between New Delhi and Islamabad could weigh on Pakistan’s economic growth and impair access to external financing.

Dar’s comments came in the wake of New Delhi blaming Islamabad for a deadly attack on domestic tourists in Indian Kashmir last month. India’s Prime Minister Narendra Modi has vowed to punish the backers of the attack “beyond their imagination” and fears have been rising that India might carry our surgical strikes or special forces raids along the de facto border that divides the disputed Kashmir valley between the two nations. Pakistan has denied involvement in last Tuesday’s attack but has warned it will hit back if it is targeted.

Speaking at the 4th Annual Regional Dialogue 2025 organized by the Institute of Regional Studies (IRS) in Islamabad, Dar, who is also the foreign minister, said Pakistan was endowed with rich natural and human resources and an enormous economic potential, located at the crossroads of South Asia, Central Asia, and the Middle East, and wanted to “capitalize on these inherent advantages for the prosperity and betterment of our people and that of the region.”

“We have prioritized geo-economics as one of the cardinal pillars of our engagement with our international partners. We are determined to enhance regional connectivity, and increase bilateral and multilateral developmental partnerships for socio-economic uplift,” the foreign minister said.

“To achieve these goals, we are desirous of peace in the region and beyond. At a time when we are headed on the path of economic stability, we do not want any distractions from our people-centric development agenda.”

He said he hoped the international community would help Islamabad achieve its goals, and prevent any spoilers in the region “from obstructing our path to peace and prosperity.”

The recent standoff with India has come as Pakistan treads a tricky and narrow path to economic recovery. 

On Monday, Moody’s Ratings said tensions between India and Pakistan would impair Pakistan’s economic growth and access to external financing. The ratings agency said persistent tensions could pressure Pakistan’s foreign exchange reserves, though it did not expect a full-scale military conflict.

Pakistan secured a $7 billion bailout program from the IMF last year and was granted a new $1.3 billion climate resilience loan in March.

The program is critical to the $350 billion economy and Pakistan said it has stabilized under the bailout that helped it stave off a default threat.

Last week, according to media reports, India raised concerns with the IMF on its loans to Pakistan, asking for a review. 

The adviser to Pakistan’s finance minister has said the IMF program is “well on track.”

“The latest review has been done well and we are completely on track,” adviser Khurram Schehzad, told Reuters last week, adding that Pakistan had very productive spring meetings with financial institutions in Washington.

“We did about 70 meetings ... interest has been very high for investing and supporting Pakistan as the economy turns around,” Schehzad said.

The soaring tensions between the two countries have drawn global attention and calls for cooling tempers.

US Vice President JD Vance said on Thursday Washington hoped Pakistan would cooperate with India to hunt down Pakistan-based assailants.

Kashmir is claimed in full by both Hindu-majority India and Muslim-majority Pakistan, but each rules it in part.

-With input from Reuters

ISLAMABAD/NEW DELHI: India and Pakistan have significantly upgraded their military capabilities since the nuclear-armed neighbors clashed in 2019, posing increased risks of escalation even in a limited conflict, former military officers and experts say.

Pakistan says India plans a military incursion after New Delhi blamed Islamabad for a deadly attack on domestic tourists in Indian Kashmir last month. India’s Prime Minister Narendra Modi has vowed to punish the backers of the attack “beyond their imagination.”

Pakistan has denied involvement in the attack but has warned it will hit back if it is targeted.

In 2019, India carried out air strikes inside Pakistan after the bombing of an Indian military convoy in Kashmir and said it destroyed “terrorist camps.” Pakistani jets conducted a retaliatory air strike and shot down an Indian aircraft during actions spread over two days.

The neighbors have fought three wars — in 1948, 1965 and 1971 — and clashed countless times since gaining independence, mostly over the Kashmir region which both claim. Both acquired nuclear weapons in the 1990s and Kashmir is considered one of the most dangerous flashpoints in the world.

Military experts say neither side will consider nuclear weapons unless pushed to the wall, but even a limited conflict would carry high risks of escalation.

They say such a conflict is likely to involve aircraft, missiles or drones, where India and Pakistan are considered closely matched, although India’s far greater resources would come into play over a longer period.

“Decision makers in both states now have a higher risk appetite for conflict initiation and escalation than prior to 2019,” said Frank O’Donnell, a non-resident fellow at the South Asia Program at the Stimson Center, a think-tank in Washington, as they had managed then to clash without nuclear weapons being used.

“But without a clear mutual sense of the precise actions, that could trigger inadvertent escalation,” he added.

Both sides have acquired new military hardware since 2019, opening up new conventional strike options.

“Each side will think they are in a better position than last time,” said Muhammad Faisal, a South Asia security researcher based at the University of Technology, Sydney. “It is only when we see actual combat that we will find out.”

In particular, India believes that it was at a disadvantage in 2019 because it had to rely mainly on aging Russian jets. It has since inducted 36 French-made Rafale fighter jets, a top Western aircraft, with more on order for its navy.

To counter, Pakistan got one of China’s most advanced war planes, the J-10, a rough equivalent of the Rafale, in batches since 2022. It has at least 20 of the aircraft, according to the London-based International Institute for Strategic Studies.

The planes carry advanced capabilities, with the Rafale armed with Meteor air-to-air missiles that operate beyond visual range. The J-10 is armed with the comparable PL-15 missile, according to a Pakistani security official who declined to be identified because they were not authorized to brief the media.

To plug the gaps in air defenses exposed on both sides in the 2019 conflict, India secured Russia’s battle-tested S-400, a mobile anti-aircraft missile system. Pakistan obtained the HQ-9 from China, which is based on Russia’s S-300, one notch down.

’CLAMOUR FOR ACTION’

“Most certainly in some respects we are better off (than 2019),” said Anil Golani, a former air vice marshal in the Indian Air Force, and the director general of the Delhi-based Center for Air Power Studies think tank.

“There’s a lot of clamor for action in the country but, in my personal assessment, both India and Pakistan are not looking for an all-out conflict,” he added.

Hanging over any conflict is China, India’s rival and Pakistan’s close ally and biggest supplier of military equipment. Although the US has urged India and Pakistan to ease tensions, it will closely watch any conflict for insights on Beijing’s aerial strength.

The Chinese plane and its PL-15 missile have not previously been tested in combat.

“It could be a contest between Western and Chinese technology,” said Faisal, adding “for India, there is the dilemma of how many air squadrons to commit to the Pakistan front, as it must also guard against China.”

China and India fought a brief border war in 1962 and the two armies have clashed, most recently in 2022, along their tense Himalayan frontier.

Pakistan has a fleet of F-16s, the US aircraft acquired decades back when ties with Washington were stronger. These F-16s were deployed in the 2019 tussle, leading India to lodge protests with the US, although New Delhi now enjoys far closer ties with Washington.

This time, to avoid the political fallout with the F-16 and to take advantage of having a more advanced aircraft, Pakistan will likely spearhead with the Chinese J-10, experts said.

But a drone or ground-launched missile strike is considered more likely since neither would risk a pilot being shot down.

India has turned to Israel for combat-capable drones, getting the Heron Mark 2, and it has UA Predator drones on order. Pakistan has acquired Turkiye’s Bayraktar TB2 — used by Ukraine in its war with Russia — and the Akinci, also from Turkiye, according to the Pakistani security official.

Amid the standoff, Pakistan tested a surface-to-surface ballistic missile with a range of 450 km (280 miles) on Saturday, to show that the armed forces were ready to “safeguard national security against any aggression,” according to a statement from the country’s military. Pakistan also has a range of short-range and medium-range missiles, capable of being fired from ground, sea and air.

There was no immediate comment from India on the test. India’s capabilities include the BrahMos supersonic cruise missile of about 300 km range as well the Agni series of intercontinental ballistic missiles.

The 2019 skirmish almost spiraled out of control, with multiple missile strikes threatened before US intervention calmed the situation down.

Kaiser Tufail, a former fighter pilot in the Pakistani air force, said that India did not manage to establish deterrence in 2019, so it would aim for a more incisive strike this time, bringing more risks in its wake.

Modi said following the 2019 skirmishes that the country had felt the lack of Rafale fighters at the time, which were on order, and suggested that the results of the clash could have been different if it had the French fighter.

“If you go beyond what we saw in 2019, it is very risky,” said Tufail. “Nuclear-armed countries slugging it out is extremely dangerous.”