Pakistan launched its second missile test in just three days on Monday, while India announced plans for security exercises across multiple states, fueling concerns that the two nuclear-armed neighbors may be sliding toward a dangerous clash over a recent deadly attack in Kashmir.
Moody’s has cautioned that the growing tensions could derail Pakistan’s fragile economic recovery, even as world leaders called for restraint.
The diplomatic fallout follows the April 22 massacre in Indian-administered Kashmir, where gunmen killed 26 Hindu pilgrims — the deadliest attack on civilians in India in nearly 20 years. India has accused Pakistan of having a hand in the assault, a charge Islamabad has rejected, though Pakistani officials claim they have intelligence suggesting India is preparing for military strikes.
The standoff has already led to shuttered borders, suspended trade, restricted airspace, and sporadic cross-border gunfire along the volatile Kashmir frontier.
India’s interior ministry has instructed several states to hold emergency preparedness drills on May 7, a government insider told Reuters. The drills, which will include air raid warnings, evacuation procedures, and public safety training, aim to ready civilians for possible attacks. The official did not specify which states would take part or explicitly mention Pakistan or Kashmir.
Meanwhile, Pakistan’s military announced the successful test of its short-range Fatah surface-to-surface missile, with a range of 120 km (75 miles), just two days after it launched the Abdali ballistic missile, capable of striking targets up to 450 km away. Prime Minister Shehbaz Sharif hailed the latest test as proof that Pakistan’s defenses are “in strong hands.”
Information Minister Attaullah Tarar confirmed there are currently no open communication channels with India.
Kashmir has long been the flashpoint in the bitter rivalry between majority-Hindu India and Muslim-majority Pakistan, both of which claim the Himalayan region but control it in parts. India has long accused Pakistan of aiding Islamist militants in Kashmir, while Islamabad insists it offers only moral and diplomatic backing to Kashmiris seeking independence.
Economic Risks Mount
Moody’s warned that the deteriorating situation threatens Pakistan’s $350 billion economy, which has been slowly stabilizing after a $7 billion IMF bailout last year helped avert a financial meltdown. “A prolonged rise in tensions with India would likely weigh on Pakistan’s economic growth and disrupt fiscal consolidation efforts, jeopardizing progress toward macroeconomic stability,” Moody’s said. It also warned that persistent tensions could restrict Pakistan’s access to foreign funding and further deplete its foreign reserves.
The alert came days after Reuters reported that India has requested the IMF to reassess its loan program to Pakistan. While India’s economy is expected to remain largely unaffected — given its limited economic ties with Pakistan — analysts noted that higher defense spending could strain India’s fiscal position.
Amid the diplomatic scramble, Iran’s foreign minister arrived in Pakistan Monday for talks and is expected to visit India later this week, offering to help mediate between the rivals. Russia, meanwhile, voiced concern over the escalating tensions and emphasized the importance of its relationships with both countries. Russian President Vladimir Putin condemned the Kashmir attack in a phone call with Indian Prime Minister Narendra Modi and expressed “full support” for India in its fight against terrorism, according to the Indian Foreign Ministry.
Pakistan announced it plans to formally alert the United Nations Security Council about the situation and will urge the UN to take measures to maintain peace and security.