Media platforms are awash with analysis and post-mortem of Operation Sindoor, India’s forceful response to the barbaric terror attack at Pahalgam in Jammu & Kashmir. Defence experts—both genuine and self styled—have waxed eloquent about military strategy and tactics.
Diplomatic pundits of all hues have debated passionately about India's success or failure in persuading the world that it can no longer live with the shadow of terror looming.
Geopolitical commentators have argued over lofty issues such as balance of power, the China factor, and the “reliability” of the United States as a partner. As even lingering doubts over India’s decisive “victory” in the short battle disappear with new satellite evidence, all sorts of factors are being touted as the ones that swung matters in India’s favour.
But behind this fog of expertise and punditry lies a far simpler truth: it is the economy.
Widening Economic Gulf
A lot has been written in recent times about how the Indian economy has galloped ahead of Pakistan. The data reveals the ever-yawning gap.
For instance, at the beginning of the 21st century, India's was less than five times than that of Pakistan. By the end of this year, it will be 12 times larger—and the gap will only continue to widen.
The most conservative estimates project India's GDP to grow at 6.5 percent to 7 percent in the medium term. In contrast, it is difficult to imagine a scenario where Pakistan's GDP can grow at more than 4 percent a year.
As of now, the GDP of India is $4.39 trillion and that of Pakistan is $335 billion. In a telling irony, the per capita income of Pakistan was higher than that of India consistently till 2008. But after the 26/11 Mumbai terror attacks that year, India surged ahead — and has continued to do so.
At the moment, India’s per capita income is edging towards $3,000, while Pakistan struggles to cross $1,600. India is now so far ahead of Pakistan that even an attempt at meaningful comparison will be laughable.
The chart below compares Pakistan’s GDP with that of Uttar Pradesh, Gujarat, and Maharashtra. Maharashtra alone far surpasses Pakistan, and at least half a dozen Indian states now boast a larger GDP. And we’re not only talking about the high-performance states. India’s economic dynamism is widespread.
Take Odisha: 25 years ago, Odisha used to be in the race with Bihar to be the poorest state of India. A knowledgeable Pakistani would have laughed at the idea of Odisha catching up. Yet today, Odisha’s per capita income is set to become twice that of Pakistan.
Corporate Muscle vs National GDP
There is another interesting way of looking at the glaring and ever-growing difference between the two economies that is not often talked about. The annual revenue of Reliance Industries is about $125 billion—about a third of Pakistan’s entire GDP. And that’s just sales revenue, not market capitalisation.
Now consider this: the combined annual sales revenue of India’s top five companies—Reliance, LIC, Indian Oil, State Bank of India, and ONGC—will cross $450 billion this year. Just five companies. Together, they will be significantly higher than the total GDP of Pakistan.
There is no end to the wealth of data that reveals the ever-yawning gap between the two economies. For instance, Suzuki recently launched a spliced-up version of the Alto car model in Pakistan. The price tag is more than Rs 30 lakh.
To make matters worse for Pakistan, political instability, persistent economic crisis—the country has been bailed out just recently for the 24th time in 35 years by the International Monetary Fund (IMF)—and virtually non-stop terrorism means no sane or sensible investor will put money in that country. No investments automatically mean tepid and weak growth rates, leading to a vicious cycle.
No Money for War
Countries with limited resources can still pose a strategic challenge to larger adversaries. For a long time, Pakistan did achieve that with a considerable amount of success. Yet, a state does need revenue to finance even modest arms purchases of a strategic nature. And it is here that the gap between India and Pakistan appears even more shocking.
A state can raise money in three ways: taxes, borrowings, and printing money. The later two options are not sustainable as inflation remains rampant in Pakistan and it is perpetually on the precipice of a debt default. The only other option is tax revenues.
The chart above shows total tax revenues collected by Pakistan and India in 2024. In this metric, India is almost 20 times bigger than Pakistan. To top it all, India has foreign exchange reserves of close to $700 billion while Pakistan can boast of barely $10 billion.
The simple question is: where will Pakistan get the money to engage in even a two-week conflict with India? Saudi Arabia, Turkey, and China can give some dole for some time. But not all the time.
The Real Adversary
These brutal facts have prompted strategist thinkers to start thinking the impossible. Till now, India has been confronted with a two-and-half front strategic threat: China, Pakistan, and the Enemy Within. Will one front become de facto irrelevant in the future, except being the instrument of nuclear blackmail?
Pakistan had been in no way even close to pose a challenge to India whichever way, and then Pahalgam and Operation Sindoor happened as well. What was the reason that Pakistan did what it did, even after knowing the possible eventualities?
The answer, again, is the economics. It wasn’t Pakistan that India was truly confronting; the two-and-a-half-front doctrine no longer applies. The core lesson of Operation Sindoor is that India faces one enemy across all fronts: China.
Pakistan was just a proxy. For all practical matters, our army was indirectly confronting China. When you put this part of information in the same context that this column has been written, then all of a sudden you realise that the matrix has changed.
If India’s GDP is almost 12X of Pakistan, we need to look into the fact that China’s GDP happens to be almost 5X of India. Key difference being, while the gap between India and Pakistan is increasing by the day, the gap between India and China doesn’t show that optic.
China faces a real threat of a rising India, something which it doesn’t like in its own backyard. It is easier for them to fund a proxy war via Pakistan that could destabilise India and make it look like a less safer destination for FDI inflow. With the new tariff war instability and manufacturing hubs starting to shift their bases, it is all the more reason for China to make a strategic move right now via Pakistan.
We are dealing with the same enemy on both the fronts for all practical matters.
(Yashwant Deshmukh and Sutanu Guru work with the CVoter Foundation. This is an opinion piece and the views expressed are the authors' own. The Quint neither endorses nor is responsible for them.)