Restoration of peace in the Iran conflict could provide greater economic advantages for India compared to Pakistan, according to expert analysis. The strategic dynamics and recent economic measures by India play a significant role in this outlook.
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As peace efforts advance in the ongoing conflict in Iran, India is positioned to gain more economically from the restoration of stability than its neighboring country, Pakistan. This assessment was made by Michael Kugelman, a non-resident senior fellow at the Asia Pacific Foundation, who shared his insights on Bloomberg’s "Insight with Haslinda Amin." Kugelman pointed out that India's extensive economic engagements and market potential position it better to capitalize on regional stability[1].
India's potential gains from the peace process come amid the country's latest efforts to stabilize its currency. The Reserve Bank of India (RBI) has implemented the most significant clampdown on the rupee in a decade. These measures aim to strengthen the currency but bear the risk of deterring foreign investors, upon whom India has increasingly relied. This dual challenge poses risks and opportunities for India's economic landscape[2].
According to Kugelman, while both India and Pakistan can potentially benefit from a peaceful resolution in Iran, India's larger economy and diversified economic ties provide it with a distinct advantage. The nation’s extensive trade relations and infrastructure development projects are poised to accelerate economic benefits in a peaceful regional environment. On the other hand, Pakistan's economic gains might be more limited due to its smaller scale and narrower international trade networks[1].
Kugelman also addressed perceptions regarding India's strategic silence in the geopolitical arena concerning the Iran conflict. Contrary to some analyses, he does not see India's reserved stance as disadvantageous. Instead, India's deliberate diplomacy is seen as an attempt to maintain strategic flexibility and avoid being entangled in volatile geopolitics while reaping economic benefits from a stable Iran[1].
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