Nearly two weeks after the Pahalgam terrorist attack, the India-Pakistan crisis has not subsided. It has instead moved into the much more dangerous period between an attack and an expected response, when neither side knows exactly what the other intends but both are preparing for the possibility of escalation. India continues to accuse Pakistan-linked militants of responsibility for the killing of 26 people on 22 April, while Pakistan denies involvement and has called for an independent investigation. New Delhi has suspended participation in the Indus Waters Treaty, reduced diplomatic ties and closed the Attari-Wagah crossing; Islamabad has responded with measures including closing Pakistani airspace to Indian airlines and suspending trade. Exchanges of small-arms fire have continued along the Line of Control, while both governments have issued increasingly severe warnings. None of this means war is inevitable. But the crisis has entered the phase where the greatest danger may no longer be a deliberate decision by either government to begin a major war. It is two nuclear-armed states making individually rational preparations for escalation, interpreting the other’s preparations as evidence that escalation is coming, and gradually creating the war each claims it would prefer to avoid.
This is the security dilemma in unusually concentrated form. Imagine Indian military planners believe Pakistan may retaliate after an Indian counterterrorism strike. India therefore moves aircraft, air-defence systems or other capabilities into positions from which they can respond quickly. Pakistani intelligence observes those movements but cannot know India’s internal reasoning. What India regards as defensive preparation can appear in Islamabad as preparation for a larger attack. Pakistan then raises its own readiness. Indian intelligence detects that change and interprets it as further evidence that Pakistan intends escalation. Neither side needs to be lying. The problem is that military preparations are observable while intentions are not. Under uncertainty, governments often plan against the opponent’s capabilities rather than trusting its stated intentions, because the cost of being surprised can be catastrophic.
Nuclear weapons make this problem simultaneously more constrained and more dangerous. India and Pakistan understand that a full-scale war carries risks vastly greater than conventional conflict between ordinary states. That should create powerful incentives for restraint. Yet nuclear deterrence can also create space for limited military action because each side assumes the other understands those catastrophic costs and will therefore avoid escalating indefinitely. India can consider a limited strike believing Pakistan will not rationally choose nuclear war over it. Pakistan can consider a limited response under exactly the same assumption. The result is the stability-instability paradox: nuclear weapons make unlimited war less attractive while potentially making limited confrontation appear more manageable.
The problem is that “limited” exists in the mind of the attacker, not automatically in the perception of the target. India may design an operation intended only to destroy infrastructure associated with a militant organisation. Pakistan may interpret an aircraft crossing, missile launch or strike on its territory as the beginning of a wider campaign. Pakistan’s response may then be designed as equally limited from Islamabad’s perspective but appear escalatory in Delhi. The escalation ladder therefore does not contain universally labelled rungs. Each side is climbing a ladder whose spacing the other side may perceive differently.
The 2019 Balakot crisis demonstrates both why policymakers might believe escalation is controllable and why that belief is dangerous. After the Pulwama suicide bombing killed 40 Indian paramilitary personnel, India conducted an air strike near Balakot inside Pakistan. Pakistan retaliated the following day. Aerial combat followed, an Indian MiG-21 was shot down and Wing Commander Abhinandan Varthaman was captured before Pakistan returned him. The crisis then de-escalated. From one perspective, Balakot established that India could conduct a limited conventional strike inside Pakistan without triggering general war. From another, it demonstrated how quickly a counterterrorism operation could produce direct combat between the two air forces and the capture of a pilot.
Successful de-escalation creates a dangerous form of survivorship bias. Policymakers observe that previous risk-taking did not end catastrophically and update towards believing similar risks are manageable. But the absence of catastrophe last time may have depended on contingent factors: where bombs landed, how many people died, whether pilots survived, how political leaders interpreted intelligence and whether diplomatic channels remained available. Repeating the same strategy does not guarantee the same outcome.
This is why casualty levels matter enormously. Governments can absorb symbolic military damage more easily than large civilian death tolls. If an Indian operation destroys an isolated militant facility without substantial Pakistani military or civilian casualties, Islamabad possesses more political room to respond symbolically or moderately. If large numbers of Pakistani soldiers or civilians are killed, domestic pressure for retaliation rises dramatically. The same applies in reverse. Escalation is partly a function of the political audience created by casualties.
This makes precision strategically valuable beyond its humanitarian importance. A more discriminate operation reduces the number of actors demanding revenge and allows the adversary greater face-saving space. Military effectiveness therefore should not be measured simply by maximum destruction. In coercive diplomacy, excessive destruction can reduce the probability that the target chooses restraint.
The strategic objective should consequently be specified before force is used. If India’s goal is to punish the perpetrators and reduce the capability for another terrorist attack, the optimal operation may be very different from one designed to compel the Pakistani state to alter its entire security policy. The second objective requires substantially greater coercive leverage and therefore carries greater escalation risk. Governments often enter crises without distinguishing these aims clearly, producing military operations expected simultaneously to punish, deter, reassure domestic audiences and transform adversary behaviour.
Those objectives can conflict.
A highly visible strike may maximise domestic signalling.
A covert intelligence operation may degrade militant networks more effectively.
A limited strike may preserve escalation control.
A large strike may create stronger deterrence but also stronger retaliation.
Strategy means deciding which outcome matters most.
This is where the demand for evidence of Pakistani involvement becomes particularly important. There is a major difference between demonstrating that attackers belonged to a Pakistan-based organisation, demonstrating that they received support from individuals inside Pakistan and demonstrating that Pakistani state institutions directed or knowingly enabled the attack. Those propositions imply different levels of state responsibility. India may possess classified intelligence unavailable publicly, but the stronger its intended action against Pakistan itself, the greater the diplomatic value of demonstrating the chain of attribution to partners.
This is not because India requires foreign permission to defend its citizens. It is because international legitimacy changes the cost of escalation. If major governments believe India’s evidence is compelling and its response proportionate, diplomatic pressure falls more heavily on Pakistan. If attribution remains disputed and military action appears broad, India risks converting a strong international position after the killing of civilians into a more ambiguous debate about interstate escalation.
Pakistan has its own responsibility. Simply denying state involvement is insufficient if organisations capable of attacking India continue operating from Pakistani territory. Sovereignty creates obligations as well as rights. A state claiming that militants act independently must demonstrate credible efforts to prevent its territory being used for external violence. Otherwise plausible deniability becomes structurally indistinguishable from tolerance. The relevant question is not only who ordered an attack but what institutions allowed the network capable of carrying it out to survive.
This is where financial intelligence, arrests, prosecution and organisational restrictions can matter more over time than battlefield retaliation. Militant organisations require money, communications, recruitment, logistics, weapons and safe locations. Every component creates an attack surface for intelligence and law enforcement. Destroying one camp produces dramatic imagery. Disrupting financing and recruitment can produce less visible but more persistent effects.
Counterterrorism therefore is an organisational economics problem. Raise the cost of recruiting one fighter. Raise the probability that money transfers are intercepted. Reduce access to weapons. Increase the probability that planners are identified. Each intervention changes the expected cost of organising the next attack. The objective is making militant operations increasingly expensive and unreliable.
Military action can contribute to this portfolio.
It should not substitute for it.
The Indus Waters Treaty remains one of the most consequential non-military pressure points because India’s decision to hold it in abeyance attacks an institution that survived every previous major crisis since 1960. The treaty’s importance is not merely how many cubic metres of water each country receives. It created predictability over a resource fundamental to Pakistan’s agriculture and food security. Removing institutional cooperation increases uncertainty even before India possesses infrastructure capable of altering water flows dramatically.
This is another example of how institutions have economic value because they reduce variance. A farmer making planting decisions values not only average water availability but confidence about when water will arrive. Governments planning reservoirs and irrigation value data. When information-sharing mechanisms deteriorate, uncertainty itself becomes a cost.
India therefore possesses leverage through the treaty.
But the more existential Pakistan perceives the water issue to be, the more dangerous that leverage becomes. Pakistan has already warned that attempts to stop or divert water allocated to it would be treated as an act of war. This is why coercive tools need reversibility. Holding the treaty in abeyance can create bargaining power if restoration becomes conditional on measurable counterterrorism cooperation. Destroying the cooperative framework permanently without changing Pakistani behaviour would simply remove one of the few successful institutions insulating the relationship from crisis.
The economic cost of the confrontation is already spreading. Pakistan’s closure of its airspace forces some Indian airlines operating westward routes to take longer paths, increasing fuel consumption and operating costs. Trade restrictions hurt businesses on both sides, although bilateral trade is small relative to India’s overall economy. Tourism in Kashmir faces an immediate shock. Military mobilisation itself consumes resources. Financial markets price geopolitical uncertainty.
For India, these costs are manageable individually.
Their opportunity cost matters more.
India is attempting to sustain rapid economic growth, attract global manufacturing, expand infrastructure and position itself as one of the central powers of the emerging international system. Persistent crises with Pakistan divert political attention and increase regional risk without changing the structural balance between the two countries.
India’s GDP is now many times Pakistan’s.
Its diplomatic network is broader.
Its technological and capital base is substantially larger.
This creates a strategic asymmetry that should influence Indian thinking.
A stronger power often benefits from time and stability because structural advantages compound.
A weaker adversary can benefit from disruption because disruption reduces the value of those advantages.
This does not mean India should absorb terrorist attacks passively in the name of economic growth.
It means every response should be evaluated according to whether it strengthens or interrupts the long-term trajectory producing Indian power.
The strongest strategy is one that punishes militant networks while allowing India to return quickly to development.
An indefinite crisis does the opposite.
This is why domestic communal stability is strategically important too. The Pahalgam attackers appear to have deliberately emphasised religious identity during the massacre, making communal polarisation an obvious potential objective. If the attack produces widespread suspicion of Indian Muslims, militants gain something they could never obtain militarily: a larger identity conflict inside India itself.
India’s Muslim population exceeds the entire population of many countries.
Treating that population as collectively implicated in violence committed by a tiny militant network would therefore be both morally wrong and strategically irrational.
National cohesion is part of deterrence.
Terrorism attempts to demonstrate that citizens with different identities cannot coexist safely.
The strongest rebuttal is refusing to allow terrorists to determine the boundaries of citizenship.
The same principle applies to Kashmiris. Local residents depend heavily on tourism and ordinary economic interaction with the rest of India. The attackers targeted precisely that connection. If fear empties Kashmir’s tourism economy or broad collective suspicion falls on local communities, the attack succeeds twice: first through murder and then through economic separation.
Security measures therefore should be intensive where evidence supports them while avoiding indiscriminate disruption.
This is difficult.
It is still the strategic requirement.
International actors now have incentives to prevent escalation. The United States maintains important relationships with both India and Pakistan, although its strategic partnership with India has become substantially deeper. China is Pakistan’s closest major partner but also has strong incentives to avoid a war threatening regional trade and Chinese investments. Gulf states have close relationships with both governments.
These countries do not need to mediate the Kashmir dispute formally to contribute.
They can facilitate crisis communication.
That distinction matters because India has historically rejected third-party mediation over Kashmir as a bilateral issue. But ensuring military messages are understood correctly is not equivalent to allowing outsiders to determine territorial sovereignty.
Hotlines.
Private diplomatic messages.
Clarification of military movements.
Warnings about misinterpreted intelligence.
These mechanisms reduce uncertainty.
And uncertainty is currently one of the most dangerous variables.
The crisis can be represented as a simple game of incomplete information. India does not know Pakistan’s exact willingness to retaliate at each level. Pakistan does not know the scale of India’s intended response. Both know the other possesses nuclear weapons but neither knows precisely where the other’s escalation thresholds lie. Each therefore sends signals through military movements, public statements and diplomatic actions.
The problem is that signals can be misread.
A threat intended to deter can convince the adversary that attack is imminent.
A mobilisation intended to reassure domestic audiences can look operationally offensive.
This is why rhetoric matters.
Political leaders often believe maximalist language strengthens deterrence.
Sometimes it does.
But threats reduce room for later compromise because backing away creates domestic reputational costs.
This is the audience-cost trap.
The more publicly a leader promises severe retaliation, the harder it becomes to accept a quiet settlement even if intelligence later suggests restraint is strategically preferable.
Governments therefore should preserve ambiguity about operational details while remaining clear about objectives.
India can say perpetrators and supporting networks will face consequences without publicly committing itself to one military scale before all evidence and diplomatic options are assessed.
Pakistan can say it will defend its territory without presenting every Indian counterterrorism action as requiring unlimited retaliation.
That creates room for controlled escalation if escalation occurs at all.
The alternative is a competition in public resolve where both sides gradually eliminate their own off-ramps.
This is what makes the current waiting period so dangerous.
Nothing dramatic may happen.
That would be good.
But every day without visible action increases speculation about what India is preparing.
Pakistan responds to the speculation.
India observes Pakistani preparation.
The security dilemma intensifies even without a shot beyond the Line of Control.
Political pressure also increases because citizens interpret delay differently.
Some see careful strategy.
Others see weakness.
Governments therefore face a decision-time problem: waiting provides better intelligence and diplomatic preparation while potentially increasing domestic pressure and adversary mobilisation.
There is no perfect timing.
The correct standard remains the same.
What action most reduces the probability of another Pahalgam?
Not what action appears largest.
Not what produces the strongest television images.
Not what generates the most immediate emotional satisfaction.
What actually changes the expected behaviour of militant organisations and the institutions capable of constraining them?
That is the test.
India possesses far greater national power than the gunmen who carried out the attack.
The danger is allowing their act to determine how that power is used.
Terrorists gain strategic influence precisely when governments become predictable in anger.
A massacre occurs.
Retaliation follows.
The adversary retaliates.
Communal tension rises.
Militant recruitment becomes easier.
The next attack becomes more likely.
Breaking that cycle does not require pacifism.
It requires discriminating coercion.
Punish the responsible actors.
Preserve national cohesion.
Maintain diplomatic legitimacy.
Protect economic momentum.
Keep escalation controllable.
Use institutions such as the Indus Treaty as bargaining leverage rather than emotional targets.
And preserve enough communication that two nuclear-armed governments can still tell one another where the boundaries are.
The attack in Pahalgam was designed to create fear.
The next stage will determine whether it also creates strategic instability.
India and Pakistan both possess the power to escalate far beyond anything the attackers themselves could ever achieve.
That is precisely why the burden now lies with the states.
The militants chose the first move.
The measure of statecraft is whether they are allowed to choose the second one too.
