The Deadly Terrorist attack in Pahalgam on 22nd April claimed the lives of 26 tourists, leaving India as a nation seething with anger at the visuals of the dastardly attack. In the aftermath of the attack, India conducted Operation SINDOOR on the morning of May 6, followed by heavy shelling and killing of civilians by Pakistan in the Poonch area of Jammu and Kashmir. The threat of an all-out war looms large if Pakistan indulges in any bravado.

Just a day after the abhorrent attack, a slew of retributive measures was announced after a meeting of the Cabinet Committee on Security (CCS), led by PM Narendra Modi. It was decided to keep the crucial Indus Water Treaty in abeyance, the Attari-Wagah border was shut with immediate effect, Pakistani Nationals were asked to leave India, the Defence advisors of Pakistan in India were declared Persona Non-Grata, and the overall strength of the Pakistani High Commission in India was to be downsized to 30 from the present 55 officials. Pakistan, in response, closed its airspace for Indian airlines and suspended all trade ties with India. Complimenting Pakistan’s retaliatory measures, there was the usual nuclear sabre-rattling as well. Issuing an open threat to India, Pakistan’s Railway Minister Hanif Abbasi said that its 130 nuclear warheads are not only for display and have been kept for India, and if India tries to stop Pakistan’s share of water from the Indus, then the former should prepare for a full-scale war.

While on the surface, it may seem like a routine bilateral escalation between India and Pakistan, it wouldn’t be unreasonable to think that there may be some deeper strategic motives at play. Recently, US President Donald Trump slapped massive up to 245 percent tariffs on all Chinese imports, reacting to which the Chinese took up similar measures and raised the tariffs to 125 percent on American goods from the current 84 percent. The Trade war between the two biggest economies of the world sent ripples across the world, and India too was concerned as its manufacturing, mainly steel, auto, electronics, and pharmaceutical industries are heavily reliant on China for raw materials, and any disruptions in the supply chain could prove detrimental to the Indian economy and its consumers. But just as every cloud has a silver lining, so too does this trade war.

In a recently published report in the Indian Express, Richard Baldwin, a professor of Economics at IMD Business School, said that Middle power countries like India could secure a substantial foothold in global supply chains because of the US-China Trade War. He emphasized that if US tariffs persist on China, it could be beneficial to emerging markets as businesses would look to diversify and relocate, and India presents itself as a preferred destination for the same. It wasn’t just a speculation; this resonated on the ground as well, as Apple laid out its ambitious plan to shift all US-bound iPhone production from China to India by 2026. According to the Financial Times Report, Apple aims to produce more than 60 million iPhones annually in India to meet its demand back home in the US.

India was also actively involved in identifying and attracting several companies that were looking to shift their operations away from China. It tried to position itself as a natural alternative for companies moving away from China by portraying itself as a safe, secure, and stable democracy that offers a conducive environment for businesses.

But the recent Pahalgam attack and the escalation that followed between India and Pakistan gave China exactly what it needed. It was a chance for China to showcase the risk factors involved for businesses that were looking to relocate to India. The conflict served as an alarming reminder to the world, especially businesses, that the situation between the two South Asian arch-rivals is still volatile and could explode at any moment. The Chinese social media, in the recent past, has been flooded with the narrative of how this trade war between them and the US has given an undeserving opportunity for India to attract businesses and investments. Though Beijing openly urged both India and Pakistan to act with restraint, behind the curtains, it was actively pulling the strings to encourage Pakistan to escalate and stretch the confrontation with India. China also extended support to Pakistan’s demand for an impartial probe into the Pahalgam Terror attack.

Currently, Beijing is dealing with an economic slowdown, and the situation has only gotten worse after the trade war with the US. It wouldn’t be imprudent to guess that an active Chinese role is at play behind the scenes, as it would be in China’s interest to portray India as an unstable, unfavourable, and unsafe alternative to thwart the relocation efforts of various businesses. Using Pakistan as a proxy to further its objective by offering diplomatic and even military support, China has tried to spoil India’s image as a safe investment hub. Additionally, the terrorist attack in Pahalgam’s Picturesque Baisaran Valley has allowed India’s adversaries to cast doubt on the claims of the Modi government that the situation has drastically improved in Jammu and Kashmir post the abrogation of Article 370. India has been trying hard to build the narrative that the abrogation has ushered in an era of peace and progress for Jammu and Kashmir, and the recent attack challenges this claim of the Indian government. The attack directly hits the core of Jammu and Kashmir’s economic recovery, especially its tourism sector.

(The writer is a political strategist with expertise in media relations and geopolitical developments)