In the current crisis following the Pulwama attack, Pakistan has undoubtedly come out as the winner in two bouts fought so far both in terms of diplomacy and military capacity and capability. Much of this has also been acknowledged by the intelligentsia of India that has been facing new curbs on the freedom of expression during the tenure of the incumbent government.
But the battle of the battles is not over yet as the Modi government fighting for its survival in the forthcoming elections; it cannot afford to end it at the stage where Pakistan has come out as a clear winner. This has inflicted a serious dent on the vote bank of the BJP, particularly the business community that had helped it win the 2014 elections.
The bigger dent is yet to emerge with the flight of capital and foreign investments shying away or putting on hold. Soon security advisory advices from various foreign governments and the companies' parent offices would start to pour in, advising foreign investors to travel only if it is absolutely necessary. This would be applicable both on India and Pakistan but India's economy will take a greater hit on this account than Pakistan's.
This could be the repeat of the six-month India-Pakistan standoff following the Mumbai attacks event in early 2000 when the investment in India nosedived prompting the panicked businesspeople to prevail on the government to ease out the tension.
The economies of both Pakistan and India will suffer in the present standoff but India will suffer more as it has to feed five times more people than Pakistan's.
The ongoing standoff between the two countries is also reflective of new heightened levels of uncertainty and insecurity in the whole of South Asian region in particular and the rest of the world in general.
China, which has now come up as a dominant power in Asia, considers this standoff as a threat to its own economy and to its One Belt One Road initiative.
China's long-running trade war with the US has forced it to look for alternative trading partners. As China has therefore started to rebuild ties with rival rising power India and Prime Minister Narendra Modi. Last year Modi made two visits to China.
This week, China's Foreign Ministry called for both Pakistan and India to "maintain self-restraint and focus on regional peace and stability."
In an urgent late night call on Wednesday, Pakistan Foreign Minister Shah Mehmood Qureshi asked Chinese Foreign Minister Wang Yi to play "a constructive role in easing the current tensions."
During the call, China's Foreign Minister Wang Yi stressed that "the sovereignty and territorial integrity of all countries should be respected, and China does not want to see the acts that violate the norms of international relations."
The US is also upset as it is in no position to derail Pakistan's engagement in the ongoing promising US and Taliban dialogue and its foreign secretary went out of the way to defuse the current standoff between Pakistan and India by exercising extensive pressure on both the countries.
For the Modi government it's all about the next election. For the people of the two countries it is all about their safety and welfare. One has to pick one of the two options.
(The writer is former President of Overseas Investors Chamber of Commerce and Industry)