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The National Security Council (NSC), which met last Wednesday under the Chairmanship of PM Imran Khan in the wake of India's recent unprecedented declaration on the status of occupied Jammu & Kashmir, resolved to downgrade Pakistan's diplomatic relations with New Delhi and suspend all bilateral trade.

The following five key decisions were taken:

1) Downgrading of diplomatic relations

2) Suspension of bilateral trade with India.

3) Review of bilateral arrangements.

4) Matter to be taken to UN Security Council

5) August 14 to be observed as 'Kashmir Day' to show solidarity with brave Kashmiris.

These five initiatives spell out a mature and meaningful response to India's unprecedented belligerence and aggression against Kashmiris. All five will well serve in shaming India at multiple forums and spotlighting the issue to draw the world attention for a long time to come.

Unilateral downgrading by Pakistan of its diplomatic relationship with India and booting out its Ambassador puts India in a state of embarrassment and on a weak wicket to deal with global perception on the subject. Also, it means that high-level bilateral talks between the two countries are ruled out. This development will surely put the UN under greater pressure. It also opens doors for third-party intervention with a better justification for PM Imran Khan to build up on President Trump's offer of mediation.

Pakistan's decision to suspend trade ties will not have much impact on both the nations. Trade between the two countries stood at just $2.4 billion in 2017-18, accounting for a mere 0.31 percent of India's total trade with the world and just about 3.2 percent of Pakistan's global trade. But its consequences will be far reaching as Pakistan's borders will remain closed for the transit trade of India particularly with Afghanistan for which India has been extensively lobbying with Afghanistan and other powers.

India shot an immediate response to Pakistan's stand and on Thursday termed Pakistan's decision to downgrading diplomatic ties an attempt to present an alarming picture to the world about bilateral relations and urged Islamabad to review its decision.

The Ministry of External Affairs (MEA) said India regretted the steps announced by Pakistan and asserted that its decision on Occupied Jammu and Kashmir is an internal affair.

The ministry said Pakistan negatively perceiving India's developmental move is not surprising as the neighbouring country has utilised such sentiments to justify its "cross-border terrorism".

"The Constitution of India was, is and will always be a sovereign matter. Seeking to interfere in that jurisdiction by invoking an alarmist vision of the region will never succeed," the MEA said in a statement.

For the time being, it's going to be war of words between the two neighbouring countries and is unlikely to escalate situation into an armed conflict unless India steps up its atrocities on Kashmiri people compelling Pakistan to react.

The main challenge for both countries will emerge when curfew in occupied Kashmir is lifted. For sure, it will not be an easy one.

While demonstrating flawless alertness to meet any eventuality arising out of India's growing belligerence and aggression, this seemingly 'lean period' could be best utilised by Pakistan in getting concluded the Afghanistan-American peace agreement. Pakistan can derive certain dividends out of it: securing a clean chit on FATF, mobilising world and UN opinion in its favour, exposing the ulterior motives of India and its betrayal of UN resolutions and bilateral agreements between India and Pakistan and above all keeping the hope and spirit of Kashmiris high.

It is, however, logical to analyse and conclude that this situation, in whatsoever state it turns out to be, will dent the economy of both nations. In the process India is likely to suffer more because it has far greater mouths to feed and is facing far greater internal challenges and conflicts to manage.

Howsoever bold, offensive and happy face the BJP government may project - a fear of unknown will inevitably gain strength in this highly ethnically, religiously and now ideologically divided society of 1.37 billion people. It will be one big unhappy nation on the face of this planet.

Some signs have already started to surface in the face of unknown and uncertainty hitting the Indian economy.

Maruti Suzuki is India's biggest car manufacturer. It has reported a 36 percent year-on-year decline in sales - its sharpest drop in two decades. According to Live Mint, the auto industry accounts for nearly half of the country's manufacturing output. Maruti's troubles add to mounting evidence of a slowdown and credit crunch in India's economy. Other car manufacturers are facing similar issues. In India, tens of thousands are losing jobs as auto industry's crisis deepens.

Pakistan should not walk into India's trap; it must avoid overkill. The five soft but strong, meaningful, dignified and mature initiatives spelled out by Pakistan are, at this stage, appropriate. These initiatives must be pursued diligently and cautiously.

(The writer is the former President of Overseas Investors Chambers of Commerce and Industry)

Copyright Business Recorder, 2019

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