Nifty surged on RIL boost and an early US trade deal optimism

·       But escalating India-Pakistan geopolitical tensions over the Pahelgam massacre may be a drag in the coming days

·       India may be among the first few countries to sign a preliminary trade deal with the US shortly

·       The format and shape of the trade deal may address both India’s high tariffs and non-tariff barriers, which are negative for protection-savvy domestic producers

India’s benchmark stock index, Nifty, surged over 1.0% on Monday, April 28, 2025, on the RIL boost. India’s largest private sector company and the index heavyweight, Reliance Industries Ltd (RIL), jumped over 5.0% on an upbeat report card. Also, other index heavyweights led by India’s leading banks like ICICI, HDFC, Axis and SBI helped on upbeat earnings and the prospect of another 100 bps rate cuts by RBI in 2025; RBI has already cut 50 bps cumulative in February and April after holding repo rates at 6.50% in 2024, at too high for too long despite India’s core CPI inflation was hovering around 3.4% on an average in 2024.

RBI officially and also unofficially targets India’s total CPI, heavily weighted by volatile and sticky food inflation. Now, food inflation in India has dipped drastically from almost double digits to a low single-digit due to some seasonal issues and also a favorable base effect. India’s headline CPI also dipped below 4.0%, RBI targets, but real GDP growth also slipped towards 6.5% to 6.0% from the previous 8.9% average for the last three years after COVID. India’s economic slowdown may be attributable to higher cost of living, weak labor market, and subdued or no real wage growth for most of the private MSME sector. This, along with the Trump trade war tantrum and the high potential synchronized global Trumpcession, the RBI may cut a cumulative 150 bps in CY25 or FY26.

Overall, India’s Nifty recovered almost 10% in March and April (till date) after correcting almost 15% from October 2024 to February 2025 amid subdued earnings growth, India’s economic slowdown, and the Trump tariff tango. In mid-April, Nifty recovered after the Trump admin indicated trade deal priority for ‘reliable allies’ like India, Japan, South Korea, and also Vietnam (on a first-come come first serve basis). The Indian market was buoyed by hopes of a favorable Trump trade/tariff deal optimism. But despite Trump-Modi ‘bhai-bhai’ (brother-like) friendship, Tariff Man Trump may not provide any special concession for ‘Tariff King’ India.

Trump said about India on April 23, 2025

“India, not very complicated deals-- it's about the tariffs India charges almost more than any other country in the world, and believe it or not we do very little business with India other than the fact that I like the Prime Minister very much--- he's a friend of mine he was here two weeks ago as you know and we stood right outside-- did a news conference-- unfortunately the grass was very wet and it was very hard for people to stand on the grass they got their shoes all ruined but other than that it was a very good news conference and he's a great guy but we do very little business-- you know why-- because their tariffs are so high they have among the highest tariffs higher than China--- they have among the highest tariffs in the world and I understand they're going to reduce those tariffs—

But it's really sort of their problem, not ours we do very little selling--I mean Harley-Davidson-- I said-- how you doing in India this is about six years ago they came to lunch as a great American company they make the motorcycles and I said: "How are you doing in India as an example?"  Well, we don't do any business there why because the tariffs are too high. I said, "That's interesting well, what are you going to-- do?" He said, "Well we're going to build a plant in India."

And that's what they did--- I don't want that to happen they were forced to build a plant well essentially what we're doing same thing remember there's no tariff when they build their plant here and everybody wants to build because they don't want and the higher the tariffs go the more likely it is they come in and build a plant you know I mean if it's 25% that's fine if it's 50% you'll get more plants 75 you get more at 100 you get more than that and they're all coming in at numbers that nobody's I don't think.

Howard, there's ever been numbers like we've seen never seven eight trillion dollars’ worth in two months because I you know it took me a month to get started in all fairness but in two months we uh we did this and now we're coming up on a hundred 100 days first 100 days and I think we're going to be close to eight trillion dollars there was never any president that did even a tiny percentage of that—“

Trump may not be so kind to India to allow some undue tariff concessions without getting reciprocity. Although India may be among the first few countries, may have at least a preliminary (Phase one) trade deal with the US, it should be in line with the US global (common/standard) template addressing issues of not only India’s higher tariffs, but also higher GSTs or other sales taxes/levies, making US imported goods into India costlier. It will also involve removing or addressing various alleged non-tariff barriers by India on US goods along with perceived government subsidies for exports (India’s PLI scheme), and currency manipulation.

The US may have created a global template for tariff talks with all trading partners-WSJ report.

“The United States Trade Representative's (USTR) office has reportedly developed a template to streamline trade negotiations amid President Trump’s reciprocal tariff policies, as reported by the Wall Street Journal on April 25, 2025. This framework aims to set common terms for staggered negotiations with multiple trading partners, addressing the global trade disruptions caused by U.S. tariffs, which include a 10% baseline tariff on most imports and higher duties on specific countries, such as 145% on Chinese goods.

The global template outlines broad negotiation categories, including tariffs and quotas, non-tariff barriers (e.g., regulations on U.S. goods), digital trade, rules of origin, and economic security issues. U.S. officials plan to tailor demands for individual nations within these categories, with negotiations already underway with over 50 countries, including Japan, South Korea, and Switzerland, following Trump’s tariff announcements.

The broad categories for negotiation are tariffs and quotas, non-tariff barriers to trade, digital trade, rules of origin for products, economic security, and other commercial issues, said people familiar with a draft document outlining the negotiating terms. However, they added that the document is subject to change as the administration of United States President Trump gets more information.

The US plans to negotiate with 18 of its major trade partners over the next two months, with six partners planned to come for talks during the first week, followed by six more in the second week and six more in the third week, with the pattern repeating until the administration's July 8 deadline.”

As per reports, Apple may be preparing to shift part production from China to India for iPhone exports to the US by 2026. But Apple is already producing iPhones in its Indian factory owned & operated by Foxconn and Tata JV for India and various other countries including the US. Here, Apple/Foxconn is only assembling iPhones in India after importing almost all parts from China.  Under such a scenario, the US customs may not treat the iPhone manufactured in India as ‘original’ and may impose Chinese levels tariffs on it. Thus India or Apple has to manufacture iPhones originally from scratch including chips and other vital parts to be eligible as ‘original’ exports, not as mere Chinese transshipments or proxies.

On Monday, April 28, 2025, the US Treasury Secretary Bessent was asked about Trump’s so-called ‘telephonic talks’ with Chinese President Xi and Apple’s reported plan to shift US supply-related productions entirely to India. In that respect, Bessent said India would be the 1st country to sign the trade deal (Phase one?) with the US within the next few days.

The US Treasury Secretary Bessent on Apple, shifting production to India (related to US exports):

·       Maybe it speaks to China as an unreliable partner

·       India might be one of the first trade deals we sign

Now the question is in what format the US-India trade deal will be and whether it’s acceptable to big Indian corporates, which control Indian politics & policies, with large amounts of political/election funding instead of getting a trade protection stance and government ‘lucrative’ contracts. The Trump administration’s narrative, as reflected in various U.S. government reports and statements, portrays India as a significant abuser of trade restrictions and non-tariff barriers (NTBs) that hinder U.S. exports and contribute to an unbalanced trade relationship.

India’s High Tariffs as a Major Barrier: The U.S. has consistently highlighted India’s high tariff rates as a primary trade restriction. According to the White House and Trump’s statements, India imposes significantly higher tariffs on U.S. goods compared to the low tariffs the U.S. applies to Indian imports. Trump said India imposes brutal tariffs on the US, much more than even China or any other major 18 US trading partners.

·       Passenger Vehicles: The U.S. imposes a 2.5% tariff, while India levies 70%

·       Apples: U.S. apples face a 50% duty in India, while apples enter the U.S. duty-free (0%)

·       Rice: India imposes an 80% tariff on rice in the husk, compared to the U.S.’s 2.7%

·       Network Switches and Routers: The U.S. applies a 0% tariff, while India levies 10-20%

Trump has labeled India a “tariff king” and “big abuser” of trade ties, arguing that India’s average tariff and NTB rate is equivalent to almost 52% (though the World Trade Organization estimates India’s weighted average applied tariff at 12.5%). The USTR’s 2025 National Trade Estimate Report notes India’s overall average applied tariff at 17% and 39% for agricultural goods, among the highest of major economies. But India may not be ready to compromise on agri tariffs as agriculture is a sensitive area for both vote banks and note banks (political and high profile corruption); India’s rich agriculturists do not pay any income taxes.

India’s Non-Tariff Barriers (NTBs): The U.S. identifies a range of NTBs that restrict American companies’ free & fair access to the Indian market. The 2025 USTR report and White House statements indicated ‘hidden restrictions’ such as:

·       Burdensome Import Requirements: India’s mandatory Bureau of Indian Standards (BIS) certifications and Quality Control Orders (QCOs) in sectors like chemicals, electronics, medical devices, textiles, and telecom products are seen as duplicative and costly. Over 700 QCOs cover around 100 sectors, with plans for 125 more (Bureaucratic licensing requirements)

·       Customs and Licensing Barriers: Opaque customs procedures, import bans, and restrictive licensing requirements impede U.S. exports

·       Agricultural Restrictions: Strict import rules on dairy, pork, and fish, including non-GMO certification requirements without scientific backing, and slow approval processes for genetically modified products, are criticized

·       Data Localization and Digital Trade: India’s data localization mandates and restrictions on cross-border data flows are viewed as discriminatory, affecting digital products and e-commerce

·       Limits on e-commerce: Amazon, Walmart's Flipkart faced restrictions on how they could operate under India’s evolving e-commerce regulations

·       Intellectual Property (IP) Issues: India’s weak patent protections, lack of trade secret laws, and inadequate IP enforcement have placed it on the USTR’s Priority Watch List; Forced local content requirements; challenges in software and pharma IP enforcement and weak protection of patents

·       Price Controls: Price caps on medical devices like stents and implants are seen as limiting market access for U.S. firms

The White House estimates that removing these NTBs could boost U.S. exports to India by at least $5.3 billion annually.

Lack of Reciprocity: The Trump narrative emphasizes a lack of reciprocity in U.S.-India trade. The U.S. maintains low tariffs (averaging 2.2-3.3%) and an open market, while India’s high tariffs and NTBs create an uneven playing field.

The U.S. merchandise trade deficit with India reported at $46 billion in 2024, is cited as evidence of this imbalance, driven by India’s protectionist policies. Trump has argued that access to the U.S. market is a “privilege, not a right,” and reciprocal tariffs (e.g., 26% on Indian goods starting July 9, 2025, if trade talks fail) are justified to counter India’s trade practices with a hefty discount of 50%.

India’s Tariffs Comparison to Other Nations: The U.S. compares India’s trade barriers to those of other countries to underscore its restrictive policies. For instance, while the U.S. imposes low or zero tariffs, nations like the EU (10% on vehicles), China (15% on vehicles), and Brazil (18% on ethanol) also have higher tariffs, but India’s rates are among the highest. India’s regulatory approach is said to resemble China’s in some respects, raising concerns in Washington about its trade policies.

Currency and Economic Policies: The Trump administration has accused India of currency manipulation and other economic policies that suppress domestic consumption and boost exports, contributing to the U.S. trade deficit. India’s consumption-to-GDP ratio of 68% is cited as evidence of policies that favor exports over domestic demand, distorting trade.

Trump’s Policy Response

·       Reciprocal Tariffs: On April 2, 2025, Trump announced a 26-27% reciprocal tariff on Indian goods, effective April 9, to counter India’s alleged 52% tariff and NTBs. This was part of a broader tariff regime targeting countries with high trade barriers, justified under the International Emergency Economic Powers Act (IEEPA) due to a $918 billion U.S. goods trade deficit.

·       Negotiation Leverage: Trump’s reciprocal tariffs are seen as a bargaining chip to pressure India into reducing tariffs and NTBs. India has responded with concessions, such as lowering tariffs on U.S. bourbon whiskey, Harley-Davidson motorcycles, luxury cars, and solar cells, and scrapping a 6% digital services tax.

·       Bilateral Trade Talks: The U.S. and India are negotiating a trade deal, with the first phase targeted for completion by September-October 2025, aiming to increase bilateral trade to $500 billion by 2030. The deal focuses on mutual market access and reducing barriers.

Critical Analysis of the Narrative

·       Exaggeration of Tariff Rates: The Trump administration’s claim of a 52% average Indian tariff is disputed. The WTO and USTR report India’s average applied tariff at 12-17%, with 39% for agriculture. The methodology for Trump’s figures, which includes non-tariff barriers and trade imbalances, has been criticized as inflating numbers.

·       Selective Focus: The U.S. narrative emphasizes India’s barriers but downplays its protectionist measures, such as steel and aluminum tariffs or subsidies.

·       Economic Context: India’s high tariffs and NTBs are partly driven by domestic priorities, such as protecting farmers and infant industries including MSMEs. The USTR acknowledges India’s reluctance to open agriculture due to political sensitivities, as seen in the 2020 farm reform protests.

·       Mutual Benefits: India’s concessions and the push for a trade deal suggest a willingness to address U.S. concerns, but critics argue India’s leverage—its low merchandise export dependence and diversified markets—may limit sweeping reforms.

India’s Perspective and Response: Smart move to use China to seek concessions from the US

·       India has not imposed retaliatory tariffs, opting for a cautious, non-confrontational approach.

·       New Delhi is engaging in trade talks to secure exemptions or lower tariffs, leveraging its strategic importance as a counterweight to China.

·       India is exploring opportunities to gain market share in U.S. sectors like textiles, apparel, and steel, where competitors like Bangladesh, China, and Vietnam face higher duties.

·       There are discussions to ease NTBs, such as BIS certifications and visa restrictions for Chinese workers, partly to hedge against U.S. pressure by normalizing trade with China.

Summary

The Trump/U.S. narrative frames India’s trade restrictions and NTBs as significant obstacles to fair trade, citing high tariffs, burdensome certifications, agricultural restrictions, and IP issues as key concerns. While some claims, like the 52% tariff rate, appear exaggerated, India’s relatively high tariffs and complex NTBs are well-documented in USTR reports. The reciprocal tariffs imposed in April 2025 are designed to pressure India into concessions, and India’s response—through negotiations and selective tariff cuts—indicates a pragmatic approach to mitigate impacts while pursuing a broader trade deal. However, India’s domestic priorities and strategic leverage may limit the extent of reforms, shaping a complex but opportunity-laden trade dynamic with the U.S.

India’s restrictions on foreign trade and FDI span multiple sectors, with agriculture, automotive, electronics, and telecom facing significant trade barriers (high tariffs, NTBs), while defense, media, retail, and banking have stringent FDI caps or approval requirements. These measures reflect India’s balancing act between attracting foreign capital and protecting domestic interests, national security, and political sensitivities. Recent concessions and FDI liberalizations signal openness to reform, but strategic sectors and politically sensitive areas like agriculture and retail are likely to remain restricted.

Trump’s view was that India systematically uses high tariffs and complex non-tariff barriers to block U.S. goods while demanding open access to the American market.  Trump’s approach was transactional, often threatening retaliatory tariffs and suspending benefits unless India "opened up" more. Trump frequently called India the "tariff king", complaining that India imposes very high tariffs on U.S. goods. He cited examples like:

·       Harley-Davidson motorcycles: India had a 100% import tariff, which Trump often referenced as unfair, even after India later reduced it; Trump alleged such high tariffs were designed to bring production facilities into India and thus Trump is also using the same ‘Modi strategy’.

·       Agricultural products: U.S. producers have struggled due to high Indian duties on products like almonds, apples, and dairy.

Trump repeatedly said the U.S. was seeking "reciprocal trade" — meaning if India charges tariffs on U.S. goods, the U.S. should either impose similar tariffs or India should lower its barriers. Trump suspended India’s GSP (Generalized System of Preferences) benefits in 2019 — a program that gave India duty-free access to the U.S. market for some goods, arguing India wasn't providing "equitable and reasonable access" to its market.

Negotiations for a U.S.-India mini-trade deal (under Trump 1.0) stalled because:

·       The U.S. wanted lower tariffs and fewer restrictions for goods like dairy, poultry, medical devices, and tech products

·       India sought restoration of its GSP status without making major concessions

Trump frequently said:

·       India is a very high-tariff nation. They charge us tremendous tariffs. When we send Harley-Davidson motorcycles... they charge a 100% tariff. When they send their motorcycles to us, we charge nothing

·       We’re not treated very well by India, but I happen to like Prime Minister Modi a lot

Now from the US Trade war to the India-Pakistan  proxy/real war

The recent escalation in geopolitical tensions between India and Pakistan, following the Pahalgam massacre on April 22, 2025, where 25 tourists and one local Kashmiri person were killed in Indian-administered Kashmir, has raised significant concerns about regional stability, economic impacts, and the potential for further conflict.

Context of the Escalation

Pahalgam Massacre: On April 22, 2025, ten terrorists attacked tourists in Baisaran Valley (India’s Switzerland) near Pahalgam, killing 26 people, mostly Indian citizens; and one Nepalese. The attack was claimed by The Resistance Front (TRF), which India alleges is a proxy for Pakistan-based Lashkar-e-Taiba (LeT). India has linked the attack to Pakistan/ISI/Military, though Islamabad denies any involvement and demanded an impartial probe by a group of 3rd countries.

India’s Response-India announced a series of retaliatory measures, including:

·       Suspension of the 1960 Indus Waters Treaty, a significant move affecting Pakistan’s agricultural and municipal water supply, especially in the Western region

·       Closure of the Attari-Wagah land border, halting all trade and movement

·       Cancellation of SAARC visa exemptions for Pakistani nationals and declaring Pakistani defense advisors persona non grata

·       Reduction of diplomatic staff in both countries

Pakistan’s Countermeasures: Pakistan responded by

·       Suspending trade with India

·       Closing its airspace to Indian aircraft

·       Expelling Indian diplomats

·       Warning that any disruption of water flows would be considered an ‘act of war’

Military Posturing: Reports of cross-border firing along the Line of Control (LoC) and India’s navy conducting “anti-ship firings” to demonstrate readiness have heightened tensions. Pakistan also announced a surface-to-surface missile test off Karachi and immediately put newly acquired Chinese short-range (200 km) missiles into positions.

Impact on the Indian Stock Market: The escalation has introduced volatility and uncertainty into the Indian economy and financial markets, though historical trends suggest resilience in the face of such tensions.

Stock Market Reaction: Nifty came under pressure last weekend in the aftermath of the heinous Pahalgam attack and escalating India-Pak geopolitical tensions but recovered Monday on a RIL boost.

Sectoral Impact: Sectors sensitive to geopolitical risks, such as energy, Pak heavy exporters, travel & tourism, and also infrastructure have seen increased volatility.

Resilience Factors: India’s relatively strong domestic macroeconomic fundamentals than Pak, including robust foreign exchange reserves of around $700 billion, and historical market behavior during India-Pakistan conflicts suggest limited long-term downside.

Economic Implications

Trade Disruption: The closure of the Attari-Wagah land border and mutual trade suspension have halted the $2 billion annual India-Pakistan trade, a small fraction of India’s overall economy but significant for border communities and small traders in Punjab. This also disrupts Afghan trade routes through Pakistan.

Global Supply Chain Context: Some voices suggest the attack may be linked to broader geopolitical strategies, potentially involving China, aiming to disrupt India’s growing role in global supply chains post-US-China tariffs. A full-scale conflict could strain India’s economy and delay its integration into these chains.

Fiscal and Budgetary Concerns: A prolonged conflict could disrupt India’s fiscal planning, divert resources to defense, and increase budgetary pressures.

Oil and Inflation Risks: While India’s forex reserves provide a buffer against immediate shocks; a significant escalation could raise oil prices, impacting India’s current account deficit (1.1% in Q1FY25) and inflation. A $10 rise in oil prices could increase the deficit by 30–40 bps and inflation by 20–30 bps.

Comparative Perspective: Unlike Pakistan, where the Karachi-100 index crashed by over 2,500 points on April 24, 2025, due to its fragile economy and reliance on IMF bailouts, India’s economy is more insulated. Pakistan’s economic vulnerabilities, including high inflation and low forex reserves, exacerbate its market reactions.

Possibility of an All-Out War: The likelihood of an all-out war between India and Pakistan remains low, though the risk of limited military escalation including so-called surgical strikes and counter strikes by each other is significant to satisfy respective domestic political compulsions/audiences; almost 90% of Indians now want bold military/security step by Modi admin.

Historical Precedents:

India and Pakistan have engaged in three major wars (1947, 1965, 1971) and multiple skirmishes (e.g., Kargil 1999, Balakot 2019), primarily over Kashmir and Bangladesh (1971). These conflicts have typically been contained due to international pressure and mutual recognition of nuclear risks. Past escalations, such as the 2019 Balakot airstrike, saw rapid de-escalation after limited military actions, with Pakistan releasing an Indian pilot to reduce tensions.

Nuclear Deterrence:

Both nations are nuclear-armed, with India adhering to a “No First Use” policy and Pakistan maintaining “Full Spectrum Deterrence,” including potential first use against conventional threats. The risk of nuclear escalation acts as a significant deterrent to all-out war. Pak army already warned India about Nuclear war, showing they also want to avoid an all-out conventional war. U.S. intelligence reports from the 1980s and 1990s highlighted the low probability (20%) of war but warned of “miscalculations” during crises, such as terrorist attacks or border skirmishes, potentially leading to nuclear risks. The 2019 study cited in U.S. intelligence estimates noted that a nuclear conflict could kill 50 million people and cause global food shortages, underscoring the catastrophic stakes.

Current Dynamics

India’s Stance: Prime Minister Narendra Modi has vowed to pursue the perpetrators including those behind the scenes (planners) “to the ends of the earth,” signaling a robust response, potentially including military action. Defense Minister Rajnath Singh’s assurance of a “loud and clear” response and India’s suspension of the Indus Waters Treaty indicate a willingness to escalate pressure.

Pakistan’s Position: Pakistan’s denial of involvement and warnings against water flow disruptions as an “act of war” reflects a defensive posture. Its fragile economy and reliance on IMF loans limit its capacity for sustained conflict. Pakistan's Defence Minister Khawaja Asif claimed on April 28, 2025, that a military incursion by India is imminent; citing heightened Indian rhetoric and military briefings suggesting an attack. Pakistan has reinforced its military presence along the border, particularly near the Line of Control (LoC) in Kashmir, in response to these perceived threats.

Military Escalation Risks: Reports of cross-border firing and military posturing (e.g., India’s naval exercises, and Pakistan’s missile test) suggest a potential for localized clashes. However, military analysts see these as signaling rather than precursors to full-scale war.

International Context: Unlike past crises, there is limited external pressure for de-escalation. The U.S., under the Trump administration, is less likely to intervene beyond intelligence sharing, given its focus on counterterrorism cooperation with India. China’s potential role could complicate dynamics if it perceives India’s actions as threatening its China-Pakistan Economic Corridor (CPEC) interests. Although China, Turkey, and some other Islamic countries are supporting Pakistan by providing military equipment and also supporting an impartial probe into the Pahelgam massacre of innocent tourists, China is also urging restraint and de-escalation by both India and Pakistan. Putin and Trump may also take the same stance.

Constraints on an all-out War:

·       Economic Costs: Both nations face significant economic risks. For India, a war could disrupt economic growth and supply chain integration. For Pakistan, already on the brink of economic collapse, a conflict would be catastrophic.

·       Nuclear Risks: The mutual threat of nuclear escalation and the potential for “hair-trigger responses” during a crisis limit the scope of military actions.

·       Analyst Consensus: Experts rule out a full-fledged war, expecting tensions to remain high but such a proxy war is manageable through diplomatic and limited military measures.

·       China factor for India: Although China is not a direct war threat as of now, India can’t afford to lose its China vigilance at LOC and deploy its full military strength with Pakistan, risking Chinese borders. India needs an upgraded military including state-of-the-art fighter jets for an all-out conventional war against Pakistan supported actively by China.

India’s repeated failure to ensure internal security despite the never-ending threat of Pak terrorists

This is a legacy issue for India. Terrorism is now a big business involving the killing of civilians and military/security personnel. Kashmir is already a heavy military zone and being a UT, the Federal Government; i.e. now Modi admin is responsible for internal security. But due to lack of adequate military/security personnel in that particular Pahalgam area despite heavy tourist inflow may be the main reason, why terrorists choose this place to kill innocent selective Hindus in an apparent effort to cause another Hindu-Muslim riot scenario in the country and subsequent all-out war between India and Pakistan. These terrorists may not be in full control of ISI or Pakistan’s military or civilian government.

For decades, there was an unofficial protocol for Kashmir/Pak-based terrorists not to attack tourists, who are the main pillar of Kashmir’s local economy. However, the Indian Government should not allow tourists to be at the mercy of such terrorists and should not permit such high terrain hilly places for tourists without securing the area completely. Although there may be some random/specific intelligence, overall it’s a big failure of Indian intelligence and vigilance even though Pahalgam is a Pal-border sensitive area. The Indian security force is too preoccupied with VIP/VVIP and celebrity protection (VIP culture) rather than the general public even in sensitive areas. India should learn from China how to ensure the internal security of a huge country/population with the help of extensive usage of surveillance cameras and AI/face recognition technology.

Kashmir is a legacy issue for both India and Pakistan-Trump.

The establishment narrative, as reflected in mainstream media and official statements, often amplifies the threat of war to justify strong retaliatory measures, but it overlooks deeper structural issues. The Kashmir dispute, rooted in the 1947 partition, remains a core driver of conflict, compounded by India’s 2019 revocation of Kashmir’s autonomy and Pakistan’s alleged support for militant groups. Both nations use the issue for domestic political gain, with Modi’s government leveraging nationalism and Pakistan’s military justifying its influence through anti-India rhetoric. This dynamic makes de-escalation challenging but also suggests that neither side seeks a war that would devastate their economies and populations.

Potential Scenarios

Limited Conflict: Localized military actions, such as precision surgical strikes as cross-border strikes, or naval blockades, are possible, similar to the 2019 Balakot airstrike. These would aim to signal resolve without escalating to full-scale war. The targeted surgical killing of a key terrorist leader by India/RAW in Pak-occupied Kashmir (POK) may be another option to satisfy the domestic audience. This may also consolidate Modi/BJP admin for nationalistic issues (ahead of Bihar and WB election) despite the stagflation-like scenario in the country. Also, the Modi admin may be able to sign the US trade deal without much political/public noise amid escalating India-Pak geopolitical tensions and an ongoing proxy war in the media.

Diplomatic Resolution: International mediation, potentially through neutral parties like the UAE or Saudi Arabia, could de-escalate tensions, though current U.S. disengagement reduces this likelihood.

Prolonged Standoff: A prolonged period of diplomatic and economic pressure, with sporadic border skirmishes, is the most likely scenario, given historical patterns, and military and economic constraints by both sides.

Weekly-Technical trading levels: India 50 Future, Bank Nifty Future and USDINR

Whatever may be the Trump trade and Pak war narrative, technically Nifty Future (CMP: 24354) now has to sustain over 24500-24700 for a further rally to 24950/25150-25200/25450* and 25650/26000-26200/26500 an; otherwise, sustaining below 24450 Nifty Future may again fall to 24000/23800-23600/23400-23150/22900 and 22200/22000-21700/21500 and further 21500/21200-20900/20450 and even 19800/19600-17650/16700 in the coming days.

Technically, Bank Nifty (55550) now has to sustain over 56000 for a further rally to 56500/57000-57500/58000 and 58500/58900-60500/61000 and further 61500-65750 in the coming days; otherwise, sustaining below 55900. BNF may again fall towards 55100/54600- 54000/53500 and 53000/52500-52000/51500 and further 51000/50500-50000/49700 and 49200-47700 in the coming days.

Technically, USDINR (85.45) now has to sustain over 85.00 for a rebound to 86.00/86.75-87.50/89.00 and 90.00-92.75; on the flip side, side, sustaining below 84.40, USDINR may further fall to 84.00/83.50-83.00/82.50 in the coming days.