What would be the economic impact on India if a war with Pakistan breaks out following the terrorist attack in Pahalgam?
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If a war breaks out between India and Pakistan after the Pahalgam attack, the economic impact on India could be severe.
Defense spending would spike, taking funds away from education, healthcare, and infrastructure. Markets may crash, the rupee could weaken, and inflation might rise—hurting everyday citizens. Foreign investors may pull back, trade could slow, and tourism—especially in Kashmir—would collapse.
Beyond numbers, war delays progress. Every rupee spent on conflict is one not spent on growth. Even if a war is “won,” the economy and people often pay a long-term price.