Economic Resilience Amidst India-Pakistan Tensions

Reserve Bank Governor Sanjay Malhotra stated on Friday that the conflict between India and Pakistan, which followed the Pahalgam attack where 26 civilians lost their lives, barely impacted economic activity.

Post the April 22 terror attack in Pahalgam, Indian armed forces initiated Operation Sindoor, targeting terror infrastructure in Pakistan. This included missile strikes on May 7 against nine terror sites, such as Jaish-e-Mohammad's Bahawalpur base and Lashkar-e-Taiba's facility in Muridke. Pakistan responded in kind, affecting bordering districts.

Despite these events, Malhotra noted the conflict had very limited economic repercussions. Northern India experienced brief disruptions, notably with closed airports and decreased air traffic, but no substantial supply chain issues. Prices temporarily rose, but have since stabilized without affecting broader economic indicators such as growth and inflation. Malhotra also addressed recent Covid-19 case increases, asserting it is not concerning at this time.

(With inputs from agencies.)