ISSN 2330-717X

India: Security Implications Of Economic Relations With Pakistan – OpEd


I have received many queries from my readers asking for my comments on the security implications of normal economic relations with Pakistan.I will categorise them as follows:


Trade in goods. Expansion of bilateral trade in goods can reduce the trust deficit between the two countries and facilitate a forward movement in improving the comfort level. Its security implications will be the least in the form of an increasing flow of Pakistani intelligence personnel and jihadi leaders to India under the cover of businessmen for establishing contacts with leaders of organisations such as the Indian Mujahideen (IM), for funding them and for giving them instructions. These threats could be managed by the intelligence agencies which have a long experience of dealing with Pakistani intelligence activities in Indian territory and have a good data-base on this.Trade in goods would not enable the ISI to destabilise our economy.


Trade in services and Foreign Direct Investment (FDI).This could enable the Pakistani intelligence to acquire a key presence in sensitive sectors of our economy such as banking, telecommunications, information technology etc and use the presence to disrupt our economy and collect strategic intelligence regarding our economic deficiencies that could be exploited by them.Our intelligence agencies are not yet in a position to deal with such threats effectively and do not have a good data-base on the likely threats and modus operandi of the Pakistani agencies.Even in the case of China, we went slow in these two sectors and even now our intelligence agencies have strong concerns over the wisdom of our allowing Chinese telecom and internet companies a presence in India. It has taken our intelligence agencies nearly 15 years to build up a data-base on Chinese companies with suspected links to their intelligence.They managed to build the data base because they got a lot of data from the intelligence agencies of Western countries which closely monitor Chinese companies.Such data-sharing will not be possible in the case of Pakistani companies which have a little presence in the economies of Western countries. We should, therefore, go slow and build up the capabilities and data-bases of our agencies before we allow Pakistani companies in these fields.


Foreign Institutional Investments in our stock markets. This has the highest security threat.Allowing either China or Pakistan to invest in our stocks will give them a capability to disrupt our economy through manipulation of their stock holdings.Our intelligence agencies will always be against any FII by either Pakistani or Chinese investors in our stock markets.Should not be allowed.

B. Raman

B. Raman (August 14, 1936 – June 16, 2013) was Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and Director, Institute For Topical Studies, Chennai and Associate, Chennai Centre For China Studies.

2 thoughts on “India: Security Implications Of Economic Relations With Pakistan – OpEd

  • April 16, 2012 at 6:09 pm

    Sir, if you are so paranoid with trade with Pakistan, why bother. You paint a picture of pure benevolence on the part of India, as if India does not carry out subversive activities in Pakistan Bangladesh and what about Sri Lanka? Get real.
    You seem to be an angry man. People like you who influence policy making, and the crazies on both side of the border have kept the two countries coming closer to a non aggressive co existance. Only the benefits of human interaction and trade will achieve that. What a pathetic view pov from a country which is aspring to become a super power. Bureaucrats have a myopic view of things, no matter where they are from. It is the brave, who trail blaze new paths and new opportunity. India has to look for peace with Pakistan or they will waste another 65 years of building war machines which yield nothing.

    • April 16, 2012 at 7:15 pm

      Rashid relax bro. Try to analyze what the writer has said. He is not against the ties with Pakistan. He has only conveyed the message that there are certain areas where we cannot afford to easily trust blindly on Pakistan and China (or any country for that matter. It is not unknown to world that there is a lot of militancy in Pakistan and most of it is targeted towards India and that the Pakistan Govt. has failed to control the situation (I am not saying that it is funded by Pakistan Govt.). So, in these circumstances I agree with the author of this column that though we should maintain good ties with Pakistan Govt. but we should slowly tread into the areas which will have far reaching effect on our economies and in such areas where our intelligence is not very skilled.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.