India strikes at terror camps along LoC, serves notice on Pakistan

With a string of “surgical strikes” on terrorist targets along the Line of Control with Pakistan, which stunned the world and rattled stock market investors at home, India on Thursday signalled a dramatic change from its policy of “strategic restraint” in the face of cross-border provocations.

“Based on very credible and specific information that some terrorist teams had positioned themselves at launchpads along the LoC to carry out infiltration and terrorist strikes in Jammu and Kashmir and in various other metros in our country, the Indian Army conducted surgical strikes last night at these launchpads,” Director General Military Operations, Lt. Gen. Ranbir Singh, told mediapersons on Thursday.

“The operations aimed at neutralising the terrorists have since ceased,” he said. There were no plans for “continuation of further operations,” he added.

Market slumps Within minutes of the sensational announcement, the Indian stock market slumped on fears of an escalation in border tensions; the BSE Sensex ended the day down 465 points, or 1.64 per cent.

Finance Ministry officials, however, sought to calm investors, claiming that the reaction would be temporary.

“We expect stock markets and currency markets to stabilise in a few days. Terrorism is a threat to economic stability and growth. The surgical strikes will have a positive impact on financial stability and growth,” said Shaktikanta Das, Economic Affairs Secretary.

The government convened an all-party meeting later in the day and secured broad support for the military action. The Congress, the principal Opposition party, congratulated the armed forces and offered its support to the Centre in battling cross-border terrorism.

Pakistan, however, refuted India’s claim. “There has been no surgical strike by India, instead there had been cross-border fire initiated and conducted by India,” the Pakistan army said.

Review of MFN deferred The resort to the military option, which came following a clamour for decisive action against Pakistan following the recent terrorist attack on the Army camp at Uri, appeared to give the Modi government a breather to take a more measured stand on bilateral trade and economic relations. A meeting that had been called by Prime Minister Narendra Modi to review the Most Favoured Nation (MFN) status to Pakistan for Thursday was deferred to next week as Modi presided over a crucial meeting of the Cabinet Committee on Security (CCS).

That meeting, according to sources, discussed the ‘surgical attacks’ and weighed the spectrum of options before India.

The Commerce Ministry now has more time to prepare a detailed brief on the MFN status.

“There should not be an impulsive decision on withdrawing the MFN status,” a Commerce Ministry official told BusinessLine . “It could harm Indian exporters as we export much more than we import from Pakistan. Stopping trade would also lead to unemployment at the border areas, which is a serious concern.”

Dragging Pakistan to the World Trade Organisation (WTO) for not extending MFN status to India could be a better idea, the official said. But it would not have an immediate negative impact on Pakistan as a dispute could go on for two years at the multilateral forum.

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