The gains from peace for the economy, polity and state in both Pakistan and India are immense, yet the two countries are poised in a hair trigger situation for war. For Pakistan, as the relatively smaller country, the gains from peace as well as the losses from war are greater. It may therefore be helpful to examine the logic of peace and the danger of war.
 
Prime Minister Manmohan Singh of India some time ago noted that internal militancy is the principal threat to his country’s national security. This mirrored an earlier statement by Prime Minister Yousaf Raza Gillani that militant extremism was the primary threat to Pakistan’s national security. The emergence of non state actors as the main security threat, is reinforced by the fact that inspite of relatively high GDP growth rates in the past, mass poverty persists in both countries. According to a study by Dr. Arjun Sengupta, 77 percent of the population in India lives below the poverty line defined in terms of Rs.20 per day per person. In Pakistan's case about 34 percent of the population may be below the poverty line defined in terms of the calorific norm of 2100 calories per person per day while 77 percent of the population  is food insecure. For the overwhelming majority of the population in both countries, what matters is human security, rather than the threat from a neighboring state. Indeed economic deprivation is an important factor in the rise of internal conflict that threatens the state structures of both Pakistan and India. Yet the national security establishments in both countries are essentially configured for war against each other.

Consider first the danger of war. After the Mumbai terrorist outrage in 2008, it is highly likely that another such incident will trigger an Indian military response. The danger in Pakistan's case would be to ignore such a prospect. In India's case the danger lies in a misjudgment about the tolerable scale and nature of its punitive raid. If the scale of an air strike or the territorial gain of an Indian incursion into Pakistani territory reaches an unspecified critical level, Pakistan is likely to use nuclear weapons to defend itself.  At the same time, the declared Indian nuclear doctrine involves an all out nuclear attack on Pakistan following even a limited nuclear strike by Pakistan. Furthermore, as George Fernandes, the Indian Defence Minister at the time, clarified in December 2002, such an all out nuclear retaliation would occur even if Pakistan drops a tactical nuclear bomb on Indian forces operating within Pakistani territory.  Even in a limited nuclear exchange according to a study reported in Newsweek (June 8, 1998), over a hundred million people on both sides of the border would be killed with many hundreds of millions more dying of radiation related illnesses.

Although  their military establishments are preoccupied with achieving “national security” through a paradigm of military conflict, the citizens of these adversarial states share a common concern for human security: from the threat of war, religious extremism, economic deprivation, and environmental degradation.

Consider the advantages of peace. Economic cooperation with India would enable Pakistan’s economy to be catapulted on to a high growth trajectory through gains from trade and much needed foreign investment. This would substantially reduce poverty and attenuate the associated stresses on both society and state. Continued tension with India fuels the forces of religious extremism, and undermines the sustainability of a pluralistic society that is vital for democracy.  On the other hand a paradigm of peace would enable a shift from demonizing the other to mutual fertilization. This would enrich cultural plurality and produce a counter point to the narrowed mind which induces extremist responses.

The arms race between India and Pakistan is largely responsible for the poverty of their people. India ranks 142nd in terms of per capita income but is first in the world in terms of arms imports. Pakistan is not far behind, ranking 119th in terms of per capita income and 10th in terms of arms imports.