Bilateral trade is expected to be stagnant at $1.6 billion a year (Rs 6,400 crore) for a while. As Pakistan plunges into a crisis, lasting peace between the two neighbours seems more distant a possibility than ever.

While India is concerned about developments on the western flank, it is treading cautiously to avert accusations of interference in Pakistan’s internal affairs. So when General Musharraf declared Emergency in Pakistan, External Affairs Minister Pranab Mukherjee mildly remarked: “ India hopes for the start of the democratic process at the earliest.” India’s high-maintenance relationship with Pakistan has yielded few dividends so far.

Hence the muted response. For once, Pakistan cannot blame it on India. While India has lived with dictatorial and military regimes in the neighbourhood, it was hoping Musharraf would transfer power to a democratically elected leader, ushering in stability and enabling India to capitalise on the people-to-people linkages it has built with Pakistan over the past few years. While the return to democracy may be delayed, there is still hope that Musharraf will give in to sustained US pressure, paving way for a democratic government.

The bigger impact will be on the fragile composite dialogue process, whose fifth round was to be held early next year. Even the little progress on Kashmir, Siachen and Sir Creek is in danger of being shelved. India’s other major concern is cross-border terrorism.

If the stalemate continues, it will give jehadis ample opportunity to orchestrate violent attacks on India. The troubled region of Swat, where militants are embroiled in clashes with the security forces, is not far from the line of control; if the conflict spirals out of control, India is bound to be affected.

There is also the big question of Pakistan’s nuclear arsenal, which could land up in wrong hands. It is imperative for the international community, to work together to ensure that the weapons are secure.

Last but not the least, economic cooperation between India and Pakistan is also likely to be undermined by the General’s action. Already, business delegations headed to India, including one from the Federation of Pakistan Chambers of Commerce, are cancelling their visits. If the uncertainty persists, trade through the recently-opened land route from Attari might suffer.