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India-Pakistan Ceasefire and Trump’s Trade Leverage: A Diplomatic Tightrope for Modi

India-Pakistan Trump could corner Modi on trade with ceasefire

A fragile ceasefire between India and Pakistan, nuclear-armed neighbors with a history of conflict, was announced, halting four days of intense cross-border strikes that killed at least 66 people. The escalation, sparked by the April 2025 Pahalgam terror attack in Jammu and Kashmir, which claimed 26 lives, saw India launch Operation Sindoor, targeting nine terrorist sites inside Pakistan and Pakistan-administered Kashmir on May 7. Pakistan retaliated with missile and drone strikes, leading to heavy shelling along the Line of Control (LoC). U.S. President Donald Trump claimed credit for brokering the ceasefire, asserting on May 10 that he used the promise of increased trade and the threat of sanctions to compel both nations to halt hostilities. This move, however, has placed Indian Prime Minister Narendra Modi in a diplomatic bind, as India insists the ceasefire was a bilateral decision, rejecting any U.S. mediation, particularly on the sensitive Kashmir issue.

The ceasefire followed a week of unprecedented violence, the worst in nearly three decades, with India striking 11 Pakistan Air Force bases, including one near Islamabad, and claiming to have neutralized 35–40 Pakistani personnel at the LoC. Pakistan, denying support for the Pahalgam attack, reported significant losses and accused India of violating the truce within hours of its announcement. Blasts in Srinagar and cross-border artillery fire underscored the ceasefire’s fragility, though by May 11, fighting had subsided. Trump’s public statements, including a May 13 claim in Saudi Arabia that he used trade as a “carrot and stick,” drew sharp criticism in India, where the government reiterated that Kashmir remains a bilateral matter. Modi, in a May 12 address, emphasized that “terror and trade cannot go together,” signaling India’s resolve against Pakistan-sponsored terrorism while sidestepping Trump’s mediation claims.

India’s Operation Sindoor was launched in response to the Pahalgam attack, which India attributed to Pakistan-backed militants. The operation, described as “measured and non-escalatory,” aimed to dismantle terrorist infrastructure, with Modi warning that India would not succumb to nuclear blackmail. Defense Minister Rajnath Singh hailed the strikes as a bold message against terrorism, referencing the widows left by the attack through the symbolic term “sindoor” (vermilion worn by married Hindu women). Pakistan, observing a “Youm-e-Tashakur” (Day of Thanksgiving) on May 11, celebrated national unity and its military’s resilience, with Prime Minister Shehbaz Sharif asserting that Pakistan’s dignity and self-respect were paramount.

Trump’s intervention, however, complicated India’s narrative. On May 9, U.S. Vice President JD Vance spoke with Modi, followed by Secretary of State Marco Rubio’s calls to External Affairs Minister S. Jaishankar and National Security Advisor Ajit Doval on May 8 and 10. Trump’s May 10 Truth Social post announcing the ceasefire caught Indian officials off-guard, with sources indicating no trade discussions occurred during these talks. Indian opposition parties, including Congress, Rashtriya Janata Dal (RJD), and Shiv Sena (UBT), seized on the discrepancy, demanding an all-party meeting and a special parliamentary session to clarify the ceasefire’s terms and whether India had conceded to U.S. pressure. Congress leader Randeep Surjewala questioned the abrupt halt of Operation Sindoor, arguing that Indian forces had gained the upper hand, while Jairam Ramesh labeled Trump’s claims a “humiliation” for Modi.

The U.S. positioned the ceasefire as a diplomatic win, with State Department spokesperson Tommy Pigott praising Modi and Sharif for choosing peace. Trump, speaking at the US-Saudi Investment Forum, expressed his desire to be a “peacemaker,” suggesting a “nice dinner” between Indian and Pakistani leaders to resolve tensions. He also vowed to mediate on Kashmir, a proposal Pakistan welcomed but India rejected, citing its long-standing stance against third-party involvement. The G7 reportedly supported the U.S. trade sanction threat, adding international weight to Trump’s strategy. By May 15, Trump reiterated his role in Qatar, marking his sixth claim of brokering the truce.

India’s domestic backlash was significant. Former BJP lawmaker Swapan Dasgupta noted public discontent over Trump’s sudden announcement, while defense analyst Brahma Chellaney argued that the ceasefire drew global attention to Kashmir rather than Pakistan’s alleged terrorism. The Shiromani Akali Dal praised Modi’s diplomacy, claiming he forced Pakistan to seek U.S. intervention, but opposition leaders like Jammu and Kashmir Congress chief Tariq Hameed Karra criticized Modi for omitting affected regions like Poonch in his address. Karra called for relief, rehabilitation, and martyr status for civilians killed in Pakistani shelling, emphasizing the need for community bunkers along the LoC.

The ceasefire’s economic implications are notable. Trump’s promise to “substantially” increase trade with both nations if they adhered to the truce, coupled with his threat to halt trade otherwise, raised concerns about India’s autonomy in trade negotiations. India, aiming for $2 trillion in exports by 2030, relies on U.S. markets but reduced two-thirds of its tariffs post-ceasefire, prompting speculation about concessions. The Ministry of External Affairs denied trade discussions with the U.S., but India’s $1.2 trillion trade volume in 2023, with the U.S. as a key partner, underscores the stakes. Pakistan, facing economic strain, may benefit more from U.S. trade promises, potentially tilting Washington’s favor toward Islamabad.

Social media sentiment on platforms like X in May 2025 reflected India’s unease. Users expressed frustration over Trump’s Kashmir mediation offer, viewing it as a breach of India’s bilateral stance. Some praised Modi’s tough rhetoric but questioned the ceasefire’s timing, while others saw the tariff reductions as evidence of U.S. pressure. The narrative battle continues, with India framing Operation Sindoor as a success against terrorism and Pakistan claiming moral victory through its restraint. The ceasefire, cobbled together amid peak tensions, remains tenuous, with both sides accusing each other of violations as late as May 10.

India faces a delicate balancing act. Upholding the ceasefire while rejecting U.S. mediation on Kashmir requires deft diplomacy, especially as Trump’s trade leverage looms. Modi’s insistence on direct talks with Pakistan, coupled with his warning of “impactful action” against future attacks, aims to reassure domestic audiences. However, the ceasefire’s reliance on U.S. pressure, as acknowledged by analysts like Michael Kugelman, challenges India’s strategic objectives. With 32 airports reopened for civilian use and troop reductions discussed at DGMO-level talks, the immediate crisis has eased, but the long-term implications for India-Pakistan relations and India’s global standing remain uncertain.

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