The tragic terrorist attack on April 22, 2025, in the serene and picturesque tourist resort of Pahalgam, Indian-administered Kashmir, shocked the South Asian region and the world. At least 26 innocent lives were lost including a Nepali national when suspected militants opened fire indiscriminately. This heinous act not only struck a blow to the spirit of regional tourism and tranquility but also reignited the ever-volatile tensions between India and Pakistan.
Nepal, adhering to its principled foreign policy and commitment to peace, immediately and unequivocally condemned the barbaric attack. A press release issued by Nepal’s Ministry of Foreign Affairs on May 8, 2025, reflected its unwavering stance against terrorism. Nepal reiterated its position that it shall not allow any inimical forces to use its soil against its neighbors and reaffirmed its call for de-escalation and lasting regional peace.
In response to the Pahalgam attack, the Indian Armed Forces launched Operation Sindoor on May 7, 2025. The operation targeted what were identified as terrorist infrastructures across the Line of Control in Pakistan-administered Kashmir. This marks a significant escalation in a historically fragile bilateral relationship fraught with mutual distrust, border skirmishes and unresolved geopolitical disputes.
The retaliatory strikes come at a time when the region is grappling with broader socio-economic challenges and the reverberations of heightened India-Pakistan hostility are already being felt across the South Asian landscape.
According to media reports, the two nuclear-armed neighbors agreed to a “ceasefire” on May 10, following four days of intense shelling and missile exchanges that brought both countries to the brink of a full-scale war amid rapidly escalating tensions.
However, Indian Ambassador to Nepal Naveen Srivastava insists that the current situation with Pakistan is merely a "cessation of hostilities," adding that a ceasefire with Pakistan will be possible only if Pakistan stops supporting cross-border terrorism.
SAARC and the Imperative of Regional Cooperation
The South Asian Association for Regional Cooperation (SAARC), established in 1985, was founded on the principles of mutual respect, cooperation and the promotion of peace, prosperity, and progress. Nepal, as a founding member and the current Chair of SAARC, holds a moral and diplomatic responsibility to encourage dialogue and multilateralism within the region.
Historically most rights violators from conflict era have been...
SAARC’s 16 designated areas of cooperation ranging from agriculture and education to security and energy form the foundation for regional solidarity. Unfortunately, bilateral tensions between member states, most notably India and Pakistan, have often stymied the progress of this promising regional body. The last SAARC Summit was held in 2014, and subsequent gatherings have been repeatedly postponed due to political frictions, particularly following major security incidents such as the Uri attack in 2016 and now the Pahalgam massacre.
Nepal's call for the revival of SAARC’s political momentum is not merely symbolic. It is rooted in pragmatic necessity. With over 1.9 billion people about a quarter of the world’s population residing in South Asia, the stakes for regional peace could not be higher.
Economic Fallout of Conflict
Beyond human tragedy and military escalation, the broader social and economic ramifications of an India–Pakistan conflict are profound, especially for neighboring countries like Nepal. India is Nepal’s largest trading partner, accounting for over 65% of Nepal's total trade volume. In fiscal year 2022/23, Nepal exported goods worth NPR 104.7 billion (approx. USD 800 million) to India.
Imports from India stood at NPR 985 billion (approx. USD 7.5 billion).The trade deficit exceeded NPR 880 billion, underscoring Nepal's reliance on Indian imports, particularly for petroleum, vehicles, medicines and essential food items. Any conflict-induced disruption in India, whether through reallocation of resources or logistical disturbances, has immediate consequences for Nepal’s supply chains, inflation trends, and macroeconomic stability.
Indian investments also play a crucial role in Nepal's economic landscape. As of mid-2024, more than 150 Indian joint ventures operate in Nepal, across sectors like hydropower, telecom, manufacturing, and hospitality. Cumulative, Indian FDI exceeds NPR 85 billion (approx. USD 650 million).Indian commercial banks, including State Bank of India, offer essential financial services within Nepal. Prolonged geopolitical instability can divert investor attention, delay projects and dampen economic confidence. Additionally, India is Nepal’s largest source of international tourists, contributing over 20% of arrivals. Political instability and conflict perceptions deter tourism, an already fragile sector post-COVID-19.
Another significant dimension is labor migration. An estimated 600,000 Nepali citizens work in India, many in informal sectors. In FY 2023/24, remittances from India alone constituted nearly 13% of Nepal’s total remittance inflow. A deterioration in bilateral security or increased xenophobia could jeopardize their safety and economic livelihoods.
Moreover, over 90% of Nepal’s third-country trade is routed through Indian ports such as Kolkata, Haldia, and Vishakhapatnam. Tensions along India’s western borders have the potential to complicate these; logistics, increase costs, and delay essential imports.
Social Impacts
The human cost of terrorism and retaliatory military operations is profound. Lives are lost, families displaced and communities polarized. In regions like Kashmir, recurring cycles of violence have fostered an environment of fear and hopelessness. Youth unemployment is high and the prolonged exposure to conflict increases susceptibility to radical ideologies.
Cross-border skirmishes and political blame games have also resulted in deteriorating people-to-people contact. Cultural exchanges, academic collaborations and even medical tourism, previously robust between India and Pakistan, have seen a drastic decline. This trend threatens the long-term fabric of regional connectivity and cooperation.
Role of Nepal
As Chair of SAARC and a nation deeply committed to peaceful coexistence, Nepal is uniquely positioned to facilitate dialogue and promote a return to constructive engagement between India and Pakistan. Nepal’s diplomatic channels and regional standing should be utilized to convene special ministerial-level consultations within SAARC to address pressing security concerns, including terrorism, human trafficking, and transnational crime.
Furthermore, Nepal can propose the activation of dormant mechanisms within SAARC such as the SAARC Terrorist Offences Monitoring Desk (STOMD) and the SAARC Drug Offense Monitoring Desk (SDOMD). These platforms, though underutilized, have the potential to foster intelligence-sharing, joint capacity-building and coordinated counter-terrorism responses.
Strengthening the SAARC Regional Security Framework
SAARC has a strong foundational architecture for regional peace and security. The SAARC Regional Convention on Suppression of Terrorism (1987) and its Additional Protocol (2004) provide comprehensive frameworks for cooperative action. The 2008 Convention on Mutual Assistance in Criminal Matters further strengthens this resolve. Yet, implementation remains weak.
SAARC member states must commit to institutional reforms that empower its Secretariat and make its dispute resolution and crisis response mechanisms more responsive. There is also an urgent need for SAARC to develop an Early Warning System (EWS) for conflict prevention and regional peacekeeping cooperation protocols that draw on the region’s shared interest in stability.
In these testing times, what South Asia needs most is not a return to hostility but a renewed embrace of human solidarity, diplomatic maturity and visionary leadership. Terrorism, in all its forms and manifestations, must be condemned unequivocally and countered collectively. At the same time, the retaliatory path of escalating military action often fuels the very cycle it seeks to break.
As a region bound by shared history, culture, and challenges, the nations of SAARC must find the moral courage to rise above bilateral frictions and reaffirm their commitment to dialogue, cooperation, and human security. Confidence-building measures, back-channel diplomacy, and multilateral forums must be prioritized over rhetorical posturing and arms races.
Conclusion
The attack in Pahalgam and the military response that followed are stark reminders of the volatility that persists in South Asia. But they are also a call to action. As the current Chair of SAARC, Nepal must spearhead a diplomatic initiative to revive the SAARC process and re-center regional cooperation as the cornerstone of peace and prosperity.
This is a defining moment for South Asia. The choice is clear: we either succumb to the forces of division and destruction, or we rise—together—as a region of peace, resilience, and shared destiny. Let the tragic loss of life in Pahalgam not be in vain. Let it galvanize our regional leadership to reject terrorism, resist war and renew our solemn pledge to build a safer, more prosperous South Asia for all.
