Conflict turns hot over Kashmir

Fears of an all-out conflict between India and Pakistan were ignited this week when Pakistan shot down two Indian fighter jets.

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Relations are increasingly bellicose

Fears of an all-out conflict between India and Pakistan were ignited this week when Pakistan shot down two Indian fighter jets and captured two pilots, reports The Daily Telegraph. Pakistani planes have also struck "non-military targets" on the Indian side of the Kashmir border.

The incident is "the latest in a dangerous sequence of events" earlier in the week Indian planes bombed the Pakistani side of the border in retaliation for the killing of 40 Indian soldiers by Islamic militants. The rhetoric on both sides has become "increasingly bellicose" the Pakistani military has even drawn attention to its nuclear arsenal.

We've been here before, says Nikhil Kumar on CNN. Three years ago India carried out airstrikes in response to an attack on an Indian military installation in Kashmir. Pakistan claimed there "had only been an exchange of gunfire", which allowed Islamabad to saveface. In theory, India couldhave done the same, but this time the situation has been complicated by "public anger" over the Islamist attack, combined with the pressure of forthcoming elections. These factors prompted India to escalate hostilities.

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Still, there is hope, says Bloomberg. Shortly before the latest incidents there were signs that the rivals were "looking to lower the temperature with renewed diplomatic outreach".

Pakistan sought help from the UN; India reached out to the US, UK, China, France and Russia, and urged Islamabad to take action against terrorist groups. One possible mediator could be China, which has good relations with both countries. It has said it's willing to play a "constructive role" in any negotiations.

Dr Matthew Partridge
Shares editor, MoneyWeek

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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