This attempted analysis is limited due to the rapidly evolving events, with some data still unavailable or constantly changing. Also, most of the data is mainly coming from India, without prejudice to Pakistan.

India and Pakistan have been at odds for the last few decades. Border clashes have been almost regular. But this time, the unprecedented escalation has triggered the push-comes-to-shove factor. The world is watching the events very closely because both India and Pakistan have nuclear arsenals, and there’s the possibility of a rapid escalation towards a regional nuclear confrontation. And if it evolves into a proxy war between the US and China, a nuclear confrontation is even more possible.

India, angry over cumulative border incursions by Pakistan, suspended the Indus Water Treaty, which supplied Pakistan with water. Pakistan instantly declared the move “an act of war.”

Ironically, the treaty had withstood six decades of hostilities — until now. (Source: Firstpost — Vantage news).

India complained that Pakistan’s “state-sponsored terrorists” were behind the renewed border clashes, which precipitated India’s response to suspend the treaty. Whether the Pakistani “terrorists” were “state-sponsored,” as India claims, or acting on their own still has to be verified. The word ‘terrorist’ is sometimes overused to mean the enemy.

The effect of the treaty suspension on Pakistan’s agricultural production is expected to be massive, as the Indus is one of the major sources of water for Pakistan. The effect in the short term is a dramatic decline in food productivity, and in the long term a possible famine or near-famine situation. That is, if Pakistan fails to get other sources of water, which is highly unlikely, to match the volume supplied by the Indus River.

India was hoping the treaty suspension would be a deterrent to a further escalation, but the effect was the opposite, namely, retaliation and an escalation. India claimed it shot down 400 Pakistani drones, proving the resilience of its defense system.

Indian observers theorized Pakistan was merely testing the capabilities and extent of India’s defense system. But in truth, such a massive Pakistani response was not a probe or a search for intel data, but an actual escalation.

Instantly, the stock markets of India and Pakistan went into steep dives, except for Indian defense contractors, which soared upwards, as they are the suppliers for India in a state of war.

Chinese weapons makers also experienced a steep climb in stock market prices, since China supplies Pakistan with defense drones and missile systems.

In truth, Pakistan’s bravado stems from China’s support. We cannot discount that the globally omnipresent US will stay away from the conflict. But if India succeeds in getting US support in terms of financing and weaponry, we are headed for a full-blown proxy war that would make the Syrian proxy war look like a pocket rebellion.

India also has relations with Russia and is in fact using Russian defense weaponry. But India is more of a potential proxy for the US because China is more of an enemy of the US. That is the nature of proxy wars — giant friends facing giant enemies using smaller friends.

The chances of India and Pakistan being proxies for a US-China war is not known, but the potential is there. It is the proxy character of war that stimulates a final nuclear confrontation.