Islamabad, Pakistan - The massive election win of the right-wing nationalist Bharatiya Janata Party, led by hardliner Narendra Modi, in India's recently concluded general elections has set alarm bells in neighbouring Pakistan, but there is also a cautious optimism about improving ties between the two South Asian countries.
Pakistani Prime Minister Nawaz Sharif telephoned Modi to congratulate him on the "impressive victory" after the BJP swept parliament. Modi, in kind, has invited Sharif to attend his swearing in ceremony - an unusual occurrence for the two nuclear armed neighbours, who have fought three full scale wars since gaining independence from Britain in 1947.
While Modi may need to sound tough in a bid to appease the hardliners within his party, peace with Pakistan will be a necessity for his economic and developmental agenda.
On Saturday, Sharif accepted that invitation, and he is now also slated to hold a bilateral meeting with prime minister-elect Modi, who relied heavily on Hindu nationalist and sometimes anti-Pakistan rhetoric during his campaign.
The BJP leader repeatedly promised to be less tolerant of what India sees as Pakistan’s sponsorship of terrorism on its soil.
However, there is room for optimism, analysts say, as long as the campaign rhetoric does not migrate to the prime minister’s office.
"While Modi may need to sound tough in a bid to appease the hardliners within his party, peace with Pakistan will be a necessity for his economic and developmental agenda," Raza Rumi, a senior fellow at Islamabad’s Jinnah Institute, told Al Jazeera.
Rumi along with many other analysts argues that with two right-wing governments in place in both countries, there is more room to manoeuvre in the often tricky relationship, where real politik, economics and security must all be balanced with nationalist fervor.
Sherry Rehman, a former Pakistani legislator and former ambassador to the US, told Al Jazeera that the tone of the relationship will depend on how much "value Modi places on ideology and identity", given a campaign that leaned heavily on appealing to Hindu majority nationalism and communal identity.
Nevertheless, given his mandate, Rehman is hopeful that the prime minister-elect will be able to take further strides than previous governments, including the one led by the outgoing Congress party under Manmohan Singh.
"Modi is better placed than any other government since the Rajiv Gandhi government to make history if he so chooses. He has the blockbuster mandate, and need not be hamstrung by the Lok Sabha [lower House of parliament], like (Manmohan) Singh often was, in pursing promises made to Pakistan," she said.
Potential for trade deal
Sharif ran his electoral campaign last year, as Modi has this year, on a primarily economic platform: promising greater growth and investment in badly-needed infrastructure projects. Modi's tenure as chief minister of western Gujarat state between 2001 and 2014 is equally coloured by both the 2002 religious riots which left more than 1,000 dead, and a perception that he delivered efficiency and economic growth.
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One of Sharif's key promises in May last year were to open up trade with India, the regional economic power, with whom Pakistan's trade is currently hamstrung by restrictions and an almost complete ban on trade in services.
At present, the bilateral trade stands at approximately $2bn, with $1.7bn of that represented by Indian exports, and $350m in Pakistani exports. Informal, untaxed trade, analysts told Al Jazeera, is likely a further $2bn.
The potential is for overall trade to grow to $9-11bn if the two countries were to finalise long-debated Most Favoured Nation (MFN) or Non-Discriminatory Market Access (NDMA) agreements, Dr Vaqar Ahmed, a research fellow at the Sustainable Development Policy Institute who has also worked with the government on the deals, told Al Jazeera.
The Pakistani government has been pushing for those agreements since it came to power in May last year, but the signing of the documents has repeatedly been held up. Nonetheless, limited trade over land routes has continued, with cheap Pakistani cement from Dera Ghazi Khan fuelling a construction boom across the eastern border in Indian Punjab, for example.
Analysts believe that Pakistan, being the smaller economy, has more to gain by the deal in relative terms.
"The smaller country always gains in terms of import savings, technology transfer as well as access to new markets. India […] will gain in export terms, because obviously their export supply capacity is more than [Pakistan's]. But we should not be afraid of this," Ahmed, who is based in the capital, Islamabad, said.
He said that, while India stands to gain an estimated $6-7bn in exports from any favourable market access in Pakistan, the larger country's robust economy "is not dying for it".
"Now look at this in Pakistan's terms. So in your terms, your market access in places like Africa is difficult […] and your markets are closed in the Far East, while you cannot access Central Asia. India, who is your next door neighbour, is your prime opportunity. Just like China was three or four years ago. […] For Pakistan, that $3-4bn in new exports is a very big deal."
Timeline: India-Pakistan relations
Elephant in the room
Nevertheless, no trade deal has been forthcoming, with a number of signings being cancelled or postponed by the Pakistani side.
That, analysts say, points to the elephant in the room when it comes to Pakistan's foreign policy: the influence of its powerful military over the policy in general, and relations with India and Afghanistan in particular.
"I don't see trade taking off. Because I think it's not Islamabad any longer which is going to set the agenda," said Ayesha Siddiqa, a researcher and author of Military Inc, alluding to the army's role in decision making.
"If you have trade taking off, then peace can take off. […]Once you have peace, there is also an expectation of a peace dividend [which] basically means reducing the size of the armed forces, which the powers that be don’t want to see happen."
Sharif, meanwhile, continues to push for the trade deal, and has in private conversations with diplomats cited his largely positive relationship with former Indian prime minister Atal Bihari Vajpayee, also a BJP member, when both last led their countries in the late 1990s, as a cause for optimism, diplomatic sources told Al Jazeera. That is a message that the BJP has echoed publicly, following Modi's win.
'Short-term, limited war'
Meanwhile, the issue of terrorism remains a major bone of contention between the two countries. India has consistently asked its western neighbour to act against armed groups operating on its soil that have targeted it, while Pakistan denies that it has either sponsored such activity or that concrete evidence has been shared regarding Pakistani groups' involvement.
The Pakistani Foreign Office has reiterated its commitment to an aborted Composite Dialogue process, which has been stalled for the last three years.
"We expect that when the new government takes over in India, realising the importance of having peace in the neighbourhood, the dialogue process between Pakistan and India will resume," said Tasneem Aslam, the foreign office spokesperson, at a weekly briefing on Thursday.
Rehman, the former ambassador to the US, who has also worked extensively on the India-Pakistan relationship, is sceptical that there will be any immediate progress on the dialogue process, however.
"I don't expect an immediate resumption of the India-Pakistan dialogue process, because it is also too early to say if Modi as prime minister will prioritise foreign policy right away, especially with Pakistan, where he may well prefer to tread with caution," she said.
Siddiqa, however, doesn't just see the dialogue as being a far off prospect, she's also concerned about the potential, with a new, avowedly more hardline New Delhi government in place, for a "short-term or a limited war".
"My concern is that suddenly the onus of turning South Asia peaceful has somehow landed on Modi's shoulders. Granted his hand in Gujarat … I think it's a very disproportionate amount of burden on his shoulders. He's got a bad press [internationally], his reputation is dodgy, at best, so everybody will be too happy all over the world to see them being proven right."
Crisis management has never been the India-Pakistan relationship's strong suit, and Raza Rumi, too, warns that without those mechanisms in place, war is not out of the question.
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"[The threat of an attack on Indian soil] remains the greatest of fears. Modi will be expected to react strongly by public opinion. However, the nuclear deterrent remains a major safety valve for Pakistan. At the same time, things can get out of hand. Policy making in South Asia is not always rational nor is the region known for its crisis management capabilities," he said.
It remains unclear what kind of prime minister Modi will be - and how true he will remain to "Candidate Modi", who relied heavily on exclusionist, communal rhetoric and promises of a tough stance against Pakistan.
The prospect of a prime minister who is faithful to the latter does continue to ring those alarm bells in Islamabad. As one commentator put it, if Modi is true to his campaign, then "all bets [would be] off".
Perhaps that uncertainty is best summed up by a text message Al Jazeera received from a Kashmiri separatist commander based in Pakistan-administered Kashmir, shortly after Modi's election win was announced: "I think a big change is coming. May Allah save us."
Follow Asad Hashim on Twitter: @AsadHashim
Source: Al Jazeera