Tensions between India and Pakistan remain elevated following the May 2025 four-day conflict of missile and drone strikes that ended in a U.S.-brokered ceasefire now holding for over a year. Indian officials continue to warn Islamabad against harboring militant groups, while Pakistan’s military has reiterated that any new attack would trigger broad retaliation. The suspension of the Indus Waters Treaty adds another layer of friction, and sporadic backchannel contacts have not produced visible progress. Traders monitoring this market focus on the risk of escalation from future cross-border terrorism incidents in Kashmir or elsewhere, alongside the deterrent effect of nuclear capabilities and the absence of major new clashes since the 2025 ceasefire. No large-scale Indian military action has occurred in recent months.