Nifty soared on IND-PAK real war and US-China trade war truce

·       India’s Dalal Street surged most in a single day in the last four years on local and global positive cues

·       China withdrew retaliatory reciprocal tariffs on each other after two days of formal talks, quite unexpectedly

·       China may be the biggest beneficiary of the Ind-Pak brief war as it showcased (through Pakistan) that its military equipment can challenge US global dominance at a fraction of the cost

·       The US and China are interested in minerals/REE-rich POK/Balochistan worth $6T and thus may not allow another War field

India’s benchmark stock index Nifty has been under stress for the last few days on escalating India-Pakistan geopolitical tensions, with an almost all-out war-like situation over the Pahelgam massacre heinous incident. The India-Pakistan conflict in the aftermath of the Pahalgam terrorist attack on tourists and the subsequent war-like situation was a significant escalation in the long-standing tensions between the two nuclear-armed nations, primarily over the disputed region of Kashmir. Eventually, US President Trump ensured a prompt ceasefire between the two nuclear neighbors. Both countries (IND-PAK) claimed ‘victory’ over each other amid an intensified proxy war fought in cyberspace and the media. Deal maker Trump also offered to mediate the never-ending Kashmir and other issues between India and Pakistan for a permanent solution.

Kashmir Dispute between India and Pakistan

The long-standing Kashmir dispute between India and Pakistan traces back to the 1947 partition of British India, which created India and Pakistan and left the princely state of Jammu and Kashmir contested or open. Now, both nations claim Kashmir in full but control only parts, with the Line of Control (LoC) as the de facto border. Multiple wars (1947-48, 1965, 1999) and skirmishes have occurred over the region.

Pahalgam Massacre

On April 22, 2025, a terrorist attack in Pahalgam, an attractive tourist destination in Indian-administered Kashmir, killed 26 people (25 Indians and one Nepali). India accused Pakistan of supporting the attack, alleging links to groups like LET and JEM. Pakistan denied involvement, calling for an international (neutral) investigation, which India denied.

Escalation: The "100-Hour War"

India’s Action: On May 7, 2025, as highly expected, India launched a surgical strike- operation Sindoor after midnight, targeting nine terrorist sites in Pakistan and Pakistan-administered Kashmir (POK) with multiple missiles and drones. India claimed the strikes were precise, avoiding Pakistani military facilities, and killed over 100 terrorists.

Pakistan’s Retaliation: Pakistan retaliated with Operation Bunyan Marsoos ("Wall of Lead"), involving missile and drone attacks on Indian military targets. Both sides reported civilian and military casualties, with Pakistan claiming over 30 civilian deaths in its territory.

Intensity: The conflict, lasting roughly 100 hours or almost 4 days (May 7–10, 2025), involved intense dogfights of fighter jets, tit-for-tat missile strikes, drone swarms, and heavy artillery shelling exchanges along the LoC. Pakistan fired 300–400 drones, while India neutralized many using its air defense systems, led by Russian S-400; Both sides claimed to have downed each other’s fighter jets.

Diplomatic/Political Fallout: India suspended the Indus Waters Treaty, closed the Wagah-Attari border, withdrew diplomats, and imposed visa bans on Pakistani nationals.

Ceasefire Agreement

Announcement: On May 10, 2025, at 5:00 PM IST, India and Pakistan agreed to a ceasefire, effective immediately, following talks initiated by Pakistan’s Director General of Military Operations (DGMO). India’s Foreign Secretary Vikram Mishri issued an official statement, termed the so-called ceasefire between IND-PAK as an ‘understanding’ between DGNOs of both countries:

"An understanding was reached this evening between the DGMOs of India and Pakistan to stop the military action that was going on for the last few days. For the last few hours, this understanding has been violated by Pakistan. The Indian Army is retaliating and dealing with this border intrusion. This intrusion is extremely condemnable and Pakistan is responsible for it. We believe that Pakistan should understand this situation properly and take appropriate action immediately to stop this intrusion."

Mediation: U.S. President Trump claimed credit for brokering the ceasefire, though India insisted it was a direct agreement between the two nations; however, other countries, including Saudi Arabia, Iran, China, and the UAE, were involved in de-escalation efforts.

On May 10, at around 3:30 PM IST, Trump posted on Truth:

“After a long night of talks mediated by the United States, I am pleased to announce that India and Pakistan have agreed to a FULL AND IMMEDIATE CEASEFIRE. Congratulations to both Countries on using Common Sense and Great Intelligence. Thank you for your attention to this matter!’

Trump’s Truths came almost at the same time, DGMOs of both Ind-Pak were engaged in hotline talks over a ceasefire.

Ceasefire Violations: Hours after the ceasefire on May 9, both India and Pakistan accused each other of violations. Explosions and drones were reported in Srinagar and Jammu, with India’s Foreign Secretary Vikram Misri condemning Pakistan’s actions. Pakistan denied breaching the truce and urged restraint.

Later on May 11, Trump also offered Kashmir issue between India and Pakistan and to increase trade:

“I am very proud of the strong and unwaveringly powerful leadership of India and Pakistan for having the strength, wisdom, and fortitude to fully know and understand that it was time to stop the current aggression that could have led to the death and destruction of so many, and so much. Millions of good and innocent people could have died! Your legacy is greatly enhanced by your brave actions. I am proud that the USA was able to help you arrive at this historic and heroic decision. While not even discussed, I am going to increase trade substantially with both of these great Nations. Additionally, I will work with you both to see if, after a “thousand years,” a solution can be arrived at concerning Kashmir. God bless the leadership of India and Pakistan on a job well done!!!”

Stabilization: By Sunday, May 11, the ceasefire appeared to hold, with no major overnight violence reported. Normalcy began returning to border areas, though tensions persisted.

Aftermath and Implications

Regional Stability: The ceasefire averted a broader conflict, but experts warn of a fragile peace. Kashmir remains a flashpoint, with ongoing militancy and political repression.

Narrative Battle (proxy war): Both nations are shaping narratives—India portraying its strikes as a strong anti-terrorism stance, Pakistan emphasizing its defense, and Kashmir’s unresolved status.

International Response: The G7, UN, and other leaders urged restraint and dialogue. China expressed support for a lasting ceasefire, while the U.S. faced criticism for inconsistent messaging on its role; earlier, US VP Vance denied any active role in the India-Pakistan truce effort.

Kashmiri Perspective: Kashmiri voices remain marginalized, with locals caught between militancy and military crackdowns. The ceasefire offers temporary relief but no resolution to the underlying dispute.

Current Status

As of May 11, 2025, DGMO talks are ongoing to ensure the ceasefire’s durability. India maintains its punitive measures, including the suspension of the Indus Waters Treaty, signaling a hardened stance against future terrorism. India also denied any talks with Pakistan unless it dismantles all infrastructure for terrorists, and becomes a true democracy without Military control. India is also seeking the POK back to India by Pakistan and vice versa.

The situation remains tense, with both sides on high alert. Long-term peace depends on addressing the Kashmir issue, curbing militancy, and fostering dialogue, though historical precedents suggest challenges ahead. Both countries should focus on core economic issues, ranging from rampant inflation and elevated unemployment/under-employment issues, and overall development & better standard of living for the general public, rather than too much political game of chess over the never-ending Kashmir issue.

India’s PM Modi under fire over an unexpectedly prompt ceasefire with Pakistan amid Trump pressure

India’s PM Modi is now under heavy criticism by various opposition parties, including the main opposition party INC, for ‘weak leadership’, blinking too early for the Pakistan war ceasefire after pressure from Trump. Modi is being compared with the erstwhile Congress/INC PM, India Gandhi, another autocrat, who continued the 1971 Pakistan war to liberate Bangladesh (formerly East Pakistan) from Pakistan despite intense pressure from the US. Under India Gandhi’s leadership, India also conducted 1st nuclear test despite significant US objections and almost 24/7 satellite surveillance.

Trump loves trade wars and hates real war.

Tariff Man Trump may also pressure Modi/India and Pakistan to impose 150% tariffs on both if they continue the deadly war, which can turn from conventional to nuclear in the future! In a way, Trump publicly claimed credit for brokering the ceasefire, stating that his administration’s diplomacy prevented a larger conflict. This aligns with his foreign policy style of projecting influence in international crises. Indian officials, including Foreign Secretary Vikram Misri, emphasized that the ceasefire was a bilateral agreement reached through direct DGMO talks between India and Pakistan. India downplayed external mediation, asserting its autonomy in decision-making.

The U.S., as a major global power with leverage over both nations, likely played a facilitating role. Washington has strategic interests in preventing a nuclear escalation in South Asia, in which China may be involved in the future, resulting in even WWIII. Trump loves trade wars and hates real wars. Diplomatic channels, including backchannel talks, may have encouraged Modi to consider de-escalation, but this would have been framed as advice rather than outright pressure. Saudi Arabia, Iran, China, and the UAE also urged restraint, broadening the diplomatic push for peace. This collective international effort likely weighed on India’s decision, with Trump’s involvement being one part of a larger picture.

Modi’s Domestic & International Compulsions and Calculus

As a mature politician, Indian PM Modi agreed to stop the real war but continue the proxy war on Pakistan. This will help him to consolidate his leadership in not only the BJP ahead of September 2025, when Modi turns 75 of age and may have to retire from active electoral politics owing to the BJP’s informal/formal rule. Modi will also gain politically in the next major state election in Bihar and WB, despite a weak BJP organization in those states and overall economic issues in the country. BJP is also playing now caste politics contrary to the earlier stance of Mandir instead of Mandal ahead of caste heavy Bihar election.

Modi faced domestic pressure to respond forcefully to the Pahalgam attack, attributed to Pakistan-based terrorists. Operation Sindoor was a show of strength, but prolonging the conflict risked economic disruption and international isolation. A ceasefire, even if influenced by external actors like the U.S., allowed Modi to project control while avoiding further escalation, a sign of maturity.

In summary, while Trump may have exerted some diplomatic and trade influence, Modi’s decision to agree to the ceasefire was likely driven by a combination of strategic calculations, domestic priorities, and broader international urging, rather than direct pressure from Trump alone. Also, both India and Pakistan may get some special concessions from Trump in a trade deal for agreeing to a prompt ceasefire.

As a fragile economy, Pakistan was already seeking no major war.

Another issue was that India abstained in the IMF voting for Pakistan's bailout package of a $1B loan, paving the way for the approval, while the US and other countries may have also pressured Pakistan. Pakistan was already hovering with a begging bowl. The US may have pressured Pakistan to either accept the ceasefire and get the much-sought-after financial lifeline or continue the war at the expense of its already fragile economy, which is not sustainable in the mid to long run.

On May 10, Pakistan’s PM Shehbaz Sharif Tweeted and thanked Trump for mediation:

“I am extremely grateful to President Trump for his pathbreaking leadership and commitment to global peace and for his most valuable offer to play a greater role in bringing lasting peace to South Asia.  For decades, Pakistan and the U.S. have been partners who have worked together closely to protect and promote our mutual interests as well as for peace and security in critical parts of the world. I am confident that in President @realDonaldTrump, Pakistan has found a great partner who can reinvigorate our strategic partnership and strengthen Pakistan-U.S. ties, not only in trade and investment but in all other areas of cooperation.”

There was no similar tweet by Indian PM Modi, publicly thanking Trump for the ceasefire. There were also some reports in CNN, and NYT, suggesting India, under PM Modi, scrambled for a ceasefire and lobbied the US, specifically President Trump, following a barrage of missile and drone attacks by Pakistan on May 9, 2025, with a long-range ballistic missile, targeting Delhi, but it was successfully intercepted by India (S-400) in neighboring Haryana state.

China’s ‘Deep Seek’ moment on the US military industry

China likely emerged as a significant beneficiary of the India-Pakistan conflict in May 2025, particularly due to the combat debut of its J-10C fighter jet and associated weapons like the PL-15 missile. India-Pakistan conflict provided a global stage to showcase Chinese military technology, which is often marketed as cost-effective compared to Western counterparts. China is now the world’s 4th largest exporter of military equipment after the US, Russia, and France.

China now supplies almost 85% of Pakistan’s military equipment, replacing the US amid sanctions after the Afghanistan fiasco. The Pakistani Air Force’s (PAF) use of Chinese-made J-10C jets, which reportedly downed Indian aircraft (including at least one French-made Rafale), marked the jet’s first confirmed air-to-air kills. This real-world combat success validated the J-10C’s capabilities, boosting its credibility on the global arms market at a fraction of the cost.

J-10C Fighter: A 4.5-generation multirole jet, comparable to the U.S. F-16 or French Rafale, equipped with advanced avionics, AESA radar, and long-range PL-15 missiles. Its estimated cost is $40–50 million per unit, significantly lower than the Rafale ($100–200 million) or US F-16 ($60–70 million).

PL-15 Missile and other assets: The beyond-visual-range air-to-air missile, used by Pakistan, outperformed expectations, raising interest in its range and precision. It was pitted against the European Meteor missile, showcasing China’s competitive edge in missile technology. Pakistan’s use of Chinese drones and JF-17 Thunder jets (co-developed with China) further demonstrated the breadth of China’s military portfolio.

China may soon challenge the US in military exports.

The Ind-Pak conflict drew scrutiny from military analysts in the U.S., Europe, and Asia, who closely studied the performance of Chinese systems against Western military hardware. This provided China with a rare opportunity to prove its technology in a high-stakes scenario. Chinese military hardware is marketed as high-quality yet affordable. The J-10C’s $40–50 million price tag undercuts the Rafale ($100–200 million) and F-35 ($100 million+), appealing to cost-conscious nations.

Chinese drones and missiles, like the PL-15, are similarly priced lower than Western equivalents, making them attractive to developing nations. Unlike U.S. and French arms deals, which often come with restrictions (e.g., U.S. limits on Egypt’s F-16 upgrades or Meteor missile sales), China offers advanced systems without stringent geopolitical conditions, enhancing its appeal. China’s integrated production of domestic and export J-10CE models reduces costs and speeds up delivery, a strategic advantage over Western manufacturers with longer waiting times.

China may now expand its industrial exports (military and civil jets, and military equipment)

The Ind-Pak conflict sparked interest from countries like Egypt, Algeria, and Saudi Arabia, which are exploring J-10C acquisitions. Pakistan, already reliant on China for almost 85% of its military gear, serves as a testing ground and advertisement for Chinese systems. The J-10C’s performance against the Rafale and India’s Western-supplied systems signaled that Chinese technology can rival U.S. and European counterparts, potentially shifting global arms market dynamics.

China’s major markets for military equipment are Pakistan (63%), Bangladesh, Thailand, Myanmar, Algeria, Nigeria, Saudi Arabia, and Serbia, with emerging interests in the Middle East and Latin America. Its 5.9% share of global arms exports (2020–2024) reflects a focus on affordable, advanced systems, bolstered by the J-10C’s combat success in 2025. While Asia dominates, Africa and the Middle East also offer growth potential, driven by BRI ties and fewer export restrictions.

China may soon launch 6G fighter jets and other advanced weapons, in a challenge to the US and Western global dominance. By arming Pakistan, China strengthens its strategic alliance, countering India’s growing ties with the U.S. and the West. The conflict highlighted China’s role as a reliable partner, enhancing its influence in the Middle East, Africa, and Asia. However, challenges like quality concerns and limited after-sales support must be addressed to rival top exporters like the U.S. (43%), France (9.6%), and Russia (9%).

China may also have some military drawbacks, but can overcome

China’s HQ-9P and HQ-16 missile defense systems, deployed by Pakistan, failed to intercept most of the Indian missiles during the first strikes of Operation Sindoor on May 7, 2025, allowing India to successfully hit nine terrorist targets. Reports from Indian sources highlight the destruction of an HQ-16 battery near Lahore and the exposure of Pakistan’s air defense vulnerabilities.

While these claims align with India’s narrative, the lack of independent verification suggests caution in assessing the full extent of the failure. The contrast with India’s effective S-400 (Russian) and offensive capabilities underscores a technological and operational gap that may be impacting China’s reputation as a trusted arms exporter to some extent. But China can overcome these challenges and, in the future, may also seriously challenge the global dominance of US arms exports. This will be a new challenge for Trump & Co.

Why China, India, and the US are interested in the POK or the Himalayan Regions of Pakistan?

Pakistan, particularly Balochistan and Pakistan-occupied Kashmir (PoK), is rich in rare earth elements (REEs) and other critical minerals, making it a focal point for global powers like China, India, and the US. These regions, including Afghanistan and Indian-occupied Kashmir, host significant deposits of copper, gold, lithium, and REEs like gadolinium and terbium, which are vital for high-tech, defense, and renewable energy applications.

Balochistan: One of the world’s largest undeveloped copper-gold deposits, with estimated reserves of 5.9 billion tons of ore containing 0.41% copper and 0.22 grams/ton of gold, valued at over $500 billion. It holds 54 billion pounds of copper and 41 million ounces of gold, with production expected to start in 2028.

Saindak Copper-Gold Project: Operated by Chinese firms since the 1990s, it highlights Balochistan’s long-standing mineral exploitation. Significant deposits of REEs, such as gadolinium and terbium, are reported in carbonatite and pegmatite rocks, though detailed exploration is lacking. Chromite (Pakistan ranks among the top ten globally), manganese, and industrial minerals like gypsum and limestone are abundant.

Economic Potential: Balochistan contributes 40% of Pakistan’s gas production and hosts metallic minerals, gemstones, and industrial minerals, potentially boosting Pakistan’s economy if fully tapped.

Pakistan-occupied Kashmir (PoK) and Gilgit-Baltistan

·       REEs and Strategic Minerals: Carbonatites in Gilgit-Baltistan and Neelam suggest potential for light REEs (e.g., lanthanum, cerium), though unverified.

·       Gemstones and Minerals: PoK, including Gilgit-Baltistan, is rich in high-quality gemstones (e.g., ruby, emerald, topaz) and minerals like copper and gold, mined in areas like the Hindu Kush and Karakorum ranges.

·       Strategic Location: PoK’s proximity to China and its role in the China-Pakistan Economic Corridor (CPEC) enhance its geopolitical value for mineral trade.

Overall Mineral Wealth of Pakistan: Pakistan’s total mineral resources are estimated at over $6 trillion, including 6 billion tons of copper, 1 billion tons of gold, 175 billion tons of coal (Thar, Sindh), and REEs across Balochistan, Khyber Pakhtunkhwa, and PoK. REEs are critical for smartphones, electric vehicles (EVs), semiconductors, and defense systems (e.g., F-35 jets and missiles), making Pakistan’s untapped reserves strategically significant. The global race for critical minerals, driven by technological and defense needs, places Pakistan at the center of strategic competition. Each country’s interest is shaped by economic, geopolitical, and security objectives.

China’s Interest

China-Pakistan Economic Corridor (CPEC): China has invested billions of dollars in Pakistan’s mineral sector via CPEC, part of its Belt and Road Initiative (BRI). Projects like Saindak and Reko Diq are central to China’s resource strategy. CPEC 2.0 emphasizes industrialization and Special Economic Zones (SEZs), aiming to process minerals locally and export finished products, enhancing China’s control over Pakistan’s supply chain.

China’s Global REE Dominance: China controls 61% of global REE production and 92% of processing, giving it a near-monopoly. Pakistan’s REEs in Balochistan and PoK bolster China’s supply chain, especially for heavy REEs like terbium, critical for defense. By securing Pakistan’s minerals, China reduces reliance on other sources and strengthens its global pricing power, as seen in its 2025 export restrictions on REEs to the U.S.

Geopolitical Strategy: China uses Pakistan to counter India’s regional influence, particularly in Kashmir, where PoK’s minerals and strategic location (e.g., Shaksgam Valley, ceded in 1963) are leveraged. Balochistan’s Gwadar port, part of CPEC, facilitates mineral exports, enhancing China’s maritime and economic presence in the Indian Ocean.

Challenges: Baloch separatist attacks, like those by the Balochistan Liberation Army (BLA), actively aided by India/RAW, target Chinese projects, raising security costs. However, critics argue that Chinese firms extract resources with minimal local benefit, fueling resentment and accusations of economic dependency. The US also often accused China of using cheap child labor.

Mineral Security: India is expanding its own REE exploration (e.g., through Indian Rare Earths Limited) and sees Pakistan’s untapped reserves as a competitive concern, especially for defense and tech industries. The 2025 India-Pakistan conflict, sparked by the Pahalgam attack, may have been influenced by competition over disputed territories with REE potential.

Countering China: India, aligned with the U.S., through the Quad, aims to curb China’s dominance in Pakistan’s mineral sector. India perceives CPEC as a strategic encirclement, with PoK’s resources strengthening China-Pakistan ties.

Challenges: India’s direct access to Pakistan’s minerals is limited by frosty relations and the Line of Control (LoC) tensions, restricting its role to strategic monitoring rather than investment. Militancy in Indian-administered Kashmir, sometimes using U.S.-made weapons from Afghanistan, complicates India’s regional security strategy.

United States’ Interest

Critical Minerals Security: The U.S. relies on China for 70% of its REE imports, making Pakistan’s reserves a potential alternative to reduce dependency. Reko Diq’s copper and gold, and Balochistan’s REEs, are priorities for U.S. tech and defense sectors (e.g., drones, F-35 jets). In April 2025, U.S. delegations visited Pakistan to discuss mineral cooperation, with officials like Eric Meyer emphasizing “collaboration in mineral development” at the Pakistan Minerals Investment Forum.

Countering China: The U.S. sees Pakistan’s minerals as a way to challenge China’s supply chain dominance, especially after China’s 2025 REE export restrictions. The US Investments in Balochistan could shift Pakistan away from China’s orbit. The Trump administration views Pakistan’s minerals as a national security priority, with copper demand for AI data centers (330,000–420,000 tons by 2030) and military applications driving interest. U.S. investment could strengthen ties with Pakistan’s military, which seeks normalized relations to distance itself from China while advancing counterinsurgency efforts in Balochistan.

Challenges for the US: Balochistan’s security risks, with 95% of Pakistan’s 2025 terrorist attacks occurring there, deter U.S. investors. The BLA’s targeting of foreign projects, including a 2024 train hijacking, raises risks. Infrastructure and energy constraints, like unreliable electricity and water stress, hinder mining and processing, as noted by Barrick Gold executives.

Broader Geopolitical Context

Global REE Demand: REEs are dubbed the “new oil” due to their role in EVs, semiconductors, and defense. China’s 2025 export curbs, targeting heavy REEs like dysprosium and terbium, have heightened global competition, making Pakistan’s reserves critical. But Balochistan’s insurgency, fueled by local anger over resource exploitation, targets Chinese and potential U.S. projects, complicating extraction.

Pakistan’s Strategy

Pakistan is pitching its $6 trillion mineral wealth to attract global/foreign investment, as seen in the April 2025 Minerals Investment Forum, but insists on local processing to avoid raw mineral exports. PM Shehbaz Sharif aims to use this wealth to address Pakistan’s financial crisis. Despite its wealth, Pakistan exemplifies the resource curse, with economic struggles due to militancy, poor infrastructure, and governance issues.

India’s Interest

Strategic Rivalry: India views Pakistan’s mineral wealth, especially in PoK and Balochistan, as a potential threat due to its proximity and China’s involvement. PoK, claimed by India, is a flashpoint, and its REEs could shift regional power dynamics. India’s 2019 revocation of Jammu and Kashmir’s special status heightened tensions, with Pakistan’s control of PoK’s resources seen as a challenge to India’s territorial claims. India’s Modi admin scrapped Article 370, paving the way for mineral/REE exploration by non-Kashmiri companies. Now, Indian and also foreign companies can explore & mine in Kashmir on a case-by-case basis.

Indian-administered Jammu and Kashmir and Ladakh hold significant REE potential, with confirmed deposits of light REEs (e.g., lanthanum, cerium), heavy REEs (e.g., gadolinium), lithium, PGE, and uranium. The 2023 lithium discovery and ONGC’s 2018–2020 findings underscore their strategic value for India’s self-reliance in defense, EVs, and tech. Geopolitically, these resources fuel tensions with China (controlling Aksai Chin) and Pakistan (via PoK), while attracting U.S. interest to counter China’s REE dominance.

However, security risks, environmental concerns, and infrastructure gaps pose challenges. Compared to Pakistan’s PoK and Balochistan, India’s regions have more documented REE reserves, but exploitation lags due to conflict and technical limitations. India’s MSP membership and domestic efforts aim to unlock this potential, but scaling up requires urgent investment and stability. India may have around $2T worth of minerals, including REEs.

China and the US both want to control/share $10T worth of minerals/REEs in Pakistan, Afghanistan, and India.

Afghanistan’s 1.4 million tonnes of REEs, particularly in the Khanneshin complex, alongside lithium and other minerals, make it a potential global REE supplier, valued at $1–3 trillion. China seeks to dominate these resources via BRI, while the U.S. aims to diversify supply chains, and India monitors to counter regional rivals. However, Taliban control, poor infrastructure, and security risks severely limit exploitation, unlike the more advanced but still challenged efforts in Indian-administered Kashmir/Ladakh and Pakistan’s PoK/Balochistan. India’s stronger governance and Western ties give it an edge, while Pakistan benefits from China’s investment. Afghanistan’s REE potential remains a long-term prospect, hindered by instability and the risk of a resource curse.

The US, China, and Russia are now in a global race from Ukraine to Pakistan, Afghanistan, India, and even Greenland. Trump wants to make a deal for secure minerals/REEs against financial and military aid to curb the dominance of China.

Like the USD, China is now also trying to use its REE dominance as a global hegemony and also using it against the US in answer to US hegemony. India does not trust China too much and thus may be looking for US or other Western companies and technologies to develop its REE industry, which is now the ‘new oil’. But China is far ahead in REE technology, exploration, and processing. This, along with other factors like China’s unmatched ability for the timely supply of industrial goods and other critical techs,  and overall border peace, India is now also looking for a deeper friendship with China, especially after Trump's trade war rhetoric.

Conclusions: 

China is in a better position of strength to win this long war of attrition on trade, minerals, and military exports. But China and the US do not want an escalation of geopolitical tensions between India and Pakistan to ensure a smooth and secure minerals source. Trump is also offering to mediate between India and Pakistan on the Kashmir issue. Trump/US may also provide Pakistan with the same financial assistance instead of minerals/REEs. Trump will not allow another Ukraine-like war between India and Pakistan. Both China, the US, and Russia want a stable region (Pakistan, Afghanistan, and Kashmir-India) for securing minerals/REEs, which is now the ‘new oil’.

Market Impact

On Monday, May 12, 2025, India’s Nifty soared almost 3.8%, the best one-day rally in 4 years on local & global positive cues amid the India-Pakistan real war and US-China trade war ceasefire. Nifty lost almost 1.6% in the last two trading sessions due to the escalating India-Pakistan war, and also the US-China trade/tariff war.

On Monday, India’s Dalal Street was boosted by HDFC Bank, RIL, ICICI Bank, Axis Bank, Infy, and TCS. Exporters gain on US-China trade truce after both countries scaled back tariffs to a basic 10% on each other, while the US kept the Fentanyl levy of 20%.

Weekly Technical trading levels: Nifty Future, and  Bank Nifty Future

Whatever may be narrative, technically Nifty Future (CMP: 25000) now has to sustain over 25200 for a further rally to 25350/25450-25550/25650 and 25900/26050-26200/26500 an; otherwise, sustaining below 25150-25000 Nifty Future may again fall to 25400/2500-24800/24200 and 24000/23800-23600/23400-23150/22900 and 22200/22000-21700/21500 and further 21500/21200-20900/20450 and even 19800/19600-17650/16700 in the coming days.

Technically, Bank Nifty (55670) now has to sustain over 56200 for a further rally to 56500/57000-57500/58000 and 58500/58900-60500/61000 and further 61500-65750 in the coming days; otherwise, sustaining below 56100-56000, BNF may again fall towards 55100/54600- 54000/53500 and 53000/52500-52000/51500 and further 51000/50500-50000/49700 and 49200-47700 in the coming days.