Both these are significant improvements as the use of solid fuel means that it can be stored for a longer period, can be launched quickly and does not need an elaborate support system (a liability in the age of threat of air strikes). A mobile launcher also signifies relative invulnerability as the missile can be continuously moved around to avoid detection and destruction.

Readers may recall that during the 1991 Gulf War, despite their massive domination of the skies over Iraq, Saddam Hussein was able to launch his Scud missiles based on mobile launchers. On April 13, barely within two days, Pakistan also claimedto have tested the Ghauri II, an equivalent of Agni II. It appears a missile race is on in the Indian subcontinent.

Agni II is of no relevance to Pakistan as that country is already covered by India's Prithvi missile. This is so because Pakistan lacks strategic depth. Eighty per cent of its population, industry and most major cities are located within a 150 km belt along its border with India. The only countries directly affected by this development are China and the US. With Agni II, for the first time India will be able to reach Beijing and the Pacific Rim area, the political and economic heart of China. With this development, for the first time since 1964 (the year of the Chinese nuclear test), India has taken its first tentative steps towards redressing the balance of power with China that was grossly tilted in favour of the latter.

With Agni II, India would be able to also reach the American base at Diego Garcia. It should induce due caution on the US in any future exercise of gunboat diplomacy, a la1971, when the USS Enterprise sailed into the Bay of Bengal during the Indo-Pak war. The effect on Pakistan is indirect. Once India begins seriously countering the Chinese power in Asia, the cautious Chinese are likely to be much more circumspect in supporting Pakistan's aggressive interference in India. It is this feeling of losing out in the long term that could be the basis of Pakistani reaction that again talked of `matching India'.

There is one basic difference between the Indian missile and nuclear programme and that of the Pakistanis. Indian defence capability has emerged over a long period, and evenly spread expenditure over many years and her `civilian' space and nuclear programme. In the case of Pakistan not only is there very little civilian use of its military expenditure but also the country is woefully backward in terms of a developed industrial infrastructure.

If, despite all this, Pakistan ran a successful arms race with India, it is thanks to the US and the Chinese support and gifts. Ineffect, India was having an arms race with not Pakistan (one-tenth our size) but with the US and China. It is true that the erstwhile Soviet Union supported India, but its role was much less effective due to its economic weakness, a weakness that led ultimately to the demise of the USSR.

The Indo-Pak arms race resembles the Cold War competition between the US and the USSR in some respects. India is economically strong and quite immune to external pressures while Pakistan, like the Soviet Union, is weak economically. In the short term, denial of an IMF loan of $5 billion may plunge the Pakistani economy into another crisis. With falling oil prices, there are limitations to the extent to which the oil rich Arabs can bankroll Pakistan. Trying to keep up with India in the military field may ultimately bankrupt Pakistan just as it did the Soviet Union during the Cold War. But the consequences of a breakup of Pakistan could have a major impact on Indian security as we may yet again face a deluge of `economicrefugees'.

The threats to the Vajpayee government have already dealt a blow to the economy and the stock markets have plunged. It is not beyond reasonable suspicion that the powers that do not want India to develop militarily may well be backing this move. In spite of these clear linkages between the issue of security and economic well being, Indian business has a clear `hands- off' approach towards security issues. The doyen of a leading business house had once remarked that the only business of his group was `business' and refused to get involved in other vital national concerns. The leave-it-to-the-soldiers mentality (a throw back to the caste system where defence was the responsibility of the kshatriya alone) and the hangover of the colonial era, where Indian security was the concern of the British, are two factors that see Indian business ignoring this field.

In the West, unlike India, business houses like Rockfeller, Ford and Carnegie have devoted major sums to creating think-tanks to help policymaking on security. Indian industry is yet to mature to that level to see where its own and the nation's enlightened self-interest lie. Arms races and major policies on war and peace continue to dictated either by generalist bureaucrats, short-sighted politicians or tunnel-visioned soldiers.

The author is a retired colonel of the Indian Army