I read an article in my paper about this issue. The author's thesis was that multinational companies put the pressure on the Indian government to tone down the war of words. These companies have based a lot of their technical infrastructure in India, and communicated to the Indian government their desire for a stable business environment. The Indian government decided that they like the multinationals more than they hate the Pakistanis.
In reality, I think there are a good many reasons why the Indians and Pakistanis didn't go to war. Nukes, business, politics, and allies all figured in to the equation.
This is one reason why the primitive undeveloped nations of the Arab world are particularly dangerous -- the only significant economic tie the rest of the world has to them is oil, and the rest of the world can't choke that off without doing severe damage to itself.
Building more economic ties won't really be possible until the various medieval (e.g. Saudi) and totalitarian (e.g. Iraq and Iran, albeit of different strains) regimes are replaced by something civilized (at which point they won't really be a problem anymore anyway).
Stay well - stay safe - Stay armed - yorktown