As the world's largest democracy gears up for a national election, India is facing a dramatic rise in tensions with its neighbor Pakistan — and America should be concerned.

In response to India's airstrike on Tuesday, Pakistan shot down two Indian military jets and captured an Indian pilot. India's Foreign Ministry later said that India had shot down a Pakistani fighter jet, setting the stage for a potentially larger stand-off between the two nuclear-armed south Asian nations sparring over the disputed Kashmir region and suspected terror networks operating in Pakistan.

"We have not seen a path of de-escalation but rather actions that have the potential to escalate into further conflict," said Manpreet Singh Anand, former U.S. deputy assistant secretary of State for South Asia.

Anand spoke to CNBC before Pakistani Prime Minister Imran Khan said the pilot would be released Friday "as a gesture of peace."

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Foreign policy experts say the brewing dispute between the two nations is not an isolated event and could have ripple effects that impact U.S. policy.

"America foreign policy leaders are very much focused on what's happening in Vietnam and we don't know if there is enough attention being put on the India-Pakistan issue which in my view presents a real risk of a crisis right now," said Anand, now a senior advisor at the Albright Stonebridge Group.

President Donald Trump's meeting with North Korean leader Kim Jong Un in Vietnam abruptly ended Thursday with no agreement on North Korean denuclearization.

At the summit meeting, Trump did say he expected "reasonably decent news" from Pakistan and India.

"They've been going at it, and we've been involved in trying to have them stop," he said.