Krishna's statement highlights the distinction between the eternal nature of the soul (which is real) and the temporary physical body (which is unreal). This concept is relevant to Arjuna's reluctance to fight his kinsmen, as it reassures him that while bodies may perish, the souls remain immortal. Krishna encourages Arjuna to fulfill his duty as a warrior without attachment to the consequences, emphasizing the importance of duty (dharma) and the impermanence of life.