Pakistan defense minister: If India conducts acts of terrorism in our cities, it will be a tit for tat and we will make them pay

Pakistan defense minister: If India conducts acts of terrorism in our cities, it will be a tit for tat and we will make them pay

The recent terror attack in Pahalgam, Jammu and Kashmir, has led to a significant escalation in tensions between India and Pakistan. The attack, which left at least 26 people dead, mostly tourists, has sparked a series of retaliatory measures from both countries. This article examines the latest developments and their potential financial implications.

On April 24, 2025, Pakistan announced a series of retaliatory measures against India, including the suspension of the 1972 Simla Agreement. This agreement, signed by India and Pakistan, had facilitated cross-border trade and visa exemptions. Pakistan also closed the Wagah border for trade and suspended SAARC visa exemptions for Indian citizens. Additionally, Pakistani military diplomats were expelled from India, with India reciprocating by expelling Pakistani military attaches [1].

India's response has been equally robust. In a move to hold Pakistan accountable, India has downgraded diplomatic ties, expelled Pakistani military attaches, and suspended the 1960 Indus Waters Treaty. The Integrated Check Post at Attari, the only active land crossing between the two countries, was immediately shut down. Pakistanis will no longer be allowed to travel to India under the SAARC Visa Exemption Scheme, and visas already issued have been revoked [2].

The financial implications of these actions are significant. The closure of the Wagah border will disrupt cross-border trade, affecting businesses in both countries. The suspension of the Indus Waters Treaty could lead to water scarcity issues, particularly in Pakistan, which relies heavily on the Indus River for agriculture and hydropower. Additionally, the expulsion of military attaches and the suspension of visa exemptions could lead to increased costs for businesses and individuals traveling between the two countries.

Pakistan's defense minister has threatened further retaliatory measures if India conducts acts of terrorism in Pakistani cities, stating that it would be a "tit for tat" response. This threat highlights the potential for further escalation in tensions and the possibility of additional financial impacts on both countries.

As tensions continue to rise, investors and financial professionals should closely monitor developments in the region. The potential for further disruptions in trade, increased security costs, and potential economic sanctions could have significant financial implications for both India and Pakistan.

References:
[1] https://www.business-standard.com/external-affairs-defence-security/news/india-pakistan-simla-agreement-suspended-wagah-border-visa-staff-125042400879_1.html
[2] https://timesofindia.indiatimes.com/india/jammu-and-kashmir-pahalgam-terror-attack-live-updates-pakistan-terrorists-killed-tourist-pm-modi-amit-shah-omar-abdullah-attari-border-indus-water-treaty/liveblog/120567195.cms