Pakistan suspends trade with India

Pakistan suspends trade with India

Pakistan has suspended trade with India following a series of tough diplomatic measures imposed by India in response to a terrorist attack in the disputed region of Kashmir. The decision, announced on April 23, 2025, comes amidst escalating geopolitical tensions between the two nations.

On Wednesday, armed men killed 26 people in the tourist town of Pahalgam in Indian-administered Kashmir, sparking a swift and severe reaction from the Indian government. In a media briefing, Indian Foreign Secretary Vikram Misri outlined the measures taken against Pakistan, including the immediate closure of the main land border crossing, the suspension of the Indus Waters Treaty, and the revocation of the South Asian Association for Regional Cooperation (SAARC) visa exemption program for Pakistani nationals [1].

The Pakistan Stock Exchange (PSX) dropped sharply in response to India’s actions, with the benchmark KSE-100 index falling 2.12% within the first five minutes of trading on Thursday. This reflects investor concern over the escalating tensions and the potential for further disruption in bilateral trade [2].

Historically, total merchandise trade between India and Pakistan has ranged between $1.8 billion and $2.5 billion during FY09 and FY10. However, following the Pulwama attack in February 2019 and the subsequent suspension of bilateral trade by Pakistan, exports from India to Pakistan have sharply contracted. This trend is likely to continue in light of the latest developments [3].

While the long-term impact of the latest attack on bilateral trade remains uncertain, past incidents suggest the potential for significant disruption. The Indian government has not commented on the claim by the Resistance Front (TRF) that the targeted tourists were linked to and affiliated with Indian security agencies.

The decision by Pakistan to suspend trade with India is a significant escalation in the ongoing conflict over Kashmir. It remains to be seen how the international community will respond to these developments and whether efforts will be made to de-escalate tensions.

References:

[1] https://www.aljazeera.com/news/2025/4/23/india-downgrades-pakistan-ties-after-attack-on-kashmir-tourists

[2] https://www.business-standard.com/external-affairs-defence-security/news/pahalgam-terrorist-attacks-fresh-tumult-for-india-pakistan-trade-125042400005_1.html

[3] https://m.economictimes.com/markets/stocks/news/pakistan-stock-market-falls-over-2-after-india-suspends-indus-waters-treaty-over-pahalgam-terror-attack/articleshow/120575121.cms