India-Pakistan Trade Freeze: Economic Ripples and Political Tensions

India and Pakistan have ceased all trade ties after recent violent incidents, marking a halt in commerce that previously existed at minimal levels. The decision follows a terrorist attack and subsequent political actions. Trade between the two nations constitutes a small fraction of India's overall trade.

In a dramatic turn of events, India and Pakistan have suspended all bilateral trade ties, including those through third countries, following a violent terror attack in Pahalgam. This move, announced by Pakistan, halts an already small trade relationship between the two neighbors.

On Thursday, the Federation of Indian Export Organisations (FIEO) reported that trade between India and Pakistan had already been declining, with figures during April-January 2024-25 not even reaching USD 500 million. India's immediate reaction to the attack included closing the Attari land-transit post and expelling Pakistani military personnel, all contributing to escalating tensions.

The cessation of trade is expected to impact Pakistan's economy significantly, especially in the supply of organic chemicals and pharmaceuticals, which make up a substantial portion of India's exports to Pakistan. This diplomatic standoff further exacerbates the historically strained relations between the two countries, primarily rooted in the Kashmir conflict and terrorism issues.

(With inputs from agencies.)