Sat, May 24, 2025
India-Pakistan Tensions: Is Economic Strategy The New Battlefield?
With India suspending the Indus Water Treaty, halting cross-border trade, cancelling visas, and even closing the Wagah border, we are witnessing a sharp turn in Indo-Pakistan relations — but this time, the economic front is increasingly in focus
Apr 24, 2025 · 1 min read
On April 22nd, a group of terrorists infiltrated and brutally took the lives of 26 tourists in Kashmir's Pahalgam, which triggered a swift and sharp response from New Delhi—not just diplomatically, but economically. The Cabinet Committee on Security has announced five key measures, many of which directly impact bilateral and regional trade dynamics.
The Indus Waters Treaty has been suspended, the Attari border closed with immediate effect, and all visas issued to Pakistani nationals revoked. In a strong diplomatic signal, India has declared all Pakistani military, naval, and air advisors in Delhi as persona non grata, giving them a week to leave. The staff strength of both High Commissions will be slashed from 55 to 30.
But beyond the headlines, it's the economic undercurrent that may have the longest-lasting consequences. With over 95% of Pakistan’s trade dependent on access through Karachi, speculation of a potential naval blockade is rattling regional observers. Direct and indirect India-Pakistan trade—which includes routes via third countries like the UAE—is now under intense review.
As trade ties freeze and strategic chokepoints come into play, the standoff could rewire South Asia’s economic corridors, with ripple effects on regional connectivity, import-export flows, and supply chains.
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