A terror attack in Pahalgam on April 22, 2025, killing 26 people, led India to shut the Attari Integrated Check Post, halting all land trade with Pakistan. Citing cross-border links to the attack, India also suspended the Indus Waters Treaty and other diplomatic privileges.

In response, Pakistan stopped all trade with India, including indirect routes, and threatened to suspend the Simla Accord. The Attari-Wagah route, once handling ₹3,886 crore in trade, is now closed, hitting small traders and Punjab’s economy hard. Pakistan’s stock market plunged 2,000 points amid fears of wider fallout.

The suspension jeopardises the $2B trade and further dims the $37B potential estimated by the World Bank, worsening regional economic tensions.