In the aftermath of the brutal terrorist attack on tourists in Pahalgam, Jammu and Kashmir, which claimed 28 lives on April 22, India has taken a series of strong retaliatory measures against Pakistan. The attack, which India has attributed to Pakistan-backed terrorism, led Prime Minister Narendra Modi to convene a high-level meeting of the Cabinet Committee on Security (CCS), resulting in five major decisions that are set to redefine Indo-Pak relations.

• India has suspended the 65-year-old Indus Waters Treaty.
• Immediate closure of the Integrated Check Post at Attari was announced.
• Visas of Pakistani citizens have been revoked, banning their travel to India.
• All Pakistani defense advisors posted at the Pakistan High Commission in New Delhi have been given one week to leave India.
• The number of staff at both Indian and Pakistani High Commissions will be reduced from 55 to 30.

Let’s start by understanding what and where the Attari Integrated Check Post (ICP) and Wagah Border are.

The Attari-Wagah Border is the international boundary between India and Pakistan. On the Indian side lies the village of Attari, and on the Pakistani side, it’s the village of Wagah. This border is famous for the daily Beating Retreat Ceremony, attracting thousands of tourists daily.

The Integrated Check Post serves multiple functions including customs clearance, immigration, security checks, and providing infrastructure for smooth cross-border movement of goods and people. In India, these ICPs are managed by the Land Ports Authority of India under the Ministry of Home Affairs.

Located just 28 km from Amritsar, Attari was India’s first land port and remains the only approved land route for formal trade between India and Pakistan. Spread across 120 acres and directly connected to National Highway 1, it also played an important role in imports from Afghanistan.

Now, let's look at the trade that was happening via the Attari Border.

For years, the Attari Land Port served as a vital link for trade between India and Pakistan, and also between India and Afghanistan. Major Indian exports through this route included soybean, chicken feed, vegetables, red chilies, plastic granules, and yarns. In return, Pakistan exported dry fruits like dates and almonds, gypsum, cement, glass, rock salt, and herbs to India.

The closure of the Attari Check Post is expected to severely disrupt the movement of these goods. The border served as a lifeline for small traders and businesses on both sides. Moreover, trade with Afghanistan also took place through this route.

According to an Economic Times report, trade worth around ₹3,886 crore was conducted through the Attari Check Post during the financial year 2023-24. During this time, 6,871 cargo trucks and 71,563 passengers crossed the border.

A Moneycontrol report noted that India’s merchandise exports to Pakistan surged by 127% in FY24, reaching a five-year high. In FY24, India exported merchandise worth ₹100 crore to Pakistan. Compared to 2020, India's re-exports to Pakistan had grown by 300% by 2024. Major merchandise included clothing, machinery, agricultural products, electronics, vehicles, and chemicals. However, the maximum exports through Attari were soybeans, vegetables, red chilies, and plastic granules.

It's important to mention that formal bilateral trade between India and Pakistan has been suspended for some time. After the Pulwama attack in 2019, India hiked customs duties on all Pakistani imports by 200%, including fresh fruits, cement, petroleum products, and mineral ores. India also revoked Pakistan’s "Most Favoured Nation" (MFN) status.

In response, after India abrogated Article 370 in August 2019, Pakistan suspended all bilateral trade with India. However, facing severe inflation, Pakistan unofficially continued buying essential goods from India.

Despite the trade ban, limited trade continued via the Attari-Wagah Border and through ports like Karachi. Indian goods often entered Pakistan via Dubai, Singapore, and Sri Lanka, making them more expensive for Pakistani consumers. Thus, the Attari Check Post remained crucial, especially for small traders.

Before the Pulwama attack, bilateral trade was robust. According to UNCTAD and UN Comtrade data, India exported goods worth $2.35 billion to Pakistan in FY18, equivalent to around ₹20,000 crore today. At that time, India exported cotton, organic chemicals, plastics, nuclear reactors, boilers, machinery, and mechanical devices, while importing fruits, dry fruits, salt, sulfur, stones, various metals, and leather products from Pakistan.

In addition to shutting down the Attari Check Post, India has also decided to revoke visas issued under the SAARC Visa Exemption Scheme for Pakistani nationals. No Pakistani citizen will be allowed to travel to India under this scheme now. SAARC (South Asian Association for Regional Cooperation) aims to promote economic and regional integration among South Asian nations.

Closing the Attari Check Post is expected to have a severe economic impact on Pakistan. Pakistan imports crucial goods from India like soybeans, chicken feed, vegetables (potatoes, onions, garlic, tomatoes), fruits, spices (chilies, turmeric, cumin), tea, sugar, pulses, basmati rice, organic chemicals, and medicines. The disruption will cause shortages of these items in Pakistan, pushing up prices and worsening its already fragile economy. Pakistan will have to import these goods from countries like China or Turkey at higher prices, adding to its financial burden.

Additionally, India’s suspension of the Indus Waters Treaty will impact Pakistan’s agriculture and power supply. The reduced flow of water from India will likely lead to water scarcity, lower crop yields, and power shortages in Pakistan.

On India's side, small traders, especially local businesses in Punjab, will also suffer losses. India imports cement, rock salt, multani mitti (fuller's earth), leather, cotton, Peshawari slippers, Lahori kurtas, and some medical equipment from Pakistan. Their supply disruption could lead to price hikes in the Indian market too. Furthermore, India imports dry fruits and herbs from Afghanistan via the Attari route, and this trade will also be affected.

Thus, while the closure will hurt both sides, the impact on Pakistan is expected to be far greater.

Meanwhile, India's tough measures are already showing effects. On April 24, the Pakistan Stock Exchange (PSX) witnessed a heavy crash. Within just five minutes of opening, the benchmark KSE-100 index plunged by nearly 2,500 points. A similar crash was observed on April 23 as well.

Disclaimer:  
The information provided in this article is based on publicly available reports, news sources, and official statements as of April 2025. The financial figures, trade statistics, and political developments mentioned are subject to change over time.