India-Pakistan tensions have escalated after the recent terror attack in Pahalgam. In a swift response, India has announced 5 key retaliatory measures. Among these is the closure of the sole land trade route between the 2 nations. Pakistan has also responded with reciprocal moves, suspending trade and airpace with India.

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Attari-Wagah trade highlights 

India has continued exports with Pakistan despite multiple instances of violence and terror over the years. Trade through this corridor accounted for Rs 3,886 crore or 451 million dollars in 2023-24, with over 6,800 cargo movements and more than 71,000 passenger crossings.   
 
India exports essential items like soybeans, vegetables, plastic products, and chicken feed. These exports are now at a standstill, severely impacting consumers. Exporting from longer routes will lead to supply-chain issues and higher costs. While inflation has eased in recent times, the broader structural challenges can compound economic issues in Pakistan.
 
Stock market crashes 
 
Pakistan's financial market are reeling from this fallout. The Karachi Stock Exchange plunged by 1,303.29 points—down 1.10 per cent. 

According to a Reuters report, investors rushed to pull out capital amid rising regional tensions and uncertainty.  
 
Pakistan’s growth forecast downgraded 
 
Global lending agencies are also taking stock of Pakistan’s deepening crisis. The IMF has revised Pakistan’s GDP growth forecast downward—from 3 per cent to 2.6 per cent—citing political and security risks. Credit agency Fitch has also warned of a further decline in the Pakistani Rupee, driven by current account concerns.  
 
In contrast, India’s financial markets have shown resilience. On Wednesday, the Sensex marked its seventh straight day of gains and an 8.48 per cent weekly rise.