New Delhi, April 25 -- Following the recent terror attack in Pahalgam, India has officially halted all trade with Pakistan, further escalating tensions between the two countries.

However, according to the Global Trade Research Initiative (GTRI), this border closure is expected to stop only formal trade, not demand. Pakistan is likely to try to continue sourcing Indian goods indirectly through third countries, though at a higher cost.

GTRI mentioned that trade relations between India and Pakistan have remained strained since the Pulwama attack in February 2019. At the time, India revoked Pakistan's Most Favoured Nation (MFN) status and imposed a steep 200 per cent duty on its imports.

It said, "In short, border closures halt formal trad...