The diplomatic relations between India and Pakistan have dramatically deteriorated following a deadly terror attack in Pahalgam, Indian-administered Kashmir, with Pakistan announcing a series of retaliatory measures including the closure of its airspace to Indian carriers.

This escalation marks one of the most serious confrontations between the nuclear-armed neighbours in recent years, with both sides implementing punitive diplomatic actions and reporting military exchanges along the Line of Control. The situation continues to evolve rapidly with concerns about potential further escalation and significant economic implications, particularly for aviation and trade between the two nations.

Following the attack, India implemented a series of significant retaliatory actions against Pakistan. The Indian government formally suspended the long-standing Indus Waters Treaty, which has governed water sharing between the two nations since 1960. This historic decision was communicated through an official letter from India's Ministry of Water Resources to Pakistan, citing "sustained cross-border terrorism" as justification.

Additionally, New Delhi closed the primary land border with Pakistan at the Attari transit post and ordered the expulsion of Pakistani military attachés. The Indian government also cancelled all existing visas issued to Pakistani nationals, effective from April 27, 2025, and suspended visa services. Furthermore, Indian citizens have been advised to avoid travelling to Pakistan, with those currently there urged to return.

In response to India's measures, Pakistan announced its own set of retaliatory diplomatic actions on Thursday, April 24, 2025. Prime Minister Shehbaz Sharif suspended a canal irrigation initiative shortly after India's withdrawal from the Indus Waters Treaty. The Pakistani government has requested proof to substantiate India's allegations regarding Islamabad's involvement in the Pahalgam attack. According to a statement from the Prime Minister's Office, Pakistan "vehemently rejects the Indian announcement to hold the Indus Waters Treaty in abeyance".

Further escalating the situation, Pakistan has declared that it "shall exercise the right to hold all bilateral agreements with India, including but not limited to the Simla Agreement, in abeyance". Pakistani officials have warned that any attempt to stop or divert water belonging to Pakistan as per the treaty would be considered "an Act of War".

Airspace Closure And Impact On Aviation

One of the retaliatory measures taken by Pakistan has been the closure of its airspace to Indian airlines as of Thursday, April 24, 2025. This restriction applies to all aircraft registered in India as well as those owned or leased by Indian operators. The airspace closure has immediate implications for Indian carriers' international flights, particularly those departing from Delhi and northern cities heading toward Central Asia, the Caucasus, West Asia, Europe, the UK, and North America. Air India has announced that several of its flights to these destinations may need to take longer, alternative routes over the Arabian Sea, causing potential delays.

Similarly, IndiGo has extended the duration of its flights from Delhi to Baku and Tbilisi by approximately one and a half hours and cancelled its Delhi-Almaty flight.

Financial And Operational Implications For Airlines

The airspace closure is expected to have substantial financial implications for Indian carriers. With flights now taking longer detours, airlines will require more fuel, leading to higher operational costs and potential payload limitations. According to industry insiders, this could translate into higher airfares, with potential increases of 8-12 percent in the short term. A senior pilot quoted by PTI indicated that the duration of some flights to the US and Europe could increase by as much as 2 to 2.5 hours. The precedent from the last extended airspace closure in 2019, following the Balakot airstrikes, resulted in Indian airlines losing approximately ₹700 crore due to higher fuel expenses and operational complications. Air India was particularly affected during that period as it operated more west-bound international flights than other Indian airlines.

Military Tensions And Border Skirmishes

Beyond diplomatic and economic measures, military tensions have also flared along the India-Pakistan border. The Indian Army reported and responded to firing by the Pakistan military at several locations along the Line of Control (LoC) in Jammu and Kashmir on Friday, April 25, 2025. According to military sources, "There were incidents of small arm firing at some places on Line of Control initiated by Pakistan," to which the Indian Army "effectively responded". This exchange of fire represents a significant escalation and a serious breach of the existing ceasefire agreement between the two countries. While no casualties have been reported from these incidents, they demonstrate the potential for rapid military escalation in the current climate of heightened tensions.

Risk of Further Escalation

There are growing concerns about the potential for further escalation between the two nuclear-armed neighbours. In an interview with Sky News, Pakistan's Defence Minister Khawaja Asif warned that the dispute could lead to an "all-out war" between the two nations. He stated that Pakistan would "respond in kind" to any attack by New Delhi and that his military was "prepared for any eventuality" amid the escalating tensions. When asked if the world should be worried about the situation, he replied: "Yes, I think so. The clash between two nuclear powers is always worrisome... If things get wrong, there could be a tragic outcome of this confrontation". However, he also expressed hope that the dispute could be resolved through negotiations.

Outlook And Consequences

The current escalation cycle between India and Pakistan presents significant challenges for regional stability. As both nations implement increasingly severe retaliatory measures, there is a real risk of miscalculation that could lead to unintended consequences. The immediate economic impact is already apparent in the aviation sector, with Indian airlines facing higher operational costs and passengers experiencing longer flight times and potential fare increases. The suspension of the Indus Waters Treaty raises serious concerns about water security for Pakistan, which heavily relies on rivers flowing from India. The international community will likely be watching developments closely, given the nuclear capabilities of both nations and the history of conflict over Kashmir. Unless diplomatic channels can be effectively engaged, the situation may continue to deteriorate, with potentially far-reaching implications for South Asian security and stability.

Conclusion

The retaliatory measures implemented by Pakistan following the Pahalgam terror attack represent a significant deterioration in India-Pakistan relations. The closure of Pakistani airspace to Indian airlines, suspension of bilateral agreements, and incidents of firing along the Line of Control all indicate a dangerous escalation of tensions. The economic consequences, particularly for the aviation sector, are already becoming apparent, with longer flight routes, increased operational costs, and potential fare hikes. As both nuclear-armed nations engage in tit-for-tat measures, the international community has reason for concern about the potential for further escalation. The situation underscores the fragility of peace in the region and the persistent challenge of addressing underlying disputes, particularly regarding Kashmir. Moving forward, diplomatic engagement will be essential to prevent further deterioration and reduce the risk of a more serious conflict.

IDN (With Inputs From Agencies)