NEW DELHI - In yet another signal of the downward spiral in ties between archrivals India and Pakistan, New Delhi has suspended cross-border trade in the divided region of Kashmir, saying it is being misused to smuggle weapons, narcotics and fake currency.
Initiated more than a decade ago, the confidence-building measure was seen as one of the most significant steps taken by the two countries to reduce their tensions over the Himalayan region.
Announcing a halt to the trade starting Friday, India's Home Ministry said investigations had revealed that a number of firms involved in sending goods had links to banned militant organizations and that "Pakistan-based elements" were funneling illegal weapons, narcotics and fake currency into India.
Trade began in 2008
The opening of two border routes in Kashmir in 2008 allowed Indian and Pakistani businessmen to trade goods four days a week on a barter system. The trade in items such as spices, herbs, cloth, fruits and carpets attracted no duties and was a boon to local businessmen.
India now has halted the cross-border trade two months after it withdrew Most Favored Nation status for Pakistan following a suicide attack that killed 40 paramilitaries in Kashmir in February. The Pakistan-based Jaish-e-Mohammad group claimed responsibility for the assault.
The attack led to an aerial confrontation between the two sides after India conducted airstrikes on what it said was a militant camp inside Pakistan.
Political analysts see the latest step as yet another signal of the tough stance that Prime Minister Narendra Modi has taken since the terror attack in Kashmir.
"It is a continuation of the approach that seeks to isolate Pakistan and put pressure on Pakistan on terrorism," according to South Asia expert Sukh Deo Muni with the Observer Research Foundation in New Delhi.
India has been demanding that Pakistan take steps to dismantle the infrastructure of Islamic militant groups based in its territory. Islamabad denies that it supports such groups.
Muni said the timing of the measure could also be linked to India's general elections, in which Modi has made national security his top plank. "He probably would want to send a message to the party's voters that he is very strong on Pakistan," Muni said.
Voting in India began last week and continues in stages until May 19.
India said it would revisit the issue of restarting trade after working out a stricter regulatory and enforcement mechanism.
The trade that began in 2008 was started with the idea of making the heavily militarized Kashmir border more open. The trade has remained largely unaffected by tensions between the two sides, although it has been halted briefly before, including a four-month suspension in 2016.
Claimed by both countries, Kashmir has been the cause of two of their three wars and continues to be a flashpoint between the nuclear-armed neighbors.