Pakistan hitting back with airspace and trade closure is set to cost India millions in economic and opportunity losses amid escalating tensions between the two nuclear-armed neighbours.
The mounting situation in the backdrop of Pahalgam incident, if not de-escalated at the earliest, would throw regional travel and commerce into disarray with Indian side facing the brunt of it more than Pakistan, officials and analysts warned on Saturday.
Pakistani authorities have blocked key land crossings, shut down Afghan transit trade routes from India through Pakistan, and closed their airspace — moves reminiscent of the 2019 standoff, which had cost Air India alone over $80 million in extra fuel, longer routes, and maintenance. Airlines across Asia are now scrambling to reroute flights, with operational costs projected to surge by 30 per cent or more if the closure persists.
“The financial hemorrhage could run into hundreds of millions if the airspace remains closed even for a few weeks,” said Amitabh Singh, an aviation analyst based in New Delhi. Pakistan’s decision forces Indian airlines to add hours to their flight times to Europe, the Gulf, and beyond, pushing up fuel expenses and squeezing tight post-pandemic margins.
The fallout on trade is equally severe. India’s annual exports to Pakistan, worth around $1.21 billion, have come to a standstill, with cross-border commerce through the Wagah border and other routes suspended indefinitely.
Moreover, the closure of Afghan transit trade routes — which allow Indian goods to reach Afghanistan via Pakistan — has dealt an additional blow to Indian exporters, halting critical shipments of pharmaceuticals, wheat, and engineering goods.
“Supply chains in both countries are being strangled at a delicate time when global inflation is still biting,” noted Farzana Ali, a senior trade consultant based in Karachi.
Pak-India
Strategic analysts caution that while both sides seem keen to avoid a full-blown war due to the risk of nuclear escalation, the danger of miscalculation remains high.
“No side wants to be the first to push the nuclear button,” emphasized Dr. Michael Kugelman of the Wilson Center. “But the longer tensions stay high, the greater the risk of mistakes and localized skirmishes.”
Pakistan’s Foreign Office said Islamabad “reserves all options to defend its sovereignty,” while Indian defence sources confirmed military forces are maintaining a heightened state of alert, particularly along the volatile Line of Control.
Complicating matters further, experts warn that a protracted standoff could invite deeper Chinese involvement through the China-Pakistan Economic Corridor (CPEC) projects, while also unsettling the fragile post-COVID recovery in South Asia. Gulf states, China, and the United States are all urging restraint behind the scenes, fearing the ripple effects on regional stability and global trade.
As airspace stays shut, Afghan transit trade stalls, and trucks idle at border crossings, millions of dollars are bleeding from both economies daily — raising the stakes dramatically in an already tense standoff.
