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Policy Bites

7 August 2026

India Keeps Pakistan Ties Limited as Counter-Terrorism Condition Remains

New Delhi says normal relations cannot resume while cross-border terrorism continues, although narrowly defined diplomatic, military and treaty-based exchanges remain functional

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Key Details

A Lok Sabha reply on 7 August 2026 sets out the Government’s current position on relations with Pakistan and recounts the principal measures taken after the Pulwama and Pahalgam terrorist attacks.

Area

Present Position

What It Indicates

Bilateral policy

Relations can move forward only in an environment free from terrorism, hostility and violence

An end to cross-border terrorism remains the condition for normalisation

Diplomatic representation

Both countries retain Missions in each other’s capitals, but their diplomatic and official presence has been reduced

Formal relations continue at a restricted level

Trade

India withdrew Pakistan’s MFN status and imposed 200% customs duty after Pulwama; Pakistan subsequently suspended bilateral trade

Regular bilateral commerce remains severely constrained

Indus Waters Treaty

India placed the treaty in abeyance after the April 2025 Pahalgam attack

Water cooperation is now linked to the wider security relationship

Border movement and visas

The Attari check-post was closed and visa access restricted after Pahalgam

Civilian movement and people-to-people engagement remain limited

Military communication

DGMO-level engagement continues

Crisis-management channels have been preserved

Routine security exchanges

Both sides exchange missile-test notifications and lists of nuclear installations and prisoners

Risk-reduction and humanitarian mechanisms continue despite political tensions

Talks in the past five years

The reply does not provide a number of bilateral talks

It identifies functional engagements but does not fully answer the quantitative part of the parliamentary question


Normalisation Remains Linked to Counter-Terrorism

In its Rajya Sabha reply, the Government reaffirmed that normal bilateral relations with Pakistan depend on the credible end of cross-border terrorism. It maintained that Pakistan continues to use terrorism as an instrument of state policy and that India will act against terrorist infrastructure while taking measures necessary to protect its citizens.

The response indicates that bilateral engagement remains centred on security management, with little prospect of broader political or economic normalisation under current conditions.


Pulwama and Pahalgam Triggered Different Policy Responses

The Government distinguishes between the responses to the Pulwama (2019) and Pahalgam (2025) terrorist attacks.

Following Pulwama, India:

  • withdrew Most Favoured Nation (MFN) status; and

  • imposed 200% customs duty on goods originating in or exported from Pakistan.

Following Pahalgam, the response expanded beyond trade to include:

  • placing the Indus Waters Treaty in abeyance;

  • closure of the Attari check-post;

  • visa restrictions;

  • reduction of diplomatic representation; and

  • military action against terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir.

The progression reflects a shift from economic measures to a broader strategy combining diplomatic, water, securityand military responses.


Limited Communication Continues to Reduce Strategic Risks

Despite strained relations, the Government confirmed that certain operational and humanitarian mechanisms remain in place, including:

  • DGMO-level talks;

  • advance notification of ballistic missile tests;

  • annual exchange of lists of nuclear installations; and

  • exchange of information on prisoners.

These mechanisms are intended to reduce the risk of military miscalculation, fulfil existing commitments and address humanitarian issues. They do not indicate a broader process of political dialogue or normalisation.What Was Most Favoured Nation Status?

Under World Trade Organization rules, Most Favoured Nation treatment generally requires a country to extend comparable trade terms to all WTO members. India withdrew this treatment from Pakistan after the Pulwama attack, allowing it to impose higher duties on Pakistani goods.


Policy Relevance

  • India’s Pakistan policy currently combines deterrence and diplomatic restriction with the preservation of limited crisis-management channels.

  • Continued DGMO and nuclear-risk exchanges reduce the possibility that political tensions or military incidents escalate through miscommunication.

  • Keeping the Indus Waters Treaty in abeyance introduces water cooperation into the wider security relationship, with implications extending beyond diplomacy and trade.

  • The continued suspension of regular trade limits commercial engagement, but the parliamentary reply provides no indication of conditions for its restoration beyond the broader counter-terrorism requirement.

  • The absence of the requested number of bilateral talks makes it difficult to assess how frequently the remaining functional channels have been used.


Relevant Question for Policy Stakeholders: How can essential military, nuclear-risk and humanitarian communication be preserved without being mistaken for a return to normal bilateral engagement?


Follow the Full Parliamentary Reply Here:  Lok Sabha Starred Question No. 289, answered on 7 August 2026

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