India suspended cross-border trade with Pakistan-controlled Kashmir because it was being used to funnel weapons and drugs, the government said on 18 April, 2019 in a further crackdown in the volatile territory. The Indian home ministry said it had been receiving information that militant groups were using the cross border route to send arms, drugs and fake Indian currency.
“Unscrupulous and anti-national elements are using the route as a conduit for money, drugs and weapons, under the garb of this trade,” the ministry said.
It said that inquiries by the National Investigation Agency had shown a significant number of firms engaged in the cross border trade were being operated by people with links to militant groups.
Soon after the attack on the Indian security convoy, India withdrew Most Favoured Nation status to Pakistan, accusing the neighbor of not doing enough to rein in militant groups operating from its soil. The Indian government said it believed that following the withdrawal of favoured status, more goods from Pakistan could be routed through the cross-border channels in Kashmir to avoid the higher duties.