In a sharp escalation of bilateral tensions, Pakistan has once again closed its airspace to Indian aircraft and suspended all trade relations with its eastern neighbor. This move, reminiscent of similar actions in the past, carries significant economic and logistical implications for India. Here’s a closer look at how the latest developments may impact India across multiple fronts.
Airspace Closure: A Costly Detour for Indian Airlines
When Pakistan previously shut its airspace to Indian carriers in 2019, the closure lasted for several months and cost Indian airlines an estimated $80 million — and that was during just a few days of disruption. This time, similar or even higher losses are expected if the closure persists.
Indian airlines, already struggling with fuel price volatility and global supply chain issues, now face the prospect of longer flight routes, increased fuel consumption, and higher operational costs. Flights to destinations in Central Asia, Europe, and the Americas are likely to be rerouted, causing delays and raising ticket prices.
As a result, Indian passengers may not only face extended travel times but also steeper fares. Many travelers are expected to shift toward international carriers offering cheaper and more reliable routes, potentially resulting in loss of market share for Indian airlines.
Trade between India and Pakistan has always been limited, but it remains strategically significant. According to government data, India’s merchandise exports to Pakistan reached $1.21 billion, making the trade suspension a noteworthy blow to Indian exporters.
The main commodities exported from India to Pakistan include:
- Cotton and man-made filaments
- Organic chemicals
- Pharmaceuticals and medical products
- Food items like edible vegetables, dairy products, and prepared animal fodder
- Coffee, tea, and spices
- Plastics and dyes
The closure of airspace and trade routes has consequences beyond economics. It signals a further deterioration in diplomatic relations, complicating any backchannel negotiations or people-to-people exchanges that have occasionally softened the political narrative. In an already fragile regional climate, this move risks isolating dialogue and increasing hostilities.
