After the recent Pahalgam terror incident, India’s response has had significant impacts on Pakistan’s economy. The Pakistan Stock Exchange experienced a sharp decline, with the KSE-100 index falling by 2.12%. In retaliation, India imposed sanctions such as halting the Indus Waters Treaty, shutting down the Wagah-Attari border, and revoking visa privileges for Pakistani citizens. These actions have intensified tensions between the two countries and are likely to have lasting effects on their diplomatic relations. The economic repercussions of these sanctions are already being felt in Pakistan, with investors and businesses closely monitoring the situation for further developments. The future implications of these sanctions remain uncertain, as both countries navigate this heightened period of conflict.