India and Pakistan have cancelled visas for their nationals to each other’s countries, with Islamabad warning New Delhi that it is committing an “act of war” by suspending a landmark water-sharing treaty. 

India said Thursday it will immediately suspend the Indus Waters Treaty with Pakistan as part of measures to downgrade diplomatic ties with its neighbor after 26 tourists were killed in an attack in Kashmir. 

India also said all visas issued to Pakistani nationals will be revoked with effect from Sunday, and that all Pakistanis currently in India must leave before their visas expire based on the revised timeline.

The country further announced cutting the number of diplomatic staff, closing the only functional land border crossing between the countries.

The governments on both sides have hinted that the dispute could escalate to military action.

The Indian government said the attack had “cross-border” links to Pakistan. 

Pakistan has denied any connection to the attack, warning that any Indian attempt to stop or divert flow of water would be met with “full force”.

Pakistan’s Foreign Minister Ishaq Dar said that “any kinetic step by India will see a tit-for-tat kinetic response.”

The country closed its airspace for all Indian-owned or Indian-operated airlines, and suspended all trade with India, including to and from any third country.

Hundreds of Pakistanis joined protests across the country, including in Kashmir, to rage against Indian threats after Prime Minister Narendra Modi’s Hindu nationalist government called for military action.

“India will identify, track and punish every terrorist, their handlers and their backers,” Modi told a rally Thursday. “We will pursue them to the ends of the earth,” he warned.

Tensions deepened in 2019 after Modi changed Kashmir’s status from a semi-autonomous one to direct federal control, but the two countries renewed a previous ceasefire agreement along their border in 2021.

India and Pakistan each administer a part of Kashmir, but both claim the territory in its entirety. New Delhi describes all militancy in Kashmir as Pakistan-backed terrorism – a claim Pakistan rejects.

The Indus Water Treaty, brokered by the World Bank in 1960, allows for sharing the waters of a river system that is a lifeline for both countries, particularly for Pakistan’s agriculture.

The agreement split the Indus and its tributaries between the two countries and regulated water sharing. India was granted the use of water from three eastern rivers – Sutlej, Beas and Ravi – while Pakistan was granted most of the three western rivers – Indus, Jhelum and Chenab.

There is no provision in the treaty for either country to unilaterally suspend or terminate the pact, which has clear dispute resolution systems.