Authorities suspended all intra-Kashmir trade along the line of control after two days of intense shelling left eight people dead in the Indian side of Jammu and Kashmir – the biggest civilian casualty on a single day in the past 13 years, after soldiers from both sides traded fire at each other's locations across the border in Jammu region.
Both sides blamed each other for ceasefire violations as tensions grew in an increasingly hostile relationship between India and Pakistan.
The truce is now virtually in tatters with Pakistan violating the ceasefire nearly 60 times after it sent mercenaries to attack an India Army base in Uri, in Kashmir leaving 19 soldiers dead. At least eight more Indian security troops have died since then - last week, a soldier was killed by terrorists who were given cover by Pakistani army fire; his body was left behind mutilated, prompting the army to vow revenge.
This prompted finance minister Arun Jaitley declare in an interview with NDTV that India has a "new normal" in dealing with Pakistan – that New Delhi's changed policy makes it clear that if Pakistan kills Indians, it will "pay a cost for it".
Jaitley was speaking to NDTV after eight civilians, including two young children and women were killed in Pakistani firing in Jammu and Kashmir within 24 hours. The deaths mark the single worst day for India in casualties caused by cross-border firing and shelling since a ceasefire was declared by India and Pakistan in 2003.
While Indian security forces have been retaliating, inflicting severe casualties across the border, mounting casualties on the Indian side is a cause of concern.
Pakistan should know "the times have now changed", Jaitley said, referring to the government's swivelling away from the policy of strategic restraint used by its predecessor in dealing with Islamabad. "We have suffered enough in silence... the government of India has a more proactive approach... The costs involved on Pakistan are going to be extremely severe," he said.
After Pakistani terrorists attacked an army base in Uri, leaving 19 soldiers dead, Indian troops entered Pakistan-Occupied Kashmir and targeted gathering areas for terrorists who were planning to attack major Indian cities, the army had said. Pakistan has accused India of misrepresenting cross-border firing as cross-border raids.
Prime Minister Narendra Modi and other senior government ministers have said that the Army "has been given a free hand" to deal with unprovoked Pakistani aggression along the border.
Thousands of villagers have been evacuated in the last few weeks and moved into government-run shelters. Schools have been closed.
On Tuesday - eight civilians were killed, six in Ramgarh sector - and two in Rajouri and at least 22 people were injured in the daylong firing. Thousands of people living along LoC and IB in Jammu have been asked to migrate to the plains.
''Residents of 55 villages have fled from in Ramgarh sector after the firing intensified on Tuesday. Most of these people have taken shelter in temples, schools, and Radha Soami Satsang Beas shelters in safer areas,'' reports quoting sources said.
Authorities have closed 175 government schools along the border and people have been asked to stay alerted in case of any eventuality.