Last night, India said it cannot attend the SAARC (South Asian Association for Regional Cooperation) meeting in November in Islamabad. In a statement, the government blamed "increasing cross-border terrorist attacks in the region" for creating "an environment that is not conducive to the successful holding of the 19th SAARC Summit."

SAARC has eight members. Bangladesh, Afghanistan and Bhutan followed India in pulling out of the meet, all blaming Pakistan for inciting violence. Afghanistan spoke of "imposed terrorism" on its people.

Yesterday, India summoned Pakistan's High Commissioner to inform him about two men from Pakistan who have been arrested and who allegedly helped the four terrorists who attacked the Uri army base to cross into Kashmir. Pakistan has denied involvement in the terror strike.

PM Narendra Modi has pledged that the Uri attack will not go unavenged. Though military action is not likely, he has taken other retaliatory moves to penalise Pakistan, including announcing that India will move to "maximise" the amount of water it is entitled to as part of the decades-old Indus Water Treaty.

Officials have said though it is unlikely, they cannot at this stage rule out that India will renounce or abrogate the treaty. Pakistan's top foreign affairs official, Sartaj Aziz, has said that would equate "an act of war" and has sought the intervention and arbitration of international agencies including the World Bank.

It was the World Bank that negotiated the Indus Waters Treaty that was signed in 1960. Pakistan was given 80% of the rivers that flow into it - the Chenab, Indus and Jhelum. So far, India has not utilized its share completely, allowing Pakistan to benefit from the surplus.

Tomorrow, PM Modi will with top leaders review whether to also downgrade Pakistan's status as a trading partner. In 1996, India conferred Most Favoured Nation (MFN) status on Pakistan in keeping with World Trade Organization guidelines. Pakistan did not accord the same status to India.

On Monday night, Foreign Minister Sushma Swaraj led India's campaign against Pakistan at the United Nations General Assembly and warned that "Jammu and Kashmir is an integral part of India and will always remain so."

In August, Home Minister Rajnath Singh attended a SAARC session in Islamabad despite a fierce decline in relations after the shooting in Kashmir of 22-year-old terrorist Burhan Wani.