Trade across the Line of Control (LoC) between Srinagar and Muzaffarabad was suspended on Tuesday after authorities in Pakistan-administered Kashmir said no trade will take place this week.
Authorities at the Trade Facilitation Centre near the border town of Uri in Baramulla district said they had received a letter from authorities in Pakistan saying there would be no cross-LoC trade this week.
Pakistani authorities gave no reasons for suspending the trade that takes place from Tuesday to Friday every week.
Police on the Indian side last week arrested a driver, Muhammad Yusuf Shah from Chakoti near Muzaffarabad, after recovering 66 kg of narcotics from boxes in his vehicle.
Srinagar is the summer capital of Jammu and Kashmir while Muzaffarabad is the capital of the Pakistan-administered Kashmir.