The main causes of terrorism in Pakistan or religious zealotry and extreme poverty. Most of the terrorist live in difficult to access areas of the nation.
Terrorism worldwide has not affected the trade with Pakistan much. However the terrorism in Pakistan has led to higher overheads for a lot of industries in unaffected pars of Pakistan as well. Industries and other economic activities in FATA and NWFP have taken a severe beating. This has led to a drop in exports from Pakistan.
Terrorism is the most threatening factor for economy of Pakistan. Soon after 1999 when Pakistan joined USA's war against terrorism, extremists targeted Pakistan. So far thousands of civilians have lost their lives in these suicide attacks. The only way for Pakistan to get out of this calamity is to pursue diplomatic efforts with extremists as the same is being done by USA in Afghanistan.
The relationship between Pakistan and India is of the neighboring countries. Not as good as we would have liked. The secession of Bangladesh was brought about by their own deeds. To avenge that, they have been engaged in terrorist activities in Kashmir. Pakistan has been the hub of terrorism. The relations will improve if Pakistan ends support to terrorism.
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