Decision follows move by Indian distributors to bar Pakistani actors and technicians from working on Bollywood sets.
Indian films have been banned in cinemas across Pakistan as tension between the South Asian neighbours spills over into the arts.
The retaliation comes after a ban was placed by the Indian Motion Pictures Producers Association (IMPPA) on Pakistani actors and technicians from working in the Hindi-film industry, popularly known as Bollywood.
Cinema employees in Karachi were seen removing giant posters advertising Indian films over the weekend and replacing them with banners for Pakistani and Hollywood films.
"It is deeply regrettable that a film trade body, the IMPPA, has passed a resolution to ban Pakistani stars and technicians from working in India," a statement from Pakistan's Film Exhibitors and Distributors group said late on Friday.
"[Following] the IMPPA decision ... the majority stake holders of the [Pakistani] film industry have decided to suspend the screening of all Indian films until normalcy returns."
Al Jazeera's Kamal Hyder, reporting from Rawalpindi, said cinemas have already stopped showing Indian films.
"Most people here are saying, that if this is going to be a serious affair, it should not be forgotten that Pakistani television is also showing Indian movies and Indian dramas," he said.
"There are thousands and thousands of CD shops across Pakistan, which sells Indian movies. So what they are saying is, if the government is indeed serious, then there should be more curbs on those as well."
Simmering tension
Tension has been simmering for months between India and Pakistan, but rose sharply on Thursday when India claimed it had carried out "surgical strikes" across the Line of Control, the de facto border in the divided Himalayan region of Kashmir.
The public admission of such an action against alleged "terrorist units" prompted anger in Pakistan, with both sides reporting fresh cross-border shootings but no casualties early on Saturday morning.
Celebrities on both sides of the border have now jumped into the debate.
Many Pakistani singers and film actors have been given permits to work in India's entertainment industry in recent years in an attempt to improve contacts.
Salman Khan, the popular Indian film star, has faced criticism by Indians on social media for saying that Pakistani actors should not be equated with terrorists.
"These are artists, these are two different subjects. They're terrorists, these are artists. What do you think? Is an artist a terrorist?"
By the same token, Adnan Sami, a British-born singer of Pakistani origin who received Indian citizenship last year, has been criticised on Twitter by Pakistanis for praising Indian forces.
Mahesh Bhatt, an Indian filmmaker, received similar treatment when he posted an image of himself calling for peace.
"Sadly, there isn't much difference in the level of sanity on both sides," observed Mango Baaz, a Pakistani media website, in a story comparing the online reactions across the border.
Indian films are screened in a majority of cinemas in Pakistan where filmmakers are trying revive its struggling motion picture industry.
India and Pakistan have fought three wars since they gained independence from Britain seven decades ago, two of them over Kashmir.
Following the 1965 war, Indian films were banned in Pakistan for 43 years until the ban was lifted in 2008.
Indian films have been banned in cinemas across Pakistan as tension between the South Asian neighbours spills over into the arts.
The retaliation comes after a ban was placed by the Indian Motion Pictures Producers Association (IMPPA) on Pakistani actors and technicians from working in the Hindi-film industry, popularly known as Bollywood.
Cinema employees in Karachi were seen removing giant posters advertising Indian films over the weekend and replacing them with banners for Pakistani and Hollywood films.
"It is deeply regrettable that a film trade body, the IMPPA, has passed a resolution to ban Pakistani stars and technicians from working in India," a statement from Pakistan's Film Exhibitors and Distributors group said late on Friday.
"[Following] the IMPPA decision ... the majority stake holders of the [Pakistani] film industry have decided to suspend the screening of all Indian films until normalcy returns."
Al Jazeera's Kamal Hyder, reporting from Rawalpindi, said cinemas have already stopped showing Indian films.
"Most people here are saying, that if this is going to be a serious affair, it should not be forgotten that Pakistani television is also showing Indian movies and Indian dramas," he said.
"There are thousands and thousands of CD shops across Pakistan, which sells Indian movies. So what they are saying is, if the government is indeed serious, then there should be more curbs on those as well."
Simmering tension
Tension has been simmering for months between India and Pakistan, but rose sharply on Thursday when India claimed it had carried out "surgical strikes" across the Line of Control, the de facto border in the divided Himalayan region of Kashmir.
The public admission of such an action against alleged "terrorist units" prompted anger in Pakistan, with both sides reporting fresh cross-border shootings but no casualties early on Saturday morning.
Celebrities on both sides of the border have now jumped into the debate.
Many Pakistani singers and film actors have been given permits to work in India's entertainment industry in recent years in an attempt to improve contacts.
Salman Khan, the popular Indian film star, has faced criticism by Indians on social media for saying that Pakistani actors should not be equated with terrorists.
"These are artists, these are two different subjects. They're terrorists, these are artists. What do you think? Is an artist a terrorist?"
By the same token, Adnan Sami, a British-born singer of Pakistani origin who received Indian citizenship last year, has been criticised on Twitter by Pakistanis for praising Indian forces.
Mahesh Bhatt, an Indian filmmaker, received similar treatment when he posted an image of himself calling for peace.
"Sadly, there isn't much difference in the level of sanity on both sides," observed Mango Baaz, a Pakistani media website, in a story comparing the online reactions across the border.
Indian films are screened in a majority of cinemas in Pakistan where filmmakers are trying revive its struggling motion picture industry.
India and Pakistan have fought three wars since they gained independence from Britain seven decades ago, two of them over Kashmir.
Following the 1965 war, Indian films were banned in Pakistan for 43 years until the ban was lifted in 2008.
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