SRINAGAR (Reuters) - Indian and Pakistani troops exchanged gunfire for a second straight day on Saturday as ties plummeted between the two nuclear-armed neighbours after an attack on tourists blamed on Pakistani militants killed 26 in India's Kashmir region.

India and Pakistan's reciprocal actions following the killing of 26 men by suspected militants at a tourist spot in Kashmir are set to further curtail trade, which has more than halved since 2018, trade analysts and exporters said.

The Pakistani government said that if India followed through on a threat to block rivers it would take it as “an act of war.”