India Friday called off next month's hockey series against Pakistan, the latest casualty of fast-worsening ties in the wake of the massacre of two Indian soldiers on the border and more recently, the fidayeen attack in Srinagar and the Pakistan parliament's resolution against the hanging of convicted terrorist Afzal Guru.

The bilateral relationship looked had up for a bit with the Christmas cricket series in India but it has been rapidly downhill ever since with almost all confidence-building measures collapsing.

The new visa regime, with relaxed norms for group tourist visas, was to roll out on March 15 but India stopped its implementation to protest the mutilation of its troops by Pakistani soldiers on the Line of Control (LoC) in January.

Pakistan's promise to give India most-favoured nation (MFN) status by January 1 also remains deferred. 

With the government in Islamabad completing its five-year term on Saturday (March 16) and elections around the corner, the most recent official explanation to India was that farmers in Pakistan's Punjab were against it. Pak involvement

The farmers, sources said, argued that they were in no position to compete with their Indian counterparts, who got "heavy subsidies".

Water secretary-level talks were also postponed after the LoC flare-up and no new dates have been set.

And on Friday, the government refused permission for a home-and-away hockey series on security ground, two days after suspected Pakistani terrorists killed five CRPF men in the Valley.

Political issues and mutual mistrust between the neighbours also means that trade remains below par.