Pakistan announced Wednesday that it is expelling the Indian High Commissioner and suspending bilateral trade with its nuclear-armed neighbour, days after New Delhi stripped the disputed Kashmir region of its special autonomy.
"We will call back our ambassador from Delhi and send back their" envoy, foreign minister Shah Mehmood Qureshi announced in televised comments.
He spoke as the government released a statement declaring that Pakistan will suspend trade with India in a downgrading of diplomatic ties between the arch rivals.
Islamabad also vowed to take the matter to the United Nations Security Council.
Monday's decision by the government of Indian Prime Minister Narendra Modi to tighten control on Muslim-majority Kashmir had been widely expected to trigger conflict with Pakistan and reignite an insurgency that has already cost tens of thousands of lives.
Delhi has insisted that the move is an internal matter.
Kashmir has been divided between Pakistan and India since independence in 1947.
They have contesting claims on the Himalayan region, and have fought two of their three wars over it.
Pakistan's prime minister Imran Khan vowed on Tuesday to fight the issue "on every forum" and demanded the international community take action, accusing Modi of an anti-Muslim agenda.
The Pakistani military has also said it "firmly stands" with Kashmiris.