The Federal Information and Broadcasting Ministry has told distributors and exhibitors of Indian films that it is processing new laws and regulations and NOCs will not be issued till these are approved by the federal cabinet.
Nawab Siddiqui, one of Pakistan's leading distributors and exhibitors who runs the Atrium Cineplex in Karachi, said authorities stopped the screening of Indian movies last month.
"The whole process has just been stopped and we couldn't get NOCs for new films like 'Gunday' and 'Hasee Toh Phasee', which were eagerly anticipated in our cinemas," he said.
Siddiqui said the cinema and catering industries stood to lose millions of rupees they had invested in cineplexes and malls after the government's decision in 2006 to allow the screening of Indian films.
"Investors and business groups are very worried because they have invested millions of rupees while new parties are willing to channel investment, but now everything is at a standstill for the last few weeks as no new Indian films have been released," he said.
After the 1965 war with India, Pakistan barred the screening of Indian films for nearly four decades and this gave rise to rampant piracy.
"The irony is that pirated copies of 'Gunday' are being aired on cable across Karachi but it can't be shown legally in cinemas," said the manager of Capri cinema.
Siddiqui, who works with the oldest distribution company Mandviwallas, said the screening of Indian films had fuelled the revival of the cinema industry in Pakistan.