The decision was taken at a second session of National Security Committee (NSC) within a week presided over by Prime Minister Imran Khan to review the situation following the Indian government's move on Kashmir.
"Our ambassadors will no longer be in New Delhi and their counterparts here will also be sent back," Foreign Minister Shah Mahmood Qureshi told ARY News.
According to a statement issued after the meeting, below are the five steps Pakistan will take:
1. Downgrading of diplomatic relations with India
2. Suspension of bilateral trade with India
3. Review of bilateral arrangements
4. Matter to be taken to the United Nations, including the Security Council
5. Independence Day this August 14 to be observed in solidarity with brave Kashmiris and their just struggle for their right of self-determination. August 15, which is India's Independence Day, will be observed as Black Day.