In such circumstances, Pakistan film circles believed that banning Indian content could help boost Pakistan's film industry as more people will come and watch local content. Quite the contrary, Pakistani films failed to perform well even when Indian content was banned.
This only goes on to show that Indian content is popular in Pakistan and banning it does not do any good to the country. In fact, it is economically unwise and detrimental to the industry business. It is not in India's advantage too because Pakistani actors and musicians are popular in the country.
Moreover, Bollywood has a great market in Pakistan and them not allowing their content in Pakistan would also decrease their earnings and popularity.