The final is scheduled for May 25 at Kolkata’s Eden Gardens and typically attracts a vast global television audience.
Among the overseas stars are Australians Pat Cummins, Mitchell Starc, Josh Hazlewood, Travis Head and Mitch Marsh, while former skipper Ricky Ponting coaches Punjab.
Cricket Australia said in a statement on Friday before the suspension news: “We continue to closely monitor the situation in Pakistan and India … and (are) maintaining communication with our players and support staff currently in the region.”
Pakistan cricket has already taken the decision to move the remaining matches in its T20 league to the United Arab Emirates because of player safety.
India and Pakistan have fought two of their three full-scale wars over Kashmir, a disputed territory that both claim in full but administer separate portions of since gaining independence from British rule in 1947.
New Delhi launched missile strikes on Wednesday morning in retaliation for a deadly attack in Indian-run Kashmir two weeks ago that India blames on Pakistan.
Islamabad has denied any involvement.
At least 48 people have been killed on both sides of the border since Wednesday, in the worst violence in decades between the South Asian neighbours.
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