Legalizing Indian movies in Pakistan brought competition thus Pakistan film makers started to make better movies instead of the old crap based on Gandasa culture(rural violence). It will again reached the same fate it Indian movies are banned again. There is widespread piracy business in Pakistan, even if Indian contents are banned, Pakistani people will get it in pirated form they can't resist it.
What the true meaning.
The true meaning is instead of showing how illogical it seems start with your government and their stance they don' show Pakistani content and you're people don't complain that we want the freedom to watch programs of all nationalities so why do you do that when Pakistanis demand the same? Secondly you're claim that Indian movies provide competition, might be true to some extent but even with you're films our industry wasn't giving us anything so it wasn't as if that had really helped because Indian movies have been screened here for quite some time so nothing new. Its only recently that good Pakistani movies are being made the reason being that there are good talented people coming forward with concepts who thought they couldn't reach the audience anymore but now seem positive after the success of movies like "Khuda ke Liye" and "Bol".