After the Pulwama attack on February 14 pretty much strained relations between India and Pakistan. A suicide attack resulted in the death of over 40 CRPF Jawans which shocked the nation.
BCCL
Cricket was bound to suffer as people want India to boycott the World Cup match vs Pakistan on June 16. The BCCI was contemplating giving foreign players a choice between IPL and PSL.
According to the Indian Express, the BCCI planned to isolate Pakistan by giving foreign players, who take part in both ISL and PSL a choice to participate in only one of the two leagues.
BCCL
The members of the CoA - Vinod Rai, Diana Edulji and Lieutenant General Ravi Thodge along with BCCI CEO Rahul Johri conducted a meeting where it was discussed but later the move was dropped.
It was decided that it would not be appropriate to ask foreign players to choose. So as of now they can take part in both leagues. Indians have never taken part in the PSL and Pakistani players played only in the first edition of the IPL in 2008.