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Not only that. Indian and Pakistani Railway Systems are based off the same standards. Decent railway infrastructure in Pakistan could be a huge bane for Indo-Pak trade.
No, exactly the opposite!
It will be a big boon for Indo-Pak trade.
Better railway services in Pakistan would mean timely delivery of large amount of goods and result in lower loss of capital from bad debts. In fact, there should be more and more functional trains in Pakistan to help move Pakistani and Indian goods everywhere without clogging the roadways.
Once Pakistani goods start amassing in Amritsar, even Indians will need to expand the railway yard there. Of somewhat lower magnitude, but still significant, trade will be seen between Baramulla and Muzaffarabad. And if managed well, it can help lower the tension on that highly volatile border.