India has imposed a complete ban on imports, direct or routed via a third country, of all goods from Pakistan with immediate effect on the grounds of national security and public policy, following last month’s terror attack in Pahalgam, according to a government order.
The clampdown will snuff out the remnants of the bilateral trade which was severely impacted by a 200 per cent import duty imposed on Pakistani goods in 2019 after the Pulwama terror attack.
India’s exports to Pakistan in April-January 2024-25 stood at $447.65 million, while imports were a meagre $0.42 million. Imports were limited to items like figs, basil and rosemary herbs, certain chemicals and Himalayan pink salt. The imports were $2.88 million in 2023-24.
A provision has been added in the Foreign Trade Policy (FTP) 2023 “to prohibit direct or indirect import or transit of all goods originating in or exported from Pakistan with immediate effect until further orders”, the Directorate-General of Foreign Trade (DGFT) said in a notification dated May 2.
It added this restriction is imposed in the interest of “national security and public policy”. Any exception to this prohibition will require approval of the government of India, the order said.
Inserting the provision under the heading “Prohibition on Import from Pakistan” in the FTP, it said: “Direct or indirect import or transit of all goods originating in or exported from Pakistan, whether or not freely importable or otherwise permitted, shall be prohibited with immediate effect, until further orders”.
“This will prohibit import of goods from Pakistan directly or through any other trade route,” the commerce ministry said.
Moreover, the Directorate-General of Shipping on Saturday notified that Pakistani flagged ships would not be allowed to visit any Indian port and Indian flagged ships would not visit Pakistan.
Bilateral trade between the two countries had nosedived after the Pulwama terror attack. Besides imposing 200 per cent duty, India had also withdrawn Pakistan’s “most favoured nation” trade status. The bilateral trade dipped to $647.2 million in 2023-24 from $2.41 billion in 2017-18 and $2.27 billion in 2016-17.
Commenting on India’s decision, think tank GTRI said the economic impact on India will be minimal. “However, Pakistan still needs Indian products and may continue accessing them through third countries via recorded and unrecorded routes,” GTRI founder Ajay Srivastava said.
US trade caution
The Union commerce ministry has cautioned the domestic industry to strictly followthe ‘rules of origin’ norms while exporting goods to the US, as re-routing products from high-tariff countries without substantial value addition could be classified as transhipment and attract higher duties.
The ministry also assured the industry that all efforts would be made to codify the value addition norms to provide certainty and clarity to exporters.
Meanwhile, an order by the Department of Posts that operates under the Ministryof Communication, said: “(The) government of India has decided to suspend exchange of all categories of inbound mail and parcels from Pakistan through air and surface routes.”