India has imposed a complete ban on all direct and indirect imports from Pakistan with immediate effect. This decision has been taken amidst an increased tension after the terrorist attack on 22 April in Pahalgam, Jammu and Kashmir. The Ministry of Commerce said in a notification issued on May 2 that the ban has been imposed in the interest of national security and public policy.
The Directorate General of Foreign Trade (DGFT) has added a new provision to the Foreign Trade Policy (FTP) 2023, under which “direct or indirect imports or transit of all the items that arise from Pakistan or from there, whether they are independently or not, will be restricted to the next order with immediate effect.” Any exemption from this ban will be possible only with the prior permission of the Government of India.
Pahalgam attack, for which The Resistance Front (TRF) associated with Lashkar-e-Taiba took responsibility. This attack has made India-Pakistan relations more tense. After the attack, India took several tough measures, including suspending the Indus Water Treaty, closing the Wagah-Attari border, canceling the visas of Pakistani citizens and the closure of Indian airspace for Pakistani flights.
This trade ban will severely affect Pakistan’s export sector, especially cement, textiles and agricultural products, which is already facing economic crisis. India-Pakistan bilateral trade in 2018-19 was $ 2.56 billion, with India’s exports at $ 2.06 billion. After the Pulwama attack in 2019, India had canceled Pakistan’s Most Favored Nation (MFN) status to impose 200% import duty, which had already reduced the trade significantly. At the same time, the Government of India is now compiling data of indirect exports to be done through third countries so that this trade can be completely stopped.
