In a concerted effort to curb the inflow of Pakistani goods into its market, India has heightened its surveillance on imports, especially those rerouted through third countries. Despite a ban on direct and indirect imports from Pakistan, a significant amount of Pakistani merchandise, valued at $500 million, is still being repackaged and relabeled in countries like the UAE, Singapore, Indonesia, and Sri Lanka before entering India.
The Indian government has issued a stern directive to prevent the circumvention of this ban, as authorities discovered that Pakistani items like fruits, dry dates, textiles, soda ash, rock salt, and leather goods are still making their way to the Indian market through these third countries. Sources familiar with the situation, speaking under anonymity, emphasized that this smuggling of goods undermines the economic sanctions imposed on Pakistan following its involvement in terrorism-related activities.
India's customs department has been placed on high alert to thwart these efforts. A key focus of the government's strategy is to tighten control over both direct and indirect imports from Pakistan, with the May 2 order from the Directorate General of Foreign Trade (DGFT) banning all such trade. The primary aim is to cripple Pakistan's already fragile economy by choking its export routes.
"The idea is to reduce Pakistan’s exports further as its economy continues to struggle," a source commented, underscoring that the ban seeks to intensify the pressure on Pakistan, which has faced mounting economic difficulties.
This latest step follows India’s historic move to withdraw Pakistan’s Most Favored Nation (MFN) status after the Pulwama terror attack in February 2019, which was linked to Pakistani-based terrorist groups. The withdrawal of MFN status was followed by the imposition of a 200% customs duty on Pakistani imports, leading to a dramatic drop in trade between the two nations. In fact, the value of Pakistani imports to India plummeted from $2.39 million in 2020-21 to a mere $0.42 million in the first 10 months of the 2024-25 financial year.
"The 200% tariff essentially made direct imports from Pakistan commercially unviable, and within a year, Pakistani exports to India fell by over 90%," said an official. Key sectors such as horticulture, cement, salt, and cotton yarn saw the most significant declines.
As part of its ongoing efforts to tackle Pakistani-sponsored terrorism, including the recent terror attack on tourists in Pahalgam, India has ramped up vigilance and implemented stricter regulations. The DGFT has now issued a notification to prohibit Pakistani imports—either directly or indirectly—through any third nation, with any exceptions requiring prior approval from the Government of India.
"This restriction is imposed in the interest of national security and public policy," the notification states, reinforcing that any products from Pakistan entering India must pass stringent checks, especially if they are funneled through countries perceived as "friendlier" to Pakistan.
Despite these measures, Pakistan continues to import essential goods such as medicines, sugar, chemicals, and auto components from India through informal routes. In the fiscal year 2024, Pakistan's imports from India amounted to $448 million, with key commodities including essential medicines and industrial products. However, the bilateral merchandise trade between the two nations has dwindled sharply since 2018-19, with India’s exports to Pakistan falling by over 60%, and Pakistani exports to India plummeting by nearly 97%.
India's move is part of a broader strategy to deter trade ties with a neighbor it views as a source of instability. With the latest restrictions in place, India is sending a clear message that terrorism and trade cannot coexist.
(This story is published from a syndicated feed)