Comprehensive Ban on All Pakistani Imports and Transit Goods to Safeguard National Security
In a decisive move aimed at reinforcing national security and closing all possible loopholes that could allow Pakistani goods to enter the Indian market, the Government of India has officially banned the import and transit of all items originating from or exported out of Pakistan.
This ban, which took effect immediately, was announced through a notification issued by the Ministry of Commerce and Industry, dated May 2.
The new directive—issued by the Directorate General of Foreign Trade (DGFT), the central authority responsible for regulating India’s foreign trade—builds on previous measures taken in response to escalating tensions with Pakistan, particularly in the aftermath of the recent Pahalgam terror attack.
The ban explicitly states that, irrespective of whether goods are otherwise permitted for import or classified as freely importable, any direct or indirect trade with Pakistan stands prohibited until further notice.
The only exceptions to this ban will be those approved in advance by the Indian government on a case-by-case basis.
The DGFT emphasized that this prohibition has been enacted in the “interest of national security and public policy,” signaling a zero-tolerance approach towards economic engagement with a country perceived as sheltering or supporting anti-India activities.
Attari Border Closure Preceded the Ban
This sweeping trade restriction follows closely on the heels of India’s earlier decision to suspend direct trade by closing the Integrated Check Post (ICP) at Attari—one of the few official trade routes between the two nations.
That move, implemented last month, effectively halted the formal bilateral trade channel through which goods worth nearly ₹3,886 crore were exchanged annually.
However, despite the closure of direct trade routes, trade experts had pointed out that Pakistani goods continued to make their way into Indian markets through third-country transshipment routes.
These channels, primarily operating through nations like the United Arab Emirates (UAE), Singapore, and Sri Lanka (Colombo), allowed Pakistani exports to be repackaged or rerouted to India, thereby evading the direct trade restrictions.
This latest notification seeks to shut down such alternate routes as well.
Trade Through Third Countries: A Loophole Plugged
The Global Trade Research Initiative (GTRI), a leading think tank monitoring international commerce, noted that while formal trade ties were suspended, indirect trade flourished through transshipment hubs.
Goods were commonly redirected through countries that have favorable trade arrangements with India, particularly the UAE, which has a Comprehensive Economic Partnership Agreement (CEPA) with India.
An illustrative example is the import of Pakistani dates, which continued to arrive at Indian ports via the UAE even after direct trade ties were suspended.
These imports exploited the UAE’s free trade privileges and the lack of specific documentation that could trace their origin back to Pakistan.
According to the GTRI, Indian goods worth approximately $10 billion reached Pakistani markets annually through indirect channels, benefiting from these loopholes.
With the new policy in place, such transactions now stand explicitly banned, unless authorized through a special exemption by the Indian government.
Items Exchanged Between the Two Nations
Trade data reveals that the nature of goods exchanged between India and Pakistan was diverse. India primarily exported agricultural and industrial products such as soya bean, poultry feed, fresh vegetables, red chillies, plastic granules, and plastic yarn. In return, India imported several natural and processed goods from Pakistan, including dry fruits, dates, gypsum, cement, rock salt, herbs, and various glass products.
Despite political tensions, there was a resurgence in bilateral trade figures over the past year. Trade had fallen sharply in the aftermath of the 2019 Pulwama terror attack but recovered somewhat by 2023–24.
Impact and Trade Trends Over the Years
Commenting on the new ban, Ajay Srivastava, a former Indian trade official and the head of GTRI, observed that the economic impact on India would be minimal. “India doesn’t rely on goods from Pakistan.
On the other hand, Pakistan remains dependent on certain Indian exports, which they may now continue to access through third-country imports, both through recorded and informal trade mechanisms,” Srivastava stated.
Historical trade data supports his claim. In the financial year 2018–19, bilateral trade between India and Pakistan was valued at ₹4,370.78 crore.
That number dropped dramatically in subsequent years due to political tensions and formal restrictions, falling to just ₹2,257.55 crore in 2022–23. However, 2023–24 saw a significant rebound, with trade volumes climbing to ₹3,886.53 crore—the highest level recorded in the last five years.
Simultaneously, the volume of cargo movement plunged from over 49,000 consignments in 2018–19 to a mere 3,827 in 2022–23.
Trade Potential Remains Untapped
In dollar terms, annual trade between India and Pakistan has averaged only about $2 billion over the past five years—merely a fraction of what it could be under normal diplomatic conditions.
According to a World Bank estimate, the full trade potential between the two countries is as high as $37 billion annually, assuming normalized relations and unrestricted trade.
When compared to the broader picture of India’s global trade, the numbers are even more modest. India’s total goods trade stood at approximately $430 billion, while Pakistan’s global trade volume was around $100 billion during the same period.
These figures highlight the relatively small size of India–Pakistan trade in the larger context of global commerce.
India’s latest ban marks a firm diplomatic and economic stance against Pakistan, particularly in light of repeated provocations and incidents of terrorism.
By halting all direct and indirect trade, including transshipment routes, New Delhi aims to tighten the screws economically while underscoring the strategic costs of cross-border hostility.
While the move is unlikely to have a major economic impact on India, it sends a strong message internationally about the country’s priorities in safeguarding its security and national interests.
