India has stepped up surveillance at its borders and ports after learning that Pakistani goods worth nearly $500 million are being rerouted through third countries to bypass a ban. While direct imports from Pakistan have been negligible for years, recent intelligence reveals that repackaged items are entering via countries like the UAE, Singapore, Sri Lanka, and Indonesia.
Following the terror attack in Pahalgam that killed 26 people, the Indian government issued a blanket ban on all imports from Pakistan, including those routed through third nations. Customs officials have been instructed to intercept consignments suspected of originating in Pakistan, even if relabelled abroad.
Trade Disruption Since 2019
Tensions have long affected trade between the two nations. After the Pulwama terror attack in 2019, India revoked Pakistan’s Most Favoured Nation (MFN) status and imposed a 200% customs duty on its goods. These measures nearly wiped out bilateral trade, reducing Pakistani exports to India by over 90% within a year. In 2020-21, Pakistani imports into India dropped to $2.39 million and further fell to just $0.42 million in the first ten months of 2024-25.
Key items affected include horticultural produce, textiles, salt, leather goods, and soda ash. Officials say trade cannot coexist with terror and reaffirmed India’s zero-tolerance stance.
Fresh Clampdown After Recent Attack
On May 2, the Directorate General of Foreign Trade (DGFT) issued an order prohibiting all imports originating in Pakistan, directly or indirectly. Customs and other enforcement agencies have been directed to keep strict watch, especially at ports of entry where third-country shipments are common.
Officials highlighted that such goods are often repackaged to obscure their Pakistani origin. The ban allows for exceptions only with prior government approval, citing national security and public policy concerns.
Pakistan, however, continues to import Indian goods. In FY24, Pakistan bought $1.2 billion worth of Indian products, including essential medicines, chemicals, food, and auto parts. Meanwhile, India imported only $3 million worth of goods, mainly agricultural produce.
In FY19, India exported $2.07 billion in goods to Pakistan and imported $495 million in return. Since then, both exports and imports have plunged. Pakistani demand for Indian items—due to better quality and pricing—still exists but is now fulfilled through informal routes in friendly nations.
