India cuts off all imports from Pakistan, including indirect routes, causing a devastating economic hit

India has delivered a shocking blow to Pakistan’s economy by implementing a total ban on imports from its neighbour, following the deadly Pahalgam attack. This drastic measure, which prohibits both direct and indirect imports, is set to impact an estimated $500 million worth of goods annually. With escalating tensions between the two nations, this move underscores India’s commitment to punishing Pakistan economically in retaliation for what it calls national security concerns.

The Indian government, led by Prime Minister Narendra Modi, has made it clear that it will not tolerate any attempts to bypass the ban through third countries. This includes a comprehensive restriction on all Pakistani goods entering India, even via intermediary nations. The ban extends beyond commercial goods and covers postal services as well as Pakistan-registered vessels, which will no longer be allowed to dock in Indian ports. For India, this action marks a hardline stance in a long-standing geopolitical rivalry.

The Directorate General of Foreign Trade (DGFT) issued a formal notification on May 2, making the provisions part of the Foreign Trade Policy (FTP) 2023. The new rules state that “the direct or indirect import or transit of all goods originating in or exported from Pakistan” is prohibited, with immediate effect until further orders.” This sweeping ban means no Pakistani goods, whether freely importable or not, will be allowed into India. Furthermore, the Indian government has made it clear that only through explicit approval could any exceptions to the ban be considered.

Despite the severe restrictions, India’s economy remains largely unaffected by the decision. The import of Pakistani goods, which previously amounted to around $500 million annually, is insignificant compared to India’s vast economy. However, for Pakistan, this is a major blow to its struggling economy, which depends on trade routes through India for essential goods.

The import ban is not the only diplomatic measure India has taken. Visa restrictions were implemented earlier, further tightening the noose around Pakistan. This reflects the growing animosity between the two countries, which has been exacerbated by ongoing military tensions and violent incidents such as the Pahalgam attack.

The restrictions on trade, alongside the diplomatic crackdown, reflect India’s desire to isolate Pakistan economically and politically. The move also signals India’s growing frustration with Pakistan’s internal instability and its alleged support for militant activities that threaten India’s national security.

India’s relationship with Pakistan has long been fraught with tension. The two nuclear-armed neighbours have fought multiple wars and have continued to clash over disputed territories, including the region of Kashmir. Despite years of attempts at peace talks, these nations remain entrenched in hostility. India’s latest move, restricting imports and imposing sanctions, is a clear signal that the Modi administration is unwilling to negotiate in the face of violence and terror.

The ban is expected to cause severe economic ramifications for Pakistan. Key industries reliant on exports to India may find themselves crippled, and the country’s already fragile economy could suffer further from the halted trade. At the same time, India is unlikely to experience significant repercussions due to its already diverse and expansive trade networks that are far less reliant on Pakistan.

This latest chapter in the India-Pakistan rivalry further intensifies the already fragile diplomatic situation. As both nations continue to escalate their positions, it remains to be seen how long this trade war will last and whether it will evolve into more severe confrontations. The economic and diplomatic fallout of the Pahalgam attack is only just beginning to unfold, and its consequences will reverberate for months to come.