India has enacted sweeping economic sanctions against Pakistan in the wake of the deadly Pahalgam terror attack that left 26 civilians dead, announcing a complete halt to trade and maritime access. In a bold move aimed at isolating Pakistan economically, New Delhi banned the direct and indirect import or transit of all goods originating from or routed through Pakistan. The order, issued under the revised Foreign Trade Policy, is effective immediately and remains in place until further notice.
The Ministry of Commerce stated the ban was enforced to safeguard national security and uphold public policy. At the same time, the Directorate General of Shipping issued a directive blocking any Pakistani-flagged vessel from docking at Indian ports. The shipping ban is intended to protect India’s maritime assets and logistical infrastructure from potential threats amid heightened tensions.
These punitive measures follow India’s earlier closure of the Attari-Wagah land border—the sole road-based trade route between the two nations. This closure effectively halts the last operational channel of bilateral commerce, marking the most significant freeze in trade since the 2019 Pulwama attack, after which India revoked Pakistan’s Most Favoured Nation (MFN) status.
While trade volumes had already declined sharply since 2019, some Pakistani goods still reached India via third countries like Dubai, Singapore, and Sri Lanka. In 2023-24, direct imports from Pakistan amounted to just USD 3 million, mostly in agricultural products. However, the ripple effects of India’s new policy are expected to hit Pakistan’s fragile economy hard, particularly affecting small traders and manufacturers.
Pakistan, for its part, responded by suspending all remaining trade with India. The diplomatic standoff has now spilled into essential sectors, with Pakistan scrambling to find alternative sources for critical imports, especially in pharmaceuticals—an area where it has traditionally relied heavily on Indian suppliers.
India’s economic retaliation underscores a broader strategy to exert diplomatic pressure and isolate Pakistan internationally, signaling that future acts of terror will be met with firm, multifaceted consequences.
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