In a strong retaliatory move after the Pahalgam terror attack that claimed 26 lives, the Indian government has imposed an immediate ban on all direct and indirect imports from Pakistan. The Directorate General of Foreign Trade (DGFT) announced the decision through an official notification on May 2, 2025, stating the restriction is in the “interest of national security and public policy.” This provision has been formally inserted into the Foreign Trade Policy 2023, effectively ceasing any trade or transit of goods originating in or exported from Pakistan, unless an exception is specifically approved by the Indian government.
India’s imports from Pakistan were already minimal, totaling just $0.42 million between April 2024 and January 2025, while exports stood at $447.65 million. The primary imports included fruits, nuts, oilseeds, and medicinal plants. The latest ban comes after earlier steps taken post-attack, such as the closure of the Attari land transit post and expulsion of Pakistani military attachés. New Delhi has also suspended the decades-old Indus Water Treaty. These escalations mirror similar actions taken after the Pulwama terror attack in 2019, which saw the withdrawal of Pakistan’s MFN (Most Favoured Nation) status and 200% import duties on goods from across the border.
India has further signaled its intent to approach global financial institutions to re-evaluate loans and grants to Pakistan, citing its role in sponsoring cross-border terrorism. Trade between the two countries has long been marred by political tensions, with Pakistan suspending trade ties with India in 2019. While India had extended MFN status to Pakistan in 1996, Islamabad never reciprocated and failed to deliver on promises of granting Non-Discriminatory Market Access. With bilateral trade now essentially frozen, both nations remain locked in a cycle of diplomatic and economic retaliation rooted in deep historical discord.
