What happened?
India’s Directorate General of Foreign Trade (DGFT) announced an immediate ban on the import of all goods originating in or transiting through Pakistan, effective May 2, 2025. This decision, made in the interest of national security and public policy following the April 22 Pahalgam terrorist attack. The notification prohibits both direct and indirect imports, regardless of whether goods were previously freely importable. Any exceptions to this ban now require prior approval from the Government of India.
Why it matters to India
This import ban represents a significant escalation in India’s response to perceived cross-border terrorism, particularly after the deadly Pahalgam attack linked to Pakistan-trained elements. It builds upon previous trade restrictions imposed after the 2019 Pulwama attack, which included raising import duties to 200% and revoking Pakistan’s ‘Most Favoured Nation’ status. While direct India-Pakistan trade constitutes a very small fraction of India’s overall commerce (around 0.06%, with imports at $420,000 and exports at $447.7 million between April 2024-January 2025), the ban serves as a strong diplomatic and economic signal. It complements other potential measures like the suspension of the Indus Water Treaty and airspace restrictions, increasing pressure on Pakistan’s economy. Although significant indirect trade occurs via third countries like Dubai, this comprehensive ban aims to further isolate Pakistan economically in line with India’s stated national security objectives.
