In a sharp response to the recent terror strike in Pahalgam, India has taken a series of decisive steps to sever commercial and maritime links with Pakistan. Among the most impactful actions, New Delhi has completely barred the import—both direct and indirect—of all Pakistani goods and prohibited vessels flying Pakistan’s flag from docking at Indian ports.

Although Pakistan's direct exports to India have been minimal in recent years, certain products continued to reach Indian markets through intermediary nations. This loophole has now been shut under a revised clause in India’s Foreign Trade Policy (FTP), as notified by the Ministry of Commerce. The update prohibits the “direct or indirect import or transit of all goods originating in or exported from Pakistan,” effective immediately and until further notice.

The move, according to the government, has been enforced in the interest of national security and broader public policy.

Separately, the Directorate General of Shipping issued an order banning Pakistani-flagged vessels from Indian harbors, citing the need to safeguard Indian maritime infrastructure, cargo, and assets.

TRADE SHUTDOWN IN FULL SWING

With these measures, bilateral trade has come to a complete halt. India had already closed the Attari-Wagah land trade route—the sole overland commercial crossing between the two nations—shortly after the April 22 terror incident in Jammu and Kashmir's Barisan Valley, which claimed 26 lives.

Pakistan, in retaliation, has announced the suspension of all trade with India.

Trade relations between the two countries have been on a downward spiral since 2019, when India revoked Pakistan’s Most Favoured Nation (MFN) status following the Pulwama terror attack, which killed over 40 Indian paramilitary personnel.

Despite a steep decline, trade at the Attari-Wagah border still accounted for goods worth ₹3,886.53 crore in 2023–24. The new restrictions are expected to hit Pakistan’s small traders and exporters especially hard, particularly those reliant on backdoor trade through Dubai, Colombo, and Singapore.

In 2023–24, India imported just $3 million worth of goods—mostly agricultural—from Pakistan. However, Pakistan continues to depend heavily on India for key pharmaceutical imports.

Now cut off from Indian medical supplies, Islamabad is scrambling to identify new sources to fill the gap in its healthcare sector.