Impact of India’s Ban on Pakistan-Origin Cargo at Ports
India’s recent ban on ships transporting goods to and from Pakistan has significantly disrupted trade between the two nations, leading to increased freight charges and extended shipping times for Pakistani importers. The ban, which took effect on May 2, 2025, was implemented in response to a terror attack in Pahalgam and prohibits both direct and indirect movement of Pakistani goods through Indian ports. Industry officials report that this comprehensive restriction has not only strained maritime logistics but has also prompted heightened enforcement measures by Indian authorities to detect violations.
Impact on Shipping and Import Costs
The ban has caused substantial delays in the import process for Pakistani businesses, with reports indicating that shipments are now delayed by 30 to 50 days. Javed Bilwani, president of the Karachi Chamber of Commerce and Industry, highlighted that the absence of mother vessels has forced importers to rely on feeder vessels, which are more expensive. This shift has resulted in a notable increase in transportation costs, further straining the financial resources of Pakistani importers. Exporters have also felt the pinch, particularly in terms of rising logistics expenses, especially insurance costs. Aamir Aziz, a textile exporter, noted that while exports have not been significantly affected, the increase in shipping charges has compounded existing challenges.
Broader Economic Implications
The restrictions on trade come at a time when Pakistan’s export sector is already grappling with operational difficulties due to its reliance on imported raw materials for value addition. The Pakistani government has been enforcing its own restrictions on non-essential imports to manage foreign exchange reserves, making the situation even more precarious. The Indian ban exacerbates these challenges, leading to potential supply chain disruptions that could have wider economic implications for Pakistan. The decline in trade relations is evident, with bilateral trade dropping from $2.41 billion in 2018 to just $1.2 billion in 2024, according to reports.
Enforcement Actions by Indian Authorities
In response to the ban, Indian authorities have intensified enforcement efforts to prevent the illegal import of Pakistani goods. The Directorate of Revenue Intelligence (DRI) has launched ‘Operation Deep Manifest,’ targeting goods falsely declared as originating from third countries like the UAE. So far, the operation has resulted in the seizure of 39 containers carrying over 1,100 metric tonnes of goods valued at approximately Rs 9 crore. These goods were found to have originated from Pakistan, despite being misrepresented as UAE products. The DRI’s investigation has uncovered financial connections between Indian importers and Pakistani entities, leading to arrests and further scrutiny of trade practices.
Historical Context and Future Outlook
The current trade restrictions are part of a broader pattern of strained relations between India and Pakistan, particularly following the 2019 Pulwama terror attack, which saw India raise import duties on Pakistani goods to 200%. Since then, formal trade relations have remained largely frozen, with Pakistan’s exports to India plummeting from $547.5 million in 2019 to a mere $480,000 last year. The Indian government maintains that these trade restrictions are essential for safeguarding national and economic security, as well as preventing the misuse of trade channels. As both countries navigate these complex trade dynamics, the future of their economic relationship remains uncertain.
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