Subhechcha Ganguly 
In a significant move aimed at tightening economic measures against Pakistan, Indian authorities have ramped up surveillance to prevent the entry of Pakistani goods being rerouted through third countries such as the United Arab Emirates (UAE), Singapore, Indonesia, and Sri Lanka. Officials estimate that goods worth over $500 million — including fruits, dry dates, textiles, soda ash, rock salt, and leather products — are still being repackaged and relabelled abroad to bypass the trade ban.
Following the formal suspension of direct trade ties with Islamabad, Indian customs departments have been placed on high alert to detect and block any indirect imports originating from Pakistan. This follows the Directorate General of Foreign Trade (DGFT)’s recent notification on May 2, explicitly prohibiting both direct and indirect imports from Pakistan, citing national security and public policy concerns.
“The objective is to choke Pakistani exports at a time when their economy is already vulnerable,” said an official familiar with the development, requesting anonymity.
India first struck a blow to Pakistan’s trade interests by withdrawing its Most Favoured Nation (MFN) status in February 2019, after the Pulwama terror attack. It also imposed a 200% customs duty on imports from Pakistan, which led to a dramatic collapse in formal trade — from $2.39 million in 2020–21 to just $0.42 million in the first ten months of 2024–25.
Despite the collapse of official trade, Pakistani products have continued to seep into the Indian market through friendly nations. The government’s latest directive is designed to equip customs officials with the authority to act against such attempts. “Terror and trade cannot go hand-in-hand,” said a senior official, adding that critical sectors like horticulture, cement, salt, and cotton yarn have been most affected by the trade clampdown.
Pakistan, meanwhile, continues to import essential Indian goods such as medicines, chemicals, and food products — often via informal or third-country routes — due to their affordability and superior quality. In 2023–24, Indian exports to Pakistan stood at $1.2 billion, while imports were minimal at $3 million.
The renewed trade restrictions are also seen as part of India’s response to the recent Pakistan-backed terror attack in Pahalgam on April 22, which claimed 26 lives.
