India hits Pak again, bans all imports from there with immediate effect

In a dramatic escalation of its response to the April 22 terrorist attack in Pahalgam that claimed 26 lives, India has imposed an immediate, blanket ban on all imports — direct and indirect — from Pakistan, citing grave national security concerns.

The Ministry of Commerce and Industry, through a late-night notification on May 2, amended the Foreign Trade Policy to prohibit “the import or transit of all goods originating in or exported from Pakistan.” The ban, effective immediately, will remain in force “until further orders,” marking one of the most stringent trade crackdowns by India in recent years.

The Directorate General of Foreign Trade (DGFT) confirmed that no exceptions will be made unless explicitly authorized by the central government, effectively severing a crucial, albeit limited, economic link between the two nuclear-armed neighbors.

This trade freeze follows what Indian intelligence agencies have identified as “cross-border linkages” to the Pahalgam massacre. As part of a broader diplomatic offensive, India is also lobbying to re-add Pakistan to the Financial Action Task Force (FATF) grey list, targeting its alleged support for terror financing.

In parallel, New Delhi has opened dialogues with major multilateral development banks (MDBs), urging them to halt loans and financial assistance to Pakistan. A senior official described the approach as a “multi-pronged isolation strategy” designed to choke funding channels that could potentially fuel extremist networks.

Just days after the attack, India also moved to suspend the Indus Water Treaty, a foundational bilateral agreement governing water-sharing between the two countries. In retaliation, Islamabad announced the suspension of the Simla Agreement, further deepening diplomatic hostilities.

Trade ties: A shrinking economic thread

Though India-Pakistan trade has been marginal for years, the symbolic and strategic weight of this new embargo is immense. From April 2024 to January 2025, India exported goods worth $447.65 million to Pakistan, while imports trickled in at just $0.42 million, mostly comprising fruits, oilseeds, and medicinal plants.

India’s main exports included organic chemicals and pharmaceuticals, accounting for nearly 60% of trade, alongside items like sugar, spices, and auto components.

With today’s ban, even this minimal economic thread has been severed.

As both nations brace for the diplomatic fallout, this bold move signals India’s intent to not only punish Islamabad economically but also galvanize international pressure in the wake of one of the deadliest attacks in recent years.