India Hikes Import Duty On Pakistani Goods To 200%
A truck carrying a container sits parked in front of stacked containers at the Sun Kwang Newport Container Terminal (SNCT) in Incheon New Port in Incheon, South Korea. (Photographer: SeongJoon Cho/Bloomberg)

India Hikes Import Duty On Pakistani Goods To 200%


Following the Pulwama terror attack, India on Saturday raised the customs duty to 200 percent on all goods imported from the neighbouring country, including fresh fruits, cement, petroleum products and mineral ore.

Pakistan’s exports to India stood at $488.5 million (around Rs 3,482.3 crore) in 2017-18.

“India has withdrawn MFN (most favoured nation) status to Pakistan after the Pulwama incident,” Finance Minister Arun Jaitley said. “Upon withdrawal, basic customs duty on all goods exported from Pakistan to India has been raised to 200 percent with immediate effect.”

The two main items imported from Pakistan are fruits and cement, on which the current customs duty is 30-50 percent and 7.5 percent, respectively. Slapping an import duty of 200 percent effectively means almost banning the imports from Pakistan, official sources said.

India on Friday revoked the MFN status to Pakistan in the aftermath of the Pulwama terror attack. The country invoked a security exception clause of the World Trade Organisation to withdraw this status. Both the countries are member of this organisation.

India can also restrict trade of certain goods and impose port-related restrictions on Pakistani goods.

Items which Pakistan exports to India include fresh fruits, cement, petroleum products, bulk minerals and ores, finished leather, processed minerals, inorganic chemicals, cotton raw, spices, wool, rubber product, alcoholic beverages, medical instruments, marine goods, plastic, dyes and sport goods.

India granted the MFN status to Pakistan way back in 1996, but the neighbouring country had not reciprocated.

Under the MFN pact, a WTO member country is obliged to treat the other trading nation in a non-discriminatory manner, especially with regard to customs duty and other levies.

In 2012, Pakistan had committed to giving the MFN status to India but retracted later due to domestic opposition. Instead of MFN, Pakistan said it was working on granting Non-Discriminatory Market Access status to India but that also was not announced.

Total India-Pakistan trade has increased marginally to $2.41 billion in 2017-18 as against $2.27 billion in 2016-17. India imported goods worth $488.5 million in 2017-18 and exported goods worth $1.92 billion.

During April-October 2018-19, India's exports to Pakistan stood at $1.18 billion, while imports were $338.66 billion.

India mainly exports raw cotton, cotton yarn, chemicals, plastics, manmade yarn and dyes to Pakistan.

At least 40 CRPF personnel were killed and five injured on Thursday in one of the deadliest terror attacks in Jammu and Kashmir when a Jaish-e-Mohammad suicide bomber rammed a vehicle carrying explosives into their bus in Pulwama district.

Also read: Pulwama Attack: Death Toll Rises to 40, PM Modi Warns Pakistan

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.