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Mammoth decline in imports from Pakistan after imposition of custom duties by India

Akshay Narang by Akshay Narang
10 June 2019
in Economy
Pakistan, imports, India

(PC: News Nation)

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As per latest reports, imports from Pakistan witnessed a major decline of 92 percent to $2.84 million in the month of March this year. Out of the imports worth $2.84 million, $1.19 million accounted for cotton imported by India from its neighbouring country. As per the Commerce Ministry, the figure stood at $34.61 million for the same month in the year 2018. This mammoth and unprecedented decline in the imports from Pakistan can be attributed to the strong economic action taken by India against its neighbouring country after the Jaish-e-Mohammed, a Pak sponsored terror outfit carried out a terrorist attack against a CRPF convoy in Pulwama.

India had withdrawn the ‘Most Favoured Nation’ status granted to Pakistan immediately after the Pulwama terror attack. In fact, it was the first big step taken by the Government of India following the dastardly terror attack carried out by the Pak-based terror outfit. India had granted the ‘Most Favoured Nation’ status to Pakistan two decades ago. However, the neighbouring country had never reciprocated to that status. It was more of an initiative on India’s part. After the Pulwama terror attack, there was a visible shift in India’s Pakistan policy and the immediate consequence was the revocation of the said status.

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After revoking the MFN status to Pakistan, the government had taken another stern step by raising the customs duty to 200 percent on all goods imported from Pakistan, including products such as fresh fruits, cement, spices, wool petroleum products, and mineral ore. The move was obviously expected to hurt the Pakistani economy which already is in a bad state.

In the month of October last year, Prime Minister Imran Khan on his desperate foreign tours begged for financial aid and bailouts. Imran Khan had embarked on a tour to Saudi Arabia to attend an investment conference boycotted by other leaders, on account of journalist Jamal Khashoggi’s death at the Saudi consulate in Istanbul, Turkey. At that time, Imran Khan had said in an interview before embarking on the tour that even he was concerned by Khashoggi’s death but Pakistan could not afford to skip this event because “we’re desperate” for possible Saudi loans to shore up Pakistan’s economy. Thus, Imran Khan had himself conceded that Pakistan was in a dire economic crunch on account of its desperation for loans. A balance of payment crisis looms large over the Pakistani economy and Imran Khan is expected to somehow save it from a probable breakdown.

India wanted to inflict diplomatic as well as economic costs on Pakistan along with the crackdown on its terror training centres carried out by the IAF by bombing Balakot-based JeM camps. India seems to have succeeded in achieving its objective. Pakistan has been shown its place and it is being made to suffer for fomenting terrorism against India.

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