New Delhi: India followed up the withdrawal of Most Favoured Nation (MFN) status with a 200 per cent increase in customs duty on all goods imported from Pakistan.
India is no longer legally obliged under World Trade Organisation rules to give Pakistani imports the same treatment as those from other countries. The intention is to punish Pakistan with all available tools for the Pulwama attack and one of the objectives of levying customs duty is to prohibit the imports of goods for achieving the policy objectives of the government.
Bilateral trade between India and Pakistan had broken the glass ceiling after the opening of cross-border movement of trucks in 2008 and now stands at $2.5 billion with the trade balance heavily in favour of India. Indian exports at $2 billion are four times Pakistani imports, which hover around $500 million annually.
The doubling of customs duty will lead to hardship for Pakistan’s traders of dates, cement and bitumen oil, which account for half of its exports to India and are worth $230 million. Informal trade between the two nations worth $5 billion will remain unaffected.
