After the Pulwama attack, Indo-Pak relations have taken a massive hit after a brief period of calm with both sides on good terms with one another. However, the Pulwama attack seemed to reignite the tension present between both countries ever since partition. Even though, Pakistan has officially denied any allegations linking them to the Muslim Separatists involved in the Pulwama attack, India is not holding back and PM Modi has stated that a response would be definite. This response is coming in all forms; both military and economic.
On the business side of things, India has raised the import duty on Pakistani goods by 200%. That is the equivalent of making Pakistani goods almost impossible to buy in India. Exports of Pakistan to India includefresh 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. Among these, the primary exports were fruits and cement, on which the current customs duty is 30-50% per cent and 7.5 per cent, respectively.
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.
Despite all these drastic measures, Pakistan seems to be rather composed regarding the situation considering India’s efforts including the withdrawal of Pakistan as MFN (Most Favoured Nation). PM Imran Khan’s adviser commented on these measures:
“We would not overreact. We have three options including unilateral, bilateral [action] under the South Asian Free Trade Area (Safta) and multilateral [action] under the World Trade Organisation (WTO). We would take action with great care.”
INDIA PLANS TO RETALIATE THE PULWAMA ATTACK IN ALL POSSIBLE WAYS: RAISES IMPORT DUTY ON PAKISTANI GOODS BY 200%
This could be a wise move since outrage from both sides could make matters worse, and one party needs to hold back and try to see the situation from a different angle in order to make rational decisions.