Trade fallout: India's ban on Pakistan-origin cargo at ports triggers spike in freight costs, delays for Islamabad
India's ban on ships carrying goods originating in or exported from Pakistan has led to a sharp rise in freight charges and longer shipping times for Pakistani importers, Dawn newspaper reported, citing industry officials.
The ban, imposed on May 2, 2025, following the Pahalgam terror attack, prohibits both direct and indirect movement of Pakistani goods through Indian ports.
As per news agency PTI, this comprehensive restriction has not only impacted maritime logistics but also prompted intensified enforcement by Indian agencies to detect violations.
'Mother vessels are not coming to Pakistan due to this Indian action, which delays our imports by 30 to 50 days,' said Javed Bilwani, president of the Karachi Chamber of Commerce and Industry, in comments reported by Dawn.
He said importers now rely on feeder vessels, resulting in increased transportation costs.
Exporters, too, confirmed a spike in logistics expenses, especially in insurance costs. 'There is no significant impact on exports, except for a rise in insurance costs. Shipping charges had already gone up even before the escalation,' said Aamir Aziz, a textile exporter, as cited in the Dawn report.
Pakistan's export sector, which heavily depends on imported raw materials for value addition, now faces added operational difficulties.
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With Islamabad already restricting non-essential imports to manage its forex reserves, supply chain disruptions caused by the Indian ban carry broader economic implications.
The Indian government's stance has been reinforced through multiple enforcement drives. In one such action, the Directorate of Revenue Intelligence (DRI) launched 'Operation Deep Manifest' to target illegal imports of Pakistani goods routed through third countries like the UAE.
The finance ministry said that so far, 39 containers carrying over 1,100 metric tonnes of goods valued at Rs 9 crore have been seized under the operation. These goods were falsely declared as UAE-origin but were found to have originated from Pakistan, transshipped via Dubai.
The DRI discovered money trails and financial links connecting Indian importers with Pakistani entities, and arrested one of the partners of a trading firm involved in the operation.
According to the ministry, this complex modus operandi was designed to obscure the true origin of the goods using a web of intermediaries in Pakistan and the UAE.
The crackdown is part of broader national security operations such as 'Operation Sindoor', aimed at tightening border trade oversight in response to regional threats.
India had already raised import duties on Pakistani goods to 200% after the 2019 Pulwama terror attack.
Since then, formal trade relations have remained frozen. Bilateral trade between the two countries dropped from $2.41 billion in 2018 to just $1.2 billion in 2024, as per PTI.
Pakistan's exports to India declined sharply from $547.5 million in 2019 to only $480,000 last year.
The government maintains that the trade restrictions are critical to safeguarding India's national and economic security and preventing misuse of trade channels.
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