‘India’s bold and strong move will surely hurt the Pakistani economy.’
Indian exporters and importers have hailed the Indian government’s decision to withdraw the Most Favoured Nation (MFN) tag that was given to Pakistan by India and have said that this is going to have a huge impact among Pakistani traders and would hurt the Pakistani economically.
Gaurav Gupta, President, Amritsar chapter of the Federation of Indian Export Organisations (FIEO), told The Sunday Guardian, “We welcome the decision of the government to discourage trading with Pakistan. We cannot engage with a country that has been killing our soldiers and engaging in terrorism. This decision of the Indian government is bold and strong and this is surely going to hurt the Pakistani economy. The traders on the other side have already hit the panic button.”
In response to the Pulwama attack, the Indian government had decided to increase import duties on goods from Pakistan by 200% which, according to traders, means that no import from Pakistan would take place as the prices of these goods imported from Pakistan on such high duty would not be able to survive the competition in the Indian market. Goods that are imported from Pakistan to India include cement, dry fruits, gypsum, bauxite, rock salt, chemicals, fertilisers, and leather products, among others.
Dry fruits account for the highest import from Pakistan and stands roughly at about $112 million annually, followed by cement import which is roughly about $78 million. The Attari-Wagah border in Amritsar is one of the major land ports between the two countries and on a daily basis, roughly 20-25 trucks enter and leave India with goods to and from Pakistan. The trade from this border alone stands at more than Rs 500 crores annually.
According to importers at the Attari-Wagah border in Amritsar, several of trucks and shipping containers loaded with dry fruits and cement are stuck at several ports in Pakistan and some containers have even got stuck in the high seas after the decision of the Indian government to increase import duty from Pakistan.
Mohit Khanna, a cement importer from Pakistan and also the president of the Chambers of Commerce, Attari border, told The Sunday Guardian, “We support the government’s decision to increase import duty on goods imported from Pakistan because we need to isolate them economically. But we have one request from the government that the order for the goods that had been placed before the Pulwama attack and those in transit should be allowed a one-time relief from the current decision so that these traders can get in their goods within the earlier negotiated prices as advances have also been paid to exporters in Pakistan. We have written to the local administration to look into this and we have providing bills as proof of the order dates.”
“However, we stand shoulder to shoulder with the government to protect the integrity and sovereignty of India and such a decision would impact Pakistan economically as their Current Account Deficit is already at an all-time high and with this move, it would further deteriorate,” Khanna added.
India’s total imports from Pakistan stood at $488 million during the financial year 2017-18, while during the 2018-19 (till October), India imported goods worth $338 million from Pakistan.
Exports from India to Pakistan stood at $1,924 million in 2017-18, while in 2018-19 (till October), the export figures between the two countries stood at $1,179 million. However, India accounts for just 2.55% of the total imports in Pakistan, the highest being with China (23.86%), followed by UAE (14.76%).