India has officially banned all imports—both direct and indirect—from Pakistan amid mounting tensions over the brutal Pahalgam terror attack, which left 26 civilians dead.

In a notification issued by the Commerce Ministry, the Indian government stated that:

“Direct or indirect import or transit of all goods originating in or exported from Pakistan, whether or not freely importable or otherwise permitted, shall be prohibited with immediate effect, until further orders.”

The ministry cited national security and public policy as the basis for the move. Any exceptions to the restriction will require prior approval from the Government of India.

A clause has been added to the Foreign Trade Policy (FTP) 2023 to formalize the ban, effectively halting all trade activities involving Pakistani-origin goods.

Trade already plummeting

Official data shows that India’s exports to Pakistan dropped 56.91% year-on-year between April 2024 and February 2025, down to $491 million. No imports were recorded during the same period.

Top Indian exports to Pakistan this fiscal year included drug formulations, sugar, bulk drugs, residual chemicals, and auto components.

The Attari-Wagah border, the only operational trade route between the two nations, had already been closed following the April 22 terror attack in Baisaran, Jammu and Kashmir. The attack, allegedly carried out by Pakistan-backed terrorists, claimed the lives of 26 people, including a Nepalese tourist and a local pony guide.

Investor confidence shaken in Pakistan

The diplomatic fallout has had a visible impact on Pakistan’s financial markets. The country is on track for its worst performance in both dollar bonds and stocks since 2023. Investor losses in April alone are estimated at 4%, with equities down 3%.

In contrast, India’s financial assets remain relatively unaffected.

Global calls for de-escalation

International stakeholders, including the United States, have urged both India and Pakistan to exercise restraint and avoid further escalation.