Tit for Tat: Pakistan Bans Transit Trade With India

In a bold diplomatic move, Pakistan has officially banned transit trade with India, citing regional tensions and a mutual response to India’s recent restrictions on Pakistani exports. The decision has sparked extensive discussion across South Asia and may have significant economic and political implications in the region.

• Pakistan halts all transit trade routes with India.

• A decision was taken as a mutual measure against India’s restrictive trade policies.

• Affects regional connectivity projects and third-party countries like Afghanistan and Central Asia.

• Further strains have already frozen diplomatic ties between Islamabad and New Delhi.

• No, both sides' trade has existed since August 2019, when India revoked Article 370 in Jammu & Kashmir.

Transit trade refers to the movement of goods through a country’s territory to a third country. For example, Indian goods passing through Pakistan to reach Afghanistan, or Pakistani goods transported to Nepal or Bhutan through India.

• Afghanistan–India trade often relied on Pakistan's land routes.

• Central Asian countries used Pakistan’s Karachi and Gwadar ports to access Indian markets.

With the ban in place, alternative and longer sea routes will now need to be used, increasing trade costs and delivery times.

In a press conference held in Islamabad, the Ministry of Commerce said:

“Pakistan has taken this decision in response to India’s continuous discriminatory trade policies. Until New Delhi shows a willingness to engage constructively and respectfully, Pakistan cannot allow its land to be used for Indian trade purposes.”

The statement emphasized national Independence, regional peace, and economic justice as guiding principles behind the decision.

This ban is widely seen as a reciprocal action after India.

• Imposed new tariffs and non-tariff barriers on goods from Pakistan-origin territories.

• Restricted access to Indian markets for Pakistani exporters.

• Continued hostile rhetoric and policies, especially on matters related to Kashmir and cross-border skirmishes.

Pakistan’s government was under pressure domestically to respond firmly, particularly after:

• Indian authorities blocked shipments from Pakistani companies, citing “security reasons.”

• Indian media promoted boycotts of Pakistani-origin products.

Pakistan:

• Short-term losses for trucking companies, port services, and customs operations.

• But politically, the move plays well to the domestic audience, especially with elections approaching.

India:

• Limited direct impact due to the existing ban since 2019.

• However, trade with Afghanistan and Central Asia may get costlier without Pakistan’s land route.

Regional Trade:

• Increased reliance on sea routes means higher shipping costs and longer transit times.

• Greater interest may now fall on Iran’s Chabahar Port, bypassing Pakistan and India altogether.

The ban on transit trade between Pakistan and India is not just about economics — it's a political statement. It reflects growing frustration, lack of trust, and hardening positions on both sides of the border.