A day after India revoked the Most Favoured Nation (MNF) status given to Pakistan, Finance Minister Arun Jaitley on Saturday announced a 200 per cent hike in customs duty on all goods imported from the neighbouring country. The development comes in the wake of India’s push to isolate Pakistan following a deadly terror attack in Pulwama that claimed the lives of 40 CRPF personnel on Thursday.
“India has withdrawn MFN status to Pakistan after the Pulwama incident. Upon withdrawal, basic customs duty on all goods exported from Pakistan to India has been raised to 200% with immediate effect,” Jaitley tweeted.
The two main items imported from Pakistan are fruits and cement, on which the current customs duty is 30-50 per cent and 7.5 per cent, respectively. Slapping an import duty of 200 per cent effectively means almost banning the imports from Pakistan, official sources said. India had on Friday revoked the MNF status after a decision made in the meeting of the high-level Cabinet Committee on Security, which enables India to hike Customs duties on imports from Pakistan. In FY18, India-Pakistan trade was a mere $2.40 billion or about 0.4 per cent of India’s overall trade.
Items which Pakistan exports to India include fresh 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 sports goods.
In fact, India continues to maintain a substantial trade surplus. Pakistan’s exports to India have been about a fourth of what it imports from India, the MFN concessions notwithstanding. India mainly exports cotton, dyes, chemicals, vegetables and iron and steel while it imports fruits, cement, spices and leather.