Pulwama terror attack: India hikes import duty on Pakistan goods to 200 per cent

New Delhi: Taking strong economic action against Pakistan following the Pulwama terror attack, India on Saturday raised the customs duty to 200 per cent on all goods imported from the neighbouring country, including fresh fruits, cement, petroleum products and mineral ore.

The decision would significantly hit Pakistan’s exports to India, which stood at $488.5 million (around Rs 3,482.3 crore) in 2017-18 as it would drastically increase the prices of its goods here.

“India has withdrawn MFN (most favoured nation) status to Pakistan after the Pulwama incident.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 per cent with immediate effect,” finance minister Arun Jaitley said in a tweet.

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.

Meanwhile, a dossier, nailing the culpability of Pakistan in the terror attack in Pulwama, will be given to the Financial Action Task Force (FATF), an international terror financing watchdog, to expose the neighbouring country’s links with terrorism and seeking its blacklisting, officials said.

The FATF blacklist means the country concerned is “non-cooperative” in the global fight against money laundering and terrorist financing.

If the FATF blacklists Pakistan, it may lead to downgrading of the country by multilateral lenders like International Monetary Fund, World Bank, Asian Development Bank, EU and also a reduction in risk rating by Moodys, S&P and Fitch.

The Paris-headquartered FATF will also be told through the dossier how the Pakistani agencies are providing funds to the JeM, the official said.

In the next meeting of the FATF, India will also press for the blacklisting of Pakistan so that that action can be taken against the country, another official said. The FATF plenary and working group meetings will be held in Paris next week.

India on Friday revoked the MFN status to Pakistan in the aftermath of the Pulwama terror attack. The country invoked a security exception clause of the World Trade Organisation (WTO) to withdraw this status. Both the countries are member of this organisation.

India can also restrict trade of certain goods and impose port-related restrictions on Pakistani goods.