New Delhi: In his explanation of the trade ramifications between India and Pakistan in the wake of the April 22 Pahalgam terror attack, Ajay Sahai, Director General and CEO of the Federation of Indian Export Organizations (FIEO), stated on Friday that Pakistan is likely to encounter major difficulties as a result of the disruption.

He pointed out that the two countries have always had tense commercial ties, and the current events may make matters worse for Pakistan.

“In any event, India and Pakistan did not enjoy a positive trading relationship. We imposed a 200 percent tariff when Pakistan refused to grant India the designation of Most Favored Nation (MFN). Therefore, Sahai said that considering India’s total exports of USD 800 billion, the figures are not terrific.

“Pakistan’s economy is already struggling, and they will have to deal with it. He said, “Pakistan is going to have a difficult time.

The FIEO CEO said that although India would not be much impacted by the trade interruption, Pakistan would need to review its import policies, particularly in the areas of organic chemicals and pharmaceuticals, two significant categories that were previously imported from India because of their close proximity.

“India would not be affected in any way by trade disruption… On the other hand, because of their proximity, Pakistan could need to investigate where they purchase organic chemicals and pharmaceuticals— the two key things we were supplying to Pakistan. “It’s likely that Pakistan will no longer have that advantage,” Sahai said.

Following the devastating terror assault in Pahalgam, which killed 26 innocent people—mostly tourists—and wounded several more, India decided to stop trading with Pakistan.

A Global Trade Research Initiative (GTRI) research states that following the February 2019 Pulwama assault, trade ties between India and Pakistan have remained tense. India at the time stripped Pakistan of its MFN status and levied a hefty 200 percent import tax.

According to official statistics, India shipped commodities to Pakistan valued at USD 447.7 million during the current fiscal year (April 2024 to January 2025) in spite of the official trade restrictions. On the other hand, India only imported USD 0.42 million worth of goods from Pakistan.

Pakistan is anticipated to depend increasingly on unofficial trade routes via other nations now that established trade channels have been closed. According to GTRI, re-export routes still account for around USD 10 billion in commerce, mostly via Singapore and the United Arab Emirates (UAE).

Several Indian goods, including medicines, chemicals, cotton, tea, coffee, dyes, onions, tomatoes, iron, steel, sugar, salt, and auto parts, are supposedly imported by Pakistan via these third nations.

However, via comparable indirect channels, India may import products from Pakistan, such as dried fruits like dates, apricots, and almonds, and Himalayan pink salt.

The latest action is expected to raise prices and complicate supply chains in Pakistan.