Monday, October 20, 2025
HomeIndirect TaxesFrom 200% Duty to Total Ban: How India’s Post-Pahalgam...

From 200% Duty to Total Ban: How India’s Post-Pahalgam Attack Freeze Crushed Pakistan’s Dry Dates Exports

Dry dates — once a quiet but significant component of India-Pakistan cross-border trade — have become a casualty of recurring geopolitical tensions. From punitive tariffs after the 2019 Pulwama attack to the sweeping trade ban following the 2025 Pahalgam assault, the trade trajectory of this humble commodity tells a larger story of disrupted markets, stranded farmers, and strained bilateral relations.

As of mid-2025, India has imposed a blanket prohibition on all imports from Pakistan, effectively closing both direct and indirect channels. The result: Pakistani growers face severe financial distress, Indian importers grapple with higher prices, and smugglers find renewed incentive to exploit loopholes in trade routes.

2019 — 200% Customs Duty Imposed Post-Pulwama

In February 2019, following the Pulwama terror attack, India revoked Pakistan’s Most Favoured Nation (MFN) status and imposed a 200% basic customs duty on all Pakistani-origin goods. Dry dates — one of Pakistan’s key agricultural exports to India — were among the hardest hit.

The move made Pakistani dry dates uncompetitive overnight. Imports collapsed, and Pakistani growers, especially in Sindh’s Khairpur belt, saw their produce pile up unsold. Meanwhile, Indian traders, who had relied on Pakistan for a steady supply, turned to alternative sources like the UAE, Iran, and Iraq.

Effect:

  • Pakistani date exports plunged sharply.
  • Domestic prices in India rose by about 40–50% within months.
  • Growers in Pakistan suffered heavy financial losses due to unsold inventory.

Trade Ban After Pahalgam Attack (2025)

The April 2025 Pahalgam terror attack marked another turning point. India’s Directorate General of Foreign Trade (DGFT), under the Foreign Trade Policy (FTP) framework, issued a complete prohibition on imports from Pakistan — direct or indirect.

This ban extended to goods transiting through or re-exported from third countries, closing loopholes previously used for indirect trade.

Impact:

  • Legal trade in Pakistani dry dates to India fell to zero.
  • Many shipments via Dubai or Jebel Ali were seized by Indian Customs or the Directorate of Revenue Intelligence (DRI).
  • The domestic market in India experienced supply shortages and inflated prices, particularly before festivals.

Re-Exports & Transhipment Loopholes

Before the total ban, some traders had exploited transhipment routes via the UAE to bypass direct import restrictions. Dry dates grown in Pakistan were re-packaged and labelled as of UAE origin.

While some shipments cleared Indian Customs, many were later detained amid suspicions of origin mis-declaration. The DRI seized multiple consignments of dry dates allegedly sourced from Pakistan but declared as UAE goods.

The Bombay High Court, in one recent case, ordered the release of a 56-tonne consignment declared as of Dubai origin when authorities failed to issue a show-cause notice within the prescribed time. The case highlighted the evidentiary challenges faced by enforcement agencies in proving actual country of origin.

Domestic Response in Pakistan

Pakistan’s Trade Development Authority (TDAP) and provincial agricultural bodies have repeatedly urged government intervention. Their measures and demands include:

  • Banning date imports from competing producers like Iran to protect local growers.
  • Upgrading processing facilities and improving drying techniques to meet international hygiene standards.
  • Diversifying export markets to Sri Lanka, Bangladesh, and the Middle East.

However, India remains the largest historical buyer of Pakistani dry dates — consuming more than half of Pakistan’s exports in normal years. Without that market, farmers in Sindh’s Khairpur, Sukkur, and Nara regions have suffered massive financial losses. Reports suggest some growers have even cut down date palms due to unprofitability.

Effects on Prices, Markets, and Illicit Trade

The combined effect of duties, bans, and enforcement has reshaped the subcontinental dry date market:

In India

  • Prices surged by 40–60% in retail markets such as Indore and Mumbai.
  • Dependence shifted to costlier imports from Iran, Iraq, and the UAE.
  • “Affordable” dry dates — once a staple during fasting and festivals — became a premium commodity.

In Pakistan

  • Oversupply led to drastic price crashes at farm level.
  • Storage and processing costs mounted, and quality degradation became a serious issue.
  • Exporters turned to grey channels or regional diversification, but margins remain thin.

Smuggling & Mis-declaration

  • Persistent smuggling networks attempt to bypass bans via Dubai or Oman.
  • The DRI has intensified checks on shipments labelled “UAE origin.”
  • Several seizures of date consignments from Jebel Ali have been reported since mid-2025.

Enforcement and Legal Complexities

A recurring issue is proof of origin. When dates are re-packaged or re-labelled in intermediary countries, documentary verification becomes difficult.
Customs and intelligence agencies rely on:

  • Bill of lading,
  • Port of loading data,
  • Packaging inspection,
  • and forensic residue checks.

However, these methods often fail to conclusively establish Pakistani origin, leading to legal disputes and court interventions — as seen in the Bombay High Court case.

Broader Implications

StakeholderImpact
Pakistani FarmersLost main export market; income collapse; stockpile accumulation; some shifting to alternative crops.
Indian ConsumersHigher prices, reduced supply, and increased dependence on Iranian or UAE varieties.
Trade Enforcement AgenciesStruggling with origin verification and smuggling cases.
Regional Trade BalancePakistan’s date export earnings declined; India’s import costs rose.

Quality & Safety Concerns

Experts have also raised issues over hygiene and aflatoxin contamination in some Pakistani date batches.
Upgrading drying yards, fumigation, and value-added packaging are seen as essential steps if Pakistan wants to re-enter high-value markets like the EU or maintain competitiveness regionally.

Conclusion

The India–Pakistan dry dates trade, once a modest but steady cross-border exchange, now stands effectively dismantled. From the 2019 tariff shock to the 2025 import prohibition, the sector’s decline illustrates how swiftly political decisions can disrupt deeply interlinked agricultural economies.

For Pakistani growers, the future lies in market diversification and value-added production. For India, balancing national security imperatives with consumer and importer interests remains a policy challenge — one that underscores how trade and geopolitics remain inseparable on the subcontinent.

Read More: Section 43B(h): A Provision Meant to Protect MSMEs Is Now Hurting Them — Urgent Review Needed

Mariya Paliwala
Mariya Paliwalahttps://www.jurishour.in/
Mariya is the Senior Editor at Juris Hour. She has 5+ years of experience on covering tax litigation stories from the Supreme Court, High Courts and various tribunals including CESTAT, ITAT, NCLAT, NCLT, etc. Mariya graduated from MLSU Law College, Udaipur (Raj.) with B.A.LL.B. and also holds an LL.M. She started as a freelance tax reporter in the leading online legal news companies like LiveLaw & Taxscan.
donate