India's Cargo Restrictions on Pakistan: Impact on Freight Prices and Shipping Timelines

Image Credits: Wikipedia

A recent publication by Dawn highlights India’s recent decision to prohibit all vessels transporting goods from or to Pakistan from utilizing its ports. This action has triggered a significant increase in shipping costs and considerable delays in freight services, as noted by industry representatives from Pakistan.The ban took effect on May 2, 2025, following a terror incident in Pahalgam on April 22. It encompasses both direct imports and the transit of Pakistani products through Indian waters.

Traders in Pakistan are expressing concerns over the logistical challenges this ban has introduced. Major cargo ships are now avoiding Pakistani ports due to these restrictions, forcing importers to depend on smaller feeder vessels that are not only slower but also more expensive.

Javed Bilwani, who heads the Karachi Chamber of Commerce and Industry, mentioned that shipments from Pakistan are experiencing delays ranging between 30 to 50 days. He emphasized that transportation expenses have surged because operating these smaller vessels is costlier and less efficient.

The disruption has led to increased logistics and insurance costs; however, some exporters argue that their businesses remain relatively stable despite these challenges. Textile exporter Aamir Aziz pointed out that while insurance rates have risen, overall export activities haven’t been drastically impacted since shipping expenses were already elevated prior to this situation.

This scenario poses a particular threat to Pakistan’s export sector which heavily depends on imported raw materials for producing value-added goods.With existing strict import regulations aimed at safeguarding foreign exchange reserves,any further disruptions could significantly affect the nation’s economy.

In response to potential illegal trade routes involving Pakistani goods through third countries, India has intensified its enforcement measures. According to PTI news agency reports, operations like ‘Operation Deep Manifest’ have been initiated by Indian authorities targeting such violations.

During one operation under this initiative, india’s Directorate of Revenue Intelligence (DRI) confiscated 39 containers falsely labeled as originating from the UAE. These containers contained over 1,100 metric tonnes of goods valued at Rs 9 crore but were actually sourced from Pakistan after being transshipped via Dubai.

Investigations uncovered financial links between Indian importers and Pakistani exporters involved in this scheme; one individual associated with a trading firm implicated in the case was arrested.

The Finance Ministry clarified that this operation was intricate due to intermediaries operating within both Pakistan and the UAE attempting to obscure the true origin of these products.

India had previously imposed an exorbitant import duty of 200% on items coming from Pakistan following the Pulwama attack back in 2019—effectively halting formal trade relations between both nations altogether.

As per PTI’s findings, bilateral trade plummeted dramatically—from $2.41 billion in 2018 down to $1.2 billion by 2024—with exports from Pakistan dwindling sharply from $547.5 million just five years ago down to a mere $480 thousand today.

indian officials assert that such restrictions are crucial for maintaining national security as well as economic stability while preventing exploitation of trade channels.