Pakistan SRO 750(I)/2025 — bilateral and transit trade ban on Indian-origin goods

Mechanism

SRO 750(I)/2025 invokes the federal government's general powers under sub-section (1) of Section 3 of the Imports and Exports (Control) Act, 1950 — the same statutory hook used for Pakistan's customs and external-trade prohibitions since independence. The order is broader than a conventional bilateral trade suspension because it captures third-country flows that touch Pakistani territory or jurisdiction: it bans Indian-origin imports into Pakistan, transit of India-origin cargo through Pakistan to third countries (sea/air), and exports from third countries to India that move through Pakistan by any mode.

The action is the formal escalation of the longer-running freeze in South Asian bilateral trade that began with India's 2019 withdrawal of Most-Favoured-Nation status from Pakistan after the Pulwama–Balakot crisis, and it follows the April 2025 Pahalgam attack and the subsequent five-day kinetic exchange between the two countries in early May 2025. Crucially, the 10 May 2025 ceasefire did not lift the SRO — Pakistan retained the trade ban as a residual instrument even after kinetic de-escalation.

The 8 May 2025 Ministry of Commerce clarification memorandum carved out two narrow exemptions: (a) Reshipment-on-Board cargo where Indian origin goods are not unloaded into Pakistani customs territory, and (b) pre-existing bills of lading and letters of credit issued before 4 May 2025. Both exemptions reflect carrier and bank lobbying for contractual continuity rather than any softening of the underlying prohibition.

Downstream implications

• Shipping and transhipment: Karachi and Port Qasim lose

India-origin transit volume, with freight rerouted via direct India-to-third-country lanes (Colombo, Salalah, Jebel Ali, Singapore). Maersk and other liner operators issued customer advisories within days warning of bookings being declined.

• Letters of credit / trade finance: counterparties with active

exposure to mixed-flag bills issued before 4 May 2025 received partial relief; new India-routed L/C issuances through Pakistani banks effectively halted.

• Afghan transit trade interface: the order interacts with

Pakistan's Afghan-Pakistan Transit Trade Agreement, with knock-on effects on Afghan importers historically using Indian ports for inbound flows; further follow-on instructions from the Afghan Transit Trade Co-ordination Authority remain to be tracked.

• Permanence risk: the post-Pulwama 2019 measures have proved

persistent across changes of government in both countries; SRO 750 is plausibly a multi-year structural feature rather than a transient crisis instrument.

Open questions

• Whether India follows with reciprocal extra-territorial transit

prohibitions (no formal SRO-equivalent identified to date).

• Whether the SRO is rescinded, narrowed, or amended over the next

12 months — and whether any rescission carries forward the RoB exemption as a permanent policy.

• Whether the 2025 measure prompts a re-examination of the SAARC

trade preferences framework, dormant since 2016.

• Effective enforcement at the China–Pakistan Karakoram corridor and

whether CPEC-routed flows are construed as in-scope.