New Delhi (National Times) – India has hiked tariff on Pakistan’s exports to India after accusing Pakistan of direct involvement in a terrorist attack that left 40 Indian security personnel dead on the disputed Kashmir territory.
“India has withdrawn [Most Favoured Nation] MFN status to Pakistan after the Pulwama incident.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% with immediate effect. #Pulwama,” India’s Finance Minister Arun Jaitley tweeted on Saturday.
The move will affect over $2.1 billion in trade between India and Pakistan.
India accused Pakistan of harbouring Pakistan-based Jaish-e-Mohammad (JeM) the group that perpetrated the attack against Indian security convoy. Pakistani authorities have denied any direct involvement in the incident instead pointing to lapses in Indian security agencies.
The imposition of tariff on Pakistani’s goods comes after Indian Prime Minister Nerranda Mondi promised punitive responses after the attack. Tarrif are taxes imposed on imported goods into a country by the host country. Some governments can use tariff as a tool to sanction or punish foriegn governments for actions that affect the host country’s interest.
“[The] Central government is satisfied that the import duty leviable on all goods originating in or exported from the Islamic Republic of Pakistan…should be increased and that circumstances exist which render it necessary to take immediate action,” Indian government welcomed the move by the Ministry of Finance.