Modi government raises taxes on Pakistan goods after terror hit

MUMBAI • India raised duties on all goods imported from Pakistan following the withdrawal of most-favoured nation status to its neighbour after a terror attack last week killed dozens of Indian paramilitary policemen.

The basic Customs duty on all Pakistan exports to India will be increased to 200 per cent immediately, Finance Minister Arun Jaitley said in a post on Twitter.

Withdrawing the status to Pakistan could affect US$2.61 billion (S$3.5 billion) worth of bilateral trade, an Indian government official said last Friday. Imports from Pakistan include fruit, salt, fuel and fertiliser, according to the International Trade Centre.

The move comes after over 40 paramilitary personnel died and many others were injured in an assault last Thursday on a convoy in Kashmir. Jaish-e-Mohammad, a Pakistan-based terror group, claimed responsibility for the attack that took place in Pulwama near the state capital Srinagar.

Pakistan denied the allegations. Pakistani Finance Minister Asad Umar said withdrawal of most-favoured nation status by India would not have any consequences for the economy.

Last Friday, Prime Minister Narendra Modi said India will give a befitting reply to the attack.

"The security forces have been given full freedom to decide," said Mr Modi. "I want to tell the terror groups and their sponsors that they have committed a grave mistake for which they will now have to pay a very heavy price."

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A version of this article appeared in the print edition of The Straits Times on February 18, 2019, with the headline Modi government raises taxes on Pakistan goods after terror hit. Subscribe