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The Union government has hiked the basic customs duty on all goods imported from the neighbouring country to 200 percent with immediate effect.
This comes after India revoked the 'Most Favoured Nation' (MFN) status to Pakistan on February 15 following the Pulwama terror strike, that killed 50 CRPF jawans.
"India has withdrawn MFN status to Pakistan after the Pulwama incident.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," Finance Minister Arun Jaitely said in a tweet.
India granted the MFN status to Pakistan in 1996, but the neighbouring country had not reciprocated. Under the MFN pact, a WTO member country is obliged to treat the other trading nation in a non-discriminatory manner, especially with regard to customs duty and other levies.
Increasing duties would significantly hit Pakistan's exports to India, which stood at $488.5 million (around Rs 3,482.3 crore) in 2017-18.
The main items which Pakistan exports to India include fresh fruits, cement, petroleum products, bulk minerals and ores and finished leather.
The two main items imported from Pakistan are fruits and cement, on which the current customs duty is 30-50 percent and 7.5 percent, respectively. Slapping an import duty of 200 percent effectively means almost banning the imports from Pakistan, official sources told PTI.
India can also restrict trade of certain goods and impose port-related restrictions on Pakistani goods.
Total India-Pakistan trade has increased marginally to $2.41 billion in 2017-18 as against $2.27 billion in 2016-17. India imported goods worth $488.5 million in 2017-18 and exported goods worth $1.92 billion.
During April-October 2018-19, India's exports to Pakistan stood at $1.18 billion, while imports were $338.66 billion.
With inputs from PTI
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