India tightens scrutiny on suspected Pakistani goods entering via Gulf nations

Amid heightened tensions following the April 22 Pahalgam terror attack and subsequent Operation Sindoor, India is stepping up efforts to prevent indirect trade with Pakistan through Gulf countries. Several media reports suggest that officials in New Delhi are closely monitoring imports from nations like the UAE and Iran to detect possible attempts to disguise Pakistani products as goods of Gulf origin.

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After the terror incident, the Indian government suspended diplomatic and commercial ties with Pakistan, including a complete halt on bilateral trade. However, concerns are now emerging that Islamabad may be using third-party countries, particularly Gulf states, to continue sending its products into India under alternate labels.

Authorities have flagged past instances, such as dates originating from Pakistan being rerouted through the UAE to Indian markets. In response, Indian agencies have introduced tighter inspection protocols, emphasizing verification of labeling, packaging, and country of origin declarations. These stricter checks are designed to ensure compliance with India's trade restrictions and to prevent circumvention via re-export hubs.

Officials believe this re-routing strategy is an abuse of the India-UAE trade agreement, which offers key benefits such as reduced tariffs and streamlined procedures. The scale of trade between India and the UAE makes it a significant area of concern. In FY25 alone, India imported goods worth over $63 billion from the UAE, while exports to the Emirates reached around $36 billion.

Interestingly, Pakistan's exports to the UAE rose by 28% between July 2024 and February 2025, coinciding with India’s post-attack crackdown, further fueling suspicion about potential trade diversion.