Pakistan Clarifies Trade Ban Exemption for RoB Cargo Amid India Tensions

The Federal Ministry of Commerce has issued a critical clarification on May 8, 2025, via SRO 750(I)/2025, suspending trade ties with India amid escalating tensions, while ensuring international transit obligations—particularly for Reshipment on Board (RoB) cargo—remain intact, a move with significant tax implications for businesses. Our tax law firm urges clients to brace for Federal Board of Revenue (FBR) scrutiny amid this disrupted trade landscape.

The ban, effective May 4, 2025, halts Indian-origin goods via sea, land, and air, impacting imports, exports, and transit trade, triggered by India’s Notification No. 06/2025-26 banning Pakistani goods, disrupting 6,000-7,000 TEUs weekly from Karachi, per web reports. The Ministry of Maritime Affairs’ Shipping Order No. 01001/2025 bars Indian flag carriers from Pakistani ports, with exemptions for RoB cargo—goods passing through without unloading—reassuring shipping firms amid Pakistan Ship’s Agents Association (PSAA) concerns that 70% of container ships carry Indian goods, risking port call declines. Industry experts predict costlier transshipments via hubs like Jebel Ali or Colombo, per the text.

From a tax law perspective, trade disruptions may affect customs duties under Section 25 of the Customs Act, with importers facing input tax credit challenges under Section 8B of the Sales Tax Act, 1990, as supply chains shift. Exporters must ensure withholding tax (WHT) compliance at 15% on foreign payments under Section 6 of the Income Tax Ordinance, with FBR audits likely to target transit trade adjustments. Web context highlights India’s national security justification, but posts on X reflect skepticism, suggesting economic retaliation overshadows stability claims.

Critically, the narrative of “uninterrupted transit” may mask long-term risks—web sources note India’s broader maritime ban and PSAA warnings of economic strain, while X sentiment questions Pakistan’s tit-for-tat stance, potentially escalating tax volatility. Clients must stay vigilant.

Our firm advises clients to review customs filings, ensure WHT compliance, and prepare for FBR audits, navigating this tense trade environment.