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India Withdraws Pakistan's Most Favoured Nation (MFN) Status. Here's What This Means

Written By Aishwaria Sonavane | Mumbai | Published:

Hack:

  • The Most Favoured Nation Status essentially grants favourable trade conditions between two nations but does not grant preferential treatment
  • The MFN status was granted to the neighbour in 1996 when India became a part of World Trade Organisation and signed the General Agreement on Tariffs and Trade (GATT).
  • However, in 20 years, Pakistan did not reciprocate to grant India the same status. 

India has withdrawn the Most Favoured Nation (MFN) status accorded to Pakistan in light of the dastardly terror attack in Pulwama on the CRPF in which 37 jawans have been martyred, perpetrated by Pakistan-backed Jaish-e- Mohammad terror organisation founded by Masood Azhar.

Addressing a briefing immediately after a meeting of the Cabinet Committee on Security (CCS) under the chairmanship of Prime Minister Narendra Modi at his 7, LKM residence, Union Minister Arun Jaitley announced that there was incontrovertible evidence of Pakistan's hand behind the ghastly terror attack, and accordingly, the MEA had been asked to take all possible diplomatic steps to ensure the "complete isolation from the international community of Pakistan", along with withdrawal of the MNF status that had been unilaterally been granted to Pakistan by India. 

READ| India Withdraws Pakistan's Most Favoured Nation (MFN) Status: Union Minister Arun Jaitley Says There Is Incontrovertible Evidence Of Pak's Direct Hand In Pulwama Terror Attack

What is Most Favoured Nation (MFN) status? 

The Most Favoured Nation Status essentially grants favourable trade conditions between two nations but does not grant preferential treatment. Under MNF there will be no discriminatory tariffs on products being imported from Pakistan, as compared to the product being imported from any other nation. 

The WTO says, "Grant someone special favour (such as a lower customs duty rate) and you have to do the same for all other WTO members."

When did India grant the status to Pakistan?

The MFN status was granted to the neighbour in 1996 when India became a part of World Trade Organisation and signed the General Agreement on Tariffs and Trade (GATT). However, in 20 years, Pakistan did not reciprocate to grant India the same status. 

In November 2018, Islamabad said, "At present, we have no immediate plans to grant MFN status to India."

Trade between India and Pakistan

Pakistan allows the export of only 137 products to India via the Wagha border. While India primarily exports dyes, chemicals, vegetables, cotton and so on. The bilateral trade between the two neighbour nations stands at $2.28 billion (in 2016-2017)

READ| Pakistan Issues Statement On Dastardly Pulwama Terror Attack On CRPF, Brazenly Slips In 'Indian Occupied Kashmir' Mention

Speaking minutes later, PM Modi also warned Pakistan that its nefarious designs would not succeed:

At the moment, the international community across geographies has expressed solidarity to India, condemning the attack. The White House has sent out a stringent message to Pakistan to immediately end "support" and "safe haven" to all terror groups. While Russian President Vladimir Putin has affirmed Russia's support to strengthen in counter-terrorism cooperation with India. 

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