Pakistan no longer 'Most Favoured Nation': India

Last Updated: Fri, Feb 15, 2019 12:06 hrs
Arun Jaitley 1200

New Delhi: Union Finance Minister Arun Jaitley on Friday announced that the "Most Favoured Nation" status which was granted to Pakistan stands withdrawn.

This decision was taken during the Cabinet Committee on Security meeting held a day after the worst-ever terror attack in Jammu and Kashmir.

A suicide bomber on Thursday rammed an SUV packed with explosives into a Central Reserve Police Force bus on the Srinagar-Jammu highway in Pulwama district, killing at least 45 troopers, injuring 38 and leaving the security establishment stunned.

The CRPF convoy comprised 78 buses in which around 2,500 personnel were travelling from Jammu to Srinagar.

Jaitley said that the government would ensure all diplomatic steps towards isolating Pakistan in the diplomatic community.

"The Ministry of External Affairs (MEA) will initiate all possible diplomatic steps that have to be taken to ensure complete isolation of Pakistan, of which incontrovertible evidence is available, for having a direct hand in this gruesome incident," Jaitley said.

"As far as the security forces are concerned, they will be taking all possible steps to ensure that full security is maintained and that those who have committed and actively supported this heinous act are made to pay a heavy cost," he added.

India & Pakistan MFN status:

According to India's commerce ministry, trade between the two countries was $2.28 billion in 2016-17.

Although India has accorded Pakistan the MFN status in accordance with WTO principles and rules, Pakistan is yet to accord similar policies. In fact, Pakistan initiated the Non-Discriminatory Market Access (NDMA) agreement citing political mistrust and border conflicts.

According to a PTI story dated November 2018, Pakistan's commerce minister said there were no plans to grant India the trade status. This, in spite of Pakistan's Prime Minister Imran Khan sharing his keenness for furthering peace between the two countries.

Ironically, Pakistan at that time was in talks with China over FTA (Foreign trade agreements) but was yet to even consider a review of the MFN status.

What is the concept of Most Favoured Nation?

A country is accorded this status to ensure non-discriminatory trade in line with the provisions of the WTO. According to the WTO, a member cannot discriminate between its trade partners and hence a special status granted to a trade partner must be extended to all members of the WTO.

Minister of State in the Ministry of External Affairs, MJ Akbar in a written reply to a question during a Rajya Sabha proceeding had clarified on the MFN status to Pakistan. The question sought to know if there was a review of MFN status granted to Pakistan. This, post the Uri attack. And also details for the inaction.

Akbar in his reply said that the MFN status accorded to Pakistan was not in review. "Presently, no proposal to review Most Favoured Nation status to Pakistan is under consideration. India has accorded Most Favoured Nation Status to all WTO members, including Pakistan, in accordance with provisions of the Article 1 of General Agreement on Tariffs and Trade, 1994. It is unfortunate that Pakistan has not fulfilled its international obligations in this regard, so far," his reply added.