India withdraws Most Favoured Nation, MFN Status to Pakistan, Pakistan stands to lose concessions on tariff, freer markets and a free flow of goods that come with the MFN status. Most Favoured Nation status is given to an international trade partner to ensure non-discriminatory trade between all partner countries of the WTO.
Following the Pulwama terror attack, Prime Minister Narendra Modi says Pakistan will get a “befitting response”. Pulwama Attack, The decision by India to withdraw MFN status to Pakistan is intended to isolate the country diplomatically and squeeze its industry.
Finance Minister Arun Jaitley said the Ministry of External Affairs will initiate all possible steps to ensure complete isolation from the international community of Pakistan, which is expected to have a hand in the attack carried out by terror outfit Jaish-e-Mohammed.
In fact, India continues to maintain a substantial trade surplus, despite the fact that Pakistan is yet to transition fully to MFN status for India. Pakistan’s exports to India have consistently been about a fourth of what it imports from India, the MFN concessions notwithstanding.
What is MFN status?
Most Favoured Nation status is given to an international trade partner to ensure non-discriminatory trade between all partner countries of the WTO.
Prime Minister Narendra Modi had put the status under review after the Uri attacks of 2016, but it was only revoked earlier today after the Cabinet Committee on Security met to discuss the security situation in Kashmir.
Arun Jaitley briefing and Narendra Modi assured people that the perpetrators of the terror strike would be punished. He said it was important that the country spoke in one voice after the terror strike.