India Withdraws Most-Favoured Nation Status To Pakistan After Pulwama Attack
Protestors holding Tricolor raise slogans during a demonstration against the Pulwama terror attack, in Jammu. (Image Courtesy: PTI)

India Withdraws Most-Favoured Nation Status To Pakistan After Pulwama Attack


India withdrew the “most-favoured nation” status to Pakistan after the Pulwama terror attack, a move which would enable India to increase customs duty on goods coming from the neighbouring country.

The most-favoured nation status to Pakistan stands revoked, said Finance Minister Arun Jaitley in a media briefing after the meeting of the Cabinet Committee on Security. The meet was chaired by Prime Minister Narendra Modi to discuss the security scenario in Jammu and Kashmir in the wake of the Pulwama terror attack.

At least 37 Central Reserve Police Force personnel were killed and five injured on Thursday in one of the deadliest terror attacks in Jammu and Kashmir when a Jaish suicide bomber rammed a vehicle carrying over 100 kg of explosives into their bus.

India granted the most-favoured nation status to Pakistan in 1996, but the neighbouring country has not yet reciprocated.

Also read: Kashmir Tragedy Has Many Authors

The most-favoured nation status was accorded under World Trade Organization’s General Agreement on Tariffs and Trade. Both India and Pakistan are signatories to this; and are members of the WTO, which means they have to treat each other and the other WTO member countries as favoured trading partners in terms of imposing customs duties on goods.

Removal of this status means India can now enhance customs duties to any level on goods coming from Pakistan, a trade expert said. India mainly exports cotton, dyes, chemicals, vegetables and iron and steel; while it imports fruits, cement, leather, chemicals and spices.

Total India-Pakistan trade increased marginally to $2.41 billion in 2017-18 against $2.27 billion in 2016-17. India imported goods worth $488.5 million in 2017-18 and exported goods worth $1.92 billion during the period.

Under the most-favoured nation pact, a WTO member country is obliged to treat the other trading nation in a non-discriminatory manner, especially with regard to customs duty and other levies.

Also read: Carnage In Kashmir: Price Of No Policy On Pakistan 

Former Indian High Commissioner Sharat Sabharwal And Manoj Joshi, former Distinguished Fellow At ORF On India's Options After The Pulwama Attack.

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