In the wake of Uri attack, Prime Minister Narendra Modi has called for a review meeting of the ‘Most Favoured Nation’ status granted to Pakistan.
According to media reports, the meeting will take place on Thursday and it is expected that officials from the Ministry of External Affairs and Commerce Ministry would attend the meeting.
On Monday, the Congress had demanded the withdrawal of the MFN status to Pakistan and an imposition of economic sanctions.
Both the countries, India and Pakistan, are signatories to this, which means they have to treat each other and rest of WTO member countries as favoured trading partners.
According to Assocham, out of India’s total merchandise trade of $641 billion in 2015-16, Pakistan accounted for a meagre $2.67 billion.
Reports are rife that India is considering withdrawal of the Most Favoured Nation (MFN) status to Pakistan in the wake of the Uri terror attack, where 18 soldiers were killed.
The MFN status was accorded in 1996 according to India’s commitments as a member of the World Trade Organisation (WTO). According to the MFN principle of the WTO’s General Agreement on Tariffs and Trade (GATT) – to which India is a signatory/contracting party – each of the WTO member countries (including India and Pakistan in this case), should “treat all the other members equally as ‘most-favoured’ trading partners.”
India has also decided to revisit the 56-year-old Indus Waters Treaty with Pakistan after PM Modi on Monday bluntly said that “blood and water cannot flow together”.
“Most Favoured Nation” (MFN) is a status or level of treatment accorded by one state to another in international trade. According to the WTO, though the term ‘MFN’ suggests special treatment, it actually means non-discrimination.
According to ZeeNews report, the government has decided there would no meeting of the Permanent Indus Commission set up to overlook implementation of the treaty till “terror is in the air”, and that India would also take a final call on the unilateral part of suspension of the Tulbul water navigation project in Jammu and Kashmir depending on what Pakistan next step.