India withdrew MFN Status of Pakistan

India Withdraws MFN Status of Pakistan

Question: In the backdrop of Pulwama attack, India made few decisions. Choose the incorrect statements mentioned below:
(a) India withdrew the most favored nation status of Pakistan on the aftermath of Pulwama
(b) India has granted the MFN status way back in 1996
(c) MFN offers preferential treatment to the nation
(d) Currently the value of trade between India and Pakistan is $ 2.61 billion
Answer: (c)
Related facts:

  • India withdrew the Most Favored Nation (MFN) status of Pakistan on 15th February, 2019, a day after Pulwama attack. It also raised the custom duty to 200 percent on all goods imported from Pakistan.
  • The importance of the MFN is shown in the fact that it is the first clause in the General Agreement on Tariffs and Trade (GATT). India has granted the MFN status way back in 1996.
  • India has invoked a security exception clause of the World Trade Organization to withdraw this status.
  • Under the MFN pact, a WTO member country is obliged to treat other trading nation in a non-discriminatory manner, especially with regard to customs duty and other levies.
  • During April-October 2018-19, India’s exports to Pakistan stood at $1.18 billion, while imports were $338.66 billion.
  • India mainly exports raw cotton, cotton yarn, chemicals, plastics, manmade yarn and dyes to Pakistan, and the imports include fresh fruits, cement, petroleum products and mineral ore.

By Ramayan Upadhyay

Links:
https://www.bloombergquint.com/business/india-hikes-import-duty-on-pakistani-goods-to-200-pc#gs.HU8e5h7d
https://www.thehindubusinessline.com/news/national/pulwama-attack-india-withdraws-most-favoured-nation-status-to-pakistan/article26278577.ece
https://www.indiatoday.in/india/story/india-withdraws-most-favoured-nation-status-to-pakistan-what-it-means-1456746-2019-02-15