India withdraws ‘Most Favoured Nation’ status from Pakistan; bilateral trade set to plummet
New Delhi, Feb 15 (KNN) Following the terrorist attack on CRPF convoy in Jammu and Kashmir's Pulwama district which killed over 42 CRPF personnel, India has withdrawn the Most Favoured Nation (MFN) status given to Pakistan.
The bilateral trade between India and Pakistan which stood close Rs. 17000 crore (2016) is set to shrink further following MFN withdrawal by India.
While all signatories are required to extend MFN status to each other, Pakistan never extended the MFN status to India, while India did.
The MFN clause is one of the most important principles under WTO which implies that if a country extends favourable duty concession to one country, it will have to extend to all other member countries under WTO.
A recent World Bank report has predicted that bilateral trade potential between India and Pakistan is close to $37 billion if both countries remove trade barriers. However, the bilateral trade has always remained below potential due to strained political relations between eth neighbours.
“Although a lot of trade between India and Pakistan happens through third countries such as Dubai, still withdrawal of MFN status will see reduction in trade,” says a Delhi based exporter to Pakistan.
Union Finance Minister Arun Jaitley while addressing the press after concluding the Cabinet Committee on Security (CCS) meeting at 7, Lok Kalyan Marg today said that the MFN status to Pakistan stands withdrawn.
A CRPF convoy comprising 78 buses in which around 2,500 personnel were travelling from Jammu to Srinagar was targeted by terrorist group Jaish-e-Muhammad (JeM) on February 14.
A bus, in which 42 CRPF personnel were travelling, was extensively damaged in the blast which was followed by firing on the vehicle. (KNN Bureau)