Current Affairs

After Pulwama terror attack India withdraws MFN status given to Pakistan

One day after the Pulwama terror attack on 14th February 2019, India has taken a stern step of withdrawing the Most Favoured Nation or MFN Status of Pakistan.
After Pulwama terror attack India withdraws MFN status given to Pakistan
  • This move would enable India to increase customs duty on goods coming from Pakistan.
  • The decision was taken in the meeting of the Cabinet Committee on Security (CCS) that took place on 15th February 2019.

About the MFN status:

  • The MFN status is given under WTO's General Agreement on Tariffs and Trade (GATT). It is given to an international trade partner to ensure non-discriminatory trade amongst all the members of WTO.
  • As per the first clause in the General Agreement on Tariffs and Trade (GATT), a country providing MFN status to another country has to provide concessions, privileges, and immunity in trade agreements.
  • WTO states that if a special status is granted to one trade partner, the country is required to extend it to all members of the WTO without discrimination or any special treatment.
  • An MFN status helps reduce trade barriers and results in a reduction in tariffs especially in customs duty. This in turn strengthens trade-ties between the two countries.
  • As India and Pakistan both are members of the WTO, both are required to grant MFN status to each other and other partner countries.

History of trade & MFN Status Between India and Pakistan?

  • India had granted MFN status to Pakistan in 1996, a year after the formation of WTO but Pakistan hasn't accorded MFN status to India till now.
  • The total India-Pakistan trade has increased marginally to $2.41 billion in 2017-18 as compared to $ 2.27 billion in 2016-17.
  • India had imported goods worth $488.5 million in 2017-18 and exported goods worth $ 1.92 billion in that fiscal.
  • India's exports mostly include cotton, dyes, chemicals, vegetables and iron and steel; while its imports include fruits, cement, leather, chemicals while its imports include fruits, cement, leather, chemicals and spices.

About the Pulwama Terror Attack:

  • 44 CRPF personnel were martyred in Jammu and Kashmir's Pulwama district on 14th February 2019 when a terrorist attacked with an explosive-laden vehicle into one of the buses of the convoy of the security forces.
  • Terror group Jaish-e-Mohammed has taken responsibility for the attack.
  • There were more than 78 vehicles in the convoy in which 2500 personnels were present.
  • This is the worst terror attack since the Uri attack in 2016.

Question:

Q. India has withdrawn which status given earlier to Pakistan after the Pulwama terror attack?
a. Favoured Trade Partner
b. Highest Favoured Nation
c. Most Favoured Nation
d. Prime Trade Partner
After Pulwama terror attack India withdraws MFN status given to Pakistan After Pulwama terror attack India withdraws MFN status given to Pakistan Reviewed by Inderjeet Virdi on February 16, 2019 Rating: 5

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