India has revoked the Most Favoured Nation (MFN) status to Pakistan in the aftermath of the terror attacks in Pulwama.
Most Favoured Nation is a treatment accorded to a trade partner to ensure non-discriminatory trade between two countries vis-a-vis other trade partners.
Under WTO rules, a member country cannot discriminate between its trade partners. If a special status is granted to a trade partner, it must be extended to all members of the WTO.
India had granted MFN status to Pakistan in 1996 as per India’s commitments as a WTO member. But Pakistan has not reciprocated it, citing “non-tariff barriers” erected by India as well as huge trade imbalance.
India has withdrawn MFN status to Pakistan under Article 21(Security clause) of the WTO. It will neither have to take permission of the WTO to do so nor will it have to stay within bound rates (import tariff ceilings) it has committed itself to at the multilateral forum.