India on 15th Feb withdrew the most favoured nation MFN) status given to Pakistan to convey a strong message after a Pulwama terror strike. The decision to revoke the MFN status to Pakistan was taken at a meeting of the Cabinet Committee on Security (CCS) chaired by Prime Minister Narendra Modi at his residence in New Delhi.
Militants targeted a convoy of 78 vehicles carrying more than 2,500 Central Reserve Police Force jawans from Jammu to Srinagar on 14th Feb.
What is the MFN status?
Various countries around the world came together to ease the trade and so was the WTO was formed. All the member countries of the World Trade Organisation (WTO), which came into being in 1995.
India accorded the MFN status to Pakistan a year after the formation of WTO. However, Pakistan never reciprocated the move, largely due to its domestic political equations.
Advantages of MFN:
It rather discrimination compared to tariff offered to other countries. Trade volume between the two countries is worth about $2.30 billion, which is less than 0.40 per cent of India’s total trade.
why did India revoke MFN status?
Pakistan enjoyed the MFN status for nearly 23 years. India did not withdraw the MFN status even during the Kargil War of 1999, or terror attacks on Parliament in 2003 and in Mumbai in 2008 or in the aftermath of the Uri attack, in which 19 soldiers were killed in 2016. But still, things never changed as expected.
On 15th Feb, India gave a signal for withdrawing the MFN status, also decided to “initiate” steps for complete isolation of Pakistan in the wake of its continued support to terror outfits carrying out attacks in India.
On 16th Feb, India imposed an import tax of 200% on all goods imported from Pakistan.