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.

• 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