India’s Commerce Ministry will inform the World Trade Organisation about its decision to withdraw Pakistan’s Most-Favoured-Nation (MFN) status. India has withdrawn the MFN status due to security reasons, say the officials.
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The officials emphasised saying, “Now, the commerce ministry will notify to the WTO to revoke the MFN status to Pakistan by invoking Article 21 of the WTO which is the security exception.” Indian Ministry of Commerce would work on a list of goods imported from Pakistan over which India would increase the customs duties.
India has decided to withdraw the MFN status to Pakistan, after the Pulwama terror Attacks. The decision would enable India to increase customs duties on goods imported from Pakistan. India imported goods worth USD 488.5 million in 2017-18.
Presently, India’s customs duties on goods to members of the WTO are below the bound level rates. The current customs duties imposed are called applied rates and the level at which one can increase is known as bound rates.
India imports mainly, fresh fruits, cement, petroleum products, bulk minerals, and ores and finished leather. In 1996, India granted the MFN status to Pakistan but the neighbouring country had not yet retaliated. Total India-Pakistan trade has increased marginally to USD 2.41 billion in 2017-18 as against USD 2.27 billion in 2016-17. India imported goods worth USD 488.5 million in 2017-18 and exported goods worth USD 1.92 billion in that fiscal. Indian exports to Pakistan include raw cotton, cotton yarn, chemicals, plastics, yarn and dyes.
Trade experts reacted on the MFN status by saying,” this decision would not have a major implication on bilateral trade between the countries as the value of the trade is below USD 3 billion annually. However, Pakistan can drag India into the WTO’s dispute settlement mechanism on the matter, their case would be weak as they have not yet granted the tag to India”.
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