New Delhi: In the wake of recent Uri terror attack in which 18 Indian soldiers were killed, Prime Minister Narendra Modi has called for a review meeting in which Pakistan’s Most Favoured Nation (MFN) status is likely to be withdrawn.
The meeting, which will take place on September 29, is likely to be attended by senior officials from the Prime Minister’s Office (PMO) and the Ministry of External Affairs, the sources in the PMO revealed.
India granted the MFN status to Pakistan in 1996. By virtue of the status, Pakistan gets low trade tariff and high import quota. On the other hand, despite its assurance, Pakistan has not returned the favour to India till date.
The MFN status is granted to a country in accordance with international trade practices and World Trade Organisation (WTO) regime.
According to the MFN principle of the WTO’s General Agreement on Tariffs and Trade (GATT) — to which India is a signatory/contracting party — each of the WTO member countries (including India and Pakistan in this case), should “treat all the other members equally as ‘most-favoured’ trading partners.”
According to Associated Chambers of Commerce (Assocham), out of India’s total merchandise trade of USD 641 billion in 2015-16, Pakistan accounted for a meagre USD 2.67 billion.
India’s exports to the neighbouring country worked out to USD 2.17 billion, or 0.83 per cent, of the total Indian outward shipments while imports were less than USD 500 million, or 0.13 per cent, of the total inward shipments.
The decision to review the MFN status came a day after Modi chaired another review meeting of the 56-year-old Indus Water Treaty in which it was decided that India will “exploit to the maximum” the water of Pakistan-controlled rivers, including Jhelum, as per the water sharing pact.
Modi consulted with National Security Adviser Ajit Doval, Foreign Secretary S Jaishankar and other top officials on Monday to discuss whether a reconfiguration of the Indus Waters Treaty with Pakistan was among the steps that the government should take as a response to attacks from Pakistani soil.
“Blood and water cannot flow together,” the PM had said in the meeting.
These developments come at a time when India and Pakistan are engaged in aggressive diplomatic posturing after Uri terror attack of September 18 when four terrorists had sneaked into a military base, thrown grenades and opened fire, causing the most number of deaths that the Indian army has seen in years.
The militants, said to be from terror outfit Jaish-e-Mohammed whose chief Masood Azhar is based in Pakistan, were killed in an intense three-hour gun battle.
