Modi to review Pakistan's MFN status: India never got any status, says Yashwant Sinha

Prime Minister Narendra Modi on Tuesday called for a meeting to be held on 29 September to review Most Favoured Nation (MFN) status to Pakistan, reported CNN-News18.

Officials from Ministry of External Affairs and the commerce ministry will be attending the meet, the report stated.

Stating that India should review the MFN status, former External Affairs Minister Yashwant Sinha said, "India has always treated Pakistan as a most favoured nation but has not received the same in return."

There have been reports that India is considering withdrawal of the MFN status to Pakistan in the wake of the Uri terror attack. Assocham had on Sunday said that the special privilege has not made much of a difference as trade between the two remains "abysmally" low.

A file image of Prime Minister Narendra Modi. Getty Images.

A file image of Prime Minister Narendra Modi. Getty Images.

What's MFN status?

India had accorded to the most favoured nation status to Pakistan in 1996 according to the commitments under the World Trade Organisation (WTO) which state that the member countries should treat all other trade partners equally.

Firstpost writer, Dinesh Unnikrishnan, says revoking the status with Pakistan wouldn’t mean much for India but is an important signal to the world about the intent by justifying its action citing the issue of national security, he writes.

Out of India's total merchandise trade of $641 billion in 2015-16, Pakistan accounted for a meagre $2.67 billion. India's exports to the neighbouring country worked out to $2.17 billion, or 0.83 percent, of the total Indian outward shipments while imports were less than $500 million, or 0.13 percent, of the total inward shipments.

"In all, trade with Pakistan was equivalent to 0.41 percent of India's global merchandise commerce," said DS Rawat, Secretary General of Assocham.

Explaining that the MFN status or no MFN has not made much of a difference on the bilateral trade, Rawat said, "While India has granted Pakistan the MFN status, Islamabad had not responded... even with the MFN status, Pakistan's exports to India remained less than half a billion dollar."

He said that for political reasons, the businesses have not been showing interest in each other.

"Going forward, as things stand today, almost no movement is seen in the immediate future. Even the symbolic presence of Pakistan exhibitors at the annual India International Trade Fair in November in New Delhi is not expected, whether or not formal ties are snapped or not, given the present state of affairs," said Rawat.

With inputs from PTI

Updated Date: Sep 27, 2016 15:55 PM

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