New Delhi: India on Friday revoked the most-favoured nation (MFN) status to Pakistan in the aftermath of Pulwama terror attack and, according to sources, is considering punitive actions like significant hike in customs duties, port restrictions and ban on goods imported from the neighbouring country.
In a media briefing after the meeting of the Cabinet Committee on Security (CCS), finance minister Arun Jaitley said the MFN status to Pakistan stands revoked.
Withdrawal of the MFN status would significantly hit Pakistan's exports to India, which stood at USD 488.5 million (around `3,482.3 crore) in 2017-18.
“As the Cabinet Committee on Security (CCS) has decided to withdraw the most-favoured nation status to Pakistan, the government can take punitive actions under the Customs Act and the Foreign Trade (Development and Regulation) Act,” sources said.
Under these laws, the government can restrict trade of certain goods, significantly increase customs duties and impose port-related restrictions on Pakistani goods, they said.
The main items which Pakistan exports to India include fresh fruits, cement, petroleum products, bulk minerals and ores and finished leather.
India granted the MFN status to Pakistan way back in 1996, but the neighbouring country had not reciprocated.
The MFN status was accorded under World Tr-ade Organisation's (WTO) General Agreement on Tariffs and Trade (GATT). Both India and Pakistan are signatories to this, and are members of the WTO.
Under the MFN pact, a WTO member country is obliged to treat the other trading nation in a non-discriminatory manner, especially with regard to customs duty and other levies. Withdrawal of the status would mean that India could impose heavy customs duties and discriminate Pakistani goods vis-a-vis similar items of other trading partners.