India to review Most Favoured Nation status given to Pakistan, PM Modi to chair meeting on Thursday

NEW DELHI: A day after reviewing the Indus Waters Treaty, India has now decided to review the ‘Most Favoured Nation’ Status given unilaterally to Pakistan.

Prime Minister Narendra Modi will chair a review meeting on September 29.

Officials from external affairs ministry and commerce ministry will attend the meeting.

The move follows the Modi government’s decision to look for options beyond diplomatic pressure after the terror attack on an Army camp at Uri along the line of control that killed 18 soldiers.

The MFN status was accorded in 1996 under WTO’s General Agreement on Tariffs and Trade (GATT). Both India and Pakistan are signatories to this which means they have to treat each other and rest of WTO member countries as favoured trading partners.

According to Assocham, 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 per cent, of the total Indian outward shipments while imports were less than $500 million, or 0.13 per cent, of the total inward shipments.

Prime Minister Modi had on Monday chaired a meeting to review the 58-year-old Indus Waters Treaty with Pakistan under which both countries share water of 6 rivers.

Taking the offensive right into the heart of Pakistan, India decided on Monday to suspend the meeting of the Indus Water Commission and explore ways to use its share of water of rivers flowing into Pakistan, besides hinting that it could revive construction of the Tulbul project in Jammu & Kashmir.

“Blood and water cannot flow simultaneously,” Prime Minister Narendra Modi told a meeting where the decisions designed to make Pakistan pay for the terrorist attack on the Uri Army camp were taken, extending the retaliation against the strike beyond efforts to isolate Pakistan diplomatically.

In fact, sources said, India could even consider walking out of the Indus Water Treaty (IWT) if Pakistan does not rein in terrorists, adding that the water-sharing pact is not sacrosanct.

Bureau Report