Despite calls after Uri attack, India yet to strip Pakistan of MFN status

India has not yet decided on stripping Pakistan of the “Most Favoured Nation” for trade status, although it has been under review since the September 2016 terror attack at Uri in Kashmir.

After the terror attack on the Indian Army base at Uri in northern Kashmir on September 18 last year, the government had initiated a review of the “Most Favoured Nation” or MFN status that India had granted to Pakistan for bilateral trade. Though 11 months passed since then, the government is yet to take a call on revoking the status, which India had granted to Pakistan without reciprocation from the neighbouring country.

A report of the Parliamentary Standing Committee on External Affairs quoted the Ministry of Commerce informing it that no decision had been taken so far on the withdrawal of the “Most Favoured Nation” or MFN status India had granted to Pakistan for bilateral trade.

The parliamentary panel submitted the report to the Lok Sabha recently.

The panel noted Pakistan's reluctance to reciprocate and accord India the MFN status. It recommended the government to make all possible efforts to persuade Pakistan to reciprocate by extending the MFN status to India.

The attack on the Indian Army base at Uri in Kashmir had been carried out by four terrorists, who had sneaked into India from territory under control of Pakistan. They had killed 18 soldiers before all of them had been gunned down. Another Indian Army soldier had later succumbed to his injuries.

The incident had triggered outrage as it had come just months after a similar terror attack on the Indian Air Force base at Pathankot in Punjab in January 2016. There had been calls within and outside the ruling Bharatiya Janata Party for the government to withdraw the MFN status India had granted to Pakistan in 1995 in accordance with its obligation as a member of the World Trade Organization.

Arjun Meghwal, Minister of State for Finance, had told journalists on September 22, 2016, that the Government would review India's decision to grant MFN status to Pakistan. “Promoting shared prosperity with all our neighbours has been government’s priority but terrorism cannot be the commodity exported. We will undertake a review based on our security and trade interests,” Vikas Swarup, the spokesperson of the Ministry of External Affairs, had said on October 6, 2016.

The Ministry of Commerce informed the parliamentary panel that Pakistan had in 2012 agreed on a roadmap for normalization of trade with India, but it had not adhered to any of the commitments it had made.