INCREASED CUSTOM DUTIES ON PAKISTAN: WHAT DOES IT MEAN?
The recent terror attack in the Pulwama district of Jammu and Kashmir killed 40 CRPF soldiers of the Indian Army. With Jaish-e-Mohammad, a Pakistan based terror outfit claiming to be the deviser of the attack, India responded by removing Pakistan from the MFN (Most Favored Nation) status and raising the customs duties on goods coming from the country to 200%.
Most Favored Nation is a status given to the member countries of General Agreement on Tariffs and Trade (GATT) of the World Trade Organisation (WTO), wherein countries have to treat one another as favored trading partners in terms of imposing customs duties on goods. A country that provides MFN status to another country has to give trade preference to that country. India withdrew the same MFN status from Pakistan, which was given to it in 1996.
Most Favored Nation is a status given to the member countries of General Agreement on Tariffs and Trade (GATT) of the World Trade Organisation (WTO), wherein countries have to treat one another as favored trading partners in terms of imposing customs duties on goods. A country that provides MFN status to another country has to give trade preference to that country. India withdrew the same MFN status from Pakistan, which was given to it in 1996.
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| Image Credit: dawn.com/news/1101252 |
The removal of MFN status from Pakistan means that India can now increase the customs duties on goods coming from Pakistan to any extent. This move is to likely affect $ 488.5 million worth of goods that Pakistan exports to India, that largely consists of items like fruits, cement, leather, chemicals, and spices. Even though it's being said that the move would not affect either of the countries much, this step largely has a more symbolic value.
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