What is Most Favoured Nation Status? India withdraws MFN status to Pakistan

Most favoured nation (MFN) means treating other people equally. Under the World Trade Organisation (WTO) agreements, countries cannot normally discriminate between their trading partners. MFN provides someone special favour to the countries such as a lower customs duty rate for one of their products and which are applicable for all WTO members.

The members of the WTO agree to accord Most Favoured Nation status to each other. Exceptions allow for preferential treatment of developing countries, regional free trade areas and customs unions. Together with the principle of national treatment, MFN is one of the cornerstones of WTO trade law.

A country which provides MFN status to another country has to provide concessions, privileges, and immunity in trade agreements. It is the first clause in the General Agreement on Tariffs and Trade (GATT).

Today India withdrew the 'Most-Favoured Nation' status accorded to Pakistan following the deadly Pulwama terror attack and said it will take all steps to isolate the neighbouring country globally. In a media briefing after the meeting of Cabinet Committee on Security(CCS), Finance Minister Arun Jaitley said that all efforts will be made to ensure that perpetrators of the attack are brought to book.

"The most favoured nation status to Pakistan stands revoked," he said after the CCS meeting at the Prime Minister's residence. India granted MFN status to Pakistan in 1996.