PM Narendra Modi’s meet to review most favoured nation status to Pak Postponed

Mangalore Today News Network

New Delhi, Sep 29, 2016:  In fast-paced developments on Thursday morning, Prime Minister Narendra Modi chaired a meeting of the Cabinet Committee on Security over ceasefire violations by Pakistan, putting off a planned meeting on the review of Pakistan’s "Most Favoured Nation" status after the Uri terror attack.

 

   
PM Modi was to consult with officials of the External Affairs and Commerce ministries.
  
India gave "Most Favoured Nation" status to Pakistan unilaterally in 1996 but Islamabad is yet to reciprocate.
   
Both India and Pakistan are signatories to the World Trade Organisation’s General Agreement on Tariffs and Trade (GATT), which means they have to treat each other and other member countries as favoured trading partners and can’t discriminate against each other.
   
If the government withdraws the move, the impact will be mainly symbolic because bilateral trade between the neighbours represents a fraction - around 0.4 per cent - of India’s overall goods trade.
   
In principle, India will be free to raise tariffs on Pakistani exports, but given the relatively small size of bilateral trade - it was only 2.61 billion dollars last year - it may not have a significant impact.
   
Despite lengthy negotiations over two decades, Pakistan has not reciprocated on Most Favoured Nation status for India, apparently because of political compulsions and also the need to protect its industry since there is greater demand for Indian goods in Pakistan.
   
Today’s meeting follows PM Modi’s big move to pull out of the SAARC summit in Islamabad, which has led to three more countries opting out and current leader Nepal urging a "conducive environment that will ensure the participation of all".
   
The prime minister had said that the September 18 attack on an army base in Kashmir’s Uri, in which 18 soldiers were killed by terrorists from across the border, would not go unavenged.
   
On Monday, PM Modi held a meeting to discuss whether to massively reshape the 1960 Indus Waters Treaty on the sharing of the waters of six rivers with Pakistan.
   
"Blood and water cannot flow together," the prime minister said in the meeting.