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Finally, Pak grants MFN status to India
* Trade expected to nearly triple in 3 yrs
* Pak says no change in stand on Kashmir
Ashok Tuteja/TNS

MFN Status Simplified

  • Most Favoured Nation (MFN) is a level of treatment accorded by countries interested in increasing trade with each other
  • Countries achieving MFN are given trade advantages such as reduced tariffs on imported goods
  • Special consideration is given to countries classified as "developing" by the WTO, which also enforces the status
  • India had conferred the MFN status on Pakistan in 1996

Benefit to India

  • Indo-Pak trade at present is to the tune of $2.6 billion. It is expected to reach $6 billion by 2014
  • Illegal trade between the two countries will come down

New Delhi, November 2
Reflecting the positive environment in ties between the two countries, Pakistan today decided to grant Most Favoured Nation (MFN) status to India, 15 years after Delhi accorded it the same level of treatment.

The Pakistan Cabinet’s unanimous decision was promptly welcomed in New Delhi with senior officials expressing confidence that it would go a long way in strengthening economic links between the two countries and in eventually normalising bilateral relations.

Commerce Minister Anand Sharma spoke to his Pakistani counterpart Makhdoom Amin Fahimand who confirmed to him the Pakistan Cabinet’s decision. “It’s a major development… it’s a positive step forward in India-Pakistan relations,” Sharma told The Tribune later.

Pakistan has already bestowed MFN status on over 100 countries, including its all-weather friend China, but had been hesitant to do so in the case of India because of the fear that Indian exporters may flood Pakistani markets with their merchandise once normal trade is allowed.

In fact, some banned jihadi groups, including the Lashkar-e-Toiba (LeT) and the Hizb-ul-Mujahideen (HuM), had opposed any move to grant MFN status to India in view of the Indian Army’s presence in Jammu and Kashmir.

The Pakistani Cabinet, therefore, treaded cautiously, asserting that the move would in no way affect its stand on the Kashmir issue. All stakeholders in Pakistan, including the all-powerful army that enjoys the veto power on ties with India, are said to be on board as far as granting MFN status to India is concerned.

Islamabad’s decision has paved the way for a fruitful meeting between Prime Minister Manmohan Singh and his Pakistani counterpart Yousuf Raza Gilani in the Maldives on the margins of the SAARC Summit next week. Gilani is expected to formally convey the decision to Prime Minister Manmohan Singh. Pakistan Commerce Secretary Zafar Mehmood is also scheduled to visit New Delhi in mid-November for talks with Commerce Secretary Rahul Khullar.

India had been pressing Pakistan for years for an arrangement through which Pakistan opens trade with New Delhi, insisting that Islamabad must fulfill its obligations on MFN status under the WTO regime.

Pakistan would now loosen import restrictions from India. At present, Islamabad allows import of only 1,946 items from New Delhi. India does not permit trade in 850 items with Pakistan. The trade between the two countries at present is to the tune of $2.6 billion. The MFN status to India could spur a substantial increase in the bilateral trade.

India is believed to have asked Islamabad to prepare the negative list of items, which it does not want to import from India. Pakistan maintains a positive list of items allowed to be imported from India.

Former Indian High Commissioner to Pakistan G Parthasarthy said the MFN status would ensure considerable reduction in illegal trade between the two countries through Dubai and Singapore. “MFN status is a misnomer… they (Pakistan) have not done us a favour… they are obliged to do that under the WTO regime. We will have to now see if they also give a negative list of items,” he said.

Meanwhile, the Indian Apex Chambers of Commerce welcomed Pakistan’s decision with the Confederation of Indian Industry saying it would give a jump to bilateral trade and pave the way for economic integration of South Asia. The ASSOCHAM hoped that Indo-Pak trade would now reach $6 billion by 2014.





Islamabad wants to import power too
Ashok Tuteja/TNS

New Delhi, November 2
The wind appears to be blowing in the right direction in India-Pakistan relations. Pakistan has proposed to import electricity from India.

Indian officials said Pakistan’s request to import about 500-1000 MW of electricity to partly overcome the crisis in the country was being considered by the departments concerned.

The issue may also figure prominently during talks between Prime Minister Manmohanh Singh and his Pakistani counterpart Yousuf Raza Gilani at the forthcoming SAARC summit in Maldives. Pakistan, in fact, is said to be keen on a cross-border electricity grid that would be beneficial for both countries.

This will be the second meeting between the two PMs this year. They had last met in March when the Pakistani Premier visited Mohali to watch the India-Pakistan cricket World Cup semi-final. They are expected to review the progress is the bilateral dialogue process and chalk out the roadmap for future discussions. India had offered to sell power to Pakistan during a meeting of the Commerce Secretaries of the two countries in April.







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