No discussions yet on withdrawing MFN status to Pakistan: Sitharaman

The government has had no discussions till now on withdrawing the most favoured nation (MFN) status granted to Pakistan as a “goodwill’’ gesture in 1996, Commerce & Industry Minister Nirmala Sitharaman said.

On the growing clamour from certain sections of the Indian industry and consumer group lobbies for banning Chinese goods, the Minister said that it was impossible to put a blanket ban on imports and curbs can be placed only if there are credible reasons such as dumping at subsidised prices or quality issues.

Replying to questions on the possibility of withdrawal of MFN status to Pakistan following the escalation in cross-border tension, the Minister said that the World Trade Organisation required members to extend MFN to one-another on a reciprocal basis.

“India had extended MFN to Pakistan in 1996 unilaterally as a gesture of goodwill hoping that the move would be reciprocated. Unfortunately, that hasn’t happened yet. But strictly speaking, there have no discussions till now on withdrawing the status given to Pakistan,” she said.

Extending MFN status to a country means that the country would be treated the same as other WTO members and not discriminated against.

Although Pakistan has not extended MFN status to India, over the years it has lifted import ban on majority of goods (about 6,000 items) from India. However, it continues to block about 1,206 products.

In response to calls from certain sections of the Indian industry and consumer lobby to stop imports of Chinese items, the Minister said that they have to first give evidence to prove that the quality of the goods is below laid out standards or could cause health hazards or that the items are being dumped at subsidised prices.

“Just because we may not like certain things about a country is not reason enough to block imports from that country. We could impose anti-dumping and safeguard duties, but there are established ways to go about it and dumping has to be proved,” she said.

Sitharaman, in her bilateral talks with Chinese Vice-Minister of Finance and Commerce Wang Shouwen, on Thursday, raised concerns about India’s widening trade deficit with China. She asked for fast clearance of rice and pharmaceutical exports from India and grant of IT projects to Indian companies in addition to greater market access for items such as oilseeds and tobacco.

India’s trade deficit with China crossed $52 billion in 2014-15 and accounted for almost half of the country’s total trade deficit.

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