The decision was taken a day after India withdrew its MNF status given to Pakistan.A day after India revoked the Most Favoured Nation (MNF) status given to Pakistan, Finance Minister Arun Jaitley on Saturday announced a 200 per cent hike in customs duty on all goods imported from the neighbouring country. The development comes in the wake of India’s push to isolate Pakistan following a deadly terror attack in Pulwama that claimed the lives of 40 CRPF personnel on Thursday.
“India has withdrawn MFN status to Pakistan after the Pulwama incident. Upon withdrawal, basic customs duty on all goods exported from Pakistan to India has been raised to 200% with immediate effect,” Jaitley tweeted. Pulwama Attack LIVE UPDATES
The two main items imported from Pakistan are fruits and cement, on which the current customs duty is 30-50 per cent and 7.5 per cent, respectively. Slapping an import duty of 200 per cent effectively means almost banning the imports from Pakistan, official sources said. India had on Friday revoked the MNF status after a decision made in the meeting of the high-level Cabinet Committee on Security, which enables India to hike Customs duties on imports from Pakistan. In FY18, India-Pakistan trade was a mere $2.40 billion or about 0.4 per cent of India’s overall trade.
Items which Pakistan exports to India include fresh fruits, cement, petroleum products, bulk minerals and ores, finished leather, processed minerals, inorganic chemicals, cotton raw, spices, wool, rubber product, alcoholic beverages, medical instruments, marine goods, plastic, dyes and sports goods.
In fact, India continues to maintain a substantial trade surplus. Pakistan’s exports to India have been about a fourth of what it imports from India, the MFN concessions notwithstanding. India mainly exports cotton, dyes, chemicals, vegetables and iron and steel while it imports fruits, cement, spices and leather.
Article 1 of General Agreement on Tariffs and Trade (GATT), 1994, requires every WTO member country to accord MFN status (or preferential trade terms with respect to tariffs and trade barriers) to all other member countries. Accordingly, India accorded MFN status to all WTO member countries, including Pakistan, from the date of entry into force of the so-called Marrakesh Agreement, establishing the WTO. The WTO is the only global international organisation dealing with the rules of trade between nations and the 164 member countries of the WTO represent 98 per cent of world trade. Only a handful of very small countries are out of the WTO.
“The Ministry of External Affairs (MEA) will initiate all possible diplomatic steps which are to be taken to ensure the complete isolation from the international community of Pakistan of which incontrovertible is available of having a direct hand in this act,” Jaitley had said.
