News: In a significant development in India-Pakistan relations, Pakistan allows the import of sugar and cotton from India. As per the Pakistan Commerce Ministry, the decision is driven by the rising prices of sugar in Pakistan.
- The Pakistan government cancelled trade with India in Aug 2019, after the introduction of amendments to Article 370 in India.
- Initially, India did not ban trade with Pakistan. However, after the Pulwama attack, it suspended cross-LoC trade and withdrew the Most Favoured Nation (MFN) status to Pakistan.
- The Most Favoured Nation is a treatment accorded to a trade partner. Although it seems like a special status, it actually means the country will get equal treatment to other trading partners. It ensures non-discriminatory trade between two countries.
- India granted MFN status to Pakistan in 1996, just a year after the formation of the WTO. On the other hand, Pakistan did not award MFN status to India.
Read More – India revoked MFN status to Pakistan
What are the reasons?
The Pakistan ministry cites the following reasons for its decision:
- The prices of sugar in India is very less compared to Pakistan and other countries.
- In Pakistan, the demand for Indian cotton is high among Pakistani Small and Medium Enterprises (SMEs). It is because of rising exports and decreasing crop in Pakistan.
- It is one of the positive developments in India-Pakistan relations. Recently India and Pakistan agreed to observe the 2003 Ceasefire agreement along the Line of Control (LoC).
- If bilateral relation normalizes, India would be able to pressurize Pakistan on cross border activities in Kashmir and also 2 front challenge would be manageable.
Source: The Hindu