Pakistan grants MFN status to India

After dilly-dallying for several years, Pakistan on Tuesday granted the Most Favoured Nation status to India in a significant step in improving bilateral ties and boosting two-way trade currently standing at $2.6 billion.

"After a lengthy discussion and a briefing by the Commerce Secretary, the Cabinet unanimously approved the Commerce Ministry's summary to grant Most Favoured Nation status to India," Information Minister Firdous Ashiq Awan told a news conference.

The MFN status, which means that Pakistan will give trade treatment to India at par with its other partners, is likely to boost bilateral economic ties.

India had granted the MFN status to Pakistan way back in 1996. In 2010-11, India-Pakistan trade stood at $2.6 billion.

Pakistan's move to grant MFN status to India comes ahead of the November 10-11 SAARC Summit in Maldives, where the prime ministers of the two countries are expected to meet.

Click on NEXT for more...

All stakeholders in Pakistan, including the military, were "on board" for the decision to grant MFN status to India, Awan said.

"The decision will lead to economic benefits and it is in the national interest," she said, adding that granting the MFN status to India would not in any way affect Pakistan's stand on the Kashmir issue.

During the meeting of the Cabinet chaired by Prime Minister Yousuf Raza Gilani, several ministers raised concerns on issues like Kashmir which were discussed at length, Awan said.

"Some Cabinet members had concerns about Kashmir, political issues and defence and strategic relations," she said in her opening remarks.

"Others raised issues related to national sovereignty and Pakistan's territorial integrity.

The Cabinet's decision will cause no harm to the Kashmir cause," she said.

"Trade (with India) is a separate issue. It is a most important priority for Pakistan to continue its support for the Kashmir issue and the movement (for the right to self-determination)," Awan, a senior leader of the ruling Pakistan People's Party, said.

Click on NEXT for more...

Awan pointed out that China, one of Pakistan's closest allies, had bolstered its trade relations with India despite territorial disputes between the two countries.

"We cannot live in regional isolation," she said.

Responding to a question on whether the Kashmiri leadership had been consulted on the decision to grant MFN status to India, Awan said the two parts of Kashmir were already conducting trade across the Line of Control.

Bus services too were operating across the LoC, she said.

Awan said Commerce Minister Makhdoom Amin Fahim had briefed the Cabinet about how he had engaged the Kashmiri leadership on the MFN issue.

After India granted the MFN status to it in 1996, Pakistan had held out on reciprocating the move, largely due to opposition from religious groups and some political parties which felt that extending the MFN status to New Delhi would affect Pakistan's stand on the Kashmir issue.