India scraps MFN status for Pak, empowers Army

A day after Pakistan-backed terror attack on Indian security forces in Kashmir’s Pulwama district on Thursday, India scrapped the 'Most Favoured Nation' status extended to the neighbouring country and gave a free hand to the military to decide on the course of action.

Prime Minister Narendra Modi warned the perpetrators and those aiding and abetting terrorists that they have made a big mistake and will have to pay a heavy price. Stating that free hand has been given to the security forces to act, PM dared Pakistan not to live in illusion that it can destabilise India.
“We have given full freedom to the security forces. We have full faith in the bravery and valour of our security forces. I am hopeful that the patriotic fervour will ensure that people will provide correct information to our agencies so that we can intensify our efforts to crush terror,” the prime minister said while flagging off Vande Bharat Express between New Delhi and Varansi from New Delhi Railway Station today.
"The most favoured nation status to Pakistan stands revoked," finance minister Arun Jaitley said, briefing the media on the meeting of the Cabinet Committee on Security at Prime Minister Narendra Modi's 7 Lok Kalyan Marg home in Delhi. 
There is "incontrovertible evidence" of Pakistan's direct hand, finance minister Arun Jaitley said after the worst terror attack on forces in Kashmir left 43 soldiers dead and several more seriously injured.
Besides scrapping the "Most Favoured Nation" privileges given to Pakistan, he said India would take all steps to ensure the country's isolation globally.
The foreign ministry, he said, would initiate all possible diplomatic steps to ensure complete isolation of Pakistan in the international community, adding that there was "incontrovertible evidence" of Pakistan's direct hand in the attack.
Jaitley also said those helping and supporting terrorists would "pay a very heavy price".
Most Favoured Nation status is given to a trade partner to ensure non-discriminatory trade between two countries.
India granted that status to Pakistan in 1996 but Islamabad never reciprocated, even though it is required to do so as a member of the World Trade Organisation (WTO).
Now India can raise customs duties to any level on goods coming from Pakistan.
The Indian government says at Pakistan, under Prime Minister Imran Khan, is struggling financially and India's move to scrap Most Favoured Nation status will hurt the country.
But the move will be largely symbolic as bilateral trade between India and Pakistan is barely $2 billion per year. India mainly exports cotton, dyes, chemicals, vegetables and iron and steel and imports fruits, cement, leather, chemicals and spices.