No MFN for Pak: Vegetables may cost more in Pakistan, dry fruits in India

New Delhi: Prime Minister Narendra Modi will review the decision to grant Most Favoured Nation Status (MFN) given to Pakistan in 1996. If the MFN status is withdrawn, prices of sugar, vegetables and tea may go up in Pakistan. On the Indian side, dry fruits and salt may become dearer.

The withdrawal of MFN status to Pakistan is likely to hit the Pakistani people directly as prices of essential commodities are likely to rise, especially tomato, potato and other vegetables. Sugar and tea prices too are likely to go up. Pakistan’s main imports from India are cotton, vegetables, sugar, tea, coffee and organic chemicals.
On the other hand, India imports a major chunk of cotton, fruits and nuts, salt from Pakistan. 

Cotton prices are unlikely to change as the businessmen in both countries use third country route, mainly Dubai, for export import.
There will be little impact on the bilateral trade too as it already very low at $2.7 billion (nearly Rs 17,962.42 crore). India exports goods worth nearly $1.85 billion ( Rs 12,307.60 crore) to Pakistan, while it imports goods worth $490 million (nearly Rs 3,259.84 crore).
Withdrawal of MFN status will not affect two-way trade is primarily because the businessmen in both countries use third countries for export-import. The third country trade is estimated at $3.5 - $4 billion, thus, the real trade figure between two neighbours is double the official figure.