Should India Withdraw MFN Status to Pakistan: The Case For and Against

New Delhi: India on Thursday will take another look at the Most Favoured Nation (MFN) status it granted to Pakistan in 1996 — a gesture Pakistan is yet to reciprocate to.

The decision to review the 20-year-old decision comes in the wake of the terror attack in Uri town of Kashmir in which 18 soldiers were killed.

India this week handed over evidence of "cross-border origins" of the attack to Pakistani envoy Abdul Basit, but Islamabad has maintained that they have nothing to do with the September 18 strike in Uri.

The neighbouring country's defiant stand has triggered calls for India to withdraw the MFN status to Pakistan.

WHY INDIA SHOULD WITHDRAW MFN STATUS

Strong message: A withdrawal will make it clear to Pakistan that it cannot take India's patience for granted.

One-way street: Pakistan is yet to return the favour and grant MFN status to India.

No effect on India's trade: Out of India's total merchandise trade of $641 billion in 2015-16, Pakistan accounted for $2.67 billion or just 0.83%.

But Pak businesses will be hit: Several sectors of the Pakistani economy will suffer, making certain items expensive.

May jolt others into action: Withdrawal may prepare the ground for India's economic and strategic partners, including the United States, to impose sanctions on Islamabad till it cracks down on terrorist groups

THE CASE AGAINST

Mere symbolism: Just as granting the MFN status to Pakistan didn't help in normalising ties, withdrawing it too may end up becoming a symbolic move.

Exports at risk: Though the bilateral trade has been low, Indian exports to Pakistan accounted for $2.17 billion in 2015-16. This may take a dive if Islamabad find other suppliers.

May boost smuggling: A ban on trade may give rise to cross-border smuggling, which, the World Bank says, is already a multi-billion dollar covert network

May harm India's standing: Maybe difficult to explain such a move at global commerce-based forums since Pakistan's trade practices have not raised any questions.

Trade can be the bridge: With cricket series between the two countries ruled out, trade remains the only hope to keep dialogue alive.