New Delhi: India revoked Pakistan’s most-favoured nation (MFN) status following the Pulwama terrorist attack that killed over 40 CRPF personnel and is exploring the possibility of further economic measures to tighten the screws on its neighbour. This may include imposing port restrictions, non-tariff measures, banning certain goods and higher duties on imports from Pakistan, officials said.“The MFN status, which had been granted to Pakistan, stands withdrawn,” finance minister Arun Jaitley said on Friday after the Cabinet Committee on Security met. “The MEA (Ministry of External Affairs) will initiate all possible diplomatic steps to ensure the complete isolation from the international community of Pakistan.”By withdrawing MFN status, India is no longer mandated to give the country the same treatment as all other members of the World Trade Organization While India will invoke Article 21 of the WTO that deals with security exceptions, the domestic Foreign Trade (Development And Regulation) Act allows it to impose any import restriction.“The central government may also… make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the order, the import or export of goods,” according to the Act. However, any tariff increase will be made under the Customs Act.India does not have to notify the WTO of its action. Article 21 of the WTO’s General Agreement on Tariffs and Trade does not require any country to furnish any information the disclosure of which it considers contrary to its security interests. It also does not prevent any country from taking any action that it considers necessary for the protection of its security interests.“We can make a negative list detailing the goods we don’t want to import from Pakistan, set port restrictions or higher duties. How we exercise our options is up to us,” said a senior official.Withdrawal of MFN status means India can now increase customs duties to any level on goods coming from Pakistan, even exceeding bound rates. The latter act as ceilings on tariffs that countries can set. India’s average bound rate for agricultural products is 113.5% and that for non-farm goods is 34.6%. The MFN-applied rates are 32.8% and 10.7%, respectively.India had granted MFN status, which provides non-discriminatory access to its market, to Pakistan in 1996. Under WTO norms, member countries are mandated to give this status to each other on a reciprocal basis. However, Pakistan has not accorded MFN to India and hence can’t dispute the move, according to officials.“There are four-five options that we are exploring. MFN withdrawal is on imports. We can look at non-tariff measures such as technical regulations and other Pakistan-specific measures like port restrictions,” said another official, adding that border trade is unlikely to get stalled.In the April-November period, India’s imports from Pakistan amounted to $381 million compared with $489 million in FY18 with the major items of import being fruit and nuts, gypsum, sulphur, mineral oils and cement. India’s exports to Pakistan in the first eight months of the fiscal stood at $1.4 billion compared with $1.9 billion in FY18. Cotton, organic chemicals, parts of nuclear reactors, plastics, tanning and dyeing extracts are the main exports.Of the $2.6-billion bilateral trade, which is tilted toward India, almost $1 billion takes place through the Attari-Wagah border.“We will defend ourselves if they challenge us,” said the first official cited above.Trade experts have cautioned India to weigh its actions as they could be met with retaliation.“We have a trade surplus with them and should be ready for any reaction that hits our domestic industry,” said one Delhi-based expert.“If the government wants to signal to Pakistan, then it should consider banning exports as well, and this is legal in the WTO,” said Biswajit Dhar, professor at the Centre for Economic Studies and Planning in the School of Social Sciences at Jawaharlal Nehru University.