India may oppose US call to dismantle WTO's MFN rule

New Delhi says Washington demand may multilateralise reciprocal tariffs it has imposed

- ASIT RANJAN MISHRA

India is likely to oppose a US proposal at the World Trade Organisation (WTO) to dismantle the most-favoured-nation (MFN) obligation of member countries that ensures uniform and nondiscriminatory tariff regime, with Washington arguing that the multilateral principle has failed to reflect the economic and strategic realities.

“The MFN principle is not just unsuitable for this era; it prevents countries from optimising their trade relationships in ways that would benefit each party in that relationship. Put differently, MFN impedes welfare-enhancing liberalisation. It pushes members to engage in one venue—the WTO— and attempt to develop a one-size-fits-all approach,” the US said in a recent communication to the WTO.

Though India has not formally replied to the US proposal yet at the WTO, an Indian government official said New Delhi will oppose any such move. “This goes against the core principles of the WTO. What the US is effectively seeking is to multilateralise the reciprocal tariffs it has imposed on most countries,” the official said, requesting anonymity.