With the decision to resolve six outstanding World Trade Organisation (WTO) disputes between the US and India through Mutually Agreed Solutions in June 2023, India has withdrawn additional duties on eight US origin products.
- Additional duties of 20% each on apples and walnuts and Rs 20 per kg on Almonds were imposed on the US’s products in 2019 over and above the Most Favoured Nation (MFN) duty as a retaliation to the US’s state protectionist measure of increasing tariffs on certain steel and Aluminium products.
- “Most-Favoured-Nation” (“MFN”) treatment requires Members to accord the most favourable tariff and regulatory treatment given to the product of any one Member at the time of import or export of “like products” to all other Members.
- This is a founding principle of the WTO.
- Under the MFN rule, if WTO Member A agrees in negotiations with country C, which need not be a WTO Member, to reduce the tariff on product X to five percent, this same “tariff rate” must also be extended to all other WTO Members.
- In other words, if a country provides favourable treatment to one country, it must provide the same favourable treatment to all Member countries.
- Therefore, the essence of MFN treatment is non-discriminatory treatment by providing the same conditions given to one Member to other Members. In the context of trade, it is a principle that prohibits different treatment given to the same products depending on the country of origin.
