February 13, 2025

Most Favoured Nation Status

Current Context : Switzerland suspended the Most Favoured Nation (MFN) clause in its tax agreement with India.

  • This follows a 2023 Supreme Court ruling on Nestlé, which clarified MFN clause applicability​

Background of Tax Agreement:

  • Established in 1994and updated in 2000 and 2010 to reflect changing economic conditions.
  • Aimed at promoting smoother financial relations between India and Switzerland​

About Most Favoured Nation

  • Most Favoured Nation (MFN)status is a trade and economic principle in which a country grants another country the best trade terms it offers to any other nation. This can include benefits such as lower tariffs, trade privileges, or access to specific markets.
  • Purpose : MFN ensures equal treatment for all countries, meaning if a nation offers a benefit to one country, it must extend the same benefits to other nations with MFN status.
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