Most Favoured Nation

The Swiss decision to suspend the most favoured nation clause in the Double Taxation Avoidance Agreement will not delay the ratification and implementation of the already signed trade agreement between India and the EFTA bloc, Switzerland has said. The Swiss government has suspended the Most Favoured Nation (MFN) status, which could potentially impact Swiss investments in India and lead to higher taxes on Indian companies operating in the European nation. India and the four-nation European Free Trade Association (EFTA) signed the pact, officially dubbed as TEPA (Trade and Economic Partnership Agreement), in March. Its members are Iceland, Liechtenstein, Norway, and Switzerland. The agreement is yet to be implemented. "No, the decision will not delay the ratification and implementation of EFTA-India TEPA," the Embassy of Switzerland in India has said in a response to PTI queries on the matter. It also said that this decision does not negatively affect investments from Switzerland t

FMCG major Nestle India on Thursday said the suspension of the MFN (most favoured nation) clause granted to India by Switzerland will have 'no impact' on the company. The suspension of MFN status under the Double Taxation Avoidance Agreement (DTAA) is a policy issue between the government of India and Switzerland and is not 'Nestle-specific', the FMCG firm said in a statement. Nestle India, which owns popular brands such as Maggi, Nescafe and KitKat, said the company was already "deducting 10 per cent withholding tax" on cross-country payments. Earlier on December 11, the Swiss government had announced the suspension of the MFN status granted to India following a ruling by the Supreme Court of India, which in a judgement last year had said MFN status under the DTAA cannot be enforced unless notified under Section 90 of the Income Tax Act. This judgement of the apex court had come in a case related to Nestle, where it overturned an earlier order passed by the Delhi High Court in 202

Explained: What is the most favoured nation clause and why did Switzerland suspended it for India after the Nestle's 2023 Supreme Court ruling

India signed DTCs with Lithuania and Colombia in 2011, under which it provided a withholding tax of 5 per cent to both countries

The Covid-19 pandemic offers an opportunity to normalise trade between the two countries, since both are searching for ways to restore livelihoods that have been destroyed by lockdowns

The plan would not apply to tariffs on Chinese and European goods subject to Section 301 tariffs or to steel and aluminum subject to Section 232 tariffs

India has already granted this status to all WTO members including Pakistan

India accorded the status of MFN to Pakistan in 1996

PM Modi has called a meeting of Commerce and External Affairs Ministries to discuss ways to counter Pakistan through an economic offencive

PM Narendra Modi is to hold a review meeting on MFN status to Pakistan on Thursday, according to sources

It is expected that officials from the Ministry of External Affairs and Commerce Ministry would attend the meeting