Short answers, pulled from the story.
Most favoured nation (MFN) status is a trade principle under which one country agrees not to treat another less advantageously than it treats any other country with MFN status. Any trade benefit, such as a lower tariff or higher import quota, granted to one MFN partner must be extended to all other MFN partners.
MFN status began appearing in trade treaties in the 18th century. A 1778 trade treaty between the United States and France was a prominent early example. Earlier, in 1667, Spain granted England most favoured nation trading status through the Treaty of Madrid.
All members of the World Trade Organization are required to grant each other most favoured nation status. Together with the principle of national treatment, MFN is considered one of the cornerstones of WTO trade law. The WTO was established in 1995 as an outgrowth of the General Agreement on Tariffs and Trade.
India withdrew Pakistan's MFN status in February 2019 following the Pulwama attack, which killed over 40 CRPF personnel. The revocation was framed as a direct response to that security event.
In March 2022, G7 countries jointly withdrew most favoured nation status from Russia in response to the 2022 Russian invasion of Ukraine. The group stated that Russia could not grossly violate international law and expect to benefit from being part of the international economic order. The withdrawal was accompanied by the imposition of punitive tariffs.
WTO rules allow exceptions for preferential treatment of developing countries, regional free trade areas, and customs unions. The UN Conference on Trade and Development, established in 1964, has sought to extend preferential treatment to developing country exports. Regional blocs such as the European Union and NAFTA also operate as recognised exceptions to the MFN principle.