In this article, the author reviews the legal provisions and relevant court decisions relating to the most favoured nation clause in India’s double taxation avoidance agreements (DTAAs). He traces the origin and evolution of this clause in India’s DTAAs and discusses an important dispute that arose in the application of this clause and the position of the courts on the issue. He concludes that even though some courts have decided the issue relating to invocation of MFN clause in favour of the residents of other contracting states, the position is far from settled.