The problem was the Pakistani textile market which is one of the most advanced (technologically) in the world. It needs a lot of cotton that the local supply cannot meet despite Pakistan being a major cotton producer.
India does not have a shortage of cotton - its facing a reduction in buyers for its textiles compared to Pakistani textiles. Its the rice scandal all over again - where India could not fight product to product so they decided to use underhand tactics. With the rice, they sold their rice shipments at a loss, in the hope that if they did it for some years Pakistani exports would die and the industry would crash - didn't happen, Pakistan played the quality card and we came out winners with Indians only incurring huge losses.
They couldn't just ban it for Pakistan this time with all the nonsense about MFN going to India. This is an MFN country which plays underhand tactics when it can't compete product against product? Pakistan will meet its supply from somewhere or the other.
You can bet, that China which has an even larger textile industry won't be too pleased about this underhanded tactic.
What would India do if all three nations found alternatives? Indian farmer would be the ultimate net-loser.