Nepal-India trade treaty review talks ends on positive note

The two-day Nepal-India trade treaty review meeting ended today on a positive note. The visiting Indian team agreed on a slew of major proposals put forth by Nepal.
“But the secretary-level meeting will finalise these agreements soon," said Surya Silwal, joint secretary, Ministry of Commerce and Supplies. Silwal led the Nepali delegation while Rajeev Kher headed the Indian team.
New Delhi has agreed to accord the same facilities while trading in Indian currency (IC) as in US dollar (USD). “Once this mechanism comes into effect, two major hurdles for domestic traders like the cumbersome duty refund procedure (DRP) and excise will be solved,” said Silwal.
New Delhi has hinted at lifting quota for import of vanaspati ghee. The commerce department will canalise the ghee instead the of India’s State Trading corporation (STC) that has been canalizing it earlier.
“Nepal needs to work out modalities for the other three items — acrylic yarn, zinc oxide and copper wires, which were an integral part of the quota regime,” as per the agreement at the joint secretary-level meeting.
Good news for a host of indigenous products as well. India is likely to give preferential treatment to commodities that boast of less than 30 per cent value addition. The clause will come into effect only if Nepal chooses so. Earlier, the cap on preferential treatment was on at least 30 per cent value-added goods.
Both nations are now eligible to trade in third country products. “The facility comes in the wake of liberal import policy in India,” added Silwal. Both can re-export the third country products.
Nepal has urged India to let it use two more entry points — Brahmadandi and Tanakpur in the west — to conduct inland trade.
New Delhi, in turn, has said the approval is subject to respective state governments’ assent. The nod also involves a detailed technical feasibility study.
However the visitng team agreed to let Nepal use three other airports – Mumbai, Kolkata and Chennai – for trade. Currently Nepal is permitted to use only New Delhi.
The Indian delegates were in favour of a status quo as far as the tenure of the treaty is concerned. Nepal proposed to renew the accord once in every 10 years. At present, the agreement is renewed after five years.
“However, the matter will be deliberated at the secretary-level meeting,” said Silwal at the conclusion of the two-day talks – that is a follow up of parleys in New Delhi on October 19-20, 2008.