Nepal, India trade treaty review

India has agreed to add five customs points to the existing 22 on the Nepal-India border making it to a total of 27 customs points.
Disclosing this, Minister for Commerce and Supplies Rajendra Mahato said that India had also agreed to renew the Indo-Nepal Trade Treaty every seven years instead of five years. The treaty is renewed autometically every five years, if both the sides have no amendments to make.
Mahato said India had also agreed to list more exportable items like flowers and herbal products. “A long-standing issue of quarantine has also been made easier,” he said. “Now Nepali exporters do not need to send their products to Kolkata for quarantine test. India will now accept the laboratory tests conducted in Nepal. “India is helping upgrade the labs in Nepal,” Mahato said.
Prime Minister Madhav Kumar Nepal, during his Indian visit next week, will signing trade treaty with some amendments — most of which were proposed by Nepal, though some of the issues India did not agree to review.
“Nepal presented four proposals to control illegal trade between the two South Asian neighbours. India has accepted three of the proposals,” he said. “Nepal can export goods imported from India to a third country,” the minister said, adding that Nepal can also import third country goods from India as well. “But Nepal cannot export goods imported from third country to India,” he added.
The two countries have also agreed on the definition of Nepali goods, Mahato added. “Anything produced within a periphery of 200 miles of the sea will be considered Nepali and can be exported to India,” according to the reviewed agreement. Earlier a goods with 30 per cent value added in Nepal was only defined as Nepali goods.
Among other major agreements, India cannot impose anti-dumping duty on Nepali goods, quota system will be abolished and Commerce Department will prepare manual for trade simplification.
Entrepreneurs have asked the Prime Minister to push for the elimination of dual tax imposed on Nepali exports by the Indian government. The bilateral trade treaty allows duty-free market access for manufacturing goods.
India is Nepal’s major trading partner with over 60 per cent trade, as such Nepal must maintain consistency in its trade policy with India. However, the trade deficit with India has crossed Rs 107 billion due to Nepal’s inability to boost exports to India.