The Indian Union Minister of Commerce, Industry and Textiles Anand Sharma expressed satisfaction that bilateral trade between India and Nepal has increased from $1,985 million in 2009-10 to around $2,700 in 2010-11 registering an increase of around 36 per cent.
Exports from Nepal to India have also grown from $452 million in 2009-10 to $476 million in 2010-11 — an increase of around 5.3 per cent, he said, during his meeting with his counterpart Anil Kumar Jha in New Delhi.
Sharma singled out hydro power sector for increased cooperation between the two countries. "It is estimated that sale of electricity from the 40,000 MW hydropower potential of Nepal can generate revenues of more than 10 billion dollar per annum. Nepal could also attract a lot of investment in manufacturing/services sector by overcoming its present power shortage” Indian Minister said, adding that in the recent past, several Indian private companies and joint ventures have been able to secure survey licences for development of about 8,200 MW hydro power projects in Nepal at an estimated cost of IRs 82,000 crores.
"It is important that the projects are started as early as possible,” Sharma said. Indian minister also pointed out the problem of local disturbances for the Indian Investors.
He also informed that India has accepted the Nepali request for use of Vishakhapatnam port and rail route through Singhabad (India)-Rohanpur (Bangladesh).
Approval of Nepal for the Letter of Exchange (LoE) sent in this regard is awaited. Nepal’s request for further facilitation of Nepal-Bangladesh trade through Kakarbhitta-Phulbari-Banglabandha route had also been agreed.
The meeting also explored India providing Buyers Credit to Nepali agencies for large project exports, especially in the infrastructure sector like roads, bridges, railways, power lines, sewerage plants, water treatment plants and housing from India. The credit can be provided under National Export Insurance Account (NEIA) through EXIM Bank for a maximum period of five to eight years.
Indian firms are the biggest investors in Nepal accounting for about 47.5 per cent of total approved foreign direct investments (FDIs). There are about 150 operating Indian ventures in Nepal engaged in manufacturing, services — banking, insurance, dry port, education and telecom — power sector and tourism industries.
Indian joint ventures in Nepal have contributed significantly to increase in Nepal’s exports to India. They also provide direct employment to around 30,000 Nepalis and indirect employment to more than twice the number.
Both governments have finalised the bilateral investment protection and promotion agreement during the four-day visit of Prime Minister Dr Baburam Bhattarai.
Sharma stressed on problems faced by Indian business in Nepal. He pointed out that Surya Nepal — a subsidiary of ITC Ltd, India — had to shut down permanently its readymade garment production because of long running labour problems.
He also touched upon the problems faced by GMR group. Such incidences will, over a period of time, have a negative effect, he added.
Meanwhile, Finance Minister Barsha Man Pun called on Indian Union Finance Minister Pranab Mukherjee on Saturday. Mukherjee assured Pun of India’s full cooperation and support in building-up various projects in Nepal.