Nepal-India IGC meeting on January 9-10; experts, pvt sector suggest gamut of issues for revision

The Nepal-India Inter-Governmental Committee (IGC) on Trade, Transit and Cooperation meeting is set to be held in Kathmandu in January.

The IGC, apex bilateral mechanism for promotion of trade and investments between Nepal and India, is scheduled for January 9-10, confirmed the Ministry of Industry, Commerce, and Supplies. Earlier, the IGC meeting was scheduled for November but the meeting was postponed.

The meeting will review progress made on several agendas in the sphere of trade and commerce, Commerce Secretary Govinda Bahadur Karki said, adding that the IGC is a regular meeting and Nepal has no specific agendas for this meeting.

However, experts have been suggesting a gamut of issues including review of the duty-free access provided to Indian primary agricultural products to revision rules concerning the Certificate of Origin (CoO).

They have also proposed to revise the current arrangement of allowing reciprocal access for agricultural products, horticulture, flowers, forest products, rice, pulses, flour, wheat husk, livestock, poultry, fish, honey, dairy products, and eggs, as Nepali agricultural goods struggle to compete under the current duty-free access provided to Indian products.

The private sector has also suggested the ministry to take up the issue of export hassles on large cardamom, tea, ginger, and anti-dumping duty on jute products, quarantine and food testing lab, parking fee on Integrated Check Post (ICP).

However, the experts have also recommended Nepal to negotiate a reduction in the required value addition for zero-duty access to India. At present, a 30 percent value addition is required for exports to India, but Nepal should advocate to lower it to 20 percent, according to the experts.

India is not only the Nepal's largest trading partner but also a gateway to third country trade. Thus, Nepal should also lobby to revise its transit treaty to secure access to additional Indian seaports, Dhamra Port in Odisha and Mundra Port in Gujarat, experts suggested.

Nepal has requested that Dhamra Port be designated as a gateway for its transit needs and has urged swift action on Mundra Port stating that Dhamra Port can accommodate larger ships and importing goods through this port would significantly reduce import costs for Nepali traders.

Nepal is using Kolkata Port and Visakhapatnam Port currently. However, Kolkata Port accommodates small vessels only.

But the experts have been complaining that the issues have been piling up because Nepal's presentations during discussions with India had been ineffective and lacked thorough preparation before IGC meeting.
(Published at NepalKhabar: https://en.nepalkhabar.com/news/detail/12181/)

Nepal under India’s priority to supply COVID-19 vaccines: FM Gyawali

India has kept Nepal under priority to supply vaccines against Covid-19, according to the foreign minister Pradeep Kumar Gyawali

He said that India has expressed readiness to immediately provide vaccines against Covid-19 for essential sectors in Nepal, he said, while talking to media upon arrival today at the Tribhuvan International Airport (TIA) after a three-day official visit to India. “India is ready to supply the vaccines immediately for the essential sector,” he confirmed.

India started vaccinisation from today in a large scale as it is home to the world’s largest vaccine makers. 

Indian authorities on January 4 gave green signal for the emergency use of two vaccines, one developed by Oxford University and UK-based drugmaker AstraZeneca, and another by Indian company Bharat Biotech.

Nepal expects to receive early supply of the Covid-19 vaccines from India. Nepal’s drug regulator yesterday also granted an emergency use approval to a Covid-19 vaccine developed by AstraZeneca and manufactured in India. “The Department of Drug Administration’s decided to grant emergency use authorisation to the Covishield vaccine being manufactured by the Pune-based Serum Institute of India,” according to a press note issued by the department. ““We have given emergency use approval to Covishield,” the department confirmed, adding that the Covishield vaccine can now be imported and administered in Nepal.

Nepal and India also reached an agreement to gradually open the air routes and land routes – that remains closed due to the Covid-19 pandemic – to facilitate the movement of people across the border, added Gyawali, who had reached New Delhi on Thursday leading the Nepali delegation in the sixth Joint Commission (JC) meeting. He also informed that the two countries have agreed to immediately start the construction of Integrated Check Post (ICP) in Bhairahawa, connect a four-lane bridge under construction in Mahakali River with India’s national highway, and build three additional bridges in the Mahakali River. “Nepal and India also agreed to expedite the field location survey related to the Raxaul-Kathmandu Railway line.”

During his stay in New Delhi, the foreign minister was expected to meet Indian Prime Minister Narendra Modi. The meeting could not take place, though the Nepali side had tried to seek time with the Indian prime minister for a meeting. Gyawali, however, today morning met with India’s defence minister Rajnath Singh. "Had a wonderful meeting with the foreign minister of Nepal, today,” Singh wrote on Twitter after the meeting. “India’s relations with Nepal are not limited to governments in both the countries but it is driven by the people of both the nations. India-Nepal relations offer limitless potential.”

The foreign minister’s India visit after the Prime Minister KP Sharma’s House dissolution move has though raised some eyebrows, the visit remained ‘not as expected by the incumbent government. PM Oli has called a mid-term polls for April 3o and May 10, but it seems uncertain as the House dissolution decision has been challenged in the court dividing the political spectrum in the country.

Nepal-India relationships rest on four pillars: Visiting Indian foreign secretary

 India’s relationship with Nepal rests on four pillars – development cooperation, stronger connectivity, expanded infrastructure and economic projects – according to visiting Indian foreign secretary Harsh Vardhan Shringla.

Shringla, who is on a two-day official visit to Nepal, during a lecture on Nepal-India relations in Kathmandu today, also said stressing the need for strong cooperative relations between the two neighboring countries, he also said that his country sees Nepal as foremost friend and development partner. “India will work to Nepal's priority.”

He also highlighted easier and enhanced access to educational opportunities in India for the young people of Nepal. “India will work to Nepal’s priorities,” he said, adding that the structure that the pillars hold up is also well-defined and unchanging – mutually beneficial people-to-people contacts. And in all this technology, particularly digital technology, is to my mind a force multiplier. “Nepal is fundamental to India’s neighborhood-first policy apart from people-to-people linkages between the two countries are strong.”

“Enhancing cross-border connectivity and infrastructure projects are also critical,” he said, adding that they unlock potential of millions and in millions. “Connectivity projects come in various forms like physical connectivity projects such as highways, rail and air links and inland waterways enhance movement of goods and people, whereas energy connectivity – whether power transmission lines or petroleum pipelines – contribute to the well-being of each other’s citizens, and build mutual trust and partnerships.”

“Digital connectivity through optical fibre networks is our route to the future, particularly, and as we find in India, with remote access to education, healthcare and other services through the digital medium,” he said. “Finally, trade facilitation through upgraded border infrastructure makes for easier transit and seamless commerce.”

“India sees itself as Nepal’s natural and instinctive responder,” the Indian foreign secretary said, while referring to India's prompt response to devastating earthquake in Nepal in 2015 that claimed nearly 10,000 lives leaving thousands injured. “India will also share the Nobel coronavirus vaccines as soon as the vaccine once it is rolled out.”

Shringla arrived Kathmandu yesterday at the invitation of his counterpart Bharat Raj Paudyal. Earlier yesterday, he called on President Devi Bhandari, Prime Minister KP Sharma Oli and foreign minister Pradeep Kumar Gyawali. Shringla also held a delegation-level meeting with foreign secretary Paudyal yesterday afternoon. “In my meetings here in Kathmandu, with the President and the Prime Minister of Nepal, the foreign minister, and my counterpart the foreign secretary, and other dignitaries and officials, I have been left with no doubt that our countries are on the same page and share the same vision,” he informed

He also reminded the high level meetings of the leaders from both the countries. “Our Prime Minister’s visit to Nepal in August 2014 was the first at that level in 17 years,” he said, adding that the visit injected a fresh energy into the relationship and created a steady stream of two-way travel and developmental initiatives. “Over the past six years, Prime Minister Modi has visited Nepal four times and the Prime Minister of Nepal has been welcomed in India seven times, apart from the leaders have met 16 times at the level of head of state or head of government.”

He also reminded the High Impact Community Development Projects, which according to him are tailored to the needs of the local community, create community assets, and promote socio-economic welfare at the grassroots level. “Such development projects have been implemented in all 77 of Nepal’s districts and over a hundred of them have been completed since 2014 when our Prime Minister visited Nepal for the first time when he took over.”

These programmes cover diverse sectors such as education, health, irrigation, drinking water, preservation of culture, skill development, youth training, and agriculture, and have immediate and positive impact on the lives of people, touching everybody in society, added the visiting guest. 

Before wrapping his two-day visit, Shringla today afternoon travelled to Gorkha and inaugurated three schools – Shree Mahalaxmi, Shree Ratnalaxmi and Shree Tara Secondary Schools – constructed with Indian reconstruction assistance. “There are about 1600 students in these three schools, who now have the advantage of the newly constructed earthquake resilient school buildings,” according to a press note from the Indian Embassy. “These schools are part of 71 educational institutes across nine districts being built under government of India grant assistance of $50 million for reconstruction in the education sector,” it reads, adding that the nine beneficiary districts are Gorkha, Nuwakot, Sindhupalchowk, Ramechhap, Dolakha, Kavrepalanchowk, Dhading and Kathmandu. 

Speaking on the occasion, Indian foreign secretary emphasised that education is the best investment in the future of the country and its people. Since 2003, government of India has built nearly 270 educational campuses across Nepal under High Impact Community Development Projects scheme, complementing the efforts of Nepal in this area. Shringla also encouraged Nepali students to take advantage of over 3000 scholarships being provided by government of India to contribute in the development of their country and to further strengthen India-Nepal partnership.

India is also working with Nepal on reconstruction of 147 health posts and hospitals in ten districts of Nepal under a grant of $ 50 million and 28 cultural heritage sites in 8 districts of Nepal under another grant of $ 50 million.

In his last engagement before leaving Nepal that also signifies the diverse bilateral development and cultural cooperation, foreign secretary Shringla virtually inaugurated the Tashop (Tare) Gompa monastery constructed at Shree Kharka village in Manang district, the press note reads, adding that the event was also attended by secretary at the Ministry of Culture, Tourism and Civil Aviation Yadav Prasad Koirala, acharya Lama Norbu Sherpa, president of Nepal Buddhist Federation along with the representatives of Khangsar Sewa Samiti.

After completing his two-day official visit, foreign secretary Harsh Vardhan Shringla returned to New Delhi in the late afternoon today, the press note reads.

Projects under Indian assistance

• The Motihari–Amlekhgunj petroleum pipeline was the first of its kind in the region. It has created capacity to carry two million metric tonnes of petroleum products into Nepal, and has already led to savings of over Rs 800 million for the people of this country. 

• Brisk implementation of the 900 MW Arun III hydropower power project is underway, and cross-border power transmission lines have been upgraded

• The Jayanagar-Kurtha cross-border rail line should be operational shortly. It will make Janakpur so much quicker to visit from India. Tourism from India would be an important area of employment, commerce and opportunity. We want to promote it to the extent that we can.

• The modern integrated check-posts (ICP) at Birgunj and Biratnagar have transformed cross-border movement of people and goods, and work on the integrated check-posts at Nepalgunj has commenced

• After the earthquake of 2015, India cooperated with Nepal in the restoration of 30 heritage locations, including the iconic Seto Machindranath temple in Kathmandu, the Hiranyavarna Mahavihar at Patan, and the Jangam Matha at Bhaktapur. Our best domain specialists are at the service of the living history of Nepal.

• Given the young population – both in India and Nepal – education is a crucial bridge. Seventy schools and 150 health facilities are coming up in 12 districts of Nepal with Indian support. 

• The outlay of Indian earthquake-related assistance is US$ 1 billion but its true value is not in monetary terms. It lies in how it has helped communities on the ground. To cite an instance, 46,000 houses have been built in Gorkha and Nuwakot. They incorporate earthquake-resilient technologies in line with the motto of ‘Build Back Better’, and they epitomise humanity’s ability to triumph over adversity.

Construction of ICP at Nepalgunj begins with the joint Ground-Breaking ceremony

 The construction of an Integrated Check Post (ICP) officially began in Nepalgunj today.

The third ICP – after Birgunj and Biratnagar ICPs – construction beginning ceremony was held virtually where minister for Urban Development Krishna Gopal Shrestha and Indian Minister for Commerce and Industry Piyush Goyal jointly witnessed the ground-breaking ceremony, according to a press note issued by the Indian Embassy in Kathmandu.

Minister of State for Urban Development Rambir Manandhar and Indian ambassador to Nepal Vinay Mohan Kwatra also witnessed the event along with secretary at the Ministry of Urban Development Dr Ramesh Prasad Singh from Kathmandu, the press note reads.

Mmember of parliament from Banke-2 Mohd Istiyak Rai and mayor of Nepalgunj Sub-metropolitan City Dr Dhawal Shamsher JB Rana participated in the event along with others from the Nepalgunj Project site.

The ICP in Nepalgunj, once completed, will have export and import cargo handling facilities like warehousing, including refrigerated cargo facilities, medical, plant and animal quarantine areas, amenities for drivers and passenger, CCTV and other security systems, 24-7 power backup, waste-water treatment facilities and many more facilities to facilitate smooth movement of cargo and passenger vehicles, the embassy press note reads, adding that the facility is envisaged to promote a systematic approach to cargo handling and, therefore, will result in the saving of time and inconvenience to visitors and reduce overall transaction costs for cross-border trade and commerce. “The project will be implemented by M/s Rajdeep Buildcon Pvt Ltd – a Pune-based Indian company – under the supervision of M/s RITES International Ltd, a government of India undertaking.”

The tendered cost of the project is Rs 147.12 cror Indian Currency (around Rs 2.35 billion) and construction period is two years. The facility will be built on about 61.5 hectare land identified by the government in Janaki Rural Municipality ward 1 and ward 16 of Nepalgunj Sub-metropolitan City.

A similar facility is being built on the Indian side in Rupaidiha by the Lands Ports Authority of India and the work on the facility started in May this year and over 10 per cent construction work has already been completed.

The Department of Urban Development – under the Ministry of Urban Development – will facilitate the construction of ICP in Nepalgunj on the ground, according to the press note of the embassy that has expressed hope that the ICP construction project in Nepalgunj is expected to create local employment and boost the local economy by way of direct and indirect job creation and also supply of essential raw materials and items from the local markets. “Overall the facility created under the project is envisaged to promote cross-border trade and economic activities between India and Nepal.”

The Indian government is helping build ICPs on either sides of the Indo-Nepal border to systematise the movement of cargo trucks between the two countries by bringing customs and immigration facilities under one roof.

The ICPs at Birgunj and Biratnagar were jointly inaugurated and operationalised in April 2018 and January 2020, respectively by Prime Minister KP Sharma Oli and his Indian counterpart Narendra Modi. 

According to the embassy press note, the government of India – in line with the ‘Neighbourhood First’ policy – is committed to enhancing connectivity with Nepal, including facilitating and promoting border trade and economic activities.

Commerce and Industry Minister of India Piyush Goyal, on the occasion, announced that the government of India will take up the construction of a fourth ICP at Bhairahawa in Nepal under Indian funding. Currently, the execution modalities and implementing agency for the project are under consideration, he added.

The construction of advanced cross-border logistics and infrastructure facilities over the last three years is expected to further boost connectivity, and help realise the shared pursuit of stronger and mutually beneficial trade, economic and people-to-people ties between India and Nepal, the embassy press note reads.

Nepal’s export-import trade is expensive also due to poor physical infrastructure on the border customs. The construction of ICPs along the Nepal-India border is expected to smoothen Nepal’s trade, both with India and third country.

Nepal third competitive economy in South Asia

Nepal climbs one position to become the third competitive economy – out of the eight economies in South Asia behind first-placed India and Bhutan – from the fourth last year, whereas the country has jumped to 94th position – with 63.2 score – out of 190 economies in the World Bank’s ease of doing business rankings due to improved credit information availability, easier cross-border trade, and enforcement of contracts.
Nepal was in the 110th position – with a score of 59.7 points – in the doing business ranking in 2019 World Bank report. The leap of 16 places is also attributed to Nepal’s dissatisfaction over the last year’s ranking. Nepal was ranked 105th in 2018 and slipped five positions to 110 in 2019.
In the Doing Business Report 2020, Nepal scored highest on access to credit information – 37th out of 190 economies – among the 10 indicators used by the World Bank to calculate the ranking as the country has improved access by expanding the coverage of the credit bureau.
Likewise, Nepal also ranked relatively high on cross-border trade – 60th out of 190 economies – as the country has reduced export costs and improved import times by opening the Birgunj Integrated Check Post (ICP), according to the annual report.
However, Nepal has spiralled down in starting a business indicator from 107th to 135th, which reflects all the procedural delays and time-consuming processes that have always deterred investors in Nepal. “Nepal is still poorly ranked in starting a business ranking as the country is in 135th position among the 190 economies as the country has made things more difficult – according to the World Bank – by
Nepal made notable improvements with four reforms, the report reads, adding that the country improved an online e-submission platform for construction permits and enhanced the quality of land administration by publishing official service standards for delivering updated cadastral maps. “Authorities improved the commercial judicial system by introducing time standards for key court events.”
However, Nepal made the process of registering new employees with social security more cumbersome by requiring in-person follow-ups. The country also raised property transfer registration fees, it adds.
Overall, of the 10 indicators that the World Bank evaluates to rank countries, Nepal has improved in five indicators, slipped in three and remained constant in two indicators compared to the previous year, according to the report.
The report measures procedural changes but not the quality and efficiency of the implementation of structural reforms in tax regimens and in starting a business, apart from changes in regulation. Hoever, the report does not account for the level of corruption and the existing level of investor confidence, which are major factors affecting the investment climate.
The index draws data from a questionnaire administered to professionals who oversee or advise on legal and regulatory requirements for doing business. According to the World Bank, most respondents are legal professionals such as lawyers, judges or notaries. In addition, officials of the credit bureau or registry complete the credit information questionnaire. Accountants, architects, engineers, freight forwarders and other professionals answer the questionnaires related to paying taxes, dealing with construction permits, trading across borders and getting electricity. This profile of respondents to the questionnaire perhaps accounts for the report’s focus on regulatory measures over their implementation.
Many South Asian economies kept up a solid pace of business regulatory reforms as India and Pakistan both earned spots among the world’s top ten most improved economies, the World Bank Doing Business 2020 study revealed, adding that it is encouraging to see the steady implementation of reforms in South Asia. According to senior manager of the World Bank’s Global Indicators Group, which produces the study, Rita Ramalho, “Continued and sustained progress is key to improving the domestic business climate and enabling private enterprise.”
Economies in the South Asia region carried out 17 reforms to improve the business climate for domestic small and medium-size enterprises.

South Asian ranking
Afghanistan  – 173
Bangladesh – 168
Bhutan  – 89
India  – 63
Maldives  – 147
Nepal  – 94
Pakistan  – 108
Sri Lanka  – 99
Source: World Bank

Nepal to ask India not to open Integrated Check Post yet

Nepal has started a diplomatic process to request India not to operationalise the Integrated Check Post (ICP) at Raxual on the Indian side as it could increase Nepal's cost of trade, and ‘complicate’ trade between the two countries.
“We wrote a letter on Sunday requesting India to wait for completion of the ICP on the Nepal side,” according to Commerce Ministry officials. The Customs Department, Commerce Ministry and the Supplies Ministry have discussed the implications of operationalisation of the ICP on the Indian side and its impact on Nepal’s trade. “Even the Office of the Prime Minister has been looking into the issue,” the officials added.
The Raxual-Birgunj customs is the key customs point for Nepal, accounting for over 60 per cent of Nepal’s international trade.
The unilateral operation of Indian side of ICP that is aimed at providing all the services required for export-import trade, including customs, immigration, quarantine and banking, through an integrated one window on either side of the border has made the trade more difficult for the Nepali traders.
The operationalisation of the ICP on the Indian side, which is some 13 km from the current customs office, is going to hurt Nepal’s trade, according to traders. They also have expressed serious concern over India starting operations at its new ICP at Raxual.
Claiming that trading through the new ICP may hit trade through the Raxaul-Birgunj customs point until such time as the ICP on the Nepal side is completed, they said, requesting India to wait for the completion of the ICP at the Nepali side. The Indian authorities have, however, already inaugurated the ICP on their side on Friday.
Some 30 per cent work on the ICP on the Nepal side at Sirsiya is yet to be completed. India has taken responsibility for building the ICPs on both sides. The Land Port Authority of India is responsible for operating the Indian ICP.
Birgunj customs, which was blocked for almost five months during the Tarai-Madhes protests, has not only created supply shortages in the country but also encouraged the black economy due to lack of formal channel for bilateral trade.