New Indo-Nepal trade treaty comes to life

KATHMANDU: India���s Commerce and Industry Minister Anand Sharma and his Nepali counterpart Rajendra Mahato Tuesday signed a new bilateral trade treaty in Kathmandu, which comes into effect immediately offering an upgraded seven-year pact with proviso for automatic renewal every seven years, cutting down red tape and opening a new port as well as land and air routes to Nepal.
���The new treaty retains all the positive aspects of the old treaty,��� Sharma said, referring to the earlier 1996 trade treaty that saw bilateral trade reach Rs. 204.8 billion in 2008-09 from Rs. 28.1 billion in 1995-96. In the same period, Nepal���s exports to India increased from Rs. 3.7 billion Rs. 40.9 billion while Indian exports grew from Rs. 24.4 billion to Rs. 163.9 billion.
Sharma said the new treaty will have a seven-year validity instead of the earlier five years and will be extended automatically every seven years, creating a ���stable framework for bilateral trade and investment���.
The cumbersome Duty Refund Procedure has been scrapped to provide Nepal a direct control on the customs duty revenues on import of manufactured goods from India. Besides the Calcutta Port, Nepal can now also avail of the Vishakhapatnam port while four additional land customs stations will be established to facilitate bilateral trade.
Also, for the first time, bilateral trade will be allowed by air through international airports connected by direct flights between Nepal and India (Kathmandu/Delhi, Mumbai, Kolkata and Chennai).
The two ministers also signed an Agreement of Cooperation to Control Unauthorized Trade that will allow export of goods imported by Nepal from India to the third countries without the necessity of carrying out any manufacturing activity in Nepal. This will enhance exports from Nepal to third countries where it has a better market access as compared to India.
India has also agreed to allow Nepal access to the Banglabandh port through Indian territory, allow items like rice, wheat and sugar to be sent to Nepal at a time they are not allowed to be exported to other countries and will authorize the export about 50,000 tonne of fertilizer.
Sharma said India is appreciative of the steps Nepal���s people have taken to strengthen democracy in the Himalayan nation and sought stability, progress and welfare in the neighbouring country.
Asked what India hoped to gain from the new treaty, Sharma said in would lead to increased economic growth which would in turn lead to greater stability and greater opportunities for the young people of Nepal.
���That would be to India���s benefit,��� he said.