| September 22, 2020

Experts for amending various provisions of Nepal-India Treaty of Trade

KATHMANDU, June 10: As the date for renewal of Nepal-India Treaty of Trade comes closer, experts have said that the treaty needs to be amended for enhancing bilateral trade.

Stating that different provisions in the treaty differs with the provisions in South Asian Free Trade Agreement (SAFTA), experts have said that Nepal cannot get any benefit from trade with India unless these provisions are amended.
The seven-year force period of the treaty, which was signed in 2009, ends in October 27. Though the treaty can be renewed automatically for another seven years, it has provisions that say amendments and modification can be made by mutual consent of the contracting parties.

"Interestingly, Nepal's bilateral trade provisions with India seems to be lagging behind when compared to trade provisions incorporated in SAFTA," Purshottam Ojha, former commerce secretary, said, adding: "Nepal should take proposals for making amendments in provisions related to duties in different products, custom cooperation, connectivity and different other non-tariff barrier issues."

According to Ojha, the bilateral trade treaty is weaker compared to SAFTA in the sense that the former prohibits imposition of duty on agriculture products, while SAFTA states that duty can be imposed on all agriculture products. Similarly, the treaty has put Nepali perfume, tobacco and alcohol in the sensitive list, though SAFTA has placed only alcohol and tobacco in the list.

"These contrasting provisions have made Nepal-India trade agreement weaker than the regional agreements like SAFTA," added Ojha. "If we cannot amend such provisions, it is better to move to SAFTA as SAFTA is much beneficial to Nepal."

An official of Ministry of Commerce (MoC), requesting anonymity, said that issues related to revision of provisions in Treaty of Trade is likely to be discussed in the secretary-level inter-governmental committee (IGC) meeting set to be held in India in the end of this month.

Though the trade treaty has envisaged holding IGC meeting every six months, the meeting has not been held in the past two years.

Rajan Sharma, former president of Nepal Freight Forwarders' Association (NEFFA), said that government should put quarantine and custom issues in the agenda of IGC meeting. "The government should also request India to appoint a commissioner-level officer at its embassy in Kathmandu to look after all customs-related issues for facilitating bilateral trade," he added.

Earlier this week, Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI), Nepal Chamber of Commerce (NCC) and NEFFA had jointly presented a charter of suggestions to the government on Nepal-India Treaty of Trade.
Sujan Dhungana

Sujan Dhungana is associated with Republica English Daily since July 2013. He has been writing and reporting in business issues with primary focus on transportation, industry, commerce and supplies, gadgets, fuel and dairy reporting.    
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