KATHMANDU: Indian commerce and industry minister Anand Sharma is arriving in Nepal on Tuesday to ink the new India-Nepal Trade Treaty that will now get a seven-year shelf life instead of the earlier five with the provision to have it automatically extended every seven years.
With the signing of the new treaty in Kathmandu on Tuesday between Sharma and his Nepali counterpart Rajendra Mahato, Nepal gets more time to provide a more stable framework for bilateral trade and investments.
The two ministers will also sign a new agreement upgrading the 1996 agreement to control unauthorised trade from third countries. Both the agreements had been initialled during Prime Minister Madhav Kumar Nepal’s five-day visit to New Delhi in August.
The new trade treaty will now see bilateral trade being conducted in Indian rupees at par with trade in convertible currency in respect of tax rebates and other benefits available to such trade. This indicates ending the existing complicated mechanism of tax refunds. The switch will provide Nepal direct control on customs duty revenues on import of manufactured goods from India. Other tax rebates and export promotion benefits will also become available on exports from India to Nepal, the combined impact making imports from India cheaper both for sale and further manufacture in Nepal.
The new trade treaty will also have India enhance the time limit for temporary import of machinery and equipment into India for repair and maintenance from three to 10 years. Besides, India will allow several new items to the list of primary products Nepal wants to export, like floriculture products, atta, bran, husk, bristles, herbs, stone aggregate, boulder, sand and gravel. All these items will have duty free access to India without any quantitative restriction.
India will also facilitate export under the MFN treatment of articles manufactured in Nepal, which do not fulfill the criteria for preferential access and establish four additional Land Customs Stations and open air traffic for bilateral trade. The new LCS are Maheshpur/Trutibari (Nawalparasi); Sikta-Bhiswabazar; Laukha-Thadi; and Guleria/Murtia. Bilateral trade by air will be allowed through Kathmandu/Delhi, Mumbai, Kolkata and Chennai airports.
The treaty will also boost Nepal’s technical standards, quarantine and testing facilities and related human resource capacities. Both countries have agreed to facilitate cross-border flow of trade through simplification, standardization and harmonization of customs, transport and other trade-related procedures and development of border infrastructure. The two sides will also undertake measures to reduce/eliminate non-tariff, para-tariff and other barriers that impede promotion of bilateral trade.
New Delhi has agreed to establish a joint mechanism, comprising local authorities, to resolve problems arising in clearance of goods at customs points and the two sides will review and simplify the existing administrative arrangements for operationalization of fixed quota for acrylic yarn, copper products and zinc oxide.
Sharma will also be attending the SAFTA (South Asia Free Trade Area agreement) meeting of SAARC commerce ministers in Kathmandu. His visit will be followed by that of Indian Home Secretary G K Pillai, who will hold a meeting with his Nepali counterpart Gobinda Kusum on November 6-7, the Indian Embassy in Kathmandu said.
Also in the pipeline are a meeting by the commerce secretaries of both countries in Kathmandu as well as the Joint Committee on Water Resources to expedite the Pancheswor Multipurpose Project.
Source : TOI