Indian trade with energy starved Nepal under trouble.

 SILIGURI/DHULABARI( Nepal ): Severe power and oil shortage in Nepal is causing severe downfall in its own economic activities as well as bilateral trade with India, its largest trade partner. Many Indian beneficiaries are also victim of the situation.

Since the two neighbors signed bilateral trade treaty in 1996, along with its industrial activities, Nepal's exports to India have grown eight times while its import from India doubled up. According to Trade and Export Promotion Centre of Nepal statistics, India's annual official export to Nepal is of INR 19,000 crore against import of INR 3,100 crore.

But the trend has taken a downturn. Despite having 42,000MW economically viable hydropower potential, Nepal's present production is even bellow 1000MW, much lesser than its need. The shortage forces the country's national power monopoly, Nepal Electricity Authority, to impose mandatory load shedding for even 12 hr a day. Petroleum products are also always in short supply due to irregular payment to its only oil supplier Indian Oil Corporation.

"No power, no fuel, running the show has become too difficult. Over 40% industrial operations are now almost dead. Entrepreneurs, traders and investors from both the countries have become victim of the situation," said the traders," said Federation of Nepalese Chambers of Commerce and Industry (FNCCI) members.

"Administrative stability is a must for us to go full fledged in our business activities. And that is missing here," said Mr. B. Jalan, a veteran businessman of Dhulabari, main indo-Nepal trade center in eastern Nepal adjoining to West Bengal in India. Nepal has failed to have a stable Government after downfall of century old monarchy in 2006.

"Government's repeated assurance for 'peaceful business environment' could not make business community confident enough. As a new trend, traders, entrepreneurs have started shifting in border adjoining towns like Siliguri after liquidating their assets in Nepal," they said.

"The large scale outbound trend of people with huge cash in hand from Nepal's commercial sector is bound to influence the socio economy in nearby towns like Siliguri. And it is not likely to be always positive. The issue needs immediate diplomatic level intervention," said Indian exporters engaged in trade with Nepal.

Source : economictimes.indiatimes.com