KATHMANDU, Oct 24: Nepal and India are signing a new bilateral trade treaty on October 27 after a delay of some two months. Government officials said that the Commerce Ministers from Nepal and India will put ink on the revised treaty amid a function on Tuesday.
“Indian cabinet has recently given nod to the signing and Indian Commerce Minister is arriving in Kathmandu on October 27 to sign the treaty,” said Commerce Secretary Purushottam Ojha.
Once signed, the revised treaty with special extra-duty and non-tariff barrier concessions for Nepal will come into effect from the same date and will be valid for next seven years, contrary to previous arrangement of five years.
Despite differences on provisions related to Control of Unauthorized Trade, the two governments had put initials on the treaty when Prime Minister Madhav Kumar Nepal visited New Delhi some three months ago.
However, as the Commerce Ministers´ signature is necessary for formalizing the deal, delay by the Indian government in completing necessary procedures on its side had affected its enforcement.
The revised treaty is an outcome of two-year long negotiations between the technical committees of the two countries. It provides additional facilities for Nepal, which traders said, will give impetus to country´s export trade to the largest trading partner.
For instance, India has agreed in the new treaty not to impose extra-customs duty and non-tariff barriers on Nepali goods. This is expected to boost Nepal´s export to India.
Imposition of non-tariff and extra-customs duties, which debilitated Nepal´s competitiveness, has been badly affecting Nepal on the exports front. Sharp rise in consumption, on the other hand, has caused its trade deficit to widen to more than Rs 108 billion.
Likewise, the new treaty binds India to recognize Nepal´s standards certification. It also puts the responsibility of upgrading Nepal´s laboratory on India´s shoulder, a provision which officials said will ensure enforcement of standard accreditation provision.
Once that happens, exporters of Nepali tea, cardamom, ginger and other agricultural produces will not need to produce quality certification from Indian laboratories in Kolkata or Patna for exporting their produces to India.
This will prevent traders from losses they incurred while waiting for a week for certification to come, and thus will boost the export of primary goods.
The treaty will annul the system of exporting vegetable ghee through a channeling agency. It will enable traders dealing on Indian currency to enjoy excise and all other facilities as enjoyed by traders dealing on convertible currency.
The new treaty will for the first time open bilateral trade via air routes as well. For the purpose, Tribhuvan International Airport (TIA) will be used as the official port for exports and airports in New Delhi, Mumbai, Kolkata, Bangalore and Chennai will be ports for imports.
It will also add four new land routes, namely Maheshpur (Nawalparasi), Sikta (Parsa), Guleria (Bardiya) and Laukaha (Siraha), for bilateral trade.
The treaty also provisions setting up a new mechanism including local customs, government and chamber´s officials to instantly address trade related problems.
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