Private sector demands revision of Nepal-India Trade Treaty

Kathmandu, Feb. 5:

The private sector has suggested revising the Nepal-India Trade Treaty.

They expressed the concerns over the burgeoning trade deficit and urged the government to revise the treaty in a way so that it could promote the manufacturing companies in the country, facilitating export trade and generating employment.

"Nepal has almost de-industrialised due to hegemonic trade measures imposed by India. We are facing hurdles in exporting all sorts of goods ranging from ginger to medicines. A paradigm shift is needed in bilateral trade treaty with India," president of Confederation of Nepalese Industries (CNI) Hari Bhakta Sharma said at an interaction on 'Nepal-India Trade Treaty: Challenges and opportunities' organised jointly by the Ministry of Industry, Commerce and Supplies (MoICS) and South Asia Watch on Trade Economics and Environment (SAWTEE) on Tuesday.

He urged the government to play the role of a guardian and promote industrial production.

The size of Indian trade with Nepal is much larger than with other neighbours, but the southern neighbour has given very less attention to trade infrastructure development and border facilitation in Nepal, said Sharma.

Senior Vice-President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Shekhar Golchha said that the country could not export significantly in the last couple of decades due to political hurdles, deteriorating labour relations and energy deficiency.

"But most of the challenges related to political, labour and energy are resolved. Therefore, the government must pay attention to develop quality trade infrastructure like roads, dry ports, Integrated Check Post (ICP) and laboratories to facilitate export. The treaty should be reviewed and revised to incorporate these requirements," he said.

He also said that the government should incorporate issues like reducing non-tariff barriers, removing anti-dumping measures and developing testing facilities.

Vice president of Nepal Chamber of Commerce (NCC) Kamlesh Kumar Agrawal asked the government to establish modern laboratories at Nepal-India border to facilitate the export of agricultural goods.

"The treaty should be revised in a way that the Indian states bordering Nepal would not create hassles in exporting Nepali products. It should also facilitate the export of services like insurance products to India," he said.

The traders have also asked the government to allow import of third country goods from India as it would facilitate them to import in small amount.

Immediate past president of the FNCCI Pashupati Murarka recommended reducing the minimum value addition to 20 per cent from current 30 per cent for a good to qualify as made in Nepal.

Trade expert and chairman of SAWTEE Dr. Posh Raj Pandey said that Nepal should include a provision whereby India would assist Nepal in increasing its capacity to trade through improvement in technical standard, quarantine and standard facilities and related human resources capacity upon the request of Nepal, not on India's preference.

"The trade treaty should remove the provision of tariff rate quota on vegetables, fats, acrylic yarn, copper and zinc oxide. India has not imposed quota for other South Asian nations, why only for Nepal?" he said.

Likewise, he suggested removing the provision whereby other trade partners negotiate with Nepal and India gets free riding facility.

He recommended removing the time-bound nature of the trade treaty.

Former secretary Purushottam Ojha said that the treaty should be revised as it has many regressive provisions than the South Asia Free Trade Area.

Secretary at the MoICS Kedar Bahadur Adhikari assured that the private sector's suggestions would be incorporated in the talks with the Indian delegation in Pokhara on February 8 and 9.

This is the second round of discussion on the bilateral trade treaty. The first discussion was held in New Delhi last August. The treaty was last revised in October 2009.

Joint Secretary at the Ministry Ravi Shankar Sainju is leading the Nepali delegation for the talks.

Published in The Rising Nepal daily on 6 February 2019.