Kathmandu, Oct. 15
Minister for Foreign
Affairs Shisir Khanal has said that the next chapter of Nepal-India economic
relations should be defined by ambition matched with execution.
"Our progress
should ultimately be visible in tangible outcomes: investments realised,
barriers removed, enterprises expanded, technologies shared, value chains
strengthened and opportunities created," he said while speaking at the 32nd
Annual General Meeting of the Nepal-India Chamber of Commerce and Industry
(NICCI) held in Kathmandu on Thursday.
He urged to capitalise
the bilateral relationship to forge an economic partnership that is
increasingly productive, innovative and resilient, one that connects capital
with opportunity, technology with talent, and connectivity with enterprise.
Stating that India
remains a major trade partner, source of investment, a key transit partner, and
an increasingly important market for Nepal's electricity, FM Khanal said the task
now is to make this relationship increasingly productive, diversified, and
capable of generating greater value.
"For Nepal this
means expanding productive capacity, creating jobs, attracting quality
investment, diversifying exports, and connecting Nepali enterprises with
regional value chains," he said while adding that Indian joint ventures
and multinational companies have already made an important contribution to the
economy, and encouraging the existing and prospective investors to expand their
engagement in Nepal.
According to him, economic
relationships depend on confidence and continuity. Every joint venture,
business partnership, and professional network creates stakeholders invested in
the prosperity of both the nations.
FM Khanal proposed
five major areas of immediate cooperation – facilitation and connectivity,
investment and industrial cooperation, energy cooperation, digital
transformation and emerging technologies, and tourism.
He said that efficient
border infrastructure, supply chain integration, predictable customs
procedures, integrated checkpoints, logistics networks, and reliable transport
corridors are essential to lowering the cost of doing business.
"We, at this
point, need to move away from open border and closed sky," he said.
He also stated that Nepal's
economic transformation requires productive capital that expands domestic
capacity, generates employment, and facilitates technology and knowledge
transfer.
Maintaining that the cross-border
electricity trade has opened an important new chapter in Nepal-India economic
relationships, FM Khanal said Nepal's hydropower potential, combined with
India's expanding energy market, provides the foundation for deeper investment,
stronger transmission infrastructure, and wider regional energy integration.
'Take non-tariff
barriers seriously'
Professor Amitabh
Mattoo, Dean of School of International Studies at the Jawaharlal Nehru
University, said that India must take Nepal's concerns about non-tariff
barriers seriously.
"India has right
and responsibility to enforce health, safety, and quality standards, but
regulation should be transparent, proportionate, and predictable so that a
consignment of Nepali ginger or tea is not stranded because of a requirement
that an exporter could not reasonably have anticipated," he said.
However, he said that
the export of the goods like soyabean oil has also raised legitimate questions
about the rules of origin, tariff arbitrage, and domestic value addition.
According to him, sustainable
growth must increasingly come from sectors in which Nepal creates genuine value
and there are so many: agro-processing, tea, cardamom, specialised foods, light
manufacturing, clean energy industries, tourism, and IT and digital services.
Prof. Mattoo, a Padma
Shri awardee, suggested measures like mutual recognition of accredited testing,
risk-based rather than blanket inspection, digital certificates of origin, and
consultation before any major bilateral consequences in order to have seamless
trade relations between Nepal and India.
Stating that some in
Nepal will say deeper integration means deeper dependence, he said that badly-designed
connectivity creates dependence while well-designed connectivity creates
choice.
"When Nepal's
electricity can reach Bangladesh through India, when Nepali goods can use
multiple Indian transport routes and ports, and when Nepali entrepreneurs can
access Indian capital and then reach global markets, connectivity enlarges
Nepal's agency rather than shrinking it," he said.
Prof. Mattoo said that
while some others would say that large Indian firms are over Nepali enterprise,
the answer lies in design - fair competition, local supplier development,
skills transfer, strong regulation, and joint ventures where they make economic
sense.
"We must turn
infrastructure into corridors. A road on which a truck waits for hours, or
paperwork, is yet not an economic corridor. A railway disconnected from
warehousing and efficient customs is not yet a logistics system. A border post
without interoperable digital documentation is only partly modern," said
Prof. Mattoo.
Indian growth
offers demand for Nepal
Former Ambassador of
Nepal to India Dr. Shankar Sharma said that India's growth offers demand and
resources for Nepal and the latter must build the capacity to respond.
"Open markets,
competitive production, regional energy trade, and effective implementation can
make shared prosperity a durable foundation for the relationship," he
said.
Dr. Rakesh Pandey,
Charge d'Affaires at the Embassy of India in Kathmandu, said that while
maintaining deeper integration in existing trade and economic cooperation,
interaction should be enhanced in areas like technology, AI, startups,
renewable energy, IT, connectivity, and many others.
Address challenges
at border
Speaking on the
occasion, President of the Federation of Nepalese Chambers of Commerce and
Industry (FNCCI), Anjan Shrestha said that the challenges faced by
businesses in cross-border trade should be addressed first as suggested by the
Nepal-India Joint Business Forum. "Simplifying customs procedures,
improving border infrastructure, reducing delays, strengthening transport
connectivity and ensuring predictable trade policies will lower costs for
businesses and consumers in both countries," he said.
He also
said that better coordination between the Bureau of Indian Standards (BIS) and
Nepal Standards (NS) is required for certifying products such as steel,
footwear, and plywood. "Currently, non-compliance issues with BIS
standards are adversely affecting Nepali exports. The certification process is
overly time-consuming, often taking six months to a year to complete. By the
time certification is granted, the renewal period is already due, which has
heavily discouraged local entrepreneurs," stated Shrestha.
Published in The Rising Nepal on 16 October 2026.