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Kathmandu Thursday August 02, 2001 Shrawan 18, 2058.
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India pushes for containing
‘swelling exports’
By Bhaskar Sharma
KATHMANDU, Aug 1 – The visiting Indian
trade delegation raised the issue of "swelling exports" of some Nepaleseproducts
to India in the first day of the three-day long trade talks that began here today.
The Indian delegation struggled hard to put five
of the major Nepalese exportable items to India, including zinc oxide, acrylic yarn,
copper twines, vanaspati ghee and steel pipes, under the surge net. "By putting the
items under the surge net, India wants to curtail the export of these items," said a
government official.
Article V (2) of the Nepal-India Trade Treaty
1996 says, "In the event of ….a surge in the imports generally or in the import
of any particular article, the two governments shall enter into consultation with a view
to taking appropriate measures"
According to sources at the Ministry of
Industries, Commerce and Supplies, the Nepalese side, however, maintained that natural
growth in the export of these items doesn’t attract the "Surge Clause" of
the Treaty.
Furthermore, the Nepalese side also dismissed
the Indian claim that Nepalese export to India is harming the latter’s markets, said
the sources. "The volume of export of the Nepalese products in question to the Indian
market is negligible compared to the enormous demand of such products in India. Therefore,
it can in no way harm Indian manufacturers."
The first day meeting remained inconclusive on
the issue as both the sides failed to buy each other’s version. When asked if the
Indian side proposed any remedy to the issue, an official who took part in the dialogue
said, "No."
The issue is likely to be picked up again when
the secretary level talks begin tomorrow.
Though already late by six months, the three-day
meet, an annual event, will try to identify and resolve the contentious issues that stand
in the way of effective implementation of the Nepal India Trade Treaty 1996.
Trade experts argue that any attempt to clamp
down on some of the Nepalese exports to India, which are providing lifeline to the fatally
imbalanced Nepal-India trade, would be against the spirit of the Treaty. One of the basic
objectives of the Treaty was to promote Nepalese exports to India to reduce the chronic
trade deficit on Nepalese side, says a trade expert. " If the exports growth of the
said items is contained, it will further widen the existing trade imbalance to an
unsustainable degree."
Though exports to India have seen a quantum jump
in the last five years after the signing of the Treaty, import from India has also grown
tremendously thereby keeping the trade account heavily in favour of India. During the
fiscal year 1999/2000, Nepal’s export to India picked up to Rs 22.61 billion. But
import from India crossed Rs 40.51 billion mark triggering the trade deficit with India to
Rs 18.31 billion.
The Nepalese negotiating team was led by
Purushottam Ojha, joint secretary at the Ministry of Commerce and Industry, while his
India counterpart, Ramasunderam led the seven-member Indian team.
Tomorrow the meeting will be upgraded to
secretary level where Prabir Sengupta, Indian Commerce Secretary, will lead the Indian
side. A Nepalese negotiating team led by Bhanu Prasad Acharya, Secretary at the Ministry
of Industry, Commerce and Supplies will sit across the table with the Indian side.
The Nepalese side at the talks tomorrow is
likely to raise several pertinent issues, including the railway agreement and recognition
of NS mark in India. Trade experts say India could add security of Indian investment and
unauthorized trade in the discussion agenda.
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