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Kathmandu Saturday July 28, 2001 Shrawan 13, 2058.
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Raging trade ties
The Nepal-India secretary level official meeting in Kathmandu
in the first week of August is expected to iron out problems seen in the Nepal-India Trade
Treaty. The talks will focus on bilateral trade issues that have been contentious but have
not been taken up formally between the two sides as the meeting was delayed by one and a
half years. Since the talks are going to be held just a couple of months before the
Nepal-India Trade Treaty expires on December 31, 2001, both sides have to take up issues
with a view to paving the way for a renewal of the Trade Treaty.
Nepali exporters are facing a serious problem while exporting
to India as the authorities there do not recognize the Nepalese certification of quality
for goods, despite the meetings on this issue. The Nepal Bureau of Standards and Metrology
issues the NS mark, the Nepalese standard mark for Nepalese products. As Nepal recognizes
ISI, the Indian standard mark, there should be reciprocation and no discrimination between
the two. Similarly, there has been a serious problem in the export of Nepalese
agro-products to India, due mainly to the existing sanitary and phyto-sanitory clauses in
the Nepal-India Trade Treaty. A few months back India refused to import milk from
adjoining districts in eastern Nepal precisely on that excuse. The secretarial meet should
therefore focus on resolving this problem.
The Indian side is likely to raise the issue of unauthorized
trade. India has been complaining about transshipment of third county goods including
cheap Chinese products and high value products from other countries, with a very little
value addition. Zinc oxide, synthetic yarn and copper wire are some of the goods on their
hit list. But His Majesty’s Government has increased the export duty on such goods
including vegetable ghee through the current fiscal year budget. The Indian side has also
been proposing a minimum of 30 percent value addition requirement on these goods. Nepali
officials should weigh the pros and cons before reaching to any agreement on such a
sensitive issue. Issues like the security of business establishments with Indian
investments would likely be top of the agenda for the Indian side and this is relevant in
the context of the repeated attacks on such establishments. Also relevant is that Nepal
has signed agreements on the security of foreign-funded industries with five other
countries. Nepal should be positive about this and officials concerned have made
encouraging gestures ahead of the talks.
Nepal needs to woo the Indian side to sign a Railway
agreement. In the absence of an agreement, the inland container depot (ICD) in Birgunj has
remained idle long after its completion. Similarly, the construction of warehouses at
Calcutta (Kolkotta) and Haldia ports should get top priority during the meeting. These
facilities will contribute to a great extent to facilitate Nepal’s trade with third
countries. Once the Birgunj ICD becomes operational, it will reduce transit costs by an
estimated 40 percent. Although government officials claim that the talks are routine and
annual agendas affecting the renewal of the Nepal-India Trade Treaty will feature.
Therefore, the meet should be taken as an important event and the talks should be held
accordingly.
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