 |
Kathmandu Sunday March 03, 2002 Falgun 19, 2058.
|
Nepal-India
Trade Treaty renewed
By Bijaya Ghimire
NEW DELHI, March 2 :
The long-running contention over the renewal of the 1996 Nepal-India Trade Treaty is
finally over. Nepali and Indian commerce officials today signed a protocol and renewed the
Treaty, which comes into effect from March 6.
Four days of
inter-governmental secretarial level talks held here concluded today with the two sides
coming to an understanding on the disputed value addition norms and the export of four
items that India claimed to have fallen under the ‘surge net’.
Officials agreed to
impose a mandatory 25 per cent value addition slab on material and labour content on
Nepali goods to gain duty free market access to India in the first year, and 30 per cent
from the second year onwards. The percentage of value addition would be calculated taking
the export price as the base.
Similarly, the two
sides also agreed to include provisions relating to safeguard measures in case surge in
export from any of the countries take place. Likewise, four Nepali items that India claims
to have surged will now be allowed to enter free of basic customs duty into the Indian
market on a fixed quota basis.
The four items are
vegetable ghee, acrylic yarn, copper products and zinc oxide, whose exports comprise
almost 20 per cent of the total Nepali exports to India. While one hundred thousand tons
of vegetable ghee would be allowed to enter India each year free of basic customs duty
from now on, ten thousand tons of acrylic yarn, 7500 tons of copper products and 2500 tons
of zinc oxide would also be allowed.
Officials talking to
The Kathmandu Post expressed satisfaction over the renewal of the Treaty and said that the
renewed Treaty, though not as flexible would not kill the spirit of the 1996 Treaty.
"The manner in
which the Treaty has been renewed is satisfactory. Though the four items facing the fixed
quota system from now on will see tough days ahead, the export of other products from
Nepal to India will remain largely unaffected," said a high level Nepal delegate to
the latest talks.
"The additions
made in the Treaty are as a result of the tough stand taken by the Indian side that
proposed to include provisions on safeguarding the domestic industries of both Nepal and
India respectively," said the source.
The source also
informed that the provision on safe guard could be reviewed at the inter-governmental
secretarial level meeting if the two sides so desire. However, Nepali officials are
downbeat that the provisions on safe guard and export surge may again give rise to dispute
as in the recent past. The latest testimony to the Indian seriousness to safeguarding
their domestic industries is the imposition of 4 per cent Special Addition Duty on Nepali
produce as announced in the Indian budget for the fiscal year 2002/03 ending March 31st.
The confusion over the
Treaty’s renewal for the past six months had created an atmosphere of uncertainty in
the Nepali business circle. The Treaty was due to expire last December 5 but was extended
by three months as a state of emergency was declared in Nepal.
India had formally
asked Nepal to review the 1996 Treaty last August arguing that the export of some Nepali
products rose unprecedented in the past few years thereby edging their domestic products
from their own markets.
Several earlier rounds
of secretarial and joint secretarial negotiations held both in the Indian and the Nepali
capitals had failed to resolve the impasse over the Treaty renewal.
The 1996 Trade Treaty
has yielded positive results for both Nepal and India through a tremendous expansion in
bilateral trade. Exports from Nepal to India in the fiscal year 2000/01 stood at Rs 27
billion, up from below Rs 4 billion in 1995/96. Similarly, imports grew from Rs 24 billion
to Rs 46 billion in the corresponding period.
Other Stories
|
