‘India to treat Nepal preferentially in future too’

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KATHMANDU, Feb 28: Indian Ambassador to Nepal Shyam Saran today said that motivated political propaganda has plagued Nepal-India bilateral efforts towards better economic cooperation.

Ambassador Saran clearly said that such propaganda comes even before the economics of ‘how the two countries can work together on a number of mutually beneficial issues’ is agreed upon.

He was referring to recent media reports that downplayed the latest efforts of the Indian side towards an early signing of the protracted Railway Agreement.

Signing of the Railway Agreement between the two countries is necessary for the operation of the Birgunj-based Inland Container Depot (ICD).

Nonetheless, the Ambassador added that Nepal would continue to receive preferential trading treatment from India even in the future.

He was speaking at the inaugural session of eighth annual general meeting of Nepal-India Chamber of Commerce and Industry (NICCI).

On the occasion, Ambassador Saran also said that changed regional and global context has prompted changes in Nepal-India Trade Treaty of 1996. "Changes in the global arena, especially due to World Trade Organization, necessitated changes in the trade treaty, whether we like it or not," he said.

The Ambassador also said that Nepal could benefit a lot from India in the areas of hydropower, trade, tourism and Information Technology.

However, he said that both sides should have willingness to address the mutual issues of concerns, only through which a mutually beneficially partnership could be forged.

Jagat Bahadur Gurung, Assistant Minister for Industry, Commerce and Supplies, said that the operation of the ICD at Birgunj is not far.

"India and Nepal has agreed on wide-ranging issues and the ICD will come into operation within the next three months," the minister said.

He expressed hope that the cease-fire declared by the government and the Maoist recently would transform into long term peace, which is necessary to boost the downtrodden business confidence.

Likewise, Tejendra Khanna, former Indian Commerce Secretary, who was conferred with an honorary NICCI membership, said that both Nepal and India still have huge trade potentials.

His statement was directed at the unsaid claims that the treaty of 1996 renewed last year does not bear the same vision as the earlier one.

He stressed that trade now should be carried out with quality and productivity in mind. "Regulatory mechanism to ensure the quality of production should be strong and effective," he said.

At the same time, Khanna added that some of the existing procedural irritants in trade should be removed. "Time-bound limits should be set for doing away with such irritants," he said.

On the occasion, Arun K Chaudhary, NICCI President, said that the livelihoods of the Nepali agricultural community is at stake.

"The imposition of quarantine and long procedures required for the entry of Nepalese agricultural products into India has scared the fragile sentiment of the agricultural community," he said.

He also said that frequent policy changes on both sides of the border has marred the flow of big investment into Nepal. "... the changes have been regressive rather than progressive," he said.

Binod Chaudhary, President of the Confederation of Nepalese Industries and Chandi Raj Dhakal, Vice President of the Federation of Nepalese Chambers of Commerce and Industry, also spoke on the occasion.

Quota system has affected Nepal’s exports: Khanna

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KATHMANDU, Feb 28: Tejendra Khanna, former Indian commerce secretary, is remembered for his lead role in drafting the most-liberal Nepal-India Trade Treaty in 1996. It was he who signed the treaty on behalf of the government of India. However, when the treaty was renewed last year, the most liberal trade regime was slightly trimmed when India imposed quantitative restrictions on some Nepali exports to India. Khanna views that the step has definitely narrowed the doors, but it is still wide enough. Khanna who arrived here on Thursday at the invitation of Nepal-India Chamber of Commerce and Industry, spoke to The Kathmandu Post. Excerpts:

TKP: What was the vision behind signing the most liberal Nepal-India Trade Treaty in 1996?

Khanna: At that time we were working under the guidelines given by then Prime Minister I K Gujaral and he had a clear intention that India, being the largest economy of the region, should build up very good relationship with the neighbouring countries. Therefore, we felt that India should be liberal to the imports of goods manufactured genuinely in Nepal without going for normal provisions of minimum value addition. So that was the broad vision we adopted to strengthen our economic ties with neighbours and the treaty was signed accordingly. I am happy that Nepal’s exports to India recorded a very good growth in first three or four years.

TKP: Did you face any resistance while signing the treaty in 1996?

Khanna: I didn’t face any resistance because the then political leadership had given me a very clear mandate to consider the interests of Nepal and to find out a system so that Nepal can be given all facilities and assistance in order to boost her exports. There was unanimity among the leaders that India should provide some liberal trade regime to Nepal and it was laid down in the Nepal-India Trade Treaty signed in 1996. Going by the policy, cross-border trade procedures were simplified and ground rules were set up to facilitate the Nepali manufacturing industries to enable them to export their products to India.

TKP: Despite the liberal trade regime adopted in 1996, what made the Indian government to introduce quantitative restrictions while renewing the treaty last time?

Khanna: The Indian government apparently came across a number of complaints from vegetable ghee and acrylic yarn manufacturers in Bihar and Utter Pradesh. They said that the cheaper goods coming from Nepal were hurting the Indian industries. So, in response to the complaints, the Indian government began looking at the matter differently and imposed quantitative restrictions, minimum requirement of value addition on four sensitive commodities, whose imports to India had increased remarkably. This is how the Indian government tried to maintain a balance between the old agreement and the difficulties of Indian manufacturers.

TKP: Don’t you think that the latest amendments to Nepal-India Trade Treaty 1996 has dishonoured the spirit of the treaty?

Khanna: I think everyone likes to look into the issue from their own point of view. All I can say is that India has taken a middle path by partly accommodating liberal trade with Nepal and partly addressing the problems of Indian manufacturers. My own sense is that the Indian government will continue to maintain special trade relation with Nepal. I don’t think there is a change in the spirit of the treaty, but a democratic government should also listen to its voters and make due response.

TKP: Why Nepal continues to face problems even after the renewal of the treaty last year?

Khanna: There shouldn’t be any problems left unsolved and unattended when there is a real intention to solve them. I think problems can be solved, if both sides really want to solve their problems. But, there is a need of a close monitoring of the issue as there used to be high powered Monitoring Group in my days and the Group used to take initiatives whenever problems arose and most of the problems used to be settled in a very short time.

TKP: What are major factors behind the declining Indian Investments into Nepal?

Khanna: The main reason behind the decline in Indian investments into Nepal is the security problem of Nepal. Investors always look for peaceful environment where they can feel secure. I think the Indian investors will start coming to Nepal once the peace is restored. Another thing is that both the governments should resolve any sort of trade problem as soon as possible and it can help Nepal to be a lucrative investment destination for Indians.

TKP: What is the prospect of trade relation between Nepal and India?

Khanna: I think trade relation between the two countries will continue to expand very well. Various procedural problems, as customs barrier, transit and quarantine issues, among others, should be solved through talks before it starts hurting business interests of both the nations..

India extends ghee exports time

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KATHMANDU, Feb 28: India has allowed an extra 30 day-period to Nepali vegetable ghee exporters to effect their quota exports to India, states a press release issued here today by Indian Embassy here.

The statement further states that Central Warehousing Corporation (CWC) of India, through which the export of vegetable ghee is chanalised, will now be providing for 30-day extra time beyond the date of issue.

In line with the recent decision, the CWC has already issued No Objection Certificates to Nepali exporters for 85,247 metric tons of vegetable ghee as of 28th February 2003, states the release.

NIBL to provide easy loans

KATHMANDU, Feb 28 (PR)- Nepal Investment Bank Limited (NIBL) has agreed to provide easy loans to small, medium and cottage industries along with retail businessmen on the basis of group responsibility. Prithvi Bahadur Pandey, Chief Executive Director of the bank at a meeting held by Nepal Chamber of Commerce (NCC) and participated in by the retail businessmen, small-medium and cottage industrialists, reads an NCC press release. President of NCC Rajesh Kaji Shrestha highlighted the importance of the participating businessmen and industry in providing consumer goods and employment and stressed that state-run and private banks should provide loans on convenient terms to them.

Inferior hybrid seeds import rising

By Sameer Ghimire

KATHMANDU, Feb 28: While the desire of Nepali farmers to increase their production and productivity has fuelled the import of hybrid seeds in large quantities, the government officials perhaps are not much aware that inferior seeds are finding easy access into the country.

And with no effective government body to look after the quality of incoming seeds, a large chunk of which comes from India, agro-experts estimate that 10-15 per cent of total hybrid seeds imports are sub-standard.

As of the last fiscal year, unofficial estimates put the total import of hybrid seeds at 219 tons. However, since Nepal shares a porous border with India the actual inflow figures of hybrid seeds, including the inferior ones, can be much higher.

Fears is that unrestricted rising inflow of inferior seeds, due mainly to government laxity, can lead to further influx of such seeds thereby hitting on both production and productivity in the long run.

"Most domestic farmers, already burdened by poverty, will face disaster in the long run unless effective measures are taken to check the increasing inflow of inferior hybrid seeds," says Govinda Sharma, Executive Director of Institute for Sustainable Agriculture Nepal (INSAN).

Government officials, not refuting claims that hybrid seeds of degraded quality are finding their way into the Nepali markets, however, deny that the inflow of the inferior seeds could go up to any alarming level.

"We have worked closely with the local farmers to prevent the usage of substandard seeds within our territory," says Koushal Kishore Lal, Chief of Seed Sowing Centre, a state owned body endowed with the responsibility of ensuring the availability of quality seed throughout the country.

But Lal’s argument stands weak when facts are considered. It has not been long when farmers of Kavre and Sindhupalchok faced a disastrous crop failure as a result of the usage of inferior seeds, which were sold claiming as pure and original hybrid seeds.

And adding to the inferiority of the seeds is the fact that many a time when farmers purchase seeds of one vegetable, the seeds themselves grow out into another vegetable. So much for the government watchdog.

It was only during the last season that farmers of Dapcha in Kavre found that their hybrid cauliflower seeds turned out giving feeble mustard plants, thereby ruining their investment. Farmers from seven neighbouring villages of Dapcha faced similar problem during the same season.

Likewise, farmers of Bhimtar of Sindhupalchowk suffered much due to the usage of inferior hybrid seeds. They had bought Indian cauliflower hybrid seeds of the ‘Graspo’ brand, which against their initial expectations turned out to be of low grade and with productivity.

Such unrestricted inflow of hybrid seeds is due mainly to the weak quarantine check posts in the country. "None of our quarantine check posts is well equipped, which at the end has only prompted a surge in the inflow of low quality hybrid seeds," says Bala Ram Baskota, central member of All Nepal Farmers Association.

And while farmers are the ones to face the direct brunt of the availability of the low-grade seeds, it is the entire country that suffers at the macro-level, especially when the micro-investments in seeds, fertilisers and irrigation, apart from the labour involved, are totalled.

"First, the country is paying to import such seeds. Second, farmers spend a lot in other agricultural inputs, including fertilisers and irrigation," says Dhurbesh Chandra Regmi, Public Interest Lawyer engaged with South Asia Watch on Trade, Economics and Environment (SAWTEE). "The cumulative loss is high."

And apart from the lower-than-expected production and productivity, the impact of the usage of low-grade seeds is more. Use of such seeds can hit hard on the fertility of the soil in the long run, experts point out.

A case in Damak is a glaring example of what the use of poor hybrid seeds can invite. Dharma Prasad Poudel’s three bighas of land was declared unfit for crops for three years following a few seasons of planting substandard hybrid seeds.

Such fear of rising import of inferior hybrid seeds has come at a time when various public forums have strongly been advocating against the import of even high-grade and government recommended hybrid seeds.

The protest is based on the arguments that, among others, use of such hybrid seeds can increase a country’s dependency on foreign seed companies, which might lead a country into long-term food security threats, instead of helping to minimise the risk.

TAAN asks Govt to simplify laws

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KATHMANDU, Feb 28: Trekking Agents Association of Nepal (TAAN) today asked the government to simplify the rules and regulations that are affecting trekking on the hills than 6,500 metres high.

"The peaks less than 6,500 metres high should be opened for trekking and there should be a strong monitoring mechanism to supervise trekking," Suman Pandey, President of TAAN said.

Pandey was speaking at the inaugural function of Silver Jubilee Year of TAAN’s establishment here today. Established in 1978, TAAN has now about 400 member trekking agencies in the country.

Both the domestic and international trekking agencies are taking out their groups on trekking without prior notice to the TAAN or the government, Pandey said, adding that this has seriously threatened the organised and legal trekking business in Nepal.

On the occasion, the TAAN also announced several programmes. While the development package for domestic travellers is one of the important programmes, the exploration of new area for expedition would be the other programme.

In order to promote the trekking areas, the TAAN plans to produce documentaries to be telecast in domestic and international electronic media," TAAN says, adding that many more people will be lured to trekking and it would help in promoting the industry in the long run.

Adventure Camp for Schools, TAAN Award to Journalist, Conference on International Travel Writes and Adventures Tour Operators, Workshop to Minimise the Illegal Trekking Operators, Eco-trekking Workshop and Adventure Meet are some other attractions of the year.

Tourism experts and high-ranking government officials gathered on the occasion expressed hope that the tourism industry is taking a positive turn, following the announcement of the cease-fire by the government and the Maoist.

While the government officials reiterated their commitment to promote trekking agencies and take necessary steps to resolve problems, the private sector tourism entrepreneurs pointed out the need to provide legal and other supports for the trekking business.

"As there is high competition among domestic tour operators and international tour operators, innovative methods of destination promotion have to be followed," said Tek Chandra Poudel, Founder President of the TAAN.

Deputy Prime Minister Badri Prasad Mandal, Minister for Culture, Tourism and Civil Aviation Kuber Sharma and Assistant Minister for Culture, Tourism and Civil Aviation Ravi Bhakta Shrestha also expressed good-wishes to the TAAN families on entering 25th year.

RNAC to begin S’pore, Malaysia flight from today

KATHMANDU, Feb 28 (PR) - Royal Nepal Airlines Corporation (RNAC), the national flag carrier, is beginning its new flights to Singapore and Malaysian capital Kuala Lumpur from Kathmandu from March 1st.

The RA Boeing will fly to Singapore every Monday and Thursday at 23.30 hours, after which the same flight will go to Kuala Lumpur and return directly to Kathmandu on Tuesday and Friday at 11.25 a.m.

According to a press release issued here today by the RNAC, the decision was taken in keeping with a good number of Nepali workers in Malaysia and high probability of establishing easier connecting flights to Australia, New Zealand and the United States.

While the flight to Kuala Lumpur is the first ever direct flight from Kathmandu, Singapore is getting connected to Kathmandu after almost one year, after Singapore Airlines pulled out its daily flights to Kathmandu last April.