Nepal-India Trade Treaty 1996
Need For Status Quo

By Prof. Dr. Madan K. Dahal

THE 1996 Nepal-India Trade Treaty could be described as an outstanding example of India’s best understanding towards promoting Nepal’s burgeoning economy through bilateral trade and cooperation. The treaty fully assures duty free access to goods, except specified in the negative list, manufactured in Nepal to Indian market without being subjected to any quantitative restrictions. The biggest virtue of the treaty is that "The Treaty shall be automatically extended for further periods of five years at a time, unless either of the parties gives to the other a written notice, three months in advance, of its intention to terminate the Treaty. This Treaty may be amended or modified by mutual consent of the parties" (Article XII).

Both Nepal and India have immensely benefited from the treaty. Available statistics reflects that trade-flow has increased both ways, though heavily in favour of India. Over the years, investment-flow from India also increased considerably to 85 operating, 14 under construction, 42 licensed and 48 approved joint ventures as of July 15, 2001. Nepal’s export to India went up remarkably from Rs. 8.8 billion in FY 1997/98 to Rs. 27.3 billion in FY 2000/01, while imports from India increased from Rs. 27.3 billion in FY 1997/98 to Rs. 46.7 billion in FY 2001/02 with a deficit of Rs. 19.4 billion which is estimated to be 4.7% of the GDP. The overall impact of treaty is found to be positive.

Despite this, India’s initiation to amend the treaty is conspicuous and contrary to what is envisaged in the Article II that "The Contracting Parties shall endeavor to grant maximum facilities to undertake all necessary measures for the free and unhampered flow of goods, needed by one country from the other, to and fro from their respective territories". India’s proposal for a major change in the 1996 Trade Treaty primarily confined to the need for addressing five objections to treaty comprising the issues of rules of origin, export surge for specific items (hydrogenated vegetable, zinc oxide, acrylic yarn, copper wire and iron pipe), certificate of origin, negative list and WTO compatibility.

In this context, the Joint Economic Council (JEC) of Nepal and India—Federation of Nepalese Chambers of Commerce & Industry (FNCCI) and Confederation of Indian Industries (CII) have made a number of recommendations to address these issues that would help promote Nepal’s export to India and Indian investment in Nepal and foster ‘win-win’ trade for both countries. The major recommendations of JEC comprise that 1996 Nepal India Trade Treaty should be automatically extended. The JEC further suggested for initiating strong measures to control trade deflection across the border, having minimum 30 per cent value added to qualify for duty-free export to India, defining appropriately the concept of ‘surge’, exploring ways and means jointly by Bureau of Indian Standards (BIS) and Nepal Bureau of Standards and Metrology (NBSM) about which products certified by NBSM are accepted in India, and developing efforts to promote Indian investment in Nepal. Responses to these recommendations have been lukewarm from India side.

India’s demand for 30-50 per cent value added on Nepali goods to be exported to India is not export-friendly, for it would create extremely adverse impact on Nepalese economy. Nepal has always been a big market for India, irrespective of tariff barrier, attributing to open border. With 1996 treaty Nepal had the advantage to penetrate Indian market and correct its balance of trade disequilibria with India. However, India’s unilateral attempt to modulate the treaty in recent days would totally disrupt the free access to Nepalese goods in Indian market and marginalize Nepal’s efforts towards development through trade with India, an emerging economic power. Nepal is deprived of the benefits from the economies of neighborhoods.

The issue of export surge and, for that matter, expansion of negative list from earlier three to now eight items ranging from alcohol, perfume and tobacco to hydrogenated-vegetable (Banaspati Ghee), zinc oxide, acrylic yarn, copper wire and iron pipe is over exaggerated, for major ten export items from Nepal to India include only Banaspati ghee and polyester yarn that occupy a negligible status in India’s total imports.

India’s apprehension to export surge of a few Nepali products with so-called injury to Indian industries is discernible obsession to levy anti-dumping duties and luxury tax on some of the imports from Nepal. This is not explicable how a small quantity of exports from Nepal ruined entire Indian industries within a short span of time. Although the argument for WTO compatibility posed by India seems to have some theoretical underpinnings of globalization, Nepal’s growing trade relations with India is of utmost priority. However, it is also imperative to examine the benefits from SAFTA and assess the prospects for moving towards zero tariff regimes between the two countries in future.

India’s proposal for a drastic change in the existing treaty has appeared at a time while Nepal is engaged in formulating Tenth Plan (2002-07) to achieve a high level of sustainable growth for poverty alleviation through providing employment opportunity. At this juncture, India’s cooperation to Nepal by maintaining status quo in the existing trade treaty, for the next five years, will have far reaching implications in Nepal-India economic relations. Discrepancies in the treaty could be resolved, subsequently, through protocols and the letters of exchange between the two countries.

Colourful Facets Of Hindu Rituals

By Govinda Bhattarai

NEEDLESS to mention, Nepal harbours a rich and diverse cultural heritage. The adage of Prithwi Narayan Shah the Great, the founder of modern Nepal, who said, "Nepal is a common garden of 4 castes and 36 sub-castes" still holds good today. The predominantly Hindu population practices unique cultural rites that awe-strike the Westerners who are little known about the Eastern mysticism. People belonging to every culture have their own way of observing different rituals from their birth to death. But rituals observed in a typical Hindu community have something to make an outsider feel perplexed.

One of such traditional practices of the Hindus, as in most of the cultural groups across the globe, is the rites associated with death. The funeral rituals of a person must be done even if the dead body is not recovered. When a missing person is presumed dead, the Hindus create an image of the dead from sacred straw called kush, assuming it to be the body of the deceased. And the straw corpse is cremated with full honour, including 13 days of funeral formalities and one year of mourning.

And what if the person presumed dead, by miracle, reappears? In such a case, the person has to pass through all the rituals that were observed from the day of his/her birth. In this connection, the story of a man who came back home long after he was given up for dead is worth mentioning here.

Tanka Subedi from a village in the remote district of Okhaldhunga walked down towards Likhu river on the foothill. As he felt sweltered in the parching summer sun, he bared himself and in loincloth plunged into the cool and sparkling water that originates from the Himalayas. Ploughing in the nearby field, a man belonging to the backward Magar community was watching all this. He knew that the Brahmin was renowned for swimming, even for a long underwater swim. The river and Subedi, since his boyhood, had had a very good understanding for each other. But to the ploughman’s dismay, the famed swimmer would come neither up to the surface nor onto the bank. He thought that Subedi might be playing a trick to deceive the onlooker. But when this took a long time, more than what one would expect, the peasant stopped his yoke of oxen and stretched his eyes far down and across the river but Subedi was nowhere to be seen.

In his panic, he grabbed Subedi’s clothes and rushed to inform the concerned family of what he witnessed. But instead of patting him for what he did, the villagers suspected him of a foul play.

As a matter of fact, Subedi had some six hundred rupees with him, which was not found in the clothes. And on the basis of this, they accused him of robbing and killing Subedi, and throwing the dead body into the river. The illiterate Magar’s confidence caved in before the thundering voices of upper caste elite. The poor peasant, despite his innocence, paid the money and was sent to prison.

As mentioned above, Subedi’s funeral rites were performed amid the wailing of his mother and wife. Though the body was not recovered, they gave him up for dead.

A few months later, a rumour spread in the village that Tanka was seen in Kathmandu, and it was confirmed at last. He was brought back to the village but not to be seen by the family members before all the rituals from his birth to marriage were observed all the way once again. So the lost-and-found man was put into a large clay pot locally called ghyampa for some time and then taken out by breaking it. This process reflects his new birth, the clay pot representing the mother’s womb. Then followed the other rituals from infancy through boyhood to adolescence and adulthood including, the name-giving ceremony, the sacred thread bearing ceremony and so on. And finally came his marriage, or rather re-marriage, with his wife. Now he was a new man.

Tanka was the lone son of his parents. He lost his father in his childhood and he was the only one with the entire responsibility of continuing his ancestry. Pampered as he was, he grew up to be an obstinate young boy. His mother, anxious not to let him go away from home, had the teenager son marry a girl from a neighbouring village. He fathered a few children over the years. With his age, his obstinacy grew and finally changed into anger and frustration. He often had quarrels with his mother and wife. Fed up with the hard works in the fields, he however wanted to visit other places, especially the family relatives in the Tarai and Kathmandu. But mother would not allow him this.

One day he decided to leave the village deceiving the family. He told his mother that he would go to collect the money he had to take from one of the villagers who had bought one of their oxen. He met the man, got the money and headed towards south and the whole incident that followed has already been mentioned above.

It’s Tihar Time Now

By PNK

IT’S bon appetit all the way. After all who doesn’t want to have a feast of a lifetime. But, unfortunately it’s only a handful who have got the resources, by hook or crook, to get things moving to whet the appetite for which we Nepalese are so famous. Forgive me if there are many who barely make their hands meet their mouths in terms of the food intake every day of the year. Bumper harvest or not, in a predominantly agricultural country like ours. In this point, one can just imagine the plight when there is drought or unprecedented monsoon rains.

Life has to be lived and it’s the society that has got the various festivals into place. If not Chaitra then Asoj becomes the best of times to celebrate Dashain dubbed the biggest festival in the country. The planetary positions and tithis (auspicious days as fixed by the position of the moon) decide what days any particular festival is to be marked and holidays fixed accordingly. That might be the reason why we celebrated Dashain way behind the usual dates. That’s how things work. After all, religion and astrology and astrologers too have a vital role to play in our society.

One thing that escapes the mind of probably everyone is why just two weeks after Dashain, Tihar (Festival of Lights) makes its bright presence felt. Maybe the victory of good over evil must inevitably lead to worshipping Goddess Laxmi. It is as if better days have come for everyone who marks the days with reverence.

In spite of the gaiety and happiness all around, there are things that merit attention. Of course, enjoying Dashain is not possible unless you’ve toiled all the year round. There are exceptions, of course. There may be some for whom the merry season is spread out all the year round. But for the majority, Dashain is when it actually arrives. The new clothes, may be the goat, delicacies to savour and so on come only with the arrival of the festival. Whether you have your steady income to cover the expenses or get a loan or something from others, it has to be time to enjoy oneself.

Hardly has the hangover of Dashain subsided, worries all over begin as to how Goddess Laxmi is to be greeted in the best of ways. Not an easy task for an average Nepali. Yet, there is no escaping. The trappings may not be there but lights have to be. The weather may signal a change. Cold northerly winds start blowing incessantly. The appetite sees no sign of getting fulfilled. There are so many things to be done and bought as well.

More than the list for Dashain, the items to be bought for Tihar is mind boggling. The market is flooded with goods which exceed all expectations. But, look at the list in your hand and then you realise that the shops are not doing any injustice on you buy offering unnecessary temptations. Coke or Pepsi may have boosted their sales by making the customers by the rules of every trick of the trade. But, won’t you be surprised when you find the same name has crept into your shopping list—not by mistake but deliberately.

It’s Tihar time and there can be no compromises whatever your financial status may be. But what about those poor families living not only in urban centres but also in the remote districts. For them the light is all that comes from the sun, moon or the twinkling stars. Yes, it’s a big contrast. In the city, at least, the flickering lights in the houses of others can somewhat soothe the mind but the body craves for more. The kids may be liabilities at such times but it is they who represent the real meaning of Dashain or Tihar. Without them, there’s no fun whether in the religious, cultural or social sense.