BUSINESS & ECONOMY

Trade, investment vital for relations

By A Staff Reporter

The 5th Annual General Meeting (AGM) of the Nepal-India Chamber of Commerce & Industry (NICCI) concluded on Sunday.

Speaking as the Chief Guest at the Meeting, Minister for Commerce Ramkrishna Tamrakar said that the areas and basis to further strengthen relations between the two countries have changed.

“Trade and investment have become the most important areas, by which the relations have to be improved between the two countries.” For that, he said, the business communities of both the countries are the most important players.

He also said Nepal has proposed to India three points to regulate and promote trade between the two countries. They include, managing the border points at five places — Birgunj, Biratnagar, Bhairahawa, Kakarvitta and Nepalgunj; establishment of export promotion zones at Bhairahawa, Birgunj and Biratnagar; and extension of broad-gauze railway from Raxaul to Birgunj, from Katihar in Bihar to Biratnagar and from Gorakhpur to Sunauli.

Welcoming the meeting, President of NICCI, Rukma Shumsher Rana said that Prime Minister Girija Prasad Koirala’s recent statement, saying that Nepal has adopted an open investment policy and also that it is investment-friendly, is a encouraging sign that the government is willing to make the environment more conducive for foreign investment.

But he said there are small things which play important roles to attract foreign investment. He also said the rate of corporate tax in Nepal is rather high and also demanded  the provision of at least 5 years tax holiday for investors.

Rana, however, said Nepalese exports to India are facing some difficulties in terms of testing of the containers, which are done only at Calcutta and the four per cent special additional duty, the Indian government recently imposed on India’s imports from Nepal.

Making his remarks, president of the Federation of Nepalese Chambers of Commerce and Industries, Pradeep Kumar Shrestha said after the trade and transit treaties of 1996 and 1997, there have been tremendous growth in Nepal’s trade with India. He also said the private sector should play pro-active role in expanding Nepal’s trade relations with India and outside.

Indian ambassador K.V. Rajan, in his remarks, said that there are tantalizing good news and success stories in Nepal’s exports, but it is not yet time to open the Champagne bottles. There has to be an assessment of the problems.

He said there might be some problems for no particular reasons, and it is also not the intention of both the governments for such obstacles to come up. “Such problems need to be solved through micro-level and sectoral level interactions.

The Indian ambassador said, after the signing of the Mahakali Treaty, the Indian investors are looking to set up value-added  and energy-intensive industries.

“The Mahakali Treaty has tremendous implication on both trade and investment in both the countries,” he said.

The vote of thanks at the initial session was given by Arun Kumar Chaudhary, Vice President of NICCI. Chaudhary said that there have been growing understanding and realisation among the leaders of both the countries for promoting trade and investment between Nepal and India.

Meanwhile, last year’s NICCI Excellence Award has been given to Nepal Lever Ltd. on large scale industries, and to Asian Paints on small scale industries. Dr. Yubraj Khatiwada, Economist and president of the Management Association of Nepal (MAN) and also a member of the Award selection committee said the industries failed to present valid and required documents in the medium scale category. Similarly, in the service sector, Everest Bank was given the award.

Meanwhile, on the trade front, there has been tremendous increase in Nepal’s trade with both India and other countries in the last decade.

Ten years ago, Nepal’s export to India was Rs. 602.5 million and the import was worth Rs. 4.72 billion. But five years ago, Nepal’s export to India had increased by 418.6 per cent to Rs. 3.12 billion and the import by 271 per cent to 19.61 billion.

During the last fiscal year, Nepal’s export to India had increased to   Rs. 12.53 billion and the import had stood at Rs. 32.11 billion, thereby improving Nepal’s balance of payment.

In the first five months of the current fiscal year, Nepal’s export to India has increased by 39.7 per cent to Rs. 19.04 billion in comparison to the same period of the last year. Similarly, in import, it has risen by 38.21 per cent to Rs. 41.7 billion over the same period.

The boost in the trade came especially after the trade treaty of December 1996. The treaty has several provisions including the provision of the Certificate of Origin, instead of the provision of material or labour content in the exportable items. Similarly, India has also reduced the number of goods in the negative list to only three.

Nepal to take part in UK Carpet Fair

By A Staff Reporter

In its bid to expand market, Nepalese carpet entrepreneurs are taking part in Harrowgate Carpet Fair scheduled to be held in September 2000 in UK. It was informed at a seminar on the use of British Wool in manufacturing Nepalese carpets held at British Embassy’s newly renovated conference hall.

“We have felt that there is a vast potential for Nepalese handkotted carpets in the UK markets. It’s time for us to tap this market,” Rajendra Khetan, President of Nepal Britain Chamber of Commerce and Industry (NBCCI) said. Nepal’s present carpet export to the UK is very little in comparison to that of Germany and United States of America.

Similarly, NBCCI secretary Ashish Sengupta informed that the Chamber has initiated talks with British companies to hold a Nepalese Carpet Exhibition cum Sales during the Fair. “The exhibition will be only for the carpets woven from Tibetan/British blended woolen yarn,” he emphasized.

Speaking on the same occasion, the Chamber executives also expressed hope that this will enable British public to know about Nepalese carpets, which is not yet prominently marketed in the UK.

For the last couple of months British Wool Marketing Board (BWMB), the only commodity board in the UK, has been intensifying their marketing strategy in Nepal. The present seminar is the second of its kind organized by the BWMB.

It had organized a similar seminar in January this year and had announced to provide licences to those products which used at least 50 percent of the British wool. After that seminar, many Nepalese entrepreneurs have started to weave carpets using the blend of bot Tibetan and British wool.

Addressing the gathering, Ronald Nash, British Ambassador to Nepal, informed that some of the British wool traders have also consented to match the price of blended British wool to that of other countries. The Nepalese carpet producers are presently using Tibetan wool along with New Zealand wool.

According to Naresh Lamichhane, Nepalese wool expert, British wool can be blended with Tibetan wool which is the main unique selling point of the Nepalese carpets. “Beside that, due to its high resilience, use of British wool would enhance the quality of Nepalese carpets,” said A. G. Sherpa, President of Central Carpet Industries Association.

Richard Poole from BWMB also spoke on the occasion.