NATIONAL7Spotlight Weekly)]

Car Row

The dilly dallying over allowing the entry of self-certified Indian cars into Nepal sparks a fresh trade row

By KESHAB POUDEL

As Indian cars are being stopped at the Raxaul custom point on the Nepal-India border on the ground of their non-compliance with Nepal's emission standards, bilateral trade relations have plunged into renewed controversy.

The row over the import of self-certified Indian cars worsened following an interim order issued by the Supreme Court last month. In its decision, the court asked customs and other officials not to allow the entry of Indian cars on the basis of self-certification without seeking further clarifications.

Cars in street : Do they comply with standard ?

In a public litigation filed by advocate Prakash Mani Sharma on behalf of Pro Public, the petitioners argued that self-certified Indian vehicles do not meet the emission standard set under the Nepal Emission Standard 1999 and urged the court to declare null and void the agreement signed by Prime Minister Girija Prasad Koirala during his visit India to allow the import of Indian cars on the basis of self-certification. Car dealers complain that their side of the story was not been heard before the court issued the interim order.

His Majesty's Government introduced the Nepal Motor Vehicle Emission Standard which became effective from December 1999. The laws and procedures tried to replicate the Euro I standard. However, the norms deviated so substantially from the Euro I standard that no vehicle manufacture in the world could comply and export vehicles to Nepal.

Primarily, the deviation arose from the fact that the government demanded Type Approval (TA) and Conformity of Production (COP) certification to be presented at the time of import from the government-authorized testing agency. The Euro I legislation clearly states the submission of COP should be 12 months from the date of manufacture. Euro I legislation mandates a chassis dynamometer test for vehicles weighing under 2.5 tons and carrying fewer than six people. Nepal's standard mandates such a test for vehicles weighing under 3.5 tons.

Because of the non-recognition of self-certification of the indian manufacturers, some vehicles imports under this category came to a standstill for few months. After a request from Japan and Korea, the government allowed the import of vehicles from those countries on the basis of self-certification.

But in the case of India, a resumption of imports of such cars was possible only after the visit of Prime Minister Koirala. Last week, the government again issued instructions not to allow vehicle imports from India on the basis of self-certification. As a result, most dealers are holding large numbers of vehicles in Raxaul.

The car dealers have suggested that Indian cars manufactured after April 1, 2000 should be allowed to enter Nepal. There argument is that Indian manufacturers are legally obliged to maintain Euro I standards on vehicles produced from that date onwards.

After the announcement of new emission standards, Nepal stopped importing some models of Indian cars. Only after the letter of understanding between two countries on August 3, 2000 did Nepal agree to accept self-certification of Indian cars.

They complain that the present policy on self-certifcatoin discriminates against Indian cars. "If self-certification is wrong for Indian car manufactures, than it is wrong for all car manufacturers," said an Indian car dealer.

As the row over the import of Indian cars on the basis of self-certification continues, there are fears that Nepalese exports to India may face a similar fate in that country. "If the Nepalese government does not provide equal treatment to Indian cars and does not respect the joint communique, India will take retaliatory measures," said a diplomat in Indian Embassy requesting not to be identifited.

The joint communique issued after Prime Minister Koirala's visit to India specifically points out the need to allow imports of Indian vehicles on the basis of self-certification. According to the agreement, imports of Indian vehicles into Nepal under Nepal's new emission norms would be permitted on the basis of self-certification by Indian vehicle manufactures based on type approval. In a reciprocal move, India also agreed to withdraw additional taxes on Nepalese goods.

As the prime minister is unable to impose his decisions on ministries, no ministry seems to be in a position to execute the decisions of another agency. Meanwhile, Indian cars are sitting idly at a Raxaul lot, waiting for their turn to cross the border.