National 5 (Spotlight Weekly)

Friendly Gesture

The Indian side addresses a number of practical problems faced by the Nepalese business community

By BHAGIRATH YOGI

Six weeks after the maiden state visit by King Gyanendra to New Delhi, Indian officials agreed to positively address most of the outstanding issues related to the implementation of the bilateral trade treaty.

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At the end of the August 15-16 secretary-level Inter-Governmental Committee (IGC) meeting in New Delhi, the Indian side agreed to establish three more quarantine check posts at Sunauli, Jogbani and Banbasa by November 1, this year. India has already set up three such checkposts at Panitanki, Raxaul and Rupaidiha along Indo-Nepal border to facilitate import of Nepalese agriculture products and bring down the existing quarantine fee.

Nepalese farmers sell around five billion rupees' worth of agricultural products to India every year. Earlier, the Indian Agriculture Ministry had asked for quarantine certificate, which was hitherto not necessary. The quarantine checking of agro-products and medicinal plants had been made compulsory under the recently renewed Nepal-India trade treaty.

The Indian side agreed in principle to waive Special Additional Duty (SAD) soon besides assuring that concerned state governments would immediately waive 20 percent "luxury tax" that the West Bengal state government was imposing on Nepalese tea and vegetable ghee. The Indian government had introduced a 4 percent SAD on all imports into the country in this year's budget.

The Indian government also agreed to remove the 40 percent anti-dumping duty being imposed on acrylic yarn and zinc oxide exported from Nepal. Thanks to the continuous lobbying by the Nepalese business community, the Indian government also agreed to raise the quota fixed for Nepalese copper products by additional 2,500 tons. Now, the quota allotted for copper products that will enjoy duty free access into the Indian market for this year has reached 10,000 tons.

"The meeting was conducted in a very congenial atmosphere and the Indian side was quite positive toward most of the issues raised by the Nepalese side," said Purushottam Ojha, joint secretary at the Ministry of Industry, Commerce and Supplies, who attended the meeting. "Some of the issues which need to be resolved will be discussed at the technical level."

One such issue is the linking of the Inland Container Depot (ICD), popularly known as "Dry Port," at Birgunj with the Indian railway network. Both the Indian railways as well as Nepalese businessmen have lost millions of rupees as the ICD remains non-functional due to lack of such connection.

The IGC decided to conduct a separate meeting to settle differences over the bilateral railway agreement and regulations on trans-border movement of motor vehicles. The official-level meeting in September will discuss these two agendas, officials said.

The issue of recognizing Nepali Standard (NS) mark in the Indian market at par with the Indian Standard mark (ISI) has been postponed. The issue will be finalized after the Indian technical team makes necessary study regarding the NS mark certification, officials said.

Nepal Chamber of Commerce has welcomed the concessions provided by the Indian government to Nepalese businesses in the recent IGC meeting.

During Prime Minister Sher Bahadur Deuba's visit to India in March this year, India had agreed to undertake the feasibility study of the East-West railway in Nepal under the framework of bilateral cooperation. The two sides had also agreed to expeditiously conclude a Bilateral Investment Promotion and Protection Agreement to promote Indian investment in Nepal. It was agreed that the two sides would hold negotiations within May in order to conclude the bilateral agreement on the operationalization of the Birgunj-Raxaul rail link and the ICD at Birgunj.

After months of uncertainty, Nepal and India agreed to renew the bilateral trade treaty in March this year, which introduced the provision of value addition on the Nepalese manufactured articles and also fixed quota ceilings for four items identified by the Indian government under the "export surge" provisions.

Accordingly, India had fixed the quota of 100,000 tons for vegetable ghee, 10,000 tons for acrylic yearn, 7,500 tons for copper wire (now raised to 10,000 tons) and 2,500 tons for zinc oxide. Goods in excess of the fixed quota can be exported under the most-favored nation facility.