The official goodwill visit by the Foreign Minister of India Mr. S.M. Krishna to Nepal at the invitation of the Nepalese Deputy Prime Minister and Foreign Minister Ms. Sujata Koirala is aimed at broadening the basis of mutual friendship, understanding and confidence between the two counties. The holy scriptures of the Hindu religion like the Vedas, Brhmangranthas and Upanishads are the common heritage of the Nepalese and the Indian people. Gautam Buddha, the light of Asia, who was born in Lumbini in Nepal, trekked down to the plains in India in search of Enlightenment. It is a proven fact that Balmiki, the composer of renowned epic Ramayan, saw the light of the world within Nepal at Balmikinagar in Bhaisalotoan. Nepal and India enjoy very close, friendly relations, on account of geographical proximity and close cultural and economic bonds. The political developments that are taking place now in Nepal will have far-reaching consequences. Nepalese are confident that peace, stability and economic development will be achieved through the Constituent Assembly by drafting the Constitution and adopting subsequent economic ethos in the days to come. In the recent past, Government of India is taking positively and listening to Nepalese business and industrial community’s suggestions and requests to eliminate or to eradicate the bottlenecks and in furthering bilateral trade and economic relations in order to strengthen our cordial and economic relations. Nepal is facing huge and ever increasing trade gap with India. Though the major share of imports from India constitutes of petroleum products, still Nepal will be facing a huge trade gap. And to lessen this gap, Nepali products need to upgrade their product quality with value addition, and, instead of exporting raw agro-products, Nepal should go for the value addition and export of processed and semi-processed agro products. The Trade Treaty of 1996 was a milestone in the annals of the trade treaty with India as Nepal has received the preferential market access to the Indian market for Nepalese products excepting three products under the negative list. However, in 2002 the treaty was revised with the provision of the quota for some products and the provision of value addition was introduced. The treaty got renewed in 2007 with the same spirit but some operational problems were observed. Those problems were solved through mutual discussion and debate and lobbying activities at different levels. The Treaty of Trade and Agreement of Cooperation to Control Unauthorized Trade was signed in 2009 and has come into immediate effect. The last time the treaty was signed was in 1991, but since then much has changed, and there was general dissatisfaction in various quarters, but the revised treaty is expected to address the misgivings. The revised Nepal-India trade treaty enables Nepal to boost export to India. The revised trade treaty solves most of the problems that Nepal has been facing since it was signed first in 1991. After 18 years, the trade treaty minimizes problems of Nepal in the bilateral trade and helps expand trade relations with India. The treaty has a seven-year shelf life, two years more than the earlier treaty. Nepal was facing problems in certifying its goods in India previously but the revised treaty will solve this problem, as the certification processes would be done in the laboratories of Nepal itself. The treaty will boost Nepal’s technical standards, quarantine and testing facilities and related human resource capacities. Both countries have agreed to facilitate cross-border flow of trade through trade facilitation measures of simplification, standardization and harmonization of customs, transport and other trade-related procedures and development of border infrastructure. India has also facilitated export under the Most Favored Nation treatment of articles manufactured in Nepal, which do not fulfill the criteria for preferential access and establish four additional Land Customs Stations (LCS) and open air traffic for bilateral trade. The new LCS are Maheshpur/ Trutibari (Nawalparasi); Sikta-Bhiswabazar; Laukha-Thadi; and Guleria/Murtia. Bilateral trade by air will be allowed through Kathmandu/Delhi, Mumbai, Kolkata and Chennai airports. The new trade treaty also has a provision on bilateral trade being conducted in Indian rupees at par with trade in convertible currency in respect of tax rebates and other benefits available to such trade. This indicates ending the existing complicated mechanism of tax refunds in the name of the DRP. Imports from India have grown even more and the trade deficit is glaring. Arrangements have been made to expedite exports of Nepalese goods to India by setting no restriction to the quantity of exports to India from Nepal. Nepal should take full advantage of the new environment envisaged in bilateral trade. Likewise, Nepal could also have some joint venture projects and programmes in the areas of IT and IT enabled products/services and must also look the avenues for furthering the promotion of trade in services sectors.