IGC meeting to appraise trade treaty

Kathmandu, August 20:

As Indo-Nepal Trade Treaty is coming to an end on March 5, Nepal and India are holding a four-day long meeting in New Delhi from August 22 to sort out ‘operational and implementation’ level snags that has hit the bilateral trade.

Inter-Governmental Committee (IGC) meeting was scheduled to be held in every six months to sort out bilateral trade and investment problems but this time the meeting is being held after 31 months at the secretary and joint secretary level due to political instability, said an official at the ministry of industry, commerce and supplies (MoICS) while talking to The Himalayan Times.

Naindra P Upadhyaya, joint secretary at the MoICS, who is participating at the joint secretary level meeting, said that the IGC meeting would focus on trade, investment and implementation aspect of trade treaty. “Nepal would focus on continuation and automatic renewal of trade treaty,” he informed. Upadhyaya said that operational and technical issues, investment enhancement and export sector problems are some of Nepal’s agendas.

Other issues that the IGC meeting will discuss involve infrastructure development, customs simplification and testing of products at border points, said the MoICS official, adding that trade-related issues will dominating the meeting. “Nepal hopes to see continuation of preferential arrangements for Nepali products,” the official informed. Trade imbalance — that stands over Rs 65 billion in the fiscal year 2005-06 — between Nepal and India has been a troubling issue, according to the MoICS.

Nepali delegates are set to discuss ways to bridge trade gap and facilitate smooth export of Nepali goods to India without additional duties, said the MoICS official. Similarly, tariff issues between Nepal and India are also being discussed in the context of SAFTA. Last year, Nepal imported goods over Rs 105 billion from India and exported only Rs 40 billion worth goods.

Nepali delegation will also discuss four per cent additional customs duty that is still imposed on readymade garments and stone aggregates. However, India has recently revoked four per cent additional duty on some of the major Nepali products.

Other issues that have hit Nepal-India trade are additional duties, quarantine checking, testing certification and complexities of customs procedures. However, Nepal has failed to export the total quota of vegetable ghee, copper wire, zinc oxide and acrylic yarns provided by India while renewing the trade treaty in 2002.

Dr Pushkar Bajracharya, economist at the Central Department of Economics

Tribhuvan University opined that Nepal still needs preferential treatment which is one of the key issues.

“Border trade will be another issue to be discussed at the meeting,” he said adding that quarantine issue — that keeps emerging time and again — has also hit our trade.

“The issues of road infrastructure development to facilitate goods, effective operation of Inland Container Depot (ICD) and standards are also critical,” Bajracharya added.