Nepal lists out its priorities for IGC meeting
Kathmandu, April 23
The Ministry of Industry, Commerce and Supplies (MoICS) has listed out its priorities for discussion with its Indian counterpart during the inter-governmental committee (IGC) meeting, popularly known as commerce secretary-level talks, which is going to be held here on Thursday and Friday.
Prior to the IGC meeting, the meeting of joint secretaries is going to kick off from tomorrow to discuss the agendas raised by the both countries and present them to the secretary-level talks after necessary groundwork.
The joint secretary-level talks or IGSC (inter-governmental sub-committee) meeting will be led by Joint Secretary of the MoICS Ravi Shanker Sainju and Bhupinder Singh Bhalla from the Ministry of Commerce and Industry, India. The IGSC meeting that is starting from tomorrow will discuss various issues related to trade facilitation; non-tariff measures faced in export of agriculture products from Nepal; amendment in transit agreement; finalisation of trans-shipment modality to sign agreement; simplification of rules of origin criteria enforced by India in importing Nepali goods, removal of quota system in export of some Nepali products governed by the Nepal-India Trade Treaty; promoting banking channel in payment of logistics and transportation services and minimising the alarming trade deficit with the southern neighbour, which is also the largest trading partner of the country.
There are raft of agenda that Nepal is going to present under three broad categories, according to MoICS Joint Secretary Sainju. “The issues are related with trade facilitation; procedural facilitation for Nepali exports to Indian market for minimising widening trade gap and exchange cooperation in capacity development, trade infrastructure development and for protection of mutual interest.”
As Nepal has long been requesting India for trans-shipment facility, the modality of the facility will be finalised during the meeting. After the Indian government provides trans-shipment facility to Nepal-bound cargoes, Nepali importers and exporters would not require customs transit declaration at the Indian ports. Freights will be directly shipped to the destination country from only rail linked Inland Clearance Depot in Birgunj and also be ferried directly to Birgunj from the country of origin.
To prevent the chances of the Nepal-bound cargoes being sold in the Indian market, the MoICS has already started electronic cargo tracking system in Nepal-bound cargoes at the Indian ports. Nepal will also propose the long pending letter of exchange (LoE) on facility that allows Nepali traders to ferry Nepal-bound cargo to the nearest rail of major custom points - Bhairahawa, Biratnagar and Nepalgunj.
Likewise, removal of tariff rate quota governed by the Nepal-India Trade Treaty will be proposed in the meeting. India has set tariff rate quota in export of four Nepali products - vegetable ghee, zinc oxide, copper wire and acrylic yarn - since 2002. However, India - as signatory of multilateral trade agreements - cannot enforce quota system in the present context.
Similarly, India has agreed to simplify rules of origin criteria for least developed countries (LDCs). As per the agreement in World Trade Organisation (WTO), LDCs can export goods with 25 per cent value addition in goods produced with 75 per cent imported raw materials. However, the requirement of originating material is 30 per cent while exporting goods in India.
Also on the agenda for discussion is opening up private railways to ferry Nepal-bound cargoes by amending Railway Service Agreement, which India has also prioritised. Currently, only government-owned Indian Railways subsidiary - Container Corporation (CONCOR) - has been allowed to ferry Nepal-bound cargoes.
The agendas of both sides that are agreed upon during the IGSC will be presented in commerce secretary-level talks, in which Commerce and Supplies secretary Chandra Kumar Ghimire and his Indian counterpart Rita Teaotia will lead and take the discussions forward.
- Transhipment agreement
- Amendment in transit agreement
- a) Include inland waterways for freight transportation
- b) Execution of Electronic Cargo Tracking System
- c) Facility to ferry goods via rail to the nearest railhead of Nepal border - Jogbani (Biratnagar); Nautanwa (Bhairahawa); Rupedhia (Nepalgunj)
- d) Open up for private railway to ferry Nepal-bound cargo
- Seek other convenient sea port for third country trade
- Simplification in rules of origin as per the WTO provision/ removal of tariff rate the quota system in four export items - vegetable ghee, zinc oxide, copper wire and acrylic yarn
- Minimising ballooning trade deficit with India
- NTMs faced by Nepali agro exports (tea, cardamom, ginger) to India
- Managing site for unloading dirty cargo (coal, clinker, fly ash)
- Procedural facilitation in sending Nepali newspapers and books
- Promoting payment of transportation and logistics service providers through banking channel