Kathmandu, August 4:

Senior government officials and private sector people today pointed out to the non-tariff barriers prevalent in trade between Nepal and India in recent years.

Industry secretary Bharat Bahadur Thapa said that as Nepal-India Trade Treaty expires in less than nine months, the problems prevalent between the two countries on the trade front should be resolved so that the trade treaty’s benefits could be realised.

While renewing the Nepal-India trade treaty, issues of non-tariff barriers should be taken care of otherwise they would hit our trade, said Thapa, while addressing a gathering of business sector people at a programme held by Nepal-India Chamber of Commerce and Industry (NICCI) today.

We have inherent problems between the two nations. The forthcoming trade treaty should also be dedicated towards making trade relations smoother for a least developed country like Nepal, said Thapa. Following the trade treaty signed in 2002, trade between Nepal and India has declined, he said.

Dr Pushkar Bajracharya of Tribhuvan University, presenting a paper on ‘Nepal-India Trade and Investment: Looking Ahead’ said that Nepal’s total trade has reached Rs 209 billion or 37 per cent of the GDP.

Nepal’s total exports amount to about Rs 59 billion and imports amount to Rs 150 billion. Total trade deficit stands a whopping Rs 91 billion currently, said Bajracharya. India alone holds 61 per cent of the total Nepal’s trade which is a sharp rise compared to 29 per cent in 1990-91.

Exports to India have reached 68 per cent of total exports and imports from India have reached 65 per cent of Nepal’s total imports, said Bajracharya. What is serious is that trade deficit has also gone up to about Rs 50 billion or 8.9 per cent of the GDP, he said.

Major exports of Nepal to India include vegetable ghee, chemicals, yarn, plastic goods, copper wire and rods, jute goods, toothpaste and agro products.

He said that four per cent additional duty imposed on Nepali goods while exporting to India is still prevalent and affecting exports. He said that the counterveiling duty is still applicable on garments despite non-existence of excise duty in India. “There are many administrative hurdles for enhancing Nepal’s exports to India”.

Acting president of the Confederation of Nepalese Industries (CNI), Narendra Basnyat said that non-tariff barriers have affected Nepal’s export to India. He said that the Nepal-India Trade Treaty should be renewed in the spirit of 1996 trade treaty if we are to boost the industrialisation process and boost investment.

The numerous hurdles and hiccups in exporting goods to India should be removed, Basnyat stressed. He also said that export of agro-products to India has been hampered, thanks to non-tariff barriers.

Badri Prasad Ojha, coordinator of management team of FNCCI, said that confusing tariff issues are not helping Nepal’s trade with India. Even for hydropower exports, the Nepal has to be more liberal, said Ojha.

Arun Chaudhary, president of NICCI, said that there is a need to identify sectors, which carry core competencies. Chaudhary stressed on boosting joint ventures between Nepal and India.