India, Nepal extend trade pact for another 5 years

Mumbai: The governments of India and Nepal have renewed their crucial bilateral treaty for another five years without a review. "The Indo-Nepal Trade Treaty, which was to expire yesterday, has been renewed as it is," said Nepal''s commerce secretary Bharat Bahadur Thapa. The decision to extend the pact was taken at a high-level meeting of the commerce ministry officials of the two countries on February 23. All concerned bodies have been issued with the renewal notification, Thapa said. Nepal''s manufactured goods, barring three items in the negative list and five items with quantitative restrictions, would continue to enjoy unlimited duty-free market access in India without Nepal requiring to reciprocate with the facility, he said. Under the treaty, the agricultural exports would also enjoy duty-free market access in India, but with a provision of reciprocity, which means Indian farm products would also continue to enjoy duty free market access in Nepal. While both Nepal and India are members of the WTO and SAARC, Nepal is seeking more bilateral concessions, especially on non-tariff barriers.

India has revoked additional customs duty on 111 items of export from Nepal, the country wants more items to be given the waiver and increased quotas for select export items, like vegetable ghee. It is also urging India to ease the red tape at the quarantine check posts for Nepali agricultural goods.

India, Nepal''s largest trading partner, accounting for nearly 70 per cent of Nepal''s foreign trade, wants to ink a comprehensive economic partnership pact that will go beyond goods and services.

With dramatic political changes taking place in Nepal since last year, there wasn''t much time for the two sides to thrash out a new framework.

Any immediate changes in the treaty are also likely to be opposed by the Maoists, who have signed a pact with the Nepal government saying they should be consulted on issues of national importance.