By Sudeshna Sarkar, IANS
Kathmandu : India is willing to review its 11-year-old bilateral trade treaty with Nepal in order to give the Himalayan kingdom more market access, the Indian government’s top official in Nepal has said.
“The India-Nepal trade treaty establishes a unique relationship providing Nepal a unique, non-reciprocal preferential access to India,” Indian Ambassador to Nepal Shiv Shankar Mukherjee said.
“We are willing to consider the provisions of the treaty to further improve Nepal’s access to the Indian market,” he added.
Mukherjee said New Delhi is ready to work together more closely on issues relating to standards, testing and certification, quarantine, food testing, and related issues as well as help Nepal develop its infrastructure and systems in these areas.
Addressing a two-day seminar on Nepal-India Trade and Economic Relationship that kicked off in Kathmandu Wednesday, the Indian envoy also said that despite occasional problems, the pact, renewed every five years, has helped diversify and expand Nepal’s industrial base, and attract Indian investments.
Since the two neighbours signed the treaty in 1996, Nepal’s exports to India have grown eight times and almost 96 percent of the increase in Nepal’s exports has been on account of India.
As part of its assistance in developing trade-related infrastructure, India has undertaken building integrated check posts at four border check points on the Indo-Nepal border for smooth flow of people and goods.
It is also funding the development of over 1,500 km of roads that would provide easy access to the East-West Highway from the border regions.
As part of the road building assistance, a link road will connect Mahendranagar in Nepal’s far west with Tanakpur in India.
India is also considering a project for cross-border rail links at five locations at the Indo-Nepal border to boost cross-border linkage and trade and commerce between the two countries.
The accelerated programme for expansion and upgrading of highways in Bihar, which serve as the main trade route for Nepal, will also help Indo-Nepal trade.
“Nepal’s export-import ratio with India is significantly better than it is with the rest of the world,” Mukherjee said. “If we look at our broader economic partnership, the trade deficit is largely compensated by the remittances received from India, the payment of pensions to the ex-serviceman and the money spent by the Indian tourists in Nepal.”
For sustained and rapid economic growth, Mukherjee said Nepal should make sound investments in manufacturing, agriculture, power generation, and services and tourism sectors.
The envoy has underscored hydropower as the factor that can kick-start Nepal’s economy.
“Precious time and resource have been lost in the past due to misplaced arguments and missed opportunities,” he said. “It is ironic that despite having a huge hydropower potential, Nepal is dependent on imports to meet its domestic demand and is likely to remain so in the foreseeable future.”
India is offering to build a 250 MW storage project, assist the Devighat Hydropower Project through part grant and part line of credit and build the Rahughat Hydropower Project through a line of credit.
Mukherjee said New Delhi is also ready to encourage Indian private and public sector institutions to be partners in developing the hydropower sector, firstly for Nepal’s own domestic consumption and if Nepal has any surplus, then for revenue generating exports to India.