Bridg­ing Indo-Nepal trade gap

PM Naren­dra Modi’s visit to neigh­bour­ing Nepal aug­mented bi­lat­eral co­op­er­a­tion in sec­tors such as trade, in­vest­ment and con­nec­tiv­ity. The visit is ex­pected to greatly boost the Indo-Nepalese trade ties.

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Talks of en­hanced bi­lat­eral ties and a boost in trade and in­vest­ment were at the crux of Prime Min­is­ter Naren­dra Modi’s visit to Nepal.

The Fed­er­a­tion of In­dian Cham­bers of Com­merce and In­dus­try (FICCI) is hop­ing that the visit would add mo­men­tum to the Indo-Nepalese trade and in­vest­ment ties. "Indo-Nepal ties evoke a rich ta­pes­try of re­la­tions framed by trade and in­vest­ment, cul­ture and ro­bust peo­pleto-peo­ple con­tacts."

As part of the dis­cus­sions, Nepal has asked In­dia to in­crease for­eign di­rect in­vest­ment, re­lax non-trade mea­sures and al­low greater mar­ket ac­cess for its prod­ucts to bridge widen­ing trade deficit. Ac­cord­ing to a joint state­ment is­sued after the meet, mea­sures to “ad­dress this deficit through in­creased In­dian FDI, re­lax­ation of non-tar­iff mea­sures in­clud­ing SPS stan­dards for agro prod­ucts, support in prod­uct de­vel­op­ment, re­lax­ation of Rules of Ori­gin re­quire­ment for duty-free ac­cess of Nepalese prod­ucts, and mu­tual recog­ni­tion of stan­dards, con­for­mity as­sess­ment and ac­cred­i­ta­tion” were dis­cussed.

This visit makes Modi the first In­dian Prime Min­is­ter to visit Nepal in 17 years. The core fo­cus of the visit was on 4 Cs of co­op­er­a­tion, con­nec­tiv­ity, cul­ture, con­sti­tu­tion.

In­dia’s ex­port to Nepal in the year 2013-14 ag­gre­gated at US$3.58 bil­lion, whereas the im­ports were worth a mere US$526 mil­lion. This re­sulted in a trade deficit of about US$3 bil­lion. To tackle this is­sue, the Nepalese side has re­quested In­dia to re­move the coun­ter­vail­ing duty on its prod­ucts in­clud­ing ready­made gar­ments, cop­per, brass uten­sils, Kattha and oth­ers.

Apart from that, they have also sought re­moval of "quan­ti­ta­tive re­stric­tions on the four Nepalese ex­port prod­ucts-veg­etable fats, cop­per prod­ucts, acrylic yarn and zinc ox­ide."

In­dia has as­sured them to con­sider the re­quests. "The In­dian side also re­it­er­ated that prob­lem of trade deficit could be best bridged by de­vel­op­ment of hy­dropower in Nepal and ex­port of sur­plus power to In­dia," the state­ment said.

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