Nepal and India recently reviewed joint plans for a Rs. 100 crore pipeline project that will supply petroleum products from Raxaul, Bihar to Amlekhgunj in Nepal. The project, proposed in 2009, was to initially cost Rs 84 crore but with inflation is estimated at Rs 100 crore today. The two countries were represented by India’s Commerce Secretary, Rahul Khullar, leading a 16 member team and his Nepalese counterpart Purushottam Ojha, leading a 15 member Nepalese delegation. The two sides met for a two-day long discussion in New Delhi.
The pipeline is expected to drastically reduce transportation costs, by up to 40 percent and boost bilateral trade. India is Nepal’s largest trading partner with trade standing at USD 2.7 billion in 2010-2011. Land locked Nepal faces severe fuel shortage and is very eager to see the project succeed. The country has sought increased investment from India but much needs to be achieved in terms of resources and funds before the project can realistically start.
Apart from discussing the gas pipeline, the delegates also signed an agreement enhancing bilateral trade and investment in various infrastructure projects. India was keen to show its commitment and invest in hydel power generation. The opening of Vishakapatnam Port and simplifying procedures at the Kolkata port for Nepali traders by abolishing the Duty Refund Procedure (DRP) were also discussed during the meeting.