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Nepal, India renew trade pact |
Nepal and India on Tuesday signed a Treaty of Trade and Agreement of
Cooperation to control unauthorised trade. Indian Trade Minister Anand Sharma
and his Nepali counterpart Rajendra Mahato signed the documents. India has granted
duty free access to more items without quantity restrictions. These include floriculture
products, flour, bran, husk, bristles, herbs, stone aggregates, boulders, sand
and gravel. Besides, India has widened scope of products considered wholly produced
or manufactured in Nepal for the purpose of gaining preferential access to the
Indian market. "An agreement on most of the issues has been reached. The demand
we had put forward to put an end to export duties has also been agreed upon. This
will enable Nepal to decrease its trade deficit," said Mahato, after signing the
agreement. The pact revises the 1996 trade treaty, which resulted in phenomenal
growth of trade. The 1996 treaty provided duty-free access to Nepali products
into India except alcohol, cosmetic and tobacco to help the impoverished Himalayan
nation boost exports. "In 1996 India and Nepal had signed a trade treaty which
was very rewarding, when we look at the benefits that flowed from the treaty,
- increase in investment and the increase in trade. Former treaty as you are aware
had ensured duty free access to each other's primary products and the Nepalese
manufactured products are allowed into India, non-reciprocal access to the Indian
markets free of customs duty," said Anand Sharma. He also expressed hope that
the treaty will go a long way in removing hurdles in trade between the two countries
and create better environment. ''There will be no restriction on the quantity
of export of Nepali products to India hereafter. The revision of agreement of
cooperation to control unauthorised trade allows re-export of goods manufactured
and produced in one contracting party to third countries through the territory
of another contracting party without any manufacturing activity," he said. According
to experts, Nepal has to concentrate more on enhancing supply-side capacity rather
than getting more concessions from India if it wants to reduce the alarmingly
high trade deficit with India, its largest trade partner. The trade deficit between
the two countries stands at Rs. 108 billion. |
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