India, Nepal Review Trade and Transit Treaties

30 April 2018

The Governments of India and Nepal held an India-Nepal Inter-Governmental Committee (IGC) Meeting on Trade, Transit, and Cooperation to Control Unauthorised Trade on 26-27 April 2018 in Kathmandu, Nepal. This Meeting was led by the Commerce Secretaries of the two Governments--Ms. Rita Teaotia, Commerce Secretary, Government of India, and Mr. Chandra Kumar Ghimire, Commerce Secretary, Government of Nepal. India-Nepal trade, transit, and economic relations were discussed extensively to reduce the widening trade gap. The Meeting concluded with several landmark decisions to further improve bilateral trade and investment ties.

The Meeting

  • Agreed to conduct a comprehensive review of the bilateral Treaty of Trade by July 2018. Last revised in 2009, this Treaty governs the bilateral trade between the two nations. Mr. Chandra Kumar Ghimire, Secretary of the Ministry of Industry, Commerce and Supplies, Government of Nepal, said in an interview that this review will seek to address different trade hurdles in Nepal's bilateral trade with India;
  • Discussed amendments to the bilateral Treaty of Transit, signed in 1999, and agreed to consolidate all earlier amendments to the Treaty of Transit, within a month. The amendments sought to further ease transit movement of Nepal’s trade with third countries through additional transit points and trade gateways, simplified procedures, and implementing electronic cargo tracking, as well as enabling movement of Indian cargo through Nepali territory. The need to review the Treaty of Transit to address other transit matters, including the proposal to link Nepal to India's inland waterways, was also addressed;
  • Agreed to synchronize development of border trade infrastructure, to ensure timely utilization of investment in border infrastructure;
  • Underscored the need to harmonize standards and expedite progress on memorandums of understanding among concerned agencies of India and Nepal, to increase the volume of trade. Both sides vowed to work toward mutual recognition of testing and certificates; and
  • Reviewed an earlier agreement to form an India-Nepal Joint Business Forum comprising industry representatives, and organize the first meeting of the Forum soon. This Forum will act as an institutional business-to-business mechanism that will provide policy-level inputs on trade and investment, based on recommendations from businesses and investors.

The meeting was preceded by a meeting of Inter-Governmental Sub-Committee on Trade, Transit and Cooperation to Control Unauthorised Trade at the Joint Secretary level which was held on 24-25 April 2018 in Kathmandu.

 

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