India offers trade and transit concessions to Nepal
Henceforth, Nepali bulk imports from third countries can enter via Jogbani-Biratnagar and Nautanwa-Bhairahawa customs points apart from Raxaul-Birgunj from where they were being ferried so far.
This was among the several concessions afforded to Nepal by India during the two-day commerce secretary-level talks that concluded here late Sunday. These are expected to further facilitate trade and transit between the two countries, officials here Monday said.
India also agreed to allow plying from Indian ports to Nepal of vehicles imported from third countries. Till now, Nepali traders had to bring such imports only using containers or wagons.
This provision only permits vehicles imported via third countries at Haldia port in Kolkata, according to the minutes of the meeting. A Letter of Exchange will be signed in this respect.
The meeting also allowed Nepal to import agriculture and livestock-related products from India frequently.
Indian Commerce Secretary S.S. Rao also invited his Nepali counterpart Madhav Regmi to visit India to hold further discussions.
"I have also invited my counterpart to visit India from February 14 to take a look at other Indian ports that Nepal can use in future," Rao told reporters after the meeting.
Nepal is seeking more Indian ports, besides Haldia, to import goods from third countries.
According to the agreement, Nepal has been allowed to import hybrid cows from India to fulfill its daily dairy requirement.
Nepal has a daily shortfall of half a million litres of milk so it has decided to import at least 10,000 hybrid cows from India.
Both sides have also agreed to enhance traditional customs points by gradually upgrading infrastructure to simplify bilateral trade.
Developing mechanism to promote investments in Nepal, providing technical assistance and capacity-building almost free of cost are some of the issues that the countries have agreed during the meeting.
"Besides focusing on the trade in goods, Nepal also needs to focus on trade in service and attracting more investment from India," said Rao adding that Nepal has to focus on reaping benefit from Indian investment.
According to Nepalese figures for the fiscal year ending July 2013, Nepal's bilateral trade with India stood at Rs.26,126.9 crore, which is 66 percent of its total external trade.
Nepal is receiving only a negligible share of total foreign investment made by India that totals $140 billion, Rao said.
He added that India would start work to remove the technical and non-tariff barriers from their side. India also remains Nepal's largest source of foreign investment and Indian investments in Nepal amount to Rs.2,539.2 crore with 566 FDI (Foreign Direct Investment) projects.
India accounts for 40 percent of the total foreign investments in Nepal.
Rao said Nepal was facing huge adverse balance in its trade with India due to supply side constraints resulting mainly from energy insecurity.
"Lacking energy security is the main hurdle for the country in achieving a thriving economy," he added. Rao also urged Nepal to utilise its natural resources in a way that would ensure utmost benefit.