Nepal FM arrives to discuss trade treaty

Nepal FM arrives to discuss trade treaty

Sujata Koirala will seek Indian investment in proposed SEZ in Nepal

Koirala will also seek Indian investment in the proposed Special Economic Zone (SEZ) at Birgunj in Nepal.

Her visit is likely to set the stage for Nepal Prime Minister Madhav Kumar Nepal’s maiden visit to India scheduled next week.

Koirala will meet Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi. She will also have a meeting with External Affairs Minister S M Krishna, Commerce Minister Anand Sharma and Finance Minister Pranab Mukherjee on Tuesday.

Bilateral trade
“The focus of my visit is on enhancing bilateral trade and boosting Indian investment in Nepal,” said Koirala.

Koirala and Krishna are expected to hold discussions on the revision of the India-Nepal Trade Treaty, which is to be renewed in 2012.

India and Nepal had a single trade and transit treaty, but it was broken up into two separate treaties in 1978. The trade treaty has to be renewed every five years.

Kathmandu has been insisting on increasing the shelf-life of the treaty to 10 years. After much negotiation, New Delhi is believed to have agreed to revise the treaty to turn it renewable after every seven years.

Economic diplomacy
Koirala said Kathmandu would continue to pursue its foreign policy based on “economic diplomacy”, besides trying to get the maximum benefit from emerging economies like India and China.

“India has played a vital role in Nepal’s economic development, and we hope to increase India’s participation in our development endeavours,” she said.

Madhav Nepal’s government is laying special emphasis on tapping the country’s hydro-electric potential to fill the growing gap between demand for power and generation of power. Kathmandu has been seeking fresh investment from India in hydropower, infrastructure and other sectors. But New Delhi insisted on a bilateral agreement to guarantee the security and protection of the investment. The proposed agreement is likely to be discussed during Koirala’s meeting with Krishna.

The review of the Nepal-India Friendship Treaty (1950) will also figure during Koirala’s talks with her Indian counterpart on Tuesday.

The Maoists in Nepal had initially demanded that the friendship treaty be scrapped. During Prachanda’s tenure as prime minister, the Maoists toned down the demand to a review of the treaty. New Delhi has also agreed to have a re-look to the old agreement.