In a move addressing its widening trade deficit with India, Nepal sought a preferential treatment for its shipments to India.
Towards addressing the gaps arising out of India’s skyrocketing imports against Nepal’s sluggish exports, Nepal has reportedly requested preferential treatment for its agriculture exports and integration of its manufacturing units to Indian value-chain.
Nepal and India discussed this at a joint committee meeting held in New Delhi during August 9-10, 2018, to review the Indo-Nepal Trade Treaty.
Nepali delegation led by the Joint Secretary at the Nepali Ministry for Industry, Commerce & Supplies Ravishankar Sainju and Indian officials discussed complete removal of preferences and reciprocity in trade of agricultural and manufacturing products as part of the review process.
The review of Indo-Nepal trade treaty is the result of concerns raised by trade experts of Nepal over widening trade deficit between the two countries.
“Unilateral dependence with India in trade is risky for Nepal and the country needs to diversify its trade,” say the experts.
The current trade treaty calls for a review of the agreement for every seven years with one of the contracting parties mandated to give a prior notice of three months requesting the same.
However, Nepali delegation could not do so in 2016 owing to disruptions in the southern belt caused by the massive earthquake disaster.
Let’s hope the renewed trade treaty will open more avenues for effective and well-balanced Indo-Nepal trade mechanism.