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| Minister for Commerce and Supplies Rajendra Mahato (L) and his Indian counterpart Ananda Sharma exchanging the signed documents of Treaty of Trade and Agreement to control unauthorized trade in Kathmandu, Tuesday, Oct 27 2009. nepalnews.com/rh |
New trade treaty, which is the revision of 1991 treaty, addresses changes that have taken place in bilateral, regional and international trade in the last 18 years, said Mahato.
The revised treaty assures removal of all forms of non-tariff barriers on Nepali exports to India. The pact, which is an outcome of two years of exercise, is also focused on enhancement of Nepal's trade related capacities and recognition of the quality certificates issued by Nepali laboratories after their upgradation.
According to Mahato, the newly reached trade deal will help Nepal reduce trade deficit with India apart from acting as a milestone for Nepali export sector.
India is Nepal's largest trade partner as two-third of Nepali trade is with the southern neighbor. Since 1996, Nepali export to India has grown 13 times. However, the bilateral trade is being dominated with import from India.
It has made a provision for simplification of trade and transport related documents. It makes rules of origin, duty refund procedure and tariff rate quota in favour of both the countries.
Indian minister Anand Sharma 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,' he added.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.
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 its largest trade partner. The trade deficit between the two countries stands at Rs. 108 billion. nepalnews.com
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