KATHMANDU, March 5: In a major breakthrough, India has agreed to incorporate a clear provision on exempting excise, additional customs and other duties and charges on Nepali exports to India, under the bilateral trade treaty.
The agreement was reached on the first day of bilateral trade talks that kicked off in the capital Thursday. “Once a minute in this connection is signed tomorrow, the provision will be incorporated in the treaty as a new protocol,” a senior government official told myrepublica.com. [break]
The technical meeting of Commerce Joint Secretaries from Nepal and India has also consented to include in the treaty a similar provision for Nepal on non-tariff and para-tariff barriers.
What this means is: India would not impose new quality- and standards-related provisions and new procedures that could hinder Nepal’s exports to India. Although understandings on not imposing duty and non-tariff barriers were reached in the past as well, those were not strictly adhered to due to the absence of a clear provision in the bilateral treaty.
“Inclusion of these two provisions in the treaty protocol will made them binding clauses for India to follow,” said the source. Nepal had been seeking inclusion of the provisions in the treaty in a bid to lay down a predictable trading environment and lure investments and industries targeting the Indian market.
However, the Indian side still refrained from agreeing to Nepal’s request on not imposing state taxes on its exports. The two sides also failed to work out clear provisions on helping Nepal regain its lost preference in the Indian market.
During the meeting, the Indian team did agree to provide technical assistance to Nepal for upgrading the central food laboratory and the laboratory of the Department of Standards and Metrology (DoSM) and to harmonize the standards and accreditation system between the two countries.
“Going by the understanding reached so far, we could have our standards and food labs harmonized in six months. But it will depend on how sincerely India stands by its support commitment,” said the source.
During Thursday’s meeting, the two sides also agreed upon different mechanisms to control the unauthorized trade over the porous Nepal-India border. “The agreed mechanism, however, will need approval of higher authorities before being implemented,” said the source.
Sources further informed myrepublica.com that the two sides will sign the minutes of the agreements on Friday, when the meeting concludes. The agreements will then be picked up at secretary-level talks and also at the commerce minister level before being signed as the new bilateral trade treaty.
milan@myrepublica.com
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