High-ranking government officials from Nepal and India are set to engage in a two-day bilateral trade discussion starting Thursday, aimed at revisiting the Commerce Treaty between the two nations.
According to Nepal’s Ministry of Industry, Commerce, and Supplies (MoICS), the Nepal-India Inter-Governmental Committee (IGC) meeting will take place on January 9-10. This committee, led by the commerce secretaries from both countries, serves as a bilateral mechanism overseeing treaties, trade, transit, and investment-related matters.
In the last two meetings, both countries agreed to continue with the existing Commerce Treaty without any amendments. The most recent IGC meeting was held in Kathmandu on December 7, 2020. Nepal and India had originally signed the Trade and Commerce Treaty on November 27, 2009, with provisions for automatic renewal.
India remains Nepal’s largest trading partner, accounting for a significant share of both imports and exports. In the last fiscal year, Nepal imported goods worth NPR 996.68 billion from India, making up the majority of its total imports of NPR 1.592 trillion. Similarly, Nepal earned NPR 103.17 billion from exports to India out of its total export earnings of NPR 152.38 billion.
MoICS spokesperson Babu Ram Adhikari noted that the IGC meeting will primarily address trade and transit-related issues. He stated that the bilateral discussions aim to resolve challenges that arise in trade between the two countries. India is expected to raise concerns about curbing illegal cross-border trade and the re-export of third-country goods via Nepal. Specific products like garlic and betel nuts, which face high customs duties in India, are reportedly imported to Nepal and then re-exported duty-free to India. Additionally, India may address restrictions imposed by Nepal on the import of Indian dairy products.
Nepali traders, meanwhile, face several non-tariff barriers when exporting goods to India. Products such as tea, cardamom, footwear, ginger, diapers, plywood, cement, and sanitary pads often encounter restrictions due to India’s requirement for Bureau of Indian Standards (BIS) certification. Nepal is also likely to raise concerns about easier railway access for bulk cargo transportation to third countries and quarantine-related hurdles for exporting agricultural products. An official from MoICS emphasized the importance of addressing these issues to facilitate smoother trade and improve bilateral economic cooperation.
