Nepal, India and Trade
I found this excellent Article in Telegraph Nepal of which link is provided below, while researching on India-Bangladesh Trade. I will have some comments on this as per my experience in Indian Customs Laws. The Copyright of the Article vests with Author/Publisher.
http://telegraphnepal.com/news_det.php?news_id=6067&PHPSESSID=b5a1f280b3a7b036693e0927fe7b1267
Enhancement of Nepal-India bilateral Trade & Commerce Ties
Rajesh Agrawal National Council Member, Confederation of Nepalese Industries
The bilateral framework for trade and transit is provided by the India-Nepal treaties of Trade, of Transit, and Agreement for cooperation to control unauthorized trade 1991. The trade treaty valid for five years was renewed through an exchange of letters on December 3, 1996 and March 5, 2002 and automatically renewed for another five years in March 2007.
Under the Treaty of Trade, India provides, on a non-reciprocal basis, duty free access, to the India market for all Nepalese-manufactured articles barring a short negative list (cigarettes, alcohol and cosmetics), subject to the conditions, since march 2002, that the exports meet the domestic value addition requirement of 30% and change in its classification at four-digit level in the course of manufacture or processing in Nepal.
After the March 2002 revision, annual quotas have been prescribed for duty free exports to India for four sensitive items-vegetable fats (100,000 tons), acrylic yarn (10,000 tons), copper products (10,000 tons) and zinc oxide (2,500tons).
Bilateral trade takes place generally in Indian rupees, but Nepal’s Central Bank maintains a list of items that can be imported from India in us dollars.
The India–Nepal Treaty of Transit, renewed every seven years, provides for port facilities to Nepal at Kolkata and specifies 15 transit routes between Kolkata and the India-Nepal border for bilateral trade, 22 entry/exit points are provided along the Indo-Nepal border. The transit treaty was last renewed in March 2006. The agreement for cooperation between India and Nepal to control unauthorized trade was automatically renewed for five years in March 2007.
The two governments are negotiating a bilateral investment protection and promotion agreement.
India and Nepal signed a rail service agreement in May 2004, to extend cargo train service to the inland container depot (ICD) at Birgunj in Nepal. ICD has been constructed with World Bank assistance of US$ 17 million, while India has constructed the rail tracks which link the ICD with the Raxaul railway station in India. The ICD became operational on 16th July 2004. A container corporation of India-led joint venture Himalayan Terminals Private LTD. is operating the ICD.
A motor vehicle agreement for passenger vehicles, initialed on 23rd February 2004 awaits formal signature. The agreement envisages bus services between India and Nepal on 14 routes through 5 borders on reciprocal basis.53 buses will operate under this agreement everyday. Individuals traveling to either country in their personal vehicles would also be able to cross over into the other country without payment of any charge for the first five days.
Now I would like to high light some of the issues related to trade:
The trade treaty between India and Nepal has made specific provision which allows access of Nepalese manufactured goods to the Indian market without payment of any customs duty.
But in the past, through national budgets additional duties to the extent of 4% has been imposed on Nepalese exports, later on at the request of Nepalese’s exporters as well as Nepal government these duties were called off.
Eventually when the 4% additional duty was waived by other notification, it was made applicable only to those items, which were being exported by the date of the notification as per the list approved by the finance ministry on the basis of H.S. Code classification.
Many items which could have been exported or are exported from Nepal are still subject to this 4% additional duty.
By this the exports under Nepal India trade treaty has virtually frozen to the items enlisted prior to the notification and for the new items, the treaty is virtually extinct.
As a result of such discretionary levy of the additional duty, Nepalese exports have been badly impacted.
Agro based industries are facing problem of quarantine and lab testing and borders.
The garment industries are facing problems of levy of CVD in India on the basis of MRP.
Quota and canalization on vegetable fat, acrylic yarn copper products, zinc oxide
On specific items like steel pipes it is required to take ISI mark from BIS before they can be exported though they have already taken ns mark from Nepal bureau of standards.
Pharmaceutical industries are unable to export their products to India, because the registration of their pharmaceutical products in India is almost impossible.
The indo Nepal trade treaty allows for sending any machinery for repair & maintenance only within 3 years of importation from India to Nepal. Whereas in normal cases, it is after 3-4 years of installation that a machinery requires repair and maintenance.
By products not being allowed to be exported in India;
These are products where main finished products are allowed to be exported in India, but by –products generated during the course of manufacture of the finished products are not allowed for export to India due to some prohibitions either due to the Exim policy of India or some other notification.
Heavy congestion at Kolkata port resulting in delay and cost increase of import cargos.
Road and customs infrastructure not sufficient, very weak at the borders.
Recommendations
It should be specifically provided in the treaty that neither the central government of India nor the state governments will levy any form of additional duty on goods imported into India from Nepal as per the provision of the India Nepal trade treaty. And whatever products it is being levied currently should be waived immediately.
Regarding quarantine testing Nepalese labs should be accredited for the testing.
Third party pre-shipment inspection and their certification is the norm for the exports all over the world, the same can be made applicable for India-Nepal trade on agro products.
Initiations had started for negotiating a bilateral cooperation agreement on standards between bureau of Indian standards and Nepal bureau of standards and meteorology. It should be finalized with both recognizing quality standard marks provided by each other.
Nepal allows the import of Indian products with the minimum of non-tariff barriers and the Nepali exporters also expect the same treatment from the counterpart.
Provision for allowing the sending of machinery for repair and maintenance within 3 years of import only to be amended to remove the 3 years boundation.
The motor vehicle agreement for passenger vehicles should be formalized to allow Nepalese vehicles into Indian Territory which at present require a permit.
Removal of quota and canalization; when the quota was prescribed in 2002 on vegetable ghee, acrylic yarn, copper products, zinc oxide, the import duties in India on these products were very high, but now they have been significantly reduced and in some cases it is even 0%, so there is no logic in continuing with the quota.
Nepali manufactured goods out of Indian and or Nepali raw materials should have a separate procedure for export to India. They should be given national treatment as given by the central government of India to the states like Assam, Meghalaya, Uttarakhand and Himachal Pradesh in terms of tariff and non-tariff issues.
The DRP system (duty refund procedure) was introduced for goods exported from India to Nepal in Indian currency with a view to increase trade with Nepal as well to reduce the landed cost of goods to the consumers of Nepal. Under this system the amount of excise duty paid on Indian goods is given as rebate in the customs duty levied by Nepal and that amount is refunded to the Nepal government by the Indian government. During that time import duties were about 25% in Nepal so the full excise amount would be exempted but now the duties have fallen to the range of 5-10% resulting in the full excise not being exempted hence Indian goods becoming expensive.
So for all exports from India to Nepal in Indian currency excise duty should not be charged as in the case of dollar exports.
For the congestion being faced in Kolkata additional sea ports with railway connection for Nepal as JNPT, Kandla, Vishakhapatnam and ICD Tuglakabad for import and export of goods from Nepal should be provided.
ICD Birgunj should be connected with major ICD of India for bilateral and overseas cargo.
The facilities of concur should be extended to carry export material from Nepal to major cities of India and vice versa
Goods imported from third country into India are not allowed to be re-exported to Nepal. This provision should be removed and goods imported into India from third country should be allowed to be re exported to Nepal.
Improvement of cross border trade related infrastructure such as upgrading major customs check points at Birgunj-Raxaul, Biratnagar-Jogbani, Bhairawaha-Sunauli and Nepalgunj-Rupediya to international standards, upgrading approach highways to the border on the Indian side and the Nepalese side; and broad gauging and extending rail links to Nepal.
Lastly rivers flowing from Nepal into India constitute an important part of the Ganges river system. Nepal’s enormous hydropower potential estimated at 83,000 mw, of which 44,000 mw is considered economically feasible, could transform Nepal’s economy.
There is considerable scope for mutually beneficial cooperation between India and Nepal in developing small and medium sized hydropower projects in Nepal for internal use in Nepal or exports to India. Nepal’s hydropower development policy permits private and foreign investment in generation of hydropower, including for exports.
Nepali Politics: Cant stay without commenting!!!
There is no difference between entire Nepal and my room in Hyderabad these days, in terms of power trouble. There is frequent electricity power cut in Hyderabad these days and in Nepal, both political power in addition to electricity power has dried up.
My laptop has some power back up and I have been rendered jobless in this dark night. It’s dark enough to be called dark at this night as the lights from candles are fading away even before they reach me.
I am jobless in this dark night, have been compelled to use internet through wireless( wi-fi) card. Had there been power, I would be using internet only but my net would be certainly faster on broadband n I would be roaming from one website to another. Now, in this powerless darkness, we have limited option and feel like commenting about power-political power, of course.
This week, when we start commenting on power and political power in Nepal, the name cerianly erupts in mind is Prachanda- the most hated, despiged, loved, hailed as leader etc. etc. depending on your choice and political inclination.
We are all aware of political dramas unfolding in Nepal. the sacking of army chief by Government, re-instatement of Army chief by President, PM’s prachanda’s resignation and his speech against foreign power. He said that he held his head high when foreign powers were forcing him to bend as per their wishes.
Many hailed Prachanda——-it was a ‘Hail Prachanda Era’.
In some speech, it was reported that he said that his resignation was a missile against foreign dogs or something like that. Hail Prachanda became louder.
N Today’s THE HINDU, one Indian Newspaper, published Prachanda’s interview that came as a real missile to many of us. U can see his interview and new related to this here:
Here, in the above news, Mr. Prachanda shamelessly reveals that he asked for India’s help to resolve the issue. Is that his greatness? When army row is Nepal’s internal matter, why he approached for India’s help?
That means all his tallks on nationality and not being influenced by foreign interference is just a tall claim, and how long he expects to make people fool by his inconsistent big talks??
I am sure we will soon hear on our backyard people saying, “Down with Prachanda”.
Dashain, Nepal and Business-some Thoughts
Today and appropriately tonight, I am planning to write another blog as well. Just I am thinking to utilize my little time writing some of my thoughts here.
Let me start my blog with my activities today. Today, got up at 8.40 AM and ran to class and made sure that I was in when it was 9 AM that means I got attendance. Attendance will have so much value in my University that if I have less than 75 percentages, I am not allowed writing exams.
We had two classes- One Clinics and another one was International Trade Law and after that, that means after 10.30 AM, our presentation of International Commercial Arbitration (ICA) started. It was so painful to attend that Presentation. It went on from 10.30 in the morning to 8.30 PM in the night with two breaks for Lunch and Tea. Total time that we got as breaks were 1.30 hours. Can you imagine how tire I am here now???
Anyway, who cares? Tomorrow, I have to attend again ICA. I have to present my own draft in that class and from there; I head to Advanced Intellectual Property Rights Laws (Advanced IPR) class. In Advanced IPR also, I have to present tomorrow. That effectively means, I have to prepare on two drafts tonight and by tomorrow evening, I am sure that my ass will be burnt down to ashes.
Who knows what is going to happen tomorrow and let me see. I am not bothered on these stuffs right now. I am still in the mood of Dashain as I just posted one entry wishing you all good Dashain. Once Again, Wish you an auspicious Dashain.
Now, going to what I did tonight after I came from Class and what I am planning to write here. I just visited some Nepali News sites. These days, I read about Politics but stopped thinking about this. So, Naturally, I read politics less if I hate to think and started searching apolitical and non-political news and stuffs. I visited some of the blogs. One of those blogs that I visited is Nepal Diary. See Here: http://nepaldiary.wordpress.com/
I used to visit this blog regularly but had not been updated for a long time. Now, it seems that Nepal Diary is being updated regularly.
One of the posts that attracted my eyes was this: http://nepaldiary.wordpress.com/2007/10/16/%e0%a4%97%e0%a4%a8%e0%a5%8d%e0%a4%a5%e0%a4%a8-%e0%a4%ae%e0%a4%a8%e0%a5%8d%e0%a4%a5%e0%a4%a8/
This post truly depicts the Nepal’s situation where business transactions are not taking place in rapid scale despite Dashain being just few days away. I have translated that post here and tried to post a common Nepali man’s problems. I think this is a problem of many small scale businessmen.
The post goes like this:
“Now a day, I do not have Cyber Connection in my room and updating my blog sometimes from Cyber Cafes. I am a man living in a small business and there is a whole nation on spree of business. Because of being busy in usual business, I am not able to update my blog regularly. Because of Nepali’s great festival Dashain, there is a big crowd in my shop as well though my shop is a small one. You can come there even if you just want to see-my shop, and crowd and may be blogger as well. My shop is in New Road, more precisely on Khicha Pokhari (blogger is referring to a place where usually, there will be crowd) and there happens to be a great crowd around. There is no place even to stand there on your foot. But, in this Dashain, there is not much sale. What happened? May be people do not have any money? Today, I went to Thapa Thali located Nepal Rashtra Bank to make some changes of currency-from higher denomination to smaller ones. But, Bank says that they do not have currencies of 10 Rs. And 50 Rs. And only of 5 Rs. And 20 Rs. Now, if Bank does not have any money, how common people will have!!! I think that is the reason of businesses going down and sliding further down.
Now, let’s talk about Dashain. How are you celebrating this Year’s Dashain? I think you are going to butcher a goat for meat and other delicious non-vegetarian foods. Whatever you do, but celebrate in a great way, and wherever you may be- in Nepal or outside in foreign Land. So many people have extended republic wishes in this Dashain. But, I do not know what kind of wishes should I extend for you. Okay, okay I am extending Federal Republican Dashain wishes. Let Great Lord ease the process of achieving Federal Republic Nepal. I am being here more revolutionary and not just bourgeoisie!!!!”
Wish you all a Great Dashain and Subha Vijaya Dashami.
Constututional Assembly Debates: An example
This is a small piece of Constitutional Assembly Debates in India that took place while forming India’s Constitution. They are very great source of law and study of it gives us idea how the issues are debated in Assembly. This is just a piece. For full Reading, Follow the instruction provided in the Article.
The Name of the person is the one who is speaking and in brackets, it gives us idea where he came from and what is his designation. They are talking on very many issues that you know when you read it. The name and designation is not so important, focus on the texts and what they have to say on a particular topic. (more…)
जोखिमपूर्ण जातीय विभाजन/Risky ethnic Devides.
(In the series of Consolidating Debates on Constituent Assembly Election and prospects of Federalism, these two articles in Nepali and translation in English have been published here. I agree most of the points presented in this Article.)
जोखिमपूर्ण जातीय विभाजन
डा. आलोक बोहरा
कसरी युगौंदेखिका नेपाली समस्याको समाधान नेपाललाई जातीय धारमा विभाजन गरेर सम्पन्न गर्न सकिन्छ ? जातीय तथा लैंगिक विभेद, आर्थिक अभाव, पश्चिमी पहाडका भोकमरी तथा खाद्य सुरक्षाका समस्या, कमजोर प्रशासन संयन्त्र, स्वास्थ्य सेवाको अभाव, पर्यावरणीय असन्तुलन, सहरी अपराधहरू, बढ्दो जनसंख्याको चाप, बेरोजगारी, शैक्षिक भिन्नता, प्राकृतिक प्रकोपहरू जस्तै- तराईको बाढी सामना गर्ने असमर्थता, बालश्रम, चेलीबेटी बेचबिखन, सामन्ती प्रथा र कतिपय अकर्मण्यता इत्यादि सबै नेपाली समस्या हुन्, न कि मधेसी, लिम्बुवान, बाह्मण ।
Constituent Assembly Election and Federal System
[Though I disagree with the learned Authors on some of the minor points in this Article, I hope that this Article will make an interesting and educative reading. I will make some of my "notes of dissent" clear after some days, in a separate Article.]
By Surendra R Devkota and Shiva Gautam
Nepal, since its existence, never had a citizen-centered governance structure. All state machineries during the Rana and earlier regimes were focused on only tax collection from the citizens and power consolidation at the center.
Come One, Come All To Vote Your Destiny: Election Commission
[ My few Words: This article is a copy-paste Article written by Dinesh Wagle in United We Blog. I have copied this article from UWB's website as it helps to spread information about Constituent Assembly Election in Nepal. For further information about its original publication, see the bottom of this Article. All Copyrights over the Article and images belong to Original Authors.]
By Dinesh Wagle
As part of its unprecedented campaign, Election Commission will send 8 thousand volunteers in each and every house of all villages of Nepal to deliver invitation cards: You and your family members [who are registered at the Commission] are heartily invited to the nearby voting both for the Constituent Assembly election on November 22.
An invitation to your family to vote. Sketch by Dewen via Kantipur
Random Feelings without dream
I have NO Dream
Sounds pessimistic? Right. Of Course, let’s talk about pessimism sometimes. Let’s talk about dark things in life. Life is not only spring; it passes through many many cold winters. You tell me, are not you felt bored, sad, unhappy, and angry in life? You have man, you must have. Then, why do not you talk about those things? (more…)
Something politically motivated!!!!
I have not written anything in my blog so many days. So, feeling like I have missed out something.
I am somewhere far from my temporary-but-usual place. People call it Hi-Tech City. Yes, Hi-Tech City of Hyderabad. Flooded with fancy buildings, fancy offices with fancy names. It has given job to many, status to many, and of course, quick bucks to many. Hi-Tech City in Hyderabad is a part of changing Hyderabad to Cyberabad.
NEPAL in a New Height
It is a great pleasure for this blogger to share this News with its Readers. The date for Constituent Election (Sambidhan Sabha) has been declared in Nepal and It is going to be Mansir 6, according to Nepali Calender, i,e; November 22, 2007.
This is an election that decides the fate of ill fated monarchy in Nepal. That means, the oppressive royal regime and its coterie in Nepal can not impose their criminal, anti-social and undemocratic actions on 27 million freedom loving people. (more…)
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