Kathmandu, Oct 28 (ANI): Nepal and India on Tuesday signed a Treaty of Trade and Agreement of Cooperation to control unauthorised trade.
Indian Trade Minister Anand Sharma and his Nepali counterpart Rajendra Mahato signed the documents.
India has granted duty free access to more items without quantity restrictions. These include floriculture products, flour, bran, husk, bristles, herbs, stone aggregates, boulders, sand and gravel.
Besides, India has widened scope of products considered wholly produced or manufactured in Nepal for the purpose of gaining preferential access to the Indian market.
"An agreement on most of the issues has been reached. The demand we had put forward to put an end to export duties has also been agreed upon. This will enable Nepal to decrease its trade deficit," said Mahato, after signing the agreement.
The pact revises the 1996 trade treaty, which resulted in phenomenal growth of trade.
The 1996 treaty provided duty-free access to Nepali products into India except alcohol, cosmetic and tobacco to help the impoverished Himalayan nation boost exports.
"In 1996 India and Nepal had signed a trade treaty which was very rewarding, when we look at the benefits that flowed from the treaty, - increase in investment and the increase in trade. Former treaty as you are aware had ensured duty free access to each other's primary products and the Nepalese manufactured products are allowed into India, non-reciprocal access to the Indian markets free of customs duty," said Anand Sharma.
He also 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. 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," he said.
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 India, its largest trade partner.
The trade deficit between the two countries stands at Rs. 108 billion. (ANI)