India offers economic pact to Nepal
Business Standard, India
India offers economic pact to Nepal
Our Economy Bureau / New Delhi
25 August 2006
India has offered to deepen its bilateral trade relations with Nepal by mooting a comprehensive economic parternship agreement (CEPA) to include services and investment. It has also offered to negotiate a more liberal bilateral investment promotion and protection agreement (BIPPA).
Senior government officials said India is keen to expand the scope of the economic engagement to include sectors like information technology, tourism, education and healthcare. The offer to deepen economic engagement with the Himalayan neighbour has to be seen in the context of an increasing strategic importance of the neighbour particularly in wake of recent political changes there.
The issue was raised by Commerce Secretary S N Menon with his Nepalese counterpart Bharat Bahadur Thapa during the two day India-Nepal Inter-Governmental Committee on Trade, Transit and Cooperation to control unauthorized trade which concluded in the capital today. Nepal has agreed to examine the proposal. Officials said that if Nepal agrees both sides would initially set up a task force to examine the viability of the CEPA.
The two sides discussed the extension of the bilateral trade treaty which is expiring in March 2007. Officials said that India conveyed its readiness to work with Nepal to address the latter’s concerns on non-tariff measures. The Nepalese delegation sought assistance for new economic infrastructure projects, which would be discussed further by the two sides.
Officials said both sides had agreed to resume negotiations for a BIPPA which would be based on the lines of the proposed SAARC Investment promotion and protection agreement. The two sides had been talking of a BIPPA earlier which was later stalled. Finalisation of a BIPPA is expected to help Indian corporates operating out of Nepal. Some of the corporates located in Nepal have been facing problems such as non-repayment of taxes.
Commerce Ministry officials said that the present bilateral trade agreement was likely to be extended by another five years. "There would be some modifications in the agreement in terms of inclusion of mutual recognition agreements and better transit facilities," an official said. The two sides will continue their talks tomorrow.
