The Hindu : Indo-Nepal trade treaty renewed

Online edition of India's National Newspaper
Sunday, Mar 03, 2002

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Indo-Nepal trade treaty renewed

By Our Special Correspondent

NEW DELHI MARCH 2. India and Nepal today extended the validity of the bilateral trade treaty between the countries for a period of five years with modifications to take care of some of the Indian concerns.

The treaty, which would now expire on March 5, 2007, was initialled by the Commerce Secretary, Dipak Chaterjee and his Nepalese counterpart at the end of the sixth round of the talks. Though the basic framework of the treaty stays unaltered, it does address the concerns of the Indian industry over the inflow of third country goods and surge in imports of certain commodities hurting it.

As such, the renewed protocol in its modified format takes care of the concerns relating to value-addition norms and surge in flow of certain commodities.

The details of the rules of origin too had been adopted. Originally the existing treaty was scheduled to expire on December 5 last year but before that India chose to extend it unilaterally by three months until March 5, 2002, buying time for fresh negotiations for its renewal with modifications.

Under the 1996 agreement, no definition of manufacturing and value addition was prescribed. Now the renewed version has a safeguard clause permitting appropriate remedial measures in tune with international norms in case of a surge in imports of certain commodities. The safeguard has specially been incorporated in relation to the imports of sensitive commodities like vanaspati, acrylic yarn, copper products and zinc oxide, official sources asserted.

Duty-free imports will be allowed up to a certain ceiling and any import above the ceiling would be applicable for duty as prescribed under MFN (Most-Favoured Nation) status.

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