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Ministry of Commerce revises Indo-Nepal trade treaty

28 Oct '09
5 min read

- Criterion for calculating value addition for gaining preferential access to India has been changed from ex-factory basis to FOB basis.

- India has agreed to consider waiver, on request from GON, of any additional duty that may be levied over and above CVD.

- Both sides have agreed to exempt exports of goods, which are already covered under forward contract, from imposition of restrictions on exports.

- Both sides will grant recognition to the sanitary and phyto-sanitary certificates issued by the competent authority of the exporting country based on assessment of their capabilities.

- Articles manufactured in Nepal, which do not fulfill the criteria for preferential access will be provided MFN access to the Indian market. The certificate of origin in case of such exports has been prescribed.

- The provisions regarding safeguard measures in case of serious injury to the domestic industry have been streamlined.

- A joint mechanism, comprising local authorities has been established to resolve problems arising in clearance of perishable goods.

- An Inter-Governmental Sub-Committee (IGSC) at the joint secretary-level has been established.Existing Inter-Governmental Committee (IGC) at the Secretary-level will meet once in six months and the IGSC will meet at the interval of the two IGC meetings.

- Four additional Land Customs Stations (LCSs) will be established to facilitate bilateral trade: Maheshpur/Thutibari (Nawalparasi); Sikta-Bhiswabazar; Laukha-Thadi; and Guleria/Murtia, bringing the total number of Stations to 26.

- Bilateral trade will be allowed by air through international airports connected by direct flights between Nepal and India (Kathmandu/Delhi, Mumbai, Kolkata and Chennai).

- The Indian side has agreed to review and simplify the existing administrative arrangements for operationalisation of fixed quota for acrylic yarn, copper products and zinc oxide.

- India has agreed to consider several additional products as wholly produced or manufactured in Nepal for the purpose of gaining preferential access to the Indian market. It includes articles collected in Nepal fit only for recovery of raw materials and waste and scrap resulting from manufacturing operations in Nepal.

- India has agreed to assist Nepal to increase its capacity to trade through improvement in technical standards, quarantine and testing facilities and related human resource capacities.

Click here for the main features of the 1996 Trade Treaty.

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