Saturday, August 22, 2009

New trade deal between India and Nepal and will encourage bilateral trading

India and Nepal signed a new trade treaty and agreement on August 22, 2009. After the five day visit of Nepalese Prime Minister, Madhav Kumar Nepal assured his countrymen that the two countries are going to further develop their relationship. The new trade deal would decrease will decrease Nepal’s loss in trade with India and would expand Nepal’s trade and business. On Nepal’s behalf, Purushottam Ojha, Secretary of Commerce and Supplies signed the pact and Rahul Khullar, Indian Commerce Secretary represented India. Nepalese Minister of Commerce and Indian External Affairs Minister S M Krishna were also present at the event.

The current pacts of the deal will replace the existing pacts that have been formed in 1991 and 1996. The trade treaties have been negotiated for the last two years. Under the new agreement, Nepalese products will duty-free access in India. The new treaty will also help to control the unauthorized trade from a third country and encourage bilateral trading. In the FY 2008-2009, the two countries traded goods worth 1.9 billion dollars. According to the Indian government the amount would become three billion dollars in near future. India is the sole supplier of fuel to Nepal and is also responsible for more than 44% of foreign direct investment in the country.

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