Although bilateral trade treaty allows duty-free market access for manufacturing goods, India imposes special customs duty on various secondary goods and the state governments also levy various duties on Nepal´s exports.
“This ambiguity by the Indian government has eroded predictable trading environment, affecting both investments and exports,” Mahesh Jaju, president of Morang Trade Association (MTA), told Republica.
The MTA submitted its 10-point recommendations to Prime Minister Madhav Kumar Nepal on Wednesday. The association has strongly urged the government to take initiatives in ending the provision of double taxation.
The PM is leaving for India after about two weeks.
The MTA has urged the government to place economic agendas on top during his visit. “India is our major trading partner and its policies can directly affect our business. The PM should make necessary efforts to make sure that India, including its states, maintains consistency in its trade policy with Nepal,” said Jaju.
The MTA has noted that Nepali exports have mainly faced obstacles for policies adopted by the bordering states, mainly Bihar and West Bengal.
The association has also expressed concern over power shortage in key industrial areas along the Morang-Sunsari corridor. To address the problems, the MTA has requested the PM to make arrangement for importing at least 60 MW of electricity from Farbishgunj, India. Presently, the government is supplying power in the corridor by importing from Kataiya, India.
The entrepreneurs in have also termed problems seen in Koshi dam as one of the major obstacles plaguing industries in the eastern region.
Last year, industries in the eastern region lost their access to key domestic markets because of Koshi floods which swept away portion of East-West Highway and inundated human settlements.
“Nepal should take joint initiatives with India to construct an alternative bridge over the Koshi River,” Jaju said.
The MTA has also urged the PM to request India for including railway operations between Kolkata Port and Jogbani under the bilateral railways agreement so that entrepreneurs can take benefits from Katihar-Jogbani broad gauge line which India constructed last year to facilitate bilateral trade.
The MTA delegation also asked the PM to request India to allow Nepal use Rohanpur-Singhabad railway route for trade with India. Presently, Nepal is allowed to use Jogbani-Radhikapur route for trade with Bangladesh. However, Nepal has far failed to utilize its benefits so far.
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