Formalize Trade Treaty

Almost three weeks have elapsed since the foreign secretaries of the two countries put initials on the draft of Nepal-India Trade Treaty but it´s yet to come into operation. The treaty will have to be signed by the ministers of the two countries for it to get a legal status, to be ready for implementation. Nepal had insisted on formal signing of the treaty while the visiting Nepali delegation led by Prime Minister (PM) Madhav Kumar Nepal was still in India. The Nepali side had even arranged PM Nepal´s stopover in New Delhi, while returning from Mumbai to Kathmandu, to witness the formal signing of the treaty. But the Indian side citied lack of time for the cabinet endorsement and it was deferred also because Indian Commerce Minister, Anand Sharma, had already left for Africa. The mutual understanding then was to sign and effect the treaty at the earliest.



Not just that the treaty hasn´t been signed thus far but the Indian side even didn´t respond to Nepal´s invitation to Indian Commerce Minister to Kathmandu on September 9, 10 to sign the treaty. Had the signing taken place on one of these dates, it would have provided the necessary oomph to the signing ceremony also because the Indian business delegation was in the city for bilateral discussions with the Nepali business community. We can understand the busy schedule of the Indian Commerce Minister and a possible lack of time to come to Kathmandu notwithstanding his willingness but then India could have suggested alternative dates to the Nepali side. The fact that India cold-shouldered Nepal´s suggestion on possible dates has left some quarters in Nepal doubting the possibility of formalizing the treaty in the near future.



The skeptics have even linked India´s current apathy toward signing the Trade Treaty to the Extradition Treaty—the home secretaries of the two countries put their initials on the treaty some two years ago but Nepal has thus far dragged its feet from formalizing it. We hope that´s not the case. And we are relatively confident about it also because Indian PM Manmohan Singh not only raised the issue of delay in signing the Extradition Treaty with his Nepali counterpart during his last visit but also assured the latter that India was ready to wait till the Nepali side finds itself in a "comfortable position" to ink it.



Nepal and India needs to formalize the trade treaty for both the reasons of symbolism and substance. Further delay in signing the treaty will only give more room for speculations that glitches in Nepal-India relations are growing. And Nepal needs the treaty for a practical reason—there is an urgent need to narrow the trade deficit with India, which has doubled over the last five years and reached Rs 108 billion rupees.

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