Nepal´s international trade is largely dependent on India with which the country is facing annual trade deficit of over Rs 175 billion in the absence of market diversification.[break]
On the back of slowing overall exports, Nepal is keen to explore the market in Bhutan and Bangladesh for its exportable products.
Nepal and Bhutan are yet to sign trade agreement. However, Nepal have signed trade pact on Most Favored Nation (MFN) basis with Bangladesh as per which both the countries get favorable treatment in bilateral trade of goods.
“We are speeding up the process to sign trade treaty with Bhutan and additional negotiations with Bangladesh. We will also hold discussion with Indian authorities to provide entry points for Nepal for trade with Bhutan,” Minister for Commerce and Supplies Vijay Kumar Yadav told Republica on Sunday.
According to government data, Nepal´s exports to Bhutan jumped to Rs 1.55 billion during the fiscal year 2009/10 from Rs 238.27 billion recorded during 2005/06. Similarly, the country imported goods worth Rs 133.15 from Bhutan, up from Rs 127.3 million during 2005/06.
Iron and steel products, transformers, soaps, standard wire and noodles are Nepal´s major exports to Bhutan.
During the first eleven months of 2010/11, Nepal exported goods worth Rs 421.4 million to Bhutan and imported products worth Rs 102 million from the Druk kingdom. Nepal mostly imports gypsum, coal, juice, wooden furniture and potatoes from Bhutan.
In a bid to increase bilateral trade, officials of the both the countries during the trade talks held on June 24-25 in Thimpu had agreed on a draft agreement that comprises trade protocol, issues of Rules of Origin (RoO) and setting up an intergovernmental trade forum.
Bhutanese officials have shown positive response toward Nepal´s proposal for zero tariffs for its products. Thimpu is also positive about Nepal´s proposal on preferential treatment for Nepali goods that have more than 20 percent value addition for the RoO certification under preferential treatment. The two sides have already identified Birgunj to Phutsoling, Bhutan has entry and exit points for bilateral trade. Currently, Nepal has been using Kakarvitta-Phutsoling route via Jaigaun of India for trade with Bhutan.
Officials at the Ministry of Commerce and Supplies (MoCS) said preparation was on to strengthen trade routes with Bangladesh to facilitate bilateral trade. “We are preparing to sign a Memorandum of Understanding (MoU) with Bangladesh on the modality of bringing Rohanpur-Singhabad rail route fully into operation for trade with Bangladesh,” said Jiba Raj Ghimire, under-secretary at the MoCS.
Ghimire also said Nepal would hold talks with Bangladeshi officials to start using Radhikapur-Birol route instead of existing Fulbari-Banglabanda route for smooth transit of goods.
Nepal exported goods worth Rs 3.37 billion to Bangladesh during 2009/10. It imported Rs 764.8 million worth of goods from the South Asian neighbor during the period.
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