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Cooperation with Nepal
- The Union Minister of Commerce, Industry and Textiles, Shri Anand Sharma has expressed satisfaction that bilateral trade between India and Nepal has increased from US$ 1985 mn in 2009-10 to around US$ 2700 in 2010-11 registering an increase of around 36%. Exports from Nepal to India have also grown from US$ 452mn in 2009-10 to US$ 476mn in 2010-11 (an increase of around 5.3%). During his meeting with his Nepalese counterpart Shri Mr. Anil Kumar Jha, here today, Shri Sharma singled out hydro power sector for increased cooperation between the two countries.
- Shri Sharma noted that in the recent past, several Indian private companies/Joint ventures have been able to secure survey licences for development of about 8,200 MW hydro power projects in Nepal at an estimated cost of Rs.82000 crores. “It is important that the projects are started as early as possible” Shri Sharma said.
- The Minister also informed that the Government of India has accepted the Nepalese request for use of Vishakhapatnam port and rail route through Singhabad (India) --- Rohanpur (Bangladesh). Approval of Government of Nepal for the Letter of Exchange (LOE) sent in this regard is awaited. Nepal’s request for further facilitation of Nepal- Bangladesh trade through Kakarbhitta-Phulbari-Banglabandha route had also been agreed.
- Indian firms are the biggest investors in Nepal accounting for about 47.5% of total approved foreign direct investments. There are about 150 operating Indian ventures in Nepal engaged in manufacturing, services (banking, insurance, dry port, education and telecom), power sector and tourism industries. Indian joint ventures in Nepal have contributed significantly to increase in Nepal’s exports to India. They also provide direct employment to around 30,000 Nepali citizens and indirect employment to more than twice that number. Both Governments have finalized the bilateral investment protection and promotion agreement. Shri Sharma stressed that problems faced by Indian Business in Nepal. He pointed out thatSurya Nepal, a subsidiary of ITC Limited, India had to shut down permanently its readymade garment production because of long running labour problems. He also touched upon the problems faced by GMR group. Such incidences will, over a period of time, have a negative effect, Shri Sharma added.
India, Nepal ink economic pacts
- The two sides formalised the long pending Bilateral Investment Promotion and Protection Agreement (BIPPA), which commits one State to providing compensation to commercial entities, whose country of origin is the other.
- Investments from either country in the territory of the other country are to be accorded ‘National Treatment' and ‘Most Favoured Nation' treatment.
- While Nepal had asked for soft loans of $1 billion, the final pact provided a $250-million line of credit to Nepal to finance infrastructure projects, at the concessional rate of interest of 1.75 per cent annually
Nepal PM to seek Indian support for peace process
- In the backdrop of attacks on certain Indian joint venture companies, the Indian side is keen to sign the Bilateral Investment Protection and Promotion Agreement (BIPPA).
- Agreements on import of 200 MW of power from India to meet Nepal's crippling power shortage, and Indian support to infrastructure projects, are expected.
Indo-Nepalese relations
- However, after the restoration of democracy, in 2008, Prachanda, the Prime Minister of Nepal, visited India, in September 2008. He spoke about a new dawn, in the bilateral relations, between the two countries.
- In 2005, after King Gyanendra took over, Nepalese relations with India soured.
- The two issued a 22-point statement highlighting the need to review, adjust and update the 1950 Treaty of Peace and Friendship, amongst other agreements. India would also provide a credit line of up to 150 crore rupees to Nepal to ensure uninterrupted supplies of petroleum products, as well as lift bans on the export of rice, wheat, maize, sugar and sucrose for quantities agreed to with Nepal. India would also provide 20 crore as immediate flood relief.
