After Maldives, Nepal changed tone, showed tantrums with India, asked for changes in the trade agreement of 1978

Amidst the ongoing dispute with Maldives, another neighboring country Nepal has now made a big demand from India. Nepal has said that it has many concerns in the trade agreement with India. She said the trade agreement with India is being automatically renewed in November but many of her concerns have not been addressed. This agreement was agreed upon in the meeting of the sub-committee on trade between Nepal and India. Nepalese experts say that Nepal missed a big opportunity in November when this treaty was being renewed. He said that there is a need to change many provisions of this treaty so that bilateral trade can be increased.

There was a treaty between Nepal and India in the year 1978 and this treaty has been renewed without any change in November 2023. This treaty is renewed every 7 years. Ram Chandra Tiwari, Joint Secretary in the Commerce Ministry of Nepal, said, ‘Both the neighboring countries had agreed to review the ongoing issues related to trade and transit by reviewing the trade agreement.’ He said that no date has been fixed yet for this review but it is not going to happen soon. Officials involved in this conversation say that many issues including bilateral trade, transit, customs, food testing lab were discussed.

Nepal upset due to India’s ban

Tiwari told Kathmandu Post that it has been agreed to remove the obstacles in reaching Nepal’s goods in Indian markets. Nepal side said that India is repeatedly banning the export of many food items like wheat, rice, sugar and onion. Due to this ban, inflation and smuggling have increased in Nepal. Nepali experts say that the Nepali side will be able to impose tax on highly subsidized Indian agricultural goods. He said that Nepal will not be able to tolerate the entry of Indian goods without imposing any tax for long.

Let us tell you that India is the largest trading partner of Nepal and it accounts for 65 percent of the total trade. Nepal’s imports from India are continuously increasing every year. It reached Rs 1.20 trillion in the year 2021-22. Whereas Nepal has exported goods worth Rs 106 billion to India. At present, Nepal’s trade deficit with India is Rs 921 billion. The Nepali side is in tension regarding this. There is a demand to reduce it.