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India, Nepal to discuss trade pact concerns

Indian and Nepali officials were due to meet in Kathmandu on Wednesday to discuss Indian concerns over a surge in some Nepali exports after a trade treaty between the two neighbours.

India and Nepal signed a trade pact in 1996 that allowed Nepali products except alcohol, cosmetics and tobacco duty free access to India to help the Himalayan kingdom narrow its trade deficit.

The country's trade deficit with India stood at $245.26 million in 1999-2000 (July 16-July 15).

Nepal says the treaty has helped the poverty-stricken nation develop industry while India insists that the surge in exports from Nepal is hurting its industries.

"We will discuss Indian concerns about the surge in export of some of our products," Nepal's commerce ministry official Purushottam Ojha said.

New Delhi complains that Nepali hydrogenated vegetable cooking oil, zinc oxide, copper wire, iron pipes and plastic materials had flooded markets in the bordering states of Uttar Pradesh, Bihar and West Bengal.

Officials said commerce secretaries from the two South Asian nations will hold a separate meeting on Thursday in Kathmandu to review the implementation of the five-year-old trade agreement.

"We would like to discuss the problems in the implementation of the treaty," Indian Embassy official Nagma Mallick said.

The official added that some businesses took undue advantage of the facility sending in to India third country goods after minor value addition or repackaging in Nepal.

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