Under its ‘Neighbourhood First’ policy the Narendra Modi government has decided that it will now allow Nepal to export and import goods from two of India’s strategic ports—Mundra Port in Gujarat and Dhamra Port in Odisha—under the yet to be revised transit treaty, negotiations for which are going on, diplomatic sources told ThePrint.
Such a move, according to sources, will not only give Nepal enhanced entry into the Indian markets but will also enable Kathmandu to use India as a gateway to access other markets in Southeast and Central Asian regions, said a source, who wished to not be identified. This has been a long-pending demand by Nepal, which had been pushing India for such an upgradation in both the trade as well transit treaties that were signed decades ago, The Print reported. The agreement was initially finalized as ‘The Treaty of Trade and Transit’ that was signed between the friendly neighbors in September, 1960. Thereafter, in 1978, the treaty was split into two—trade and transit.Both these treaties get automatically renewed every seven years. The last time these two treaties were reviewed was in October 2016, without any changes.
The trade treaty allows Nepal unilateral duty-free access to the Indian market even as India remains Nepal’s largest trading partner. However, Nepal continues to complain that it has not been able to penetrate the Indian markets for its good due to various non-tariff barriers.
Currently, Nepal is allowed to use only the ports of Kolkata and Visakhapatnam.
