Nepal, India agree to review treaty amid widening trade deficit
Summary
Nepal and India have agreed to review their trade treaty to address non-tariff barriers and Nepal’s widening trade deficit. Experts say the revision should simplify customs procedures, improve trade facilitation and reconsider reciprocal duty-free access for heavily subsidised agricultural goods.
Key Points
- Kathmandu and New Delhi agreed to review the Nepal-India Trade Treaty after years of automatic renewals and rising concerns over non-tariff barriers and trade imbalances.
- Experts say restrictive reciprocity provisions, high trade costs and procedural hurdles have worsened Nepal’s deficit with India and hurt exporters and farmers.
- The review may include digital trade processes, customs harmonisation, investment provisions and broader access for Nepali exports, including services.
- India remains Nepal’s largest trading partner, with bilateral trade exceeding Rs1.46 trillion and Nepal’s deficit reaching Rs951.95 billion in the last fiscal year.
