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Thu, March 28, 2024

Nepal-India Trade Treaty Renewed

B360
B360 December 6, 2016, 12:00 am
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The Nepal-India Trade Treaty has been extended for another seven years without any changes in the existing treaty that was revised the last time on October 27, 2009. Though the treaty was renewed automatically for the next seven years, its provisions can be amended or modified by mutual consent of the contracting parties. Any protocol that needs to be changed in the future can be amended through a letter of exchange. The joint commission meetings led by the foreign ministers of both countries held in New Delhi on October 26 and 27 had noted the automatic renewal of the bilateral trade treaty. The inter-governmental committee meeting led by commerce secretaries of both nations in June this year also agreed to the automatic renewal of the treaty considering the flexible provision of the treaty that any provision can be modified with mutual consent. There was debate in Nepal regarding revision of the treaty to make it more contextual and to harmonise it with agreements of the multilateral and regional trade regime. As per the current provision of the treaty, Nepal cannot extend preferential market access to any country, even on a reciprocal basis. As per the provision, any preference that Nepal extends to any country other than India will have to be extended to the southern neighbour as well. The Nepal-India Trade Treaty offers many preferences to Nepal on non-reciprocity, but it is not all about non-reciprocal trade preferences provided by India.

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FEBRUARY 2024

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