Kolkata, India- Both Nepalese and Indian private sector are extremely bullish on expanding economic cooperation between the two countries.
The prospects are very encouraging and opportunities numerous – these views came out at the just concluded meeting of the Joint Economic Council (JEC) constituted by the apex bodies of private sector of both countries, The Federation of Nepalese Chambersof Commerce & Industry(FNCCI) and the confederation of Indian industry (CII). The FNCCI CII JEC met in Kolkata on 25th January 2012. The JEC has been set up with the objective of enhancing business and economic cooperation between the two countries. It has proven to be a very good vehicle to discuss various issues related to trade, investment, transit, and other business related issues at the private sector level and working out concrete and actionable suggestions.
JEC had earlier met in October 2011 in New Delhi and also had the privilege of making a courtesy call on the Prime Minister of Nepal, Rt. Honorable Dr Baburam Bhattarai. At that meeting, several Indian companies engaged in the fields of education, power had expressed interests in investing in Nepal.
Nepal has been giving special attention to attract investments from India and towards that direction, has recently set up a Board of Investment, under the Chairmanship of Rt. Honorable Prime Minister of Nepal. The Government of Nepal has also declared 2012/ 2013 as the Nepal Investment Year. Several sub-committees have been formed to achieve the objectives such as one on Investment Promotion another on Investment Sector Identification. Nepal and India have recently signed the Bilateral Investment Promotion and Protection Agreement and the Double Taxation Avoidance Agreement. India is the largest foreign investor in Nepal and the effort of the JEC is to encourage more Indian Investments in Nepal. Mr. Suraj Vaidya, President FNCCI who participated in the JEC meeting said “I am strongly hopeful that there would be more Indian investments in Nepal in near future in the selected sectors of Hydropower, Infrastructure, Tourism, Education and Healthcare.”. The JEC has decided to organize Road Shows in different cities of India to attract investments and market the 50 projects identified by Nepal.
A special focus on Nepal’s economic progress was in the exploitation of water resources in Nepal which have the interest of several Indian Companies. This matter has assumed urgency as Nepal is suffering from huge power shortages. Mr. Padma Jyoti, the cochairman of JEC from FNCCI side said “I appeal to Government of India to consider making available an additional 100 MW of power to partly overcome the current demand supply gap in Nepal which is creating 15 hours of power cuts during the winter months”. This could be possible because in winter months demand of electricity in India comes down while in Nepal it goes up. Mr. Jyoti also requested Indian Government’s intervention in early completion of the Dhalkebar-Muzaffarpur transmission line.
Nepal has huge trade gap in the trade with India. The trade deficit of Nepal in 2010-11 amounted to US$ 3020 million as against US$ 2376 million in the previous year. Mr. Vaidya said that "in order to reverse this trend, we need to develop production capacity within Nepal and it is possible only through investment". The JEC felt that efforts should be made to reduce the trade gap as much as possible and, before taking any action in this matter, decided to commission a study by a reputed research agency which would recommend ways and means in enhancing Nepal’s exports to India and identify resulting benefits to both the countries.
There were several issues of trade which were addressed by the JEC including imposition of CVD on exports from Nepal to India, easier connectivity for movement of goods, facilitating opening of Nepalese Banks in India etc,
The JEC also met with Mr. M L Meena, Chairman Kolkata Port Trust, Ms Deepa Dasgupta, Chief Commissioner of Customs, Kolkata and Mr. Gurdeep Singh, Commissioner of Customs. During the meeting, they offered all help to facilitate early clearance of Nepalese cargo at the Calcutta port by streamlining the procedures and removing the unnecessary processes. It was noted that Nepal is very highly dependent on Kolkata/ Haldia ports for movement of Nepalese Exports and Imports, and the delays in the ports resulted in higher cost to Nepalese Business.
Mr. Chandra Kumar Ghimire, Consulate General of Nepal at Kolkata who was also there in the meetings said ”In his short stay in the country, there has been a huge positive response from the Government of India to address issues concerning trade and investments.” He added that there should be regular meeting with Customs and Port Authorities in Kolkata to resolve the industry specific problems.
JEC also decided that CII would organise a CEO’s mission to Nepal in April to participate in Nepal’s Industry & Commerce Day. A request has also been made to the Indian Government to organize “A Made in India Show” in Kathmandu in September/ October this year.
At the end Mr. Rajive Kaul, Cochairman of JEC from CII said “he was delighted with the progress made at the meeting of JEC and thanked the concerned agencies and officials for support received from the top Government officials and the corporate sectors both in India and Nepal. He expressed his confidence that trade and investments would exponentially grow in future.”
The JEC will have its next meeting in April in Kathmandu.
-Federation of Nepalese Chambers of Commerce and Industry (FNCCI)
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