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Indo nepal trade relations

The treaty allows free movement of people [2] and goods between the two nations and a close relationship and collaboration on matters of defense and foreign policy. It has ten articles. The treaty provides for everlasting peace and friendship between the two countries and the two governments agree mutually to acknowledge and respect the complete sovereignty, territorial integrity and independence of each other. As per Articles 6 and 7, the two governments agree to grant, on a reciprocal basis, to the nationals of one country in the territories of the other, the same privileges in the matter of residence, ownership of property requires RBI permissionparticipation in trade and commerce, movement and other privileges of a similar nature.

This enables Nepalese and Indian citizens to move freely across the border without passport or visa, live and work in either country and own property or conduct trade or business in either country. There are a large number of Indians living, owning property and working or doing business in Nepal as a beneficial aspect of the treaty for India. Reciprocally, many Nepalese live, own property and conduct business freely in India. For centuries, Nepal remained in self-imposed isolation. After the ascent of Mt.

But as more and more Indian immigrants from Bihar started acquiring Nepalese citizenship, most Nepalese became resentful of this provision. Signed at Kathmandu, ON 31 July The Government of India and the Government of Nepal, recognizing the ancient ties which have happily existed between the two countries; Desiring still further to strengthen and develop these ties and to perpetuate peace between the two countries; Have resolved therefore to enter into a Treaty of Peace and Friendship with each other, and have, for this purpose, appointed as their plenipotentiaries the following persons, namely, The Government of India: His Excellency Shri Chandreshwar Prasad Narain Singh, Ambassador of India in Nepal.

Article 1 There shall be everlasting peace and friendship between the Government of India and the Government of Nepal. The two Governments agree mutually to acknowledge and respect the complete sovereignty, territorial integrity and independence of each other. Article 2 The two Governments hereby undertake to inform each other of any serious friction or misunderstanding with any neighboring State likely to cause any breach in the friendly relations subsisting between the two Governments.

Article 3 In order to establish and maintain the relations referred to in Article 1 the two Governments agree to continue diplomatic relations with each other by means of representatives with such staff as is necessary for the due performance of their functions.

The representatives and such of their staff as may be agreed upon shall enjoy such diplomatic privileges and immunities as are customarily granted by international law on a reciprocal basis : Provided that in no case shall these be less than those granted to persons of a similar status of any other State having diplomatic relations with either Government.

Article 4 The two Governments agree to appoint Consuls-General, Consuls, Vice-Consuls and other consular agents, who shall reside in towns, ports and other places in each other's territory as may be agreed to. Consuls-General, Consuls, Vice-Consuls and consular agents shall be provided with exequaturs or other valid authorization of their appointment. Such exequatur or authorization is liable to be withdrawn by the country which issued it, if considered necessary. The reasons for the withdrawal shall be indicated wherever possible.

The persons mentioned above shall enjoy on a reciprocal basis all the rights, privileges, exemptions and immunities that are accorded to persons of corresponding status of any other State. Article 5 The Government of Nepal shall be free to import, from or through the territory of India, arms, ammunition or warlike material and equipment necessary for the security of Nepal. The procedure for giving effect to this arrangement shall be worked out by the two Governments acting in consultation.

indo nepal trade relations

Article 6 Each Government undertakes, in token of the neighborly friendship between India and Nepal, to give to the nationals of the other, in its territory, national treatment with regard to participation in industrial and economic development of such territory and to the grant of concessions and contracts, relating to such development. Article 7 The Governments of India and Nepal agree to grant, on a reciprocal basis, to the nationals of one country in the territories of the other the same privileges in the matter of residence, ownership of property, participation in trade and commerce, movement and other privileges of a similar nature.

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Article 8 So far as matters dealt with herein are concerned, this Treaty cancels all previous Treaties, agreements, and engagements entered into on behalf of India between the British Government and the Government of Nepal. Article 9 This Treaty shall come into force from the date of signature by both Governments. Article 10 This Treaty shall remain in force until it is terminated by either party by giving one year's notice.

The Himalaya Nation of Nepal borders northern India in the south, east and west. During British rule in IndiaNepal's ties with the British government were governed by the Treaty of Sugauli [3] that was replaced by the "Treaty of perpetual peace and friendship".

After the independence of India inthe two nations sought to forge close strategic, commercial and cultural relations. The rise of Communist China in and the subsequent invasion of Tibet heightened security concerns in both India and Nepal.

With heightening concerns over the security threat to India presented by Communist China, which was seen as seeking to project power and influence over Nepal, Sikkim and Bhutan and China's border disputes with India, the latter sought to strengthen its "Himalayan frontier" by forging an alliance on defence and foreign affairs with the Rana rulers of Nepal.

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This treaty is called unequal by most Nepalese since Nepalese law does not permit an open border, and Indians, by law, should not be able to buy lands and properties in Nepal or carry out businesses in their names. They claim that the treaty was signed by undemocratic rulers of Nepal and can be scrapped by a one-year notice. The treaty has been unpopular especially among Pahari segments of Nepal, who often regard it as a breach of its sovereignty.

Also, agreements were manipulated in the favour of antidemocratic autocratic rule of Nepal, where the power of the people is fragmented.

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Although initially supported enthusiastically by both the Rana rulers and Indian establishment, the treaty became the subject of increased resentment in Nepal, which saw it as an encroachment of its sovereignty and an unwelcome extension of Indian influence. Nepal forced the Indian military mission to leave, and both nations began ignoring the treaty provisions.Nepal and India enjoy excellent bilateral ties.

Founded on the age-old connection of history, culture, tradition and religion, these relations are close, comprehensive and multidimensional and are pronounced more in political, social, cultural, religious and economic engagements with each other. To add up the formal flavor to such historic relations, the two countries established diplomatic relations on 17 June The open border between the two countries remains a unique feature of our relations.

Nepal-India relations are, in essence, much more than the sum of treaties and agreements concluded between the two countries. The frequent high level visits by the leaders of the two countries at different points of time and the interactions constitute the hallmark of the ties between the two countries.

Furthermore, such visits have helped promote goodwill, trust, understanding and cooperation between the two countries and, have injected fresh momentum to further consolidate age-old and multi-faceted bilateral relations of friendship and cooperation on a more mature and pragmatic footing. The recent exchange of State Visits by the Prime Ministers of Nepal and India in April and May has contributed to taking the bilateral relations to newer heights on the basis of equality, mutual trust, respect and benefit.

Apart from taking effective measures for the implementation of all the agreements and understandings reached in the past, the need for reinvigorating the existing bilateral mechanisms to promote cooperative agenda across diverse spheres has been underscored.

It has also been agreed to address outstanding matters in a stipulated timeframe, with the objective of advancing cooperation in all areas. India has been a key development partner of Nepal.

The latter received strong support and solidarity from the people and Government of India in advancing its home-grown peace process as well as in the process of writing the Constitution through the elected Constituent Assembly. Following the massive earthquakes in Nepal in April and MayIndia promptly offered helping hands. The Indian cooperation started in with the construction of an air-strip at Gaucharan.

Since then, India has been assisting primarily in the areas of infrastructure development and capacity development of human resources in Nepal. Such assistance received from India has helped supplement the developmental efforts of Nepal. The Mechanism meets once every two months. Integrated check-posts have been proposed at four points on Indo-Nepal border namely i Raxaul-Birganj, completed and operationlised from April ii Sunauli-Bhairahawa, iii Jogbani-Biratnagar and iv Nepalganj Road-Nepalgunj.

Likewise, as envisaged by the MoU for the construction of Terai roads under phase I, the process of implementation has started. For the remaining three links, both sides have started preliminary works. The project is being implemented. Agreements have already been signed for both grant and loan.

List of projects have been identified for the utilization of the grant while projects are being finalized for the use of Line of Credit. The Government of Nepal finalized the projects. The modality of contracting these projects is being worked out. Water resource is considered as the backbone of Nepali economy. The issue of water resources has always been getting due prominence in the agenda of bilateral cooperation between Nepal and India for a long time. There is also an additional mechanism — Joint Committee on Inundation and Flood Management JCIFM — which deals explicitly with the issues of inundation, embankments and flood forecasting.

An important Power Trade Agreement was signed between the two countries in paving way for the power developers of the two countries to trade electricity across the border without restrictions.

The partnership with India in the areas of trade and transit is a matter of utmost importance to Nepal. India has provided transit facility to Nepal for the third country trade. Both public and private sectors of India have invested in Nepal. The trade statistics reveals phenomenal increase in the volume of bilateral trade over the years between the two countries.

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However, Nepal has escalating trade deficit with India. Status of Trade between Nepal and India.Irrigated Fields Along Lodhiya River. Confluence Conclave at Reetha Saheb March Confluence Conclave in Sheraghat March Confluence Conclave in Champawat March Wide Expanse of River Lodhiyan.

Civil society organizations working in India and Nepal have enjoyed a symbiotic relationship with one another for a long time. Similarity of cultural, political and economic contexts and commonality of social issues have brought them together. Collectively, they have contributed substantially to bilateral relations between the two countries and have been instrumental in forging people to people contact at various levels.

The solidarity which India and civil society groups exhibited with Nepalese nation during the present political developments in Nepal whereby monarchy was forced to take a back seat and popular interim Government assumed the governance of the Nation has strengthened peoples resolve to win back much cherished democracy.

This episode stands and would continue to stand out as the high point of bilateral cooperation and relations. Notwithstanding few irritants in Indo-Nepal relations, India has always been forthright in supporting democracy and peoples cause in the only Hindu country of the world.

To carry forward this tradition of cooperation between the civil societies of the two nations, and to address the new challenges both humanitarian and socio-political and economic Non-government organizations and citizens groups in India and Nepal have taken an initiative to form a joint working group which will primarily explore the areas of common concern and seek convergence of efforts on social land rights issues in both countries.

The group is open to NGOs of Indian and Nepal who work with similar concern and wish to contribute to the well being of people and strengthening of human rights infrastructure in two countries and improve bilateral relations further.

The goal of the Forum would be to strengthen the relations between the two countries by enhancing people to people contact and have common platform to discuss issues which affect lives on both sides. The group would encourage cross border cooperation on various issues including social, cultural and political.

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India–Nepal relations

Sarda Ghat Near Tanakpur. Confluence of Saryu and Kali.Indo Nepal Joint Action Forum is a working group for joint interventions in matters of trans-boundary issues concerning people and their environment, human rights, social justice and public affairs. We should try to be open with each other and express our concerns and hopes in our relationship so that it strengthens the age old links between the people of our two nations.

Nepal-India relationship is too important just to be left to the whims of increasingly turbulent international order as both countries are strategic to one another from point of view of security, sustainability and interdependence.

Nepal is a sovereign and independent nation. It has remained so in the past even when most of Asia was in the clutches of a colonial empire. It is proud of this heritage and it wants to preserve it as the single most precious gift to the future generation. Preserving its integrity, self -respect and national independence is the vital element of Nepali national interest. On this point both Nepal and India are happily on the same wavelength. There relations between India and Nepal are also somewhat formalised through several treaties viz.

Friendship treaty ofThe Mahakali Treaty of and the Kosi Agreement and several open border inter-community trade linkages. The reality also is that Nepal is a land locked country with India on one hand and China on the other, therefore becoming a natural strategic important geography. These treaties have remained contentious due to lack of regular confidence building measures between people of two nations at all levels.

Diplomatic contacts, which have its own limitations and ups and downs have solely been the determinants of bilateral relations between the two countries.

indo nepal trade relations

The people of the two countries have felt the pressing need to have more joint forums, which can specifically address variety of concerns through participatory approach and have shared solutions. Therefore, the joint working group is based on the belief that people to people contact can smoothen the relations and locate the areas where more efforts are required.

A technology which can be used as an information sharing tool, community based work monitoring and evaluation platform or binding a theme together which can take shape of a programme that can reach to wider audience are few examples it offers as solutions.

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The first use of this technology was initiated in Mahendranagar Nepal in the aftermath of Uttarakhand Deluge of when several thousands of Nepali porters servicing the pilgrims in the Kedarnath valley along with others went untraceable and there was no information about them.

Environics Trust in then Academy for Mountain Environics had done a survey of porters in Kedarnath valley, of those who carry people to the shrine. This is a kind of ritual that has carried on since then. To help trace the missing or untraceable nepali migrants, the idea of this voice server was implemented. The methodology is simple but the prompts have to be set right in order to create a welcome environment for the visitor to listen, understand and respond or select the menu.

Maintenance is yet another important aspect which require consistent connectivity issues, error resolutions and resetting the prompt as and when the problem is noticed. The recorded message is moderated at the back end to classify messages based on location, issue, priority etc.

In case the message is unclear or there is disturbance, the caller can be contacted for resubmission of message.Around BC, small kingdoms and confederations of clans arose in the region.

The 7th Kirata king, Jitedasti, was on the throne in the Nepal valley at the time. Provision of this Article in Trade Treaty led to the development of Nepal-British trade freely through the port of British India for Nepal could not import goods from other overseas countries.

Nepal was compelled to purchase goods manufactured in Britain Nepal was very much isolated from other countries, especially from the developed Western countries prior to the political change of BeforeNepal had an open interaction with Tibet where Nepalese currency was on circulation. Trading arrangements between Nepal and Tibet too was unrestricted. As a result there was an easy movement of man and materials.

There appeared a break in all these, however, after when Nepal tilted more towards the southern India. Prior to s, India and Tibet were the major trade partners of Nepal. Virtually, the country had a closed economy. The signing of Treaty of Peace and Friendship, and Treaty of Trade and Commerce between Nepal and an independent India in July can be seen as the landmark towards the external trade of Nepal. This Treaty can be seen as a non-reciprocal treaty.

The Treaty symbolizes a balanced document and served for more than five decades to keep harness between the two countries. Formal trade relation between the two countries was established in with the signing of the Treaty of Trade.

indo nepal trade relations

Ininstead of a single Treaty, three different agreements were signed. These treaties were modified significantly inafter the advent of democratic government in Nepal. Indo-Nepal Treaty of Trade made the provisions of extending substantial concessions. The Treaty of Trade, valid for five years, was revised and renewed through an exchange of letter on 3rd December The Treaty was renewed in December for a further period of five years with the provisions for further periods of five years, at a time, by mutual consent subject to such modifications as may be agreed upon.

The Treaty of Transit, came up for renewal in December and following bilateral talks, a renewed Transit Treaty was signed on January 5, The renewed Treaty contains liberalized procedures of the transit of the Nepalese goods. However, the Protocol and Memorandum to the Treaty, containing modalities and other would be subject to review and modification every seven years or earlier if warranted.

The Nepalese request for an additional transit route to Bangladesh via Phulbari was accepted 28 in June Operating modalities for the transit were accordingly worked out.

indo nepal trade relations

And, the route was operationalised from 1 September A review of the working of the route was held in March at Commerce Secretary-level talks in Delhi when several relaxations of the operating modalities requested by the Nepalese were agreed to.Nepal's finance minister Dr Yubaraj Khatiwada on Saturday January 25 said that ban on import of palm oil has been a worry for his country, and Kathmandu has taken up the issue with Delhi.

Speaking to WION correspondent in Kathmandu, the finance minister lauded India's support to Nepal and talked about trickle-down benefit in several areas, including investment opportunities. Q: How do you see the relationship between India and Nepal in terms of finance and trade? A: We have a lot of interdependence between the two countries. Indian ports are our access to the world, and we have been working very closely.

When the Indian economy performs well, we have trickle-down benefit in several areas, and this includes investment opportunities. We would like to see our neighbour prosperous and also expect that our neighbour should also support Nepal to prosper. Q: What kind of support you would like to see from New Delhi for your development needs?

Reconsider lifting ban on Palm oil import: Nepal urges India

A: It's a long menu, first is infrastructure connectivity. We are talking about better road connection, waterways, and electricity transmission lines.

They are happening, thanks to the government of India supporting Nepal in better connectivity, which includes an optical fibre that we have set up with India's support. The second will be a review of trade relations. Nepal being a small economy will like to get favourable treatment in terms of non-reciprocal treatment for some of our produces.

Often times, we may not able to compete in the market place, therefore, would like to see non-reciprocity in trade relations as our products are very small. Another area is trade facilitation, thanks to India for ICP. Exim bank is doing a lot of works, in terms of leveraging our financial requirements. Q: Demonetisation impacted you. Are the worries associated with it over? A: The previous government should have approached the Indian government right on time.

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You know, now this is a standing issue. We don't want to stick to that issue. Indian currency is regional currency, and large denomination currency notes that people can carry to Nepal should be managed in a better way so that in future we don't have to repeat such kind of problems.

I should be looking forward, so that in a futuristic way, that any kind of problem that was created in the past should not be repeated when new currency notes, large denomination notes, were issued by India. Nepal is not comfortable to carry the notes, with the fear that they will not be accepted back to India. We just want to see that currency management takes a smoother path. Q: Import of palm oil by India is another thing that your country has been very vocal about.?

Our exports are a very small component of India's import. I don't think, India's industry will be injured, with this kind of allowance. We are trying to have a talk with Indian counterpart through diplomatic channels and convince the authorities concerned that it should be resumed so that our Industry doesn't suffer. A: Not yet. Not fully yet. So the markets are also complementaries.

Like tourism, India, Nepal, Pakistan, Sri Lanka, Bangladesh can have a tourist circuit for south Asia so that every country can benefit. In energy and agriculture By continuing to use the site, you agree to the use of cookies.

You can find out more by clicking this link. Sensex closes News World. Indo-Nepal relations Reconsider lifting ban on Palm oil import: Nepal urges India Nepal's finance minister Dr Yubaraj Khatiwada on Saturday January 25 said that ban on import of palm oil has been a worry for his country, and Kathmandu has taken up the issue with Delhi. Indo-Nepal relations Nepal India's palm oil imports Indian economy.For landlocked Nepal, access to sea through Indian land routes and ports has been a critical issue.

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The India-Nepal Transit Treaty dates to A major review of the treaty was undertaken inwhen both countries signed three separate treaties on trade, transit and control of unauthorised trade.

However, the modalities were finalised only for Vizag Port and after 17 years of negotiations. One must admit that this kind of delay in implementation inevitably undermines goodwill and generates country biases. India, on other hand, has always complained about the threat from diversion of cargo and cross-border smuggling.

In a major push for improving the system of transit, the finance ministers of India and Nepal agreed to entrust a study of the system of transit to the Asian Development Bank ADB as per their joint statement of April 3, Not only was this move in sync with the Modi government resolutely working towards better relations with Nepal, but was also seen as a geo-political imperative for India due to the on-going transit treaty negotiations between Nepal and China.

With the availability of ECTS, the government undertook a big reform by bringing in a system of faceless customs administration for transit trade. In one stroke, the transit procedure was cleansed of all formal or informal intermediaries. The results have been dramatic and the average transit time for Nepal bound cargo, which earlier took days, has come down to days.

Disappointingly, only a local newspaper has carried the report of the visit. Of more concern for India is the fact that the press in Nepal has been very quiet about these developments. For a media which has fed on publishing trade and transit related woes of Nepal, the lack of any news report on these tectonic developments, makes one wonder on who is calling the content. Nothing was said about realities of terrain, lack of all-weather connectivity or impracticality of cargo transiting over 3, km, much of it snow clad.

It will be good for Nepalese businesses to remember that centuries of cultural bonding, connectivity through 28 border points and the ability to cross into territories without passports and visas are unique features by all global standards. Some appreciation of the new trade and transit dynamics will do good for otherwise a progressive relationship that has stood the test of time. Like us on Facebook and follow us on Twitter.

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