Current Article : Visit of Nepali Premier to India

September 9, 2009

Recently Nepali Prime Minister Madhav Kumar Nepal was in India for a 5 days goodwill visit from August 18 to 22. This was the first official visit of Nepal premier after assuming the office of the Prime Minister on May 22, 2009. Mr. Nepal was leading a 64-member delegation. Mr. Rajendra Mahto Nepal’s Minister for Commerce and Supplies was also in the delegation.

Some core Issues of Indo-Nepal Relationships:

1950 friendship treaty.
Weapon Exports
Trade and Transit
Avoidance of double taxation
Saptha Kosi Dam and Sun Kosi diversion project, Pancheshwar Project.

Indo-Nepal Business Relationships : A background:

The trade between India and Nepal is around Rs. 15000 crore ($3 billion).
India is a major investor in Nepal accounting for 44% of Nepal’s total Foreign Investments and a total of 400 projects as of now.

What happened during the visit?

Mr. Nepal met Indian President, Prime Minister, Finance Minister and captains of the Indian Industry, Sonia Gandhi Etc. India’s finance Minister Pranab Mukherjee said that India has pledged assistance of Rs.20 billion (Rs 32.60 billion Nepali Rupees Code: NPR) to Nepal for infrastructure projects.
What this allocation will consist of ?
This assistance will basically be a new fund allocation for existing rail and road projects which were stalled. This will also cover beefing up of border infrastructure, including constructing integrated border check-posts.

A meeting held between India’s Minister of Commerce and Industry Mr. Anand Sharma and Nepalese Minister Rajendra Mahto to take forward the bilateral Treaty of Trade & Agreement of Co-operation. Talks will continue further.

What is 1950 Friendship treaty:

The Indo-Nepal Treaty of Peace and Friendship of 1950 is a bilateral treaty between Nepal and India establishing a close strategic relationship between the two South Asian neighbors.
It was signed on July 31, 1950 by the then-Prime Minister of Nepal Mohan Shamsher Jang Bahadur Rana and Indian ambassador to Nepal, Chadreshwar Narayan Singh.
The treaty allows for the free movement of people and goods between the two nations and a close relationship and collaboration on matters of defence and foreign affairs.
However in nepal many people regard it as a breach of soveregnity, so this becomes unpopular in Nepal.

What else was Discussed?

One treaty on the renewal of trade and transit treaty and one agreement on cooperation to control unauthorised trade were initiated.
The two Foreign secretaries to discuss the 1950 friendship treaty.
Resume weapons export was discussed.
The Inter Governmental Committee at the commerce secretary level to meet soon to review the problems relating to trade and transit.
A new agreement for avoidance of double taxation is to be inked shortly.

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