'Export power to bridge deficit'
KATHMANDU:
India has reiterated that Nepal’s widening trade gap with the south could be ‘best bridged’ by export of surplus power and has expressed desire for early conclusion of Project Development Agreements (PDAs) on 900MW Arun III, 600MW Upper Marsyangdi and 880MW Tamakoshi III hydropower projects.
“The problem of trade deficit could be best bridged by development of hydropower in Nepal and export of surplus power to India,” says a joint Nepal-India press statement issued on the last day of Indian Prime Minister Narendra Modi’s visit to Nepal today.
Nepal’s trade deficit with India stood at a whopping Rs 377.08 billion in the first 11 months of last fiscal, up 30.3 per cent than in the same period the year before.
To gradually narrow this gap, India has agreed to conclude Power Trade Agreement with Nepal in the next 45 days, wished for early conclusion of PDAs on four export-oriented hydro projects, including 900MW Upper Karnali, increase Indian foreign direct investment in Nepal, relax non-tariff barriers like quarantine checks for agro products, support product development and relax rules of origin requirement for duty-free access of Nepali products, among others.
“The two prime ministers directed the concerned authorities to conclude negotiations on PDA between the Investment Board Nepal and GMR Group of India for the development of Upper Karnali hydropower project within 45 days. They also directed the concerned authorities to conclude negotiations on the agreement on trade in power sector within 45 days,” reads the joint statement.
The two premiers also expressed desire for early conclusion of three other PDAs — Arun III, Upper Marsyangdi and Tamakoshi III — as they said ‘development of projects of this size will be a major catalyst for the development of Nepal’s enormous hydropower potential’.
To export power generated by these projects and to import electricity whenever there is deficit in the country, the two prime ministers also directed authorities to expedite works related to development of cross-border transmission lines as agreed during the Joint Commission meeting.
However, acknowledging that the notion of exporting power to bridge trade deficit may take few more years to materialise, Nepal has asked India to ease trade and transit facilities to reduce the trade gap.
In this regard, Nepal urged India to remove countervailing duty being levied on Nepali exports such as readymade garments, copper, brass utensils and kattha, among others. Nepal also urged India to remove quantitative restrictions on exports of vegetable fats, copper products, acrylic yarn and zinc oxide. The Indian side has assured to consider the requests.
To facilitate cross-border trade and transit, the premiers also directed officials to expedite construction of four Integrated Check Posts (ICPs).
ICPs are being built in Birgunj, Biratnagar, Bhairahawa and Nepalgunj on Nepali side and in Raxaul, Jogbani, Sunauli and Rupedia on the Indian side with the support of the Indian government.
The concept of ICP is to bring customs office, quarantine laboratories, immigration office, banks and post office, among others, under one roof so as to facilitate movement of passengers and goods. For this, similar physical infrastructure has to be built on Nepali and Indian sides and later interconnected so that people do not have to travel quite a distance to release cargoes or visit a quarantine laboratory.
However, progress on building ICP has been satisfactory only in Birgunj-Raxaul area.
Petroleum pipeline extension
India has agreed to extend petroleum pipeline from Amlekhgunj to Kathmandu to facilitate transport of petroleum products. An understanding in this regard was reached during Indian Prime Minister Narendra Modi’s two-day official visit to Nepal, which concluded today. “… the Indian side (has) agreed to take up the project for the construction of Raxaul-Amlekhgunj petroleum pipeline in the first phase and extend it to Kathmandu in the next phase,” says a joint Nepal-India press statement issued today. The construction of pipeline in expected to control leakage and theft of petroleum products which have inflicted huge loss on Nepal Oil Corporation.
Aviation authorities to meet in six months
Nepali and Indian civil aviation authorities are meeting within next six months to discuss opening of air entry points at Janakpur, Bhairahawa and Nepalgunj and starting direct flights from Pokhara and Bhirahawa to Lucknow. An instruction, in this regard, was issued jointly by Nepali PM Sushil Koirala and Indian Premier Narendra Modi in Kathmandu today. The two premiers directed the concerned authorities to meet within six months and resolve the issue and similar issues pertaining to the Air Services Agreement, reads a joint statement issued by two prime ministers, adding, “Direct flights between regional airports Pokhara-Bhirahawa-Lucknow would save time and cost for air travellers and also improve air connectivity between India and Nepal.”
Source: THT
