Longer shelf life for sops in India-Nepal treaty
FMCG companies also get provision to seek fresh incentives after new govt takes over.
NEW DELHI: Indian FMCG companies operating in Nepal can relax. The recently-renewed bilateral treaty retains all the benefits of the earlier one, including the provision for duty-free imports into India. There is also a provision for fresh incentives to be negotiated once a new government in Nepal is sworn in.
Many companies in the FMCG and edible oil sector have set up shop in Nepal as the treaty offers sops like imports into India at zero duty. Companies like Dabur (Dabur Nepal), Unilever India (Nepal Lever) and Colgate-Palmolive(Colgate-Palmolive Nepal) have manufacturing outfits in the neighbouring nation.
The 1950 treaty gets renewed periodically. It was last renewed in 2002 for five years. Though it expired in March 2007, it has been renewed only now due to Nepal���s political turmoil.
Incidentally, both sides have left inclusion of new benefits open-ended in the treaty. The new benefits would be finalised after a new government takes over in Nepal, which is going to polls next month. The issue of simplification of quarantine procedures in India tops the country���s agenda and is expected to come up for talks. ���Whatever changes that are to be brought about in the treaty will be made after the new government in Nepal in formed,��� sources said.
India is Nepal���s largest trade partner, accounting for almost 63% of its trade with annual exports of about Rs 411 crore.
The treaty allows Nepal���s manufacturers to enter India on a non-reciprocal, preferential, or duty-free basis, with easier rules of origin than international ones. Nepalese companies can have up to 70% foreign content instead of the international norm of less than 50%.
Nepal���s major exports to India include vanaspati, toothpaste, jute goods (sackings, twines, hessian etc), polyester and acrylic yarn, pulses, hides and skins, herbs, cardamom, rice bran oil, ginger, oil cakes and noodles. The list of Nepal���s imports from India includes mechanical equipment and spare parts, medicine, transport vehicles and spare parts, cotton textile and cement, among others.
Many companies in the FMCG and edible oil sector have set up shop in Nepal as the treaty offers sops like imports into India at zero duty. Companies like Dabur (Dabur Nepal), Unilever India (Nepal Lever) and Colgate-Palmolive(Colgate-Palmolive Nepal) have manufacturing outfits in the neighbouring nation.
The 1950 treaty gets renewed periodically. It was last renewed in 2002 for five years. Though it expired in March 2007, it has been renewed only now due to Nepal���s political turmoil.
Incidentally, both sides have left inclusion of new benefits open-ended in the treaty. The new benefits would be finalised after a new government takes over in Nepal, which is going to polls next month. The issue of simplification of quarantine procedures in India tops the country���s agenda and is expected to come up for talks. ���Whatever changes that are to be brought about in the treaty will be made after the new government in Nepal in formed,��� sources said.
India is Nepal���s largest trade partner, accounting for almost 63% of its trade with annual exports of about Rs 411 crore.
The treaty allows Nepal���s manufacturers to enter India on a non-reciprocal, preferential, or duty-free basis, with easier rules of origin than international ones. Nepalese companies can have up to 70% foreign content instead of the international norm of less than 50%.
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However, it places quotas on four sensitive imports: vegetable fats, acrylic yarn, copper products and ferro oxide. The quotas will continue even in the new dispensation, sources said. Also, the excise rebate given to the Nepal government on rupee exports will continue. Nepal���s major exports to India include vanaspati, toothpaste, jute goods (sackings, twines, hessian etc), polyester and acrylic yarn, pulses, hides and skins, herbs, cardamom, rice bran oil, ginger, oil cakes and noodles. The list of Nepal���s imports from India includes mechanical equipment and spare parts, medicine, transport vehicles and spare parts, cotton textile and cement, among others.
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