A source at the Ministry of Commerce and Supplies informed myrepublica.com that the meeting would be held on May 3 and 4 in Dhaka. He further said that the talks would focus on starting zero tariff trade on commodities of mutual export interests, movement of Nepali containers in Bangladesh and expediting trade through railways via Rohanpur-Singhbad route. [break]
Despite substantial trading potential and geographical proximity, the annual bilateral trade volume between the two countries remains very low. In 2007/08, the bilateral trade was valued at Rs 5.15 billion, and that volume represented barely 10 percent of the total trade that Nepal conducts in the South Asian region.
Agricultural produces like yellow lentils, wheat products, rice, fruits and vegetables make the largest portion of Nepali exports to Bangladesh, while Nepal imports commodities like fertilizers, homeopathic medicines, raw materials for garments and jute industries, and cutlery, among others, from Bangladesh.
To do away with the situation, Nepal has exchanged a list of 146 items seeking elimination of tariffs on some and meaningful reduction of duties on others. The list mainly includes agricultural produces, fast moving consumer goods, beer and other manufacturing products.
Bangladesh currently imposes customs duty of up to 40 percent on Nepali agricultural products. Nepal had pushed for the duty concessions because the high duty structure has largely deterred it from increasing exports to its South Asian neighbor. Bangladesh too has exchanged a list of 184 items, seeking facility in reciprocal terms.
“We will negotiate out items in which we can go for starting zero tariff facility and items in which we can go for gradual but meaningful reduction in duty,” the source said.
During the talks, Nepal and Bangladesh also hope to finalize bilateral transport movement agreements. Although Bangladesh has offered its ports to Nepal for third country trade and transit, it so far has not allowed movement of containers inside its territory.
Principally, both the countries are open to such movement of cargo vehicles. But because India in the past did not allow Nepali vehicles through its border to Bangladesh, Nepal had not been able to explore out the potential of Bangladesh being the transit country. Such restrictions had also hit bilateral trade.
“But India has approved such movements of vehicles. We hope to finalize the vehicular movement agreement this time round,” said the source.
Likewise, the two sides would also hold talks about effective utilization of Kakarbhitta-Fulbari-Banglabandh road transit. Although this road transit has been the major gateway of bilateral trade, Nepal has seriously lagged behind in making effective use of this facility because of poor coordination at the Indo-Bangladeshi customs.
“Apart from this, we would also talk about starting trade via rail route of Rohanpur-Singhbad, which is a broad gauge railway line and is connected with our dry port in Birgunj through Indian railways network,” said the source.
If the two sides managed to operationalize this route, traders said it would greatly help trade between the two countries.
milan@myrepublica.com
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