In this crucial time of global uncertainty, bilateral organisations like Nepal-India Chamber of Commerce and Industry (NICCI) can play a crucial role in promoting bilateral economic relations and boost cooperation in development projects.
Against this backdrop, Sunil KC, vice-president of NICCI, shared his insights with The Himalayan Times on the efforts undertaken by the chamber in facilitating trade, the challenges and opportunities that lay ahead, among other issues.
How is NICCI facilitating in narrowing Nepal's trade deficit with India?
NICCI has been lobbying to review the Nepal-India Trade, Transit, and other bilateral treaties to make these at par WTO (World Trade Organisation) and other regional arrangements like SAFTA (South Asian Free Trade Area), BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), etcetera.
NICCI had been advocating to amend the Rail Service Agreement, and finally, it is done. For Nepal, the agreement is significant in transit for bilateral and third-country trade and reducing the costs and problems of doing business. It has also opened the door to other private railway companies to come and operate rail services in Nepal. It creates healthy competition among the rail operator companies. As a result, the fare of rail cargo will be more competitive on transhipment cargo, creating an environment of doing business in Nepal.
NICCI has also emphasised on Nepal's hydropower potential, and the projects like Pancheshwor, Upper Karnali, Karnali Chisapani, etcetera, are an opportunity for India and Nepal. Projects like Pancheshwor Hydropower Project are highly ambitious for both sides with a capacity of 6480 MW plus 1000 MW from Rupali Gad re-regulating dam, Karnali Chhisapani with 1800 MW electricity potential, can help narrow down the trade deficit with India by exporting power to India. With 25-plus years now in waiting, it should be placed and re-thought about with a new design and financing structure.
NICCI had played a vital role in the drafting of the Nepal-India Trade Treaty signed in 1996.
NICCI has also been actively lobbying and working on the policy reforms. It has provided suggestions to officials in the government. Unfortunately, the Nepal side could not negotiate with India, and the treaty got renewed automatically without any revision.
Another area is tourism. We should focus on infrastructure development for tourism, which is the key to narrow down the size of the trade deficit with India.
NICCI works closely with the government and missions abroad so Nepal's tourism industry could grow more. In the year 2017, NICCI had coordinated Nepal-India Tourism Joint Working Group meeting in Kathmandu under the leadership of Shreejana Rana (president of Hotel Association Nepal). It was organised by the Ministry of Culture, Tourism and Civil Aviation.
NICCI is also working on developing religious circuits to bring Indian and other pilgrim tourists to Nepal. With that note, I can say that NICCI has been thoughtfully and constantly working on policy reforms to promote Nepal's trade with India, which ultimately plays a role in narrowing down the trade deficit with India.
How has the COVID situation affected NICCI's activities?
We were unable to host many events as planned. For instance, we were compelled to postpone our newly purposed flagship events like 'Nepal-India Partnership Summit' and 'K2K Forum (Kathmandu-Kolkata Forum)', along with many other programmes and activities.
Now, we are planning to host them this year, either physically or virtually.
What are the major issues cited by NICCI members during your discussions?
Customs harmonic code - Indian Customs use ICEGATE software, Nepal Custom use ASYCU- DA. It has created some issues of synchronisation of code of goods being imported and exported.
Sometimes, the policy also becomes a hurdle to business houses. We have Indian JV (joint venture) companies as our members who have their brand, trademark which they used to use in some other countries and faced no issues in the international market. In Nepal, some other local companies have registered brands and trademarks and our JV members cannot use their own brands, the trademarks.
This falls under the Intellectual Property Right (IPR) and it is very unusual type of problem seen here in Nepal against the international practice.
Another case is the Advertisement (Regulation) Act, 2019 and clean feed policy, which led our JV members into a problem for transmitting their advertisements.
They are shot abroad and dubbed into different languages and aired via TV channels in other countries to promote their brand as per international standard.
However, the Advertisement (Regulation) Act has restricted those advertisements/ TV commercials/ jingles to be transmitted in TVs and radios, not dubbed or not shot in Nepal.
There is an issue is taxation. Bank documents are also the issues faced by members here in Nepal.
It needs to be simplified for ease of doing business in Nepal.
Can you elaborate on the immediate and long-term plans and programmes of NICCI?
At present, NICCI is working on conceptualising a few programmes, such as monthly online webinars, publishing a book on Religious Circuit to promote Nepal-India Pilgrim Tourism, NICCI Chronicle book, etcetera.
Additionally, Nepal-India Partnership Summit, K2K Forum as Annual flagship events of NICCI, and setting up of Nepal Innovation Centre in Delhi. The centre will coordinate with the Indian investors looking to invest in Nepal.
It will connect investors with the Nepali start-ups with innovative business model.
What is your take on rapid changes in global market with new technologies and changes in modes of doing business?
Since the global market is digitised, this may develop a human capital in this digital technology domain that we must cash now.
For this, NICCI aims to bring Indian and Nepali tech to the same place and get MoUs signed. It will provide skill training in IT sector to enhance Nepali youth. Digital connectivity is an area where foreign investment may come.
What should be the areas where Nepal could focus on to enhance bilateral and other relations with neighbouring countries so our trade could be facilitated?
Nepal can benefit from its bilateral or trilateral relations with neighbours like India and Bangladesh.
There is a scope for the partnership for electrification for Bangladesh-India-Nepal (BIN) grouping. Nepal could be the principal electricity exporter to India and Bangladesh, benefitting the nation. Bangladesh is waiting to sign the Bilateral Investment Promotion and Protection Agreement (BIPPA) with Nepal.
It has offered to invest billion in power generation in Nepal and asked Nepal to identify two potential projects in the eastern part of Nepal. But Ministry of Energy in Nepal has not responded to the proposal.
Nepal has established the Nepal Ship Company to operate the waterways connectivity with India. There is a greater scope in BIN waterways transport for cost-effective trade. The most significant advantage of all this will be for a 'landlocked' Nepal.
It can use seaports of Chittagong and Mongla for global trade access. In 2018, BJP General Secretary Ram Madhav had encouraged Nepal to use the sea ports of Bangladesh for its global trade. It was seconded by Bangladeshi Ambassador to Nepal, Mashfee Binte Shams. Ambassador Shams tried hard to bring Nepal's top leadership to Dhaka for signing such agreements, but Nepal did not show much interest.
Do you anticipate a change in priorities with the recent change in the government?
NICCI is a non-political, neutral and independent organisation.
Changes in the government do not affect our works and goals. That said, we need cordial relations with the government and work in sync for creating a better business environment and bring foreign investments.
Originally Published in the Himalayan Times