IDEAS home Printed from https://ideas.repec.org/a/sae/indqtr/v67y2011i2p129-147.html
   My bibliography  Save this article

India–Nepal Economic Cooperation

Author

Listed:
  • Nisha Taneja

    (Nisha Taneja is Professor, Indian Council for Research on International Economic Relations (ICRIER). ntaneja@icrier.res.in)

  • Subhanil Chowdhury

    (Subhanil Chowdhury is Assistant Professor, Institute of Development Studies, Kolkata (IDSK). subhanilc@gmail.com)

  • Shravani Prakash

    (Shravani Prakash is Research Associate, Indian Council for Research on International Economic Relations (ICRIER). Sprakash@icrier.res.in)

Abstract

India and Nepal signed a foreign trade agreement (FTA) in 1971 which has been renewed many times over—latest in 2009. Tariff concessions lie at the core of Indo-Nepal trade arrangements and these concessions have been administered through the ROO criteria.The Indo–Nepal trade treaty of 1996 was a landmark as India provided duty-free access to all (except three) products manufactured in Nepal. In the period between 1996 and 2002, there was a surge in Nepal’s exports to India, mainly in vegetable ghee, copper products, acrylic yarn and zinc oxide, due to large tariff differentials between India and Nepal in the raw materials used in these items. The 2002 treaty imposed a tariff rate quota these four (the tariff rate quota (TRQ) products). Between 2001 and 2002 and 2008 and 2009, India reduced its tariffs on all products whereby Nepal lost its advantage in the TRQ products and the quota utilization has been very low.Since the benefits of the offered by India under the trade treaties have been transitory, it is important for the two countries to devise a more comprehensive economic agreement sectors. In this direction, India can help Nepal in developing services, especially hydropower and tourism. For this, Nepal needs to develop a more effective regulatory structure and policy framework and India must invest more in the development of Nepal’s infrastructure.

Suggested Citation

  • Nisha Taneja & Subhanil Chowdhury & Shravani Prakash, 2011. "India–Nepal Economic Cooperation," India Quarterly: A Journal of International Affairs, , vol. 67(2), pages 129-147, June.
    • Handle: RePEc:sae:indqtr:v:67:y:2011:i:2:p:129-147
    as

    Download full text from publisher

    File URL: http://iqq.sagepub.com/content/67/2/129.abstract
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:indqtr:v:67:y:2011:i:2:p:129-147. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.