Nepal will seek zero tariff on 300 goods

Buoyed by sharp rise in trade with Bhutan in recent years, Nepali is pushing to expand country´s exports to the South Asian neighbor by seeking zero tariff entry facility for around 300 goods during the bilateral trade talks starting on Tuesday.

Nepali officials are also trying to forge an understanding with Druk officials to jointly request India to open direct transit route for Nepal-Bhutan trade during the two-day talks. During the talks, both the sides are scheduled to forge understanding on signing bilateral trade agreement. 

"As Bhutan has been imposing huge tariff on Nepali exports, we are requesting Thimpu for zero tariff facility to around 300 goods, including our major exports and goods having high export potential," a high-level source at the Ministry of Commerce and Supplies (MoCS) told Republica on Monday.

Officials of both the countries will also reach an understanding to ask India for providing transit facility for 160-km Kakarvitta-Phutsoling Road via its territory.

Iron products, electricity transmission pole, GI pipes, electricity transformer, fruits, vegetables, tea, noodles, chocolates, soaps, handicrafts and pashmina are among the 300 goods for which Nepal is seeking customs waiver from Bhutan.

Thimpu has been imposing more than 50 percent customs duty on Nepali fruits and vegetables.

Toya Narayan Gyawali, joint secretary at the MoCS and leader of Nepali talk team, said Nepal´s agenda will focus on promoting exports, seeking removal of non-tariff barriers and settling existing trade issues between the two countries. Learning from Bhutanese experience in tourism and hydropower sector is also high on Nepali agenda.

"We are encouraged by significant rise in exports to Bhutan over the past few years. Our focus will be on seeking ways to raise exports through trade facilitation," added Gyawali.

Nepal had enjoyed all time high trade surplus worth Rs 1.42 billion with Bhutan in fiscal year 2009/10. Bhutan had imported Nepali goods worth Rs 1.55 billion and exported goods worth just Rs 133 million to Nepal during the period.

The two South Asian neighbors are yet to formal bilateral trade agreement. However, both the countries are signatories to the South Asian Free Trade Area (SAFTA) -- a regional trade agreement that aims for intra-regional trade growth through easy mobility of goods among member countries.

Nepal´s exports to Bhutan in 2008/09 stood at just Rs 194 million. However, its import during the period from the Druk kingdom was Rs 352 million. Nepal´s exports to Bhutan made up around 3.5 percent of the country´s total exports to SAARC countries in 2009/10. Nepal´s total exports to SAARC countries during the period stood at Rs 45 billion.