Amendment in Treaty of Transit

Amendment in Treaty of Transit for Export of third country goods

Feb. 6, 2014, 5:45 p.m. Published in Magazine Issue: Vol: 07 No. -15 Jan. 31- 2014 (Magh 17, 2070)

Nepal and India have formalized an amendment to the ‘Export Procedure’ prescribed under the Memorandum to the Protocol to the Treaty of Transit between the two sides. This decision would facilitate traffic in transit for goods of third country origin exported from Nepal. A Letter of Exchange formalizing this decision has been finalized by both sides.

This amendment in the provisions of the Treaty of Transit brings into effect a significant decision which was reached between the two sides during the Nepal-India Inter-Governmental Committee (IGC) meeting on Trade, Transit and Cooperation to Control Unauthorized Trade held in Kathmandu on 21-22 December, 2013.

The amendment was necessitated since according to the earlier procedure only goods of Nepalese origin were allowed to be exported through India to third countries. This restriction has now been removed and now goods of non-Nepalese origin would be allowed transit through India for export to third countries. This provision would facilitate Nepal’s genuine third country export which may be required for re-export of goods imported in to Nepal for display in fairs and exhibitions.

The amendment would also facilitate re-export of third country origin capital goods from Nepal to third countries for repair and return and also re-export of rejected goods from Nepal. The change would facilitate Nepalese business as it would allow re-export of goods imported from third countries into Nepal after some value addition in Nepal for which a legal provision was made in Nepal’s Finance Act, 2009. This change would also facilitate movement of diplomatic cargo exported from Nepal and transiting through India.

There are two other important trade facilitation measures which were discussed by the two sides in the last IGC meeting pertaining to allowing movement of imported vehicles on their own power from Kolkata port into Nepal and facilitating the import of bulk cargo into Nepal by operationalization of multimodal transport link from Kolkata port through Jogbani-Biratnagar and Sunauli-Bhairahawa land routes. Proposals for making these amendments in the Treaty of Transit had been finalized by Government of India and shared through the Indian Embassy in Kathmandu with the Government of Nepal. These proposals are presently under consideration of Government of Nepal. Once finalized, these measures would further facilitate Nepal’s transit trade through India.

 

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