A Letter of Exchange (LoE) for formalizing the decision has been finalized by both sides. The amendment was necessitated as, 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-Nepali 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 Indian embassy in Kathmandu said in a statement on Friday.
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 new provision has been enforced,” a source at the Ministry of Commerce and Supplies (MoCS) said on Friday. At the Nepal-India Inter-governmental Committee (IGC) meeting held in Kathmandu in December last year, India had agreed to allow shipment of overseas goods from Nepal using Indian ports to their respective countries of origin.
Existing Nepal-India Treaty of Transit restricts repatriation of third-country goods from Nepal through the Indian territory. Because of the provision, Nepal had been facing difficulty in repatriation of goods imported from third countries for temporary use like different fairs, expos and diplomatic use.
However, Indian customs officials had been allowing export of such goods on practical ground ignoring treaty provision. The issue resurfaced after Indian official stopped allowing export of such goods through their customs points.
The source also said MoCS had already prepared a draft proposal of LoE on transport of vehicles ´on their own power´. As per the existing transit treaty, vehicles imported from third countries have to be transported to Nepal only in containers or rail wagons.
Similarly, MoCS has drafted a LoE on bringing into operation two additional routes -- Kolkata/Haldia-Jogbani-Biratnagar and Kolkata/Haldia-Nautanawa-Bhairahawa -- for Nepal´s overseas trade.
In the Inter-government Committee (IGC), Indian officials had agreed to allow Nepal to transport vehicles imported from third countries to the Nepali border on their own power.
“We have sent the both drafts to line ministries, including law ministry, for their consent. The drafts will then be submitted to the cabinet for endorsement before they are forwarded to India for approval from its side,” the source added.
The Indian embassy also said the two proposals for making these amendments in the Treaty of Transit had been finalized by India and shared through the Indian Embassy in Kathmandu with the Nepal government.