Signing ceremony of India-Nepal Joint Business Forum.
KATHMANDU: The first meeting of the India-Nepal Joint Business Forum held in New Delhi on June 1 has decided to collectively develop a roadmap for increased business cooperation and building symbiotic relationships and partnerships between the two countries.
The meeting also appointed the Confederation of Indian Industry and Federation of Nepalese Chamber of Commerce and Industry as the Forum’s official Secretariat from India and Nepal respectively.
According to the decision, the Forum shall work towards promoting cooperation in sectors of mutual interest such as agricultural products, pharmaceuticals, automobiles, industrial machinery, petroleum & petrochemicals, energy, services, manufacturing, and transport & infrastructure development.
India is the largest trading partner of Nepal, and its bilateral trade with Nepal was recorded at over US$ 8.85 billion in 2022-23, with India’s exports to Nepal amounting to USD 8.01 billion and Nepal’s export to India amounting to USD 0.84 billion.
Nepal’s trade with India constitutes for more than 60% of its total trade.
It may be noted that the bilateral trade treaty between India and Nepal was signed in 1971 and has been revised many times since, forming a strong foundation for the India Nepal trade relations.
India, being the fastest-growing major economy, has been a strong and reliable economic partner for Nepal with its strong macroeconomic fundamentals, and resilience against external shocks.
Meanwhile, Nepal, too, has shown strong growth fundamentals.
With the implementation of reforms to attract foreign investment, improved investment environment and enhanced efforts in infrastructure development, Nepal has been getting international recognition which will lead to the strengthening of its Socio-Economic framework, according to the agreement.
Renewable energy, decarbonization, transport infrastructure (roads and railways), engineering, higher education, skills development across sectors, environmental services, food and beverage products, construction and agricultural machinery, urban development, IT services, medical and health technologies, and development of overall tourism infrastructure have been identified as opportunity sectors for India and Nepal to further deepen their economic relations.
The Forum has recommended that bilateral trade between the two sides needs to be diversified to ensure sustained growth. The inclusion of a wider spectrum of traded goods would benefit businesses as well as consumers on both sides.
It has also suggested the need for greater trade and investment promotion between the two countries, especially for the above-mentioned sectors.
“This can be done through encouraging investment roadshows in major Indian cities to promote Indian investments to Nepal,” a statement issued by the Forum, said.
Similarly, the Forum has also suggested expanded investment promotion initiatives and efforts be made for ensuring greater awareness about opportunities for private sector investments in respective countries.
It should be noted that India has pledged to cut its emissions to net zero by 2070.
Due to this commitment, the renewable energy sector has gained fresh momentum in the region, the statement added.
According to the Forum, Nepal has huge potential in hydropower sector and collaboration in this sector can help India to achieve its net zero emissions goal faster and would also help Nepal to earn export revenues.
It has also suggested organizing a joint awareness program for net zero collaboration.
Stating that tourism is one of the most lucrative areas of engagement, India can be the largest source country for tourism into Nepal.
“There exists the potential to deepen and broaden cooperation in the field of tourism. Private partnerships in this sector can contribute financing, management expertise, technology, and other resources which can support the development of sustainable tourism,” the statement added.
Further, India’s expertise in education and healthcare can be leveraged to enhance educational institutions, medical facilities, and wellness tourism in Nepal.
The Forum has also suggested exchange programs, capacity-building initiatives, and joint marketing efforts which can contribute to the growth of these sectors.
Standards and regulations should be further streamlined between India and Nepal to facilitate higher trade volumes going forward, the Forum suggested.
Meanwhile, the Forum has also recommended holding meetings twice annually.