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India, Nepal sign new treaty to boost trade

Posted by Ramesh Khati on August 23, 2009

PM Madhav Kumar Nepal

PM Madhav Kumar Nepal

NEW DELHI (Reuters) – India and Nepal signed a trade treaty on Saturday to allow Nepalese goods duty-free access to India and agreed to bolster security along their border to thwart militant attacks, officials said.

India will allow Nepal to use the southern port of Vishakhapatnam for foreign trade, Indian officials said.

Trade between the two neighbours stood at $1.9 billion and they hope it will more than double in a few years time. India is Nepal’s sole fuel supplier and is the Himalayan nation’s main foreign investor.

The treaty was signed during a visit to New Delhi by Nepal’s new Prime Minister Madhav Kumar Nepal.

The moderate communist leader was chosen by Nepal’s parliament as prime minister in May, three weeks after Maoist leader Prachanda resigned.

The two countries also agreed to boost security along a 1750 km (1,000 miles) border, which security officials say is being used by militants to enter India via Nepalese territory.

“The Nepalese side assured that it would not allow its territory to be used for any activity against India and the Indian side also gave the same assurance to the Nepalese side,” a foreign ministry spokesman said.


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