Herbs exports from Nepalgunj to resume in 3 days

The Indian government has indicated that exports of medicinal herbs that came to a grinding halt few months back following introduction of a new law by the state-government of Uttar Pradesh (UP), contravening the bilateral trade treaty, will resume in a few days.

Officials at the Indian Embassy in Kathmandu Thursday assured Nepali traders that exports of their consignments will resume within three days, following the government´s diplomatic initiation to resolve the problem.“

"The embassy officials said we would be able to export medicinal herbs worth of Rs 300 million stuck at Nepalgunj customs point two months ago within three day”," Madhukar Thapa, president of the Jadi Buti Association of Nepal (JBAN), told Republica. Exporters on Thursday held a meeting with embassy officials during which request to take immediate steps to prevent their products from decaying was placed.

In this regard, the embassy has asked for a list of names of products so that it can communicate with the concerned agency in the central government and state-government back in India“ "We are pursuing the issue so that exports of medicinal herbs can resume as soon as possible,”one of the embassy officials said preferring anonymity“ "However, it will take a bit longer to change the law that has been imposed by the UP government."

The exports of medicinal herbs from mid- and far-western regions came to a grinding halt after the UP government made it mandatory for Nepali exporters to acquire a license from UP´s Department of Forest to continue exports.

Such a provision was introduced against the spirit of bilateral trade treaty between Nepal and India that ensures free movement of all goods of Indian or Nepali origin in each other´s territory, without subjecting them to any quantitative restrictions, licensing or permit systems.

The exporters had last week met Prime Minister Dr Baburam Bhattarai and asked him to take initiatives to solve the problem.

According to Thapa, 7,000 to 7,500 tons of medicinal herbs are exported from the Nepalgunj customs point to India. "We have been reassured that the medicinal herbs which are now lying at the customs point won´t decay due to the procedural hurdles that were created by the UP government," Thapa said, after the meeting at the embassy.

Govt drafting new export import Act

In a bid to make the law governing country´s overseas trade more effective and incorporate service trade, the government has drafted new Export and Import Act (EIA) to replace the existing Export and Import Control Act (EICA) enacted in 1957.
“The first draft is ready, it has already been circulated among stakeholders and concerned officials for necessary consultation,” an official of the Ministry of Commerce and Supplies (MoCS) told Republica.
He told Republica that the need for a new Act was felt mainly as the previous Act, which has no provision for service trade, has become obsolete in present context. “The new law will have specific provisions for export and import of services,” the official said.
The government has identified seven services that have comparative advantage for export. The National Trade Integration Strategy (NTIS) -- a blueprint of the government to boost country´s export, identifies tourism, labor, information and technology, healthcare, education, engineering and hydroelectricity as service areas having export potential.
“Unlike the previous Act, the new draft aims to facilitate export and import,” the official, who is also reviewing the draft of the new Act, said. “The inclusion of the word ´control´ in the previous Act had started to give negative connotation in the present context of bilateral and multilateral trade.” The official, however, refused to divulge further details.
The existing Act was prepared at a time when Nepal´s trade volume was very low. It has not been amended after its ratification in February, 1957. Among others, the existing Act allows the government to open and prevent export and import of goods if it deems necessary.
“The draft proposes the government to play facilitator´s role in import/export trade,” the official disclosed. However, it will have a clause that allows the government to regulate trade of sensitive goods and services.
MoCS, which is pushing for early finalization of the draft Act, is also reviewing Foreign Direct Investment and One Window Policy in order to make it up-to-date. “This is also an effort to make all the Acts and policies coherent with each other,” the official said.

Nepal Narrows Its Trade-Deficit with India

Nepal’s trade deficit with India has narrowed down by 1.6 percent in the first three months of FY 2011/12 compared to last years same period. Only very few products’ export, i.e. the export of zink, sheets, textiles, copper wire rod and cardamom have gone up according to the Government of Nepal’s revelation of a report last week.