Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010Most issues reported above relate to infrastructural, regulatory, institutional or geographical weaknesses and‘bottlenecks’. With respect to such impediments, it is difficult to see a truly protectionist or WTO-illegal‘hidden agenda’ on India’s part. The lack of adequate control, certification and inspection facilities at allborder checkpoints and customs entry points is a deficiency that must be addressed by both countries, ifnecessary with recourse to international donors’ programmes and dedicated capacity-building projects.Some issues, however, are matters for which Nepal should demand effective and immediate cooperation byIndian authorities. For example, import duties must be systematically applied in a non-discriminatory fashionby Indian customs authorities at all points of entry. The applicable import and customs rules and proceduresmust be published, notified, interpreted, and applied in a consistent and transparent manner. These are clearobligations and commitments that India has undertaken to implement and comply with within the frameworkof both the WTO system and the bilateral treaties. To date, Nepal seems to lack a more formal system torecord such issues as they arise and to ensure they are duly brought to the attention of government officialsfor prompt negotiation and resolution with Indian authorities.Standards-related Measures The lack of adequate quality, metrology, and inspection/certification facilities at the border or atthe airport leading to issues in certifying the weight, safety, and quality of products, stands out as apowerful non-tariff barrier; Testing facilities are missing at border crossings and quarantine is often required. This places exportcrops from Nepal, such as ginger, at a comparative disadvantage; Fumigation of pallets and wood products, as well as the heat treatment to deal with possible pests inexported products, are trade impediments in terms of both costs and time consumption; It takes an average of four o five days, sometimes seven days, to clear agricultural produce throughcustoms and get the necessary SPS certification at the Indian border, with resulting high costs of truckretentionat customs and storage.These issues may be unfortunate from the point of view of Nepalese exporters, but are legitimate prerogativesof India, as of all other WTO members. The frustration of Nepalese exporters largely reflects the weak stateof the current standard and SPS infrastructures in Nepal and the weak ‘culture’ of standards among producersand exporters. This issue is addressed more fully in Chapters 7 and 8 of this report.Anti-competitive Conduct of State-owned or Private Firms Nepalese exporters point to the deleterious effect of Indian Railways’ monopoly. Indian Railways chargethe same fees for containers transported by rail to Kolkata than those charged by Indian truckers eventhough operating costs are much lower. This affects the competitiveness of Nepalese products andencourages widespread corruption at the border.The suggestion is for the GoN to address such issues bilaterally with Indian authorities and/or that Indianimporters of the affected Nepalese products consider a legal recourse in front of the Indian CompetitionAuthority. This latter course of action might not be easy and might not guarantee a positive outcome, but itmight be considered in one of the high potential exports, in order to create a precedent and act as a ‘pilot’project.NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT131